Minding the Gap: Complex Economic Assessments in Indian Competition Law

I. Introduction

Competition law primarily involves economics. The actions taken, whether they be directed at anti-competitive organisations, business practices or mergers that are found to violate the policies of the competition law, derive from an understanding of how the market functions and how it is affected by different types of conduct. India’s competition law has developed significantly since the inception of the Competition Commission of India (CCI), and through the Supreme Court’s decisions that have created principles and growing dialogue with global competition law. However, there are significant deficiencies in the way competition law functions: premature conclusion of cases; difficulties with maintaining a consistent approach to economic reasoning; a lack of institutional capacity; and an inadequate procedural framework to manage today’s complex marketplace. The remainder of this piece examines these deficiencies in turn, beginning with the structural strains in the adjudicatory architecture itself.

II. The Architecture of Indian Competition Adjudication and Its Structural Strains

Prima facie orders directing investigation under s 26(1) of the Competition Act 2002 are not deemed ‘orders’ under s 53A and are therefore not independently appealable. By insulating such orders from appellate interference, SAIL theoretically allows investigations to proceed without judicial disruption. However, in reality, the CCI has an extensive history of terminating matters prior to making substantive findings and has replaced the finding of a prima facie determination with a conclusive determination using insufficient economic justification for doing so. This practice has distorted the threshold inquiry with the substantive analysis and eroded the rationale for the bifurcated process.

This tension surfaced in Uber India Systems Pvt Ltd v CCI, where both the Competition Appellate Tribunal and the Supreme Court reversed the CCI’s decision to close an abuse of dominance case in the ride-hailing sector. The Supreme Court found sufficient material warranting investigation into predatory pricing, a finding that implicitly criticised the CCI’s reluctance to engage with complex market dynamics at the threshold. The Commission’s order discussed cursory market-share comparison rather than any rigorous cost-based or economic analysis, leaving the question of below-cost pricing and the prospect of post-exit price recovery entirely unexamined.

III. The Economic Analysis Deficit

a) Cartel Enforcement and the Missing Economics

In Builders Association of India v. Cement Manufacturers’ Association, the DG’s investigation regarding alleged cartelisation relied on price correlations without adequately correcting for input cost variables such as electricity, a critical cost driver for cement producers. The analysis also treated administrative boundaries as relevant markets rather than conducting any demand-substitution inquiry, a foundational methodological error. The CCI similarly missed an opportunity in the LPG cylinder bid-rigging matter to scrutinise the facilitative role of the public sector enterprises that administered the exact tender process through which the anticompetitive arrangement was implemented. These failures illustrate a structural pattern: absent market definition rigour, no published fining guidelines, and decisional inconsistency that has produced an enforcement record of uneven deterrence. Without a consistent market-definition methodology, fines calculated without published guidelines become difficult to defend on appeal, and the resulting unpredictability weakens the deterrent signal that cartel enforcement is meant to send to the market.

b) Platform Markets and the Dominance Misjudgement

Platforms derive and entrench competitive power through network effects, data accumulation, and switching costs - factors invisible to share-based metrics yet decisive in determining whether effective competition is possible. Regulatory misjudgement in such markets risks entrenching dominance precisely because it goes unchecked at the stage when structural intervention would have been most effective.

In RKG Hospitalities Pvt Ltd v. Oravel Stays Pvt Ltd, the CCI acknowledged Oyo’s sizeable market share relative to its nearest competitors in the franchising services market for budget hotels, yet declined to find dominance on the ground that Oyo’s share of total Indian budget hotel stock remained low. This reasoning was inherently contradictory: the CCI excluded online hotel aggregators from the relevant market while simultaneously referencing the competitive constraints they exercised, without resolving the contradiction. Essentially, neither barriers to entry nor network effects were taken into account, even though the Competition Act explicitly lists these among the factors the CCI ‘shall have due regard to’ in verifying dominance. The CCI’s own subsequent interim remedies, which noted only two significant competitors and no new market entry, effectively conceded the error that the original inquiry had failed to detect.

IV. The EU Benchmark: Effects-Based Analysis and its Lessons

a) The Intel Lesson: Effects Analysis and Procedural Cost

Since the European Commission’s shift to a ‘more economic approach,’ EU enforcement has structurally adopted effects analysis into the adjudicatory process. The 2009 Guidance on enforcement priorities under Article 102 TFEU formalised this, establishing the ‘as-efficient competitor’ test and the centrality of foreclosure analysis in dominance cases. Intel Corp v. European Commission is the defining case and also an important lesson. The Commission’s 2009 decision, imposing a €1.06 billion fine, relied on both formal criteria and an extensive AEC analysis. The Court of Justice held that the Commission was required to examine Intel’s evidence seeming to show its rebates were incapable of anticompetitive foreclosure, a requirement not adequately met on remand. The litigation took over two decades without final resolution. The deeper cautionary tale, drawing on Northern Pacific Railway Co v. United States, is that an effects-based regime generating unlimited evidentiary contest is self-destructive. The lesson is not that effects-based analysis should be abandoned, but that it must be bounded: courts and the CCI alike must build defined evidentiary timelines and proportionality thresholds, before importing an EU-style analytical burden without EU-style institutional capacity.

b) Google Android and Market Definition in Platform Cases

Google LLC v. European Commission showcases the complexity of market definition in multi-sided platform contexts. The General Court recognised that the relevant market in a multi-sided platform case should contain products or services that have a sufficient level of interchangeability (Hoffmann-La Roche v. Commission). Even though Google and Apple were both involved in the same competitive marketplace, they did not compete against each other at either of the relevant points of reference. The General Court excluded Apple's iOS ecosystem: not because they were not competitors; but because they did not compete within a common market for the relevant legal question. Consequently, the purposive approach adopted in defining markets, to define a market for a particular enforcement question, instead of simply being an underlying economic entity, is a lesson that must be learned by enforcement authorities in India.

Antitrust market delineation is an exercise in legal construction, not scientific discovery. The Oyo case’s definitional confusion in excluding aggregators from the market while treating their conduct as competitively relevant is essentially the kind of analytical inconsistency that a purposive framework would have prevented.

V. Institutional Capacity and Procedural Imperatives

The quality of economic reasoning in any competition framework is directly proportional to institutional design. There are ample documented existing limitations at CCI. While the salaries of members of the CCI were increasing, the compensation for staff-level employees remained the same. There was no structural incentive for seconded government employees, resulting in high turnover rates and loss of institutional memory, making case economics more variable from the comparison of one case to another. Competitive authorities who are characterised as having the best performance have embedded economists directly into case teams from the beginning as an integral part of investigations and not as external reviewers of the economic theory. The enabling framework of the CCI supports engaging economic experts; the failings of the CCI lie with the lack of continued institutional support and resources, but not in its ability to engage economically knowledgeable expertise by law.

The Supreme Court’s 2025 ruling in CCI v. Schott Glass India Pvt Ltd underscored that cross-examination rights in complex economic proceedings are constitutionally significant, not merely a procedural preference. Where evidence consists of economic data, expert testimony, and contested quantitative analysis, the right to challenge it is non-negotiable. The denial of cross-examination in Schott Glass was held to have vitiated the entire evidentiary foundation of the Commission’s finding-a salutary reminder that procedural fairness and analytical rigour are mutually reinforcing, not competing values.

VI. A Way Forward

Three priorities emerge. First, the CCI must develop comprehensive guidelines on market definition and dominance assessment calibrated to digital platforms, network effects, and multi-sided markets, building on the statutory foundation in s 19(4) of the Act and drawing on the Commission’s 2024 Draft Guidelines on exclusionary abuses.

Second, institutional investment in economic capacity is non-negotiable: competitive compensation for economists, a formally constituted Chief Economist’s office integrated into case teams rather than merely attached to them, and sustained engagement with the industrial organisation community. This means benchmarking economist salaries against comparable regulatory and consulting roles, mandating a minimum tenure for seconded officers to preserve institutional memory, and requiring the Chief Economist’s office to sign off on the economic analysis underlying every significant order before it is issued. An enforcement culture anchored in rigorous economic analysis also builds the judicial familiarity with economic methodology that complex abuse cases increasingly demand.

Third, for the system not to undermine its own outputs, it is crucial that the procedural clarity around prima facie standards, cross-examination rights, and appeal timelines be established. The same procedural marathon that Intel experienced should not be replicated in India, but instead, the evidentiary framework for conducting effects-based analyses must facilitate timely and actionable results. In digital markets, where competitive harms occur quickly and where network effects lead to self-reinforcing market positions, any delay in the process is an affirmative decision favouring the incumbent.

India’s competition law has the institutional pedigree but not yet the institutional practice of rigorous economic analysis. Closing that gap does not require importing the EU’s model completely. It requires material reform: clearer thresholds for prima facie determinations, sustained investment in economic capacity, and defined evidentiary timelines that keep enforcement both economically sound and administrable. Without such reform, the CCI risks a widening gap between the sophistication of the markets it regulates and the analysis rigour it brings to bear on them.

About the Author

Vandit Sharma and Shiven Gupta are second-year law students at Ram Manohar Lohia National Law University, Lucknow.

Editor

Suprava Sahu, Senior Editor

Nupur Trivedi, Assistant Editor