CCI issues Draft Regulations on Cost of Production

 CCI Issues Draft Regulations on Cost of Production

The Competition Commission of India (CCI) has issued a draft regulation aimed at reforming the methodology used to determine costs related to allegations of predatory pricing, a form of anti-competitive behavior.

Predatory Pricing refers to the practice of selling goods or services below the cost of production with the intention of reducing or eliminating competition.

Other Forms of Anti-Competitive Practices

• Price Fixing: When competitors agree to set prices at an artificially high level, rather than competing based on price.
• Patent Misuse: Using patents to block competition, such as acquiring patents solely to sue other companies.
• Collusive Bidding: When companies conspire to control the outcome of bidding processes, particularly in government or large corporate contracts.
• Tying and Bundling: When a company forces customers to buy one product only if they also purchase another, leveraging market power in one product to gain an advantage in another.
  Example: Bundling MS Word, MS Excel, etc., under Microsoft Office.

Governance Framework to Uphold Competition in India

• Legislations:
  • Competition Act (2002)
  • Consumer Protection Act (2019)
  • Intellectual Property Laws (Patents Act, 1970 & Copyright Act, 1957)
• Institutions:
• Competition Commission of India
• Sectoral regulators such as TRAI, SEBI, IRDAI, etc.

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