The rapid expansion of Artificial Intelligence (AI) across sectors such as healthcare, logistics, education, and digital commerce has improved efficiency and innovation. However, it has also introduced new competition law challenges. One major concern is algorithmic collusion, where AI-driven pricing systems may tacitly coordinate outcomes without explicit agreements, potentially leading to higher prices and reduced consumer welfare. Unlike traditional cartels, such coordination may be embedded in opaque algorithms, making detection difficult.

Another issue is targeted price discrimination enabled by vast data collection. Firms can personalise prices based on user behaviour, willingness to pay, and demographic data. While this may enhance revenue efficiency, it risks exploiting information asymmetry and undermining fairness in markets. Additionally, dominant digital platforms can leverage AI to entrench market power through data advantages and network effects.

Therefore, AI complicates traditional antitrust analysis by shifting focus from overt agreements to algorithmic behaviour, data concentration, and structural dominance. Regulators like the CCI must modernise tools and frameworks to address these evolving risks.

The CCI has proactively undertaken a market study on AI and competition to understand how AI alters market dynamics, entry barriers, and enforcement challenges. Conducted with stakeholder consultations, the study examined how existing legal frameworks interact with AI technologies and identified potential regulatory gaps.

Institutionally, the CCI is seeking to build interdisciplinary expertise by proposing the induction of data scientists, sector analysts, economists, and legal experts for its digital markets division. The Chairperson has emphasised the need to strengthen institutional memory rather than relying heavily on short-term professionals. Collaboration with think tanks and research institutions is also being explored to keep pace with rapid technological change.

At the same time, the CCI is cautious in deploying AI internally due to concerns about confidentiality of commercially sensitive information. As a data custodian, it must ensure safeguards before integrating AI tools into investigative processes, balancing innovation with regulatory responsibility.

Ex-ante digital regulation aims to prevent anti-competitive conduct before harm occurs, particularly in markets dominated by large ‘gatekeeper’ platforms. The EU’s Digital Markets Act (DMA) imposes obligations on such platforms to prevent self-preferencing and unfair data practices. This approach recognises that ex-post enforcement may be too slow in fast-evolving digital ecosystems.

However, India’s digital economy differs from that of the EU. With a vibrant startup ecosystem and growing innovation landscape, excessive ex-ante regulation may raise compliance burdens and discourage investment. The CCI Chairperson has cautioned against mechanically replicating foreign models without considering domestic realities.

A balanced approach would involve targeting only firms with demonstrable market power and appreciable adverse effects on competition. Proportionate regulation can protect consumers while ensuring that innovation and entrepreneurship are not stifled.

In the WhatsApp 2021 privacy update case, the CCI found that forcing users to accept expanded data-sharing terms amounted to an abuse of dominance. The Commission concluded that WhatsApp, given its widespread adoption and network effects, could act independently of competitive pressures and deny meaningful user choice.

The remedies imposed—including a monetary penalty, a five-year restriction on certain data-sharing practices, and enhanced transparency requirements—demonstrated the regulator’s willingness to intervene in data-driven markets. Importantly, dominance was assessed not solely on market share but on factors such as data control, integration with other services, and the absence of effective alternatives.

This case illustrates how competition law in the digital era increasingly focuses on data power, network effects, and consumer autonomy, expanding beyond traditional price-centric analysis.

Digital platforms and AI services operate across national boundaries, often processing data and offering services globally. Anti-competitive conduct by multinational firms can have substantial effects on Indian markets even if decisions are taken abroad. The Competition Act empowers the CCI to act against such entities if their operations cause an appreciable adverse effect on competition in India.

Cross-border enforcement is essential to prevent regulatory arbitrage, where companies exploit jurisdictional differences to avoid scrutiny. Cooperation among regulators facilitates information sharing, coordinated remedies, and consistent standards in digital governance.

In an interconnected AI ecosystem, effective cross-border coordination ensures that Indian consumers and businesses are protected while aligning domestic enforcement with global best practices.

A balanced AI competition framework should rest on three pillars: proportionality, transparency, and capacity-building. First, regulatory obligations must vary according to firm size and market power, ensuring that large gatekeepers face stricter scrutiny while startups and MSMEs are not overburdened.

Second, transparency requirements should mandate disclosures regarding algorithmic decision-making, data usage, and interoperability where necessary. Safeguards must also protect commercially sensitive data during investigations. Existing tools such as merger thresholds and the green channel route can ensure efficient and proportionate oversight.

Finally, strengthening institutional expertise through recruitment of technical specialists and collaboration with research institutions will enable adaptive governance. Such a framework would protect competition, encourage innovation, and sustain India’s digital growth trajectory.