Competition Commission of India (CCI) Regulations on Cost of Production

The Competition Commission of India (CCI) has established new regulations for determining the cost of production, designed to enhance the assessment of alleged predatory pricing and deep discounting in sectors such as quick commerce and e-commerce.

Background and Development

• In February, the CCI issued draft rules as part of efforts to update the framework for assessing predatory pricing.
• After consultations with stakeholders, the Competition Commission of India (Determination of Cost of Production) Regulations, 2025 have been officially notified.
• This development is significant as CCI investigates complaints of unfair business practices in quick commerce and e-commerce.

Key Features of the New Regulations

• Flexibility: The new framework allows for case-by-case assessments of predatory conduct, considering the unique aspects of digital markets.
• Sector-Agnostic: It provides a cost-based framework that is adaptable across various industries, including the digital economy.
• Cost-Based Assessment: The regulations focus on measurable production costs and are aligned with international best practices.

Stakeholder Concerns and CCI's Response

• Some stakeholders suggested maintaining market value as an alternative benchmark due to pricing dynamics in certain markets.
• CCI responded that while market value may contextualize pricing, it does not constitute a cost benchmark.

Review of Previous Regulations

• CCI reviewed the 2009 cost regulations to align them with modern economic theories and international competition law practices.