CCI calls for self-audit of AI systems to ensure responsible autonomy

The CCI's market study on AI urges companies to self-audit algorithms to prevent anti-competitive behaviour while promoting innovation and fair market practices

The Competition Commission of India (CCI), in its latest market study on artificial intelligence (AI), has called for responsible autonomy while urging enterprises to include self-audit of AI systems to address potential competition concerns.

 

Highlighting how lack of transparency in AI can distort competition, the CCI report said that major firms may leverage their control over data, infrastructure, and proprietary models to entrench their market position which may end up raising barriers to entry.

 

“In user sectors, the widespread deployment of opaque AI systems may raise the risk of algorithmic collusion, where pricing or strategic decisions may converge without explicit coordination, undermining fair competition,” the study said.

 

The report released on Monday said, “With the existing and emerging instruments, India seeks to effectively regulate AI-driven harms while encouraging accountability and fairness in digital marketplaces.”

 

It said that India’s approach aims to strike “a delicate yet critical balance, by curbing market distortions and ensuring a level playing field for all technology players, while fostering innovation, digital entrepreneurship, and widespread technology diffusion.”

 

The CCI said that its co-regulatory, innovation-friendly model aligns with India’s ambition to become a global AI powerhouse that champions both competitive integrity and technological progress.

 

The study, conducted by the Management Development Institute Society, studied AI application in industries including retail, ecommerce, logistics and delivery, banking and financial services and healthcare to find how technology adoption is reshaping traditional business paradigms and operational frameworks. 

 

The CCI study has underscored the importance of AI adoption by MSMEs and that it would help not just optimise their resource allocation and streamline business operations but also level the playing field.

 

A survey of startups conducted as part of the study showed collusion, price discrimination, predatory pricing, limited choice, low transparency as the main concerns surrounding AI adoption.

 

“Unlike traditional collusion, AI can facilitate collusion without direct human coordination, as self-learning algorithms may independently adopt cooperative pricing strategies that maximise profits,” the report said.

 

However, while there are competition concerns, the CCI report acknowledged its pro-competitive effects such as enhanced productivity, improved customer engagement and reduced costs.

 

On the way forward and self-audit

 

The CCI has said that in order to prevent AI driven anti-competitive practices, it would strengthen its technical capabilities and infrastructure, and set up a think tank to drop expertise on matters related to digital markets with special focus on AI. The antitrust watchdog also plans to organise a conference on “AI and regulatory issues” with stakeholders and conduct focused advocacy workshops on “AI and Competition Compliance.”

 

The CCI, in its report, has prescribed a six step self-audit framework for enterprises including setting up a system to evaluate each AI system against competition risk factors, establishing clear responsibilities for competition compliance, ensuring senior management involvement in high-risk AI deployments. 

Ensuring safeguards in AI age

• Aim to strike a balance, by curbing market distortions and ensuring a level playing field
• Collusion, price discrimination, predatory pricing, among main concerns surrounding AI adoption
• CCI plans to organise a conference on “AI and regulatory issues” with stakeholders
• Has prescribed a six-step self-audit framework for enterprises, including setting up a system to evaluate each AI system against competition risk factors