The Competition Commission of India (CCI) has introduced fresh regulations aimed at assessing predatory pricing in the ecommerce and quick commerce sectors. Titled the Competition Commission of India (Determination of Cost of Production) Regulations, 2025, the new framework establishes a sector-agnostic approach to evaluating production costs, ensuring flexibility across industries, particularly the digital economy.
Rather than relying on fixed, sector-specific criteria, the rules allow for case-by-case analysis to reflect the distinct and evolving nature of digital markets. While the average variable cost will serve as the main benchmark for determining predatory pricing, the CCI can also consider alternative metrics like average total cost, average avoidable cost, and long-run average incremental cost (LRAIC) based on the complexity of each case.
Entities under investigation will also be allowed to contest the cost assessments by engaging independent experts at their own expense.
The updated rules arrive amid increased scrutiny of digital marketplaces, especially after Amazon and Flipkart were internally found by the CCI to have violated competition norms by favoring select sellers. The matter is currently before the Supreme Court. Additionally, the CCI has asked for data on the market share of quick commerce firms in the FMCG sector following a complaint from the All India Consumer Products Distributors Federation (AICPDF).
