CCI Releases Draft Rules On Predatory Pricing Assessment

(MENAFN- KNN India) New Delhi, Feb 18 (KNN) The Competition Commission of India (CCI) has unveiled a draft framework for determining the cost of production, aiming to update its methodology for assessing predatory pricing under competition laws.

The newly proposed CCI (Determination of Cost of Production) Regulations, 2025 will replace the existing norms established in 2009.

The draft regulations have been issued under Section 64(2)(a) of the Competition Act, 2002, empowering the commission to prescribe cost benchmarks for evaluating anti-competitive practices.

As per Section 4(2)(a)(ii) of the Act, predatory pricing-defined as selling goods or services below cost with the intent to reduce competition or eliminate rivals-is deemed an abuse of dominant market position.

The CCI's consultation paper outlines that average variable cost will generally serve as a proxy for marginal cost in predatory pricing assessments.

However, in certain cases, alternative cost measures such as average total cost, average avoidable cost, or long-run average incremental cost may be considered.

This regulatory overhaul follows amendments to the Competition Act in 2023, necessitating updates to multiple provisions to align with evolving economic and legal standards.

The CCI emphasised that the revisions are designed to integrate modern economic theories, judicial interpretations, and international competition law best practices.

Under the proposed regulations, cost determination may involve assistance from independent experts, and enterprises disputing cost calculations can opt for an independent review at their own expense.

Additionally, businesses can request confidentiality for submitted documents, which will be assessed under the Competition Commission of India (General) Regulations, 2025.

With the implementation of this framework, the 2009 cost determination regulations will be repealed, though any ongoing investigations or actions under the earlier rules will remain valid.

The CCI has invited stakeholders to submit comments on the draft regulations by March 19, 2025, marking a significant step toward refining India's competition law framework and enhancing regulatory clarity in the assessment of predatory pricing.

(KNN Bureau)

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