CCI's 'effects-based approach' focuses on how digital conduct impacts consumer choice: CAG

The Competition Commission of India is shifting its focus to an "effects-based" approach, prioritising digital conduct's impact on innovation and consumer choice over traditional market share metrics.

Competition Commission has been keeping pace with market trends and by pivoting towards an ''effects-based'' approach, the regulator is focusing on how digital conduct impacts innovation and consumer choice rather than just market share, Comptroller and Auditor General K Sanjay Murthy said on Wednesday.

In the digital age, he said dominance may emerge not through scale of production, but through scale of data, control over ecosystems, and influence over access.

Murthy, who was the chief guest at an event to mark the 17th Annual Day of the Competition Commission of India (CCI) in the national capital, noted that in the absence of competition, complacency is rewarded, inefficiency is entrenched, and the consumer, whether a household or the Government of India itself, ends up paying more for less.

''Over the past few years, since the evolution of digital markets, the CCI has, keeping pace with the market trends, also increasingly focused on Big Tech, investigating e-commerce platforms and penalising platforms for abuse of dominant position by indulging in exclusionary and exploitative practices,'' he said.

CCI keeps a tab on unfair business practices across sectors in the marketplace and promotes fair competition.

By pivoting towards an ''effects-based approach'', Murthy said, CCI now focuses on how digital conduct impacts innovation and consumer choice rather than just market share.

''This ensures that the regulatory framework remains agile enough to address emerging challenges like algorithmic collusion and self-preferencing in an increasingly digitised Indian marketplace. These adoptions will focus on transparency, procedural efficiency, and sophisticated enforcement tools,'' he said.

He also mentioned that the relationship between audit and competition is not incidental, but it is structural.

''In government procurement, when suppliers collude to fix prices, rig bids, or divide markets, they do not merely violate competition law; they also cause direct and measurable loss to the public exchequer.

''The CAG's audit of procurement is therefore not a parallel activity to competition enforcement - it is a complementary instrument that creates the institutional pressure necessary to ensure that India's vast government marketplace remains genuinely competitive,'' Murthy said.

Over the past years, he said, there have been several occasions when CCI has taken cognisance of CAG reports highlighting anti-competitive issues, and has inquired into the issues raised.

CCI has frequently relied on the CAG reports as a source for identifying 'red flags' in public procurement, he said, and added that CAG reports have often served as the trigger for the regulator to initiate suo motu investigations or as corroborative data for ongoing cases.