The Competition Commission of India (CCI) has floated an open tender for engagement of an Agency to conduct market study on “Artificial Intelligence (AI) and Competition”.

The objective of the proposed study is to gather insights from all relevant stakeholders, to develop a comprehensive understanding of the evolving landscape of AI and application of AI in markets in India. 

The study — which has seven main objectives — is expected to help shape the strategies of the CCI aimed at fostering innovation and fair competition. It will focus on all competition related aspects within the AI ecosystems (including generative AI ecosystem) and the potential impact of application of AI on competition, efficiency and innovation in key user industries. 

Put simply, AI is a constellation of technologies that enable machines to act with higher levels of intelligence and emulate the human capabilities of sense, comprehend and act. AI is emerging as a new factor of production, augmenting the traditional factors of production viz. labour, capital and innovation and technological changes captured in total factor productivity.

The transformative capabilities of AI have significant pro competitive potential, both on the supply and demand side. At the same time, there may be concerns with regard to potential competition risks stemming from the use of AI.

The proposed study will be a knowledge building exercise to develop an in depth understanding of the emerging competition dynamics in the development ecosystem of AI systems and implication of AI applications for competition, efficiency and innovation in key user industries. 

CCI has fixed June 3 as the last date for submission of bids for the Request for Proposal (RFP) issued on Monday.

The pre qualification criteria stipulate that the Agency must have a minimum five years of experience and also have a minimum annual turnover of ₹ 50 crore during each of the three financial years: FY2020-21, FY2021-22 and FY’2022-23.

Also, the Agency must have completed a minimum of five studies/projects (AI related/tech policy related/competition related/ sectoral studies for policy purposes) in the last three financial years.  

CCI Chairperson Ravneet Kaur had in January this year said that CCi would soon float a tender for conducting a study on the impact of Artificial Intelligence (AI) on businesses and services. She had also then emphasised that a regulator cannot take a “one size fits all” interventions in technological markets, which required nuanced assessments. 

The seven objectives of the Study include examining the emerging and potential competition issues in these markets/ecosystems, if any; study the scope and nature of AI applications/use cases and assess associated opportunities, risks and ramifications from a competition standpoint and to understand the existing and evolving regulatory/legal frameworks governing AI systems and applications in India and other major jurisdictions. 

The scope of the proposed study includes ascertaining the market size, growth trend, market concentration in each layer/stage of these AI development ecosystems; entry barriers in these markets and what are the key inputs/resources that determine the tech companies’ competitive ability to enter into and grow in these markets. Also the Study would have to assess to what extent are incumbency advantage, data advantage and network effects relevant in AI development/supply markets. 

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