Predatory Pricing | 12 May 2025

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.

Terms Related to Anti-Competitive Practices
Cartels	Associations of independent businesses or countries to regulate pricing and production (typically illegal).
Mergers	Mergers combine companies into one entity, potentially reducing competition and attracting regulatory scrutiny.
Price Discrimination	Charging different prices to different customers for the same product/service.
Price Fixing Agreements	Competitors agreeing to set a fixed price for their products/services, eliminating competition and inflating prices.