Amid growing concerns over predatory pricing and zero-pricing tactics by major digital platforms, the Competition Commission of India (CCI) proposes to define how costs should be assessed in pricing practices.
The competition watch dog released a draft of the proposal, titled the CCI (Determination of Cost of Production) Regulations, 2025, to create a clear framework for evaluating anti-competitive pricing across sectors, but with a significant impact on the fast-growing e-commerce industry.
If implemented, they will replace the 2009 norms introduced before digital markets and platform-based business models became dominant.
The new draft norms are also significant as the CCI has so far — despite existence of its 2009 cost regulations — been adopting “regulatory forbearance” in all pricing allegations including those levelled by retailers against e-commerce and quick commerce giants. Now, the competition watchdog intends to take a proactive stance in scrutinising and addressing predatory pricing complaints, sources said.
New Methodology
The draft regulations issued on Monday introduce a comprehensive methodology for cost assessment in all sectors to identify predatory pricing.
Key elements include primary metric of utilising average variable cost as a proxy for marginal cost to evaluate potential predatory pricing scenarios. The CCI also will have discretion to apply alternative cost measures — such as average total cost, average avoidable cost, or long-run average incremental cost — based on specific industry characteristics and the nuances of each case.
The new draft regulations also confer enterprise rights that allow enterprises under investigation to challenge cost determinations by commissioning expert evaluations at their own expense, ensuring a fair and transparent process.
These regulations are poised to replace the 2009 framework, and aim to enhance clarity and precision in investigations related to anti-competitive pricing. The emphasis on a structured approach reflects the CCI’s commitment to fostering a competitive marketplace while safeguarding consumer interest.
Pricing Tactics
The draft regulations come at a time when e-commerce giants like Amazon and Flipkart face scrutiny over their pricing strategies, with accusations of driving out competition through artificially low prices. It is also alleged that these platforms engage in practices like deep discounting and preferential treatment of select sellers, potentially marginalising smaller competitors and distorting market dynamics.
Implications
The introduction of the draft regulations signals a strategic shift in the CCI’s approach towards pricing practices in the economy including digital markets.
The Confederation of All India Traders (CAIT) has been vocal about the challenges faced by small retailers due to the aggressive pricing and exclusive partnerships of large online platforms.
The draft regulations are perceived as a response to such grievances, aiming to level the playing field and prevent market monopolisation by a few dominant players. The recent practices of e-commerce firms adopted in quick commerce segment also came<SU>in for lot of debate in industry circles.
Public Consultation and Next Steps
The CCI has opened the draft regulations for public consultation, inviting stakeholders—including industry participants, consumer rights groups, and legal experts—to provide feedback by March 19. This collaborative approach ensures that diverse perspectives are considered, leading to a balanced and effective regulatory framework for addressing predatory pricing complaints.