CCI Notifies New Norms for Predatory Pricing

CCI Notifies New Norms for Predatory Pricing

Why in the News ?

The Competition Commission of India (CCI) has notified the 2025 Cost of Production Regulations to better examine predatory pricing and deep discounting in quick commerce and e-commerce sectors, enabling case-by-case evaluation in dynamic digital markets.

CCI Notifies New Norms for Predatory Pricing

Background and Context:

  • The Competition Commission of India (CCI) has officially notified the 2025 Determination of Cost of Production Regulations.
  • This comes after public consultation on a draft released in February 2025.
  • The aim is to address rising complaints of unfair business practices in digital sectors, particularly quick commerce and e-commerce.
  • The new rules are designed to empower the CCI to tackle issues of predatory pricing more effectively.

Key Features of the New Framework

  • The regulations provide a case-by-case evaluation model, not a sector-specific metric.
  • This ensures greater flexibility in examining the evolving dynamics of digital markets.
  • CCI will now assess alleged predatory conduct based on the actual cost of production rather than fixed industry averages.
  • The aim is to distinguish between legitimate competitive pricing and anti-competitive pricing strategies that harm market competition.

Implications for Digital Commerce

  • The move comes amid growing scrutiny of discount practices in sectors like e-grocery, food delivery, and online retail.
  • It sends a strong message to firms against unsustainable discounting used to eliminate competitors.
  • These norms aim to ensure level playing field, protect consumer welfare, and promote fair market competition in the digital economy.

About Predatory Pricing & New CCI Norms :

●Predatory pricing: Selling below cost by a dominant firm to eliminate competition.
●As per Section 4(2)(a)(ii) of the Competition Act, it requires:
○Market dominance
○ Pricing below cost
○ Intent to eliminate competitors
●New regulations use Average Total Cost (ATC) instead of “market value” as a benchmark.
●Other metrics: Average Avoidable Cost, Long-run Average Incremental Cost (industry-specific).
●CCI can seek expert help; firms may request independent review at their cost.
●Recognizes legitimate discounts (promotions, subsidies) as non-predatory.
●Focus remains on market-driven pricing, not overregulation.
●Media linked rules to e-commerce, but CCI clarified it’s sector-neutral.
●Ensures transparency, fairness, and competitive balance.