CCI tightens grip on e-com, q-comm; releases draft regulations on predatory pricing
The draft guidelines by the Competition Commission of India (CCI) are set to create a clear framework for evaluating anti-competitive pricing across sectors.
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Amid the growing concerns over predatory pricing tactics by major e-commerce platforms, the Competition Commission of India (CCI) has releases draft guideline to define how costs should be assessed in pricing practices.
These will replace the 2009 norms introduced before digital markets became dominant. Stakeholder comments on the draft are invited until March 19.
A draft of the proposal, titled the CCI (Determination of Cost of Production) Regulations, 2025 is set to create a clear framework for evaluating anti-competitive pricing across sectors.
The competition watch dog released the draft under section 64(2)(a) of the Competition Act, 2002, which empowers the regulator to prescribe cost benchmarks for assessing anti-competitive practices. Under the rules, Section 4(2)(a)(ii) prohibits predatory pricing as an abusive conduct. The new guidelines are said to have a significant impact on the fast-growing e-commerce industry.
Under the proposed norms, in determining costs, the commission or the director general may seek assistance from experts, and enterprises disputing the cost determination can request an independent expert review at their own expense.
In the past, multiple stakeholders have raised concerns about the predatory pricing or zero pricing model set by digital commerce players. Recently, All India Consumer Products Distributors Federation (AICPDF) alleged that quick commerce firms were raising funds through deep discounting practices and predatory pricing, causing pressure on small retailers and distributors.
E-commerce giants like Amazon and Flipkart have also been facing severe criticism over their pricing strategies, with accusations of driving out competition through artificially low prices.
The Confederation of All India Traders (CAIT) recently launched a scathing attack against quick commerce companies such as Blinkit, Zepto, and Instamart, blaming them for crushing the businesses of 'small retailers'. Its white paper alleged that quick commerce firms' predatory pricing scheme, such as offering heavy discounts, is crippling the abilities of kirana stores to compete.
CAIT added that three quick commerce players (Zepo, Blinkit, and Instamart) have received a massive FDI inflow of more than Rs 54,000 crore to control logistics, warehouses, inventory, and delivery systems.
