Rapid Fire
Predatory Pricing
- 12 May 2025
- 2 min read
The Competition Commission of India (CCI) has notified the Determination of Cost of Production Regulations, 2025, to regulate predatory pricing, particularly targeting e-commerce and quick commerce platforms.
- Predatory pricing, defined under the Competition Act, 2002, refers to a strategy where a company deliberately lowers its prices below the cost of production to reduce competition and eliminate competitors.
- Once competitor firms are weakened or eliminated, the company typically raises prices to recoup its losses and consolidate market control (monopoly).
- New regulations replaced the 2009 rules by removing market value as a benchmark and redefining total cost to include depreciation and exclude financing overheads (daily business expenses) for greater clarity.
- It uses a sector-agnostic (neutral), case-by-case approach, better suited for dynamic digital markets.
- CCI is a statutory body established under the Competition Act, 2002 to promote fair competition, prevent anti-competitive practices, and protect consumer interests.
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Terms Related to Anti-Competitive Practices |
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Cartels |
Associations of independent businesses or countries to regulate pricing and production (typically illegal). |
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Mergers |
Mergers combine companies into one entity, potentially reducing competition and attracting regulatory scrutiny. |
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Price Discrimination |
Charging different prices to different customers for the same product/service. |
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Price Fixing Agreements |
Competitors agreeing to set a fixed price for their products/services, eliminating competition and inflating prices. |
| Read More: Market Monopoly and Anti-Competitive Practices |
