Competition Commission to conduct detailed study on AI; invites proposals from entities

Fair trade watchdog CCI on Monday invited request for proposals from entities to carry out a detailed market study on artificial intelligence and its impact on competition that will cover various aspects, including the ways AI-driven personalised recommendations, services and pricing influence consumer choices. The proposed market study on ‘Artificial Intelligence and Competition’ also comes at a time when the growing use of AI across industries has given rise to novel questions around its implications for competitive dynamics in markets.

Issuing the Request for Proposal (RFP) document to engage an agency/institution for conducting the study, the CCI said the transformative capabilities of AI have significant pro-competitive potential, both on the supply and the demand side, and at the same time, there may be concerns with regard to potential competition risks stemming from the use of AI.

The last date for submitting the bids is June 3 and after technical presentations by the entities, the deadline for the financial bids is June 28.

Among the various aspects, the study will look at whether and in what manner can AI facilitate and/or implement anti-competitive strategies as well as the novel strategies aided by AI that can lead to anti-competitive outcomes.

The new forms of collusion prompted by the use of AI such as self-learning algorithms and whether bias in AI algorithms can impact competition will also be examined during the study.

Other elements that will be covered include “how do AI-driven personalised recommendations, services and pricing influence consumer welfare and choice”, “what are the synergies and risks that may stem from M&As involving firms with AI capabilities” and “what are the specific factors/parameters that need to be considered in assessing competitive effects of such M&As”.

Through the study, the Competition Commission of India (CCI) will also seek to understand the main sources of competitive advantage and disadvantage for AI adopters and non-adopters, and how AI technologies influence the entry and exit barriers, market concentration, innovation incentives, and market power of firms.

Further, it will look to “understand trends and patterns of AI and to ascertain enforcement and advocacy priorities of the Commission with respect to AI and its application in markets,” as per the document.

Among others, the study will look at the existing and evolving regulatory/legal frameworks governing AI systems and applications in India and other major jurisdictions and also reach out to the relevant stakeholders.

In a recent interview to PTI, CCI Chairperson Ravneet Kaur said that AI and machine learning can drive efficiency and innovation but also raise concerns related to market concentration and potential anti-competitive behaviour.

The CCI has the mandate to promote competition and curb anti-competitive practices in the marketplace.