Renewal of the Competition Act of India

Introduction

The Competition Commission of India also known as CCI is a statutory body established by the government of India under the Competition Act, 2002, with a view to promote fair competition, protecting consumer interests, and ensure free trade in India’s markets. Its significance lies in fostering a competitive environment that drives economic growth, innovation, and consumer welfare.

The CCI also holds quasi-judicial powers and is operating under the Ministry of Corporate Affairs. The main objective of CCI is to eliminate anti-competitive and monopolistic practices, promote fair competition, protect the interest of the consumers and establish a competitive environment. 

The Change

The said Competition Act of 2002 was a natural successor to the to the erstwhile The Monopolistic and Restrictive Trade Practices referred as MRTP Act, which served as historic benchmark Act principally aiming at preventing anti-competitive practices and fostering healthy competition in the interest of consumers.

However, the Competition Act, 2002 had several ambiguities and loopholes in respect to India’s competition which resulted in delayed resolution of proceedings and compiling of cases.

Therefore the Competition Act, 2002 was thereafter significantly amended to the recent Competition (Amendment) Act, 2023. The amended Act gave rise to various aspect with relating to control of the merger and acquisition in India. The amended Act also introduced “Deal Value Threshold” wherein companies were required to notify and obtain an approval from CCI for any merger and/or acquisition exceeding Rs. 2000 crores, if the target company has “substantial business operations in India”.  Further, the time limit for obtaining approvals from CCI was reduced from 210 days to 150 days expediting the approval process and providing greater clarity and efficiency in business transactions subject to the Act. 

The Competition Act of 2023, also created new provisions wherein a central entity that facilitates coordination between competing entities which are operating at different levels, will be presumed to be part of the anti-competitive agreement, even if the central entity isn’t directly competing with the companies. For example, trading companies that are selling goods of different entities shall also be held responsible if they facilitate an anti-competitive agreement. Thus, such anti-competitive agreements which cause or are likely to cause an appreciable adverse effect on competition (AAEC) within India between the Central entity and the Competing entities are now prohibited under the new Competition Act.  

It is so proved that the amended Competition Act of 2023 brings significant modifications to the already existing legal framework with the primary objective of bringing the existing regulations in line with changing business and economic realities, expedite and streamline the administrative process, and hence creating a level-playing field.

After the amendment to the new Competition Act of 2023, the CCI recently announced a new Regulation to curb predatory pricing and deep discounting in the e-commerce and quick-commerce sectors. The regulation called as the Competition Commission of India (Determination of Cost of Production) Regulations, 2025 came into force on 6th May, 2025.

The regulations aims to provide a revised framework for evaluating potentially abusive pricing practices, particularly predatory pricing, and deep discounting. “Predatory Price refers to the sale of goods or provision of services at a price below the cost, with a view to reduce competition or eliminate competitors. The regulation specifically caters to prohibit unfair strategy where a dominant company deliberately lowers its prices below the cost of production to drive competitors out of the market. Once rival firms are weakened or eliminated, the company typically raises prices to recover the losses and consolidate market control.

Therefore the amended Regulation made significant changes in the definition of ‘total cost’ and ‘long run average incremental cost’ (LRAIC), ‘total variable cost” and “average avoidable cost” so as to update the methodology used for determining production costs in predatory pricing cases.

The definition of total cost has now been modified to include depreciation and to exclude financing overheads, ensuring a more appropriate and consistent measurement of the cost of production and the definition of LRAIC has been updated to includes all variable and fixed costs, including sunk costs, that are directly or indirectly attributable to the production of a specific product or service. 

By updating cost assessment methodologies, the new regulations aim to provide greater clarity in identifying anti-competitive pricing strategies.

Conclusion

It has been observed by the experts that the recent amendments in the Competition Act, 2023 and the recent Regulation of 2025 on determining the cost of production has been a vital step taken by the CCI to modernize the law with the current times so as to ensure it accelerates the building of the Indian economy in a manner which is competitive and predictable to the enforcement of the provision.

The above content is provided for informational purposes only. The provision of this article does not create an attorney-client relationship between D’Andrea & Partners and the reader and does not constitute legal advice. Legal advice must be tailored to the specific circumstances of each case, and the contents of this article are not a substitute for legal counsel. 

Veronica Gianola Veronica Gianola

Veronica Gianola

Senior Associate
Veronica Gianola, an accomplished Italian lawyer, is a member of the Milan Bar Association.
Bosky Tanmay Gokani Bosky Tanmay Gokani

Bosky Tanmay Gokani

Legal Advisor
Bosky Gokani, a qualified Indian lawyer, is currently based in Shanghai.

Contact us for a
first consultation

CONTACT US FOR A FREE CONSULTATION

This field is for validation purposes and should be left unchanged.