Competition In The Age Of AI: Competition Commission Of India Calls For Market Study Proposals

Posted On - 2 May, 2024 • By - King Stubb & Kasiva

Introduction

In the dynamic framework of the Indian market, the Competition Commission of India (CCI) stands as a stronghold for ensuring fair practices and safeguarding consumer interests, as mandated by the Competition Act of 2002. With a keen focus on emerging technologies and their potential implications, the CCI has set its sights on exploring the realm of Artificial Intelligence (AI) through a comprehensive Market Study.[1] To understand the transformative capabilities of AI that have significant pro-competitive potential, as well as competition concerns emanating from the use of AI, the Competition Commission of India (CCI) has issued a call for proposals to engage an Agency/Institution to conduct the study. The deadline for submitting proposals is June 3, 2024, by 5:00 PM.

The Significance of AI in the Modern Economy

Artificial Intelligence represents a paradigm shift in technology, empowering machines to emulate human cognitive functions such as learning, problem-solving, and decision-making. Its implications span across various sectors, promising significant advancements and competitive advantages for businesses worldwide. From predictive analytics to process automation, AI is reshaping traditional paradigms and setting new benchmarks for efficiency and innovation.

Objectives of the Market Study

The Market Study initiated by the Competition Commission of India (CCI) is driven by a multitude of objectives, each aimed at gaining a thorough understanding of the complex relationship between Artificial Intelligence (AI) and competition in the Indian market, aiming to:

Understand AI Systems and Ecosystems: 

Firstly, the study aims to explore into AI systems and ecosystems. This involves not merely scratching the surface but plunging into the complexities of AI, exploring its applications, the stakeholders involved, the prevailing market structures, and the dynamic interplay of competition within these ecosystems. By untying the intricacies of AI systems, the study aims to paint a comprehensive picture of the AI landscape and its implications for competition.

Explore Competition Issues:

Furthermore, the study seeks to highlight emerging competition issues within the AI domain. This involves identifying potential areas of concern where AI technologies may inadvertently facilitate anti-competitive strategies. By bringing these issues to the forefront, the study aims to proactively address any challenges that may impede fair competition in the AI-driven market.

Assess AI Applications and Regulatory Frameworks:

Another critical aspect of the study is the assessment of AI applications across diverse industries. Here, the focus is on evaluating the scope, opportunities, risks, and competitive implications of AI adoption. By scrutinizing the impact of AI applications on market dynamics, the study aims to provide valuable insights into the transformative potential of AI and its implications for competition.

Moreover, the study undertakes a comprehensive analysis of the regulatory frameworks governing AI in India and other jurisdictions. This involves a meticulous examination of existing regulations, highlighting best practices, and identifying areas for improvement. By assessing the regulatory landscape, the study aims to inform policymakers and stakeholders about the need for adaptive regulatory frameworks that can effectively address the challenges posed by AI technologies.

Engage Stakeholders:

Engagement with stakeholders is another key pillar of the study. By fostering dialogue and collaboration with relevant stakeholders, the study aims to gain holistic insights into the intersection of AI and competition. This involves reaching out to a diverse array of stakeholders, including industry experts, policymakers, and consumer advocates, to gather diverse perspectives and ensure a comprehensive understanding of the subject matter.

Identify Enforcement Priorities:

Finally, the study endeavours to identify enforcement priorities concerning AI’s application in markets. This involves determining the most pressing issues that require regulatory intervention to promote fair competition and innovation. By prioritizing enforcement actions, the study aims to ensure that regulatory interventions are targeted and effective in addressing the challenges posed by AI technologies.

Scope of the Study

The Market Study casts a wide net over various focus areas, each essential for comprehensively understanding the intricate relationship between Artificial Intelligence (AI) and competition in India. These focus areas include:

AI Ecosystem:

This facet of the study involves a deep dive into the AI landscape, encompassing key AI systems, market sizes, stakeholder landscapes, entry barriers, revenue streams, and levels of market concentration. By meticulously examining these aspects, the study aims to provide a holistic overview of the AI ecosystem, shedding light on its dynamics and implications for competition.

Application of AI in User Industries:

The study ventures into the diverse applications of AI across various industries, including retail, e-commerce, logistics, and marketing. By analysing the impact of AI applications on market dynamics and consumer behaviour within these sectors, the study seeks to uncover insights into the transformative potential of AI and its implications for competition.

Competition Issues:

This aspect of the study explores into the potential for AI to facilitate anti-competitive strategies, such as collusion and bias in algorithms. By scrutinizing these issues, the study aims to assess their impact on market fairness and transparency, thereby informing regulatory interventions aimed at preserving competition.

The study takes a critical look at the evolving regulatory landscape governing AI in India and other jurisdictions. By identifying regulatory gaps and proposing measures to address them effectively, the study aims to ensure that regulatory frameworks remain adaptive and conducive to fostering fair competition in the AI-driven market.

Key Events and Dates

  • The timeline for the Market Study is as follows:
  • Sharing of Request for Proposal (RFP): April 22, 2024
  • Pre-bid consultation meeting: May 6, 2024
  • Last date for Submission of Bids: June 3, 2024
  • Technical Presentation: June 20-21, 2024
  • Opening of Financial Bids: June 28, 2024

Pre-Qualification Criteria

Agencies interested in participating must adhere to rigorous pre-qualification criteria to ensure their eligibility. These criteria include:

  • Minimum Existence of 5 Years: Interested agencies must have a proven track record of at least five years. This criterion underscores the importance of experience and stability in the field.
  • Robust Financial Track Record: Agencies must demonstrate a strong financial track record, indicating their financial stability and capability to undertake the responsibilities associated with the Market Study.
  • Proven Track Record in AI and Competition Studies: Interested agencies must showcase a history of delivering high-quality studies or projects related to AI and competition. This criterion emphasizes the importance of expertise and experience in the subject matter.

Payment Schedule and Proposal Submission Guidelines

The payment schedule for the Market Study will be carefully structured to incentivize timely delivery and ensure high-quality output. Milestones will be tied to the submission of key deliverables, including interim and final reports. This approach aims to foster accountability and excellence throughout the study process.

In adherence to strict guidelines, agencies submitting proposals must provide comprehensive insights into their capabilities, methodology, and costing. Proposals should cover both technical and financial aspects, demonstrating the agency’s expertise and readiness to undertake the responsibilities associated with the Market Study.

Evaluation Criteria

Proposals will undergo a thorough evaluation based on a comprehensive set of criteria. These criteria include:

  • Agency Experience: The agency’s track record and experience in conducting similar studies or projects will be closely examined to assess their suitability for the Market Study.
  • Team Composition: The composition of the agency’s team, including the qualifications and relevant experience of key personnel, will be evaluated to ensure a competent and skilled workforce.
  • Approach and Methodology: The proposed approach and methodology for conducting the Market Study will be scrutinized to determine its effectiveness and alignment with the study objectives.
  • Financial Viability: The financial viability of the proposal, including the proposed budget and cost estimates, will be assessed to ensure that resources are allocated efficiently and transparently.

Conclusion

The Market Study on Artificial Intelligence and Competition in India headed by the Competition Commission of India (CCI) stands as a key initiative aimed at keeping pace with technological advancements and their profound impacts on competition and consumer welfare. Through comprehensive engagement with stakeholders, thorough analysis of competition issues, and strategic proposals for regulatory interventions, the study aims to cultivate a market landscape that is not only competitive but also nurtures fair competition, drives innovation, and safeguards the interests of consumers.

[1] Request for Proposal for the Engagement of an Agency to Conduct Market Study on Artificial Intelligence (AI) and Competition, https://www.cci.gov.in/images/whatsnew/en/tendernotice-1-11713759672.pdf

King Stubb & Kasiva,
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