An Alarm for India? Shaping India's AI, Data, and Anti-trust Future

[Aditya and Abhishek are students at Hidayatullah National Law University.]

The unparalleled growth and investment in artificial intelligence (AI) powered technology have raised significant concerns in the competitive landscape, setting an alarm among the competition law enforcement authorities. Recently, the Competition Commission of India (CCI) has highlighted the concern of AI’s potential towards algorithmic collusion and antitrust concerns demanding a proactive and forward-looking regulatory approach. Further, significant breakthroughs were brought in the Meta-CCI case where the CCI recognized data as a determining factor in the antitrust regulation in the digital space. This case opens the room for analyzing the need for regulation of how data is used in the rapidly evolving AI space. The emerging partnerships between AI developers and big tech companies lead to the leveraging of personal data, exclusive agreements impose market entry barriers due to gaps in the enforcement of Digital Competition Regulations in India. India’s antitrust regime, influenced by European Union (EU) and United States (US) laws, lacks a concrete AI-focused regulations. While the EU’s Digital Market Act (DMA) and US Federal Trade Commission (FTC) push for stricter AI market oversight, India remains behind in proactive regulation.

The article will critically examine, firstly, the paradigm breakthrough via the Meta-CCI case, and secondly, the role of AI as a new frontier in the digital market space. Thirdly, the article highlights the regulatory gaps in the Indian landscape in comparison with the approach opted by the EU and the US. Lastly, the article presents a way forward advocating for the immediate need of action towards regulation in India.

The Meta-CCI Case: A Landmark in Recognizing Data as an Antitrust Concern

AI systems are inherently dependent on the availability of high-quality data for training, validation, and optimization. The CCI moved forward in this significant case from limiting the focus on pricing abuse and exclusionary practices to explicitly recognizing data privacy as a form of non-price competition. The CCI’s investigation highlights a key concern that big tech firms not only control user data but also leverage it to stifle competition. Simultaneously it aligns with global trends where data privacy violations are recognized as a factor for antitrust law violations. Historically, Indian regulators have largely overlooked privacy concerns, focusing instead on price and market behaviour. The 2019 Competition Law Review Committee and the Market Study on the Telecom Sector in India (2021) laid the groundwork for this change, emphasizing the role of privacy in zero-price markets and recognizing its potential as a competitive parameter. 

The Meta-CCI case is a game-changer for Indian antitrust regulation, putting data dominance in the spotlight. Furthermore, it shifts the paradigm to how companies like Meta control vast amounts of user data, which is an essential component in the age of AI-driven markets. It also opens room for concerns about big tech's algorithmic bias and market control, especially when platforms prioritize their services over competitors, something that the DMA directly tackles. However, perhaps, one of the major issues lies in the gap between the interplay of competition law and data protection in India. With the Digital Personal Data Protection Act 2023 enforcement remains pending, enabling dominant firms to continue leveraging user data unchecked. This case underscores the urgent need for a vigilant, well-integrated legislative framework to keep the digital marketplace fair and competitive. 

In January 2025, on appeal by Meta, the National Company Law Appellate Tribunal (NCLAT) temporarily suspended the CCI's five-year ban on data sharing between WhatsApp and other Meta entities and reduced the penalty of INR 213.13 crore to half, providing interim relief to the company. This suspension allows Meta to continue its data-sharing practices until the appeal is decided. In the appeal, the NCLAT has highlighted the central issue being the overlap of CCI’s jurisdiction and the forthcoming data protection framework. The case remains ongoing, with the outcome pending further proceedings.

Artificial Intelligence Whether the Next Frontier for Antitrust Enforcement?

Tracing the expansion of AI into many sectors, specifically tech industries, which is witnessing remarkable advancements in terms of innovation and expanding efficiency. AI is rapidly reshaping digital market competition, creating new challenges that existing antitrust laws struggle to address. Competition regulators worldwide face the crucial task of ensuring adequate safeguards against any possible anti-competitive consequences. These concerns may take various forms like algorithmic collusion, self-learning price coordination, and platform-driven exclusionary practices. Ultimately using user data as a major tool is a covert form of anti-competitive conduct, making detection and enforcement tough and more complex.

Firstly, AI-powered price fixing and algorithmic collusion raise a significant concern, where AI systems automatically adjust prices in real time, leading to tacit collusion without the need for explicit communication. In the airlines industry cartel case, CCI examined price cartels and algorithmic tacit collusion through third-party software used by airlines to dynamically adjust fares but due to lack of evidence, the case was dismissed. However, its approach to self-learning algorithms, rising market transparency, and tacit collusion remains to be seen. Therefore, rise of AI with the growth of digital market calls for a proactive approach by Indian antitrust regulators. 

Secondly, AI-driven markets create significant barriers for new entrants, as AI thrives on vast datasets that are overwhelmingly controlled by the dominant big tech companies with enormous user data and network effects. It raises the concern that without a structured data-sharing framework, smaller and growing firms might find it nearly impossible to compete, reinforcing monopolistic AI ecosystems. An example of it could be the pre-installation of Google's small AI model "Gemini Nano" on mobile devices via agreements between Google and Original Equipment Manufacturers like Samsung which make it difficult for other developing models, act as a market barrier.

Thirdly, the rise of big tech and AI developers collaborations, recently one being Apple's partnership with OpenAI. The small AI model developers via partnership with established digital players secure privileged cloud access via exclusive agreements for facilitating market entry and growth, as in Microsoft-Open AI partnership. Even though it might foster innovation, it also raises competition concerns by concentrating key resources among a few dominant players. Therefore, limiting market access for other competitors and potentially harming consumer choice and innovation in the hands of few. If left unchecked, AI could become a tool for entrenching digital monopolies rather than fostering open and competitive markets, highlighting the need for regulatory intervention as a necessity. 

India’s Regulatory Gap: Lessons from the EU and the US

The EU and the US have proactively updated their competition laws to regulate big tech dominance, whereas India is yet to implement a specific AI-focused antitrust strategy towards regulating digital competition landscape. Since Indian antitrust regulatory regime is significantly based on the EU and the US laws, it becomes crucial to draw lessons from their approach.

DMA: Merely a model for India? 

The EU's enactment of DMA in 2022 stands as an evolving step towards regulating the digital competition landscape opting for an ex-ante approach targeting gatekeepers in the digital markets. The enforcement of the law by the EU regulators has led to investigations into Alphabet, Apple, and Meta for anti-competitive practices such as anti-steering, self-preferencing, and the pay-or-consent model. India draws significant inspiration from DMA in its Draft Digital Competition Bill 2024 (DCB) by opting for an ex-ante regulatory approach for the regulation of anti-competitive practices in digital markets in India. Furthermore, where the DMA targets core platform service providers designated as gatekeepers, the DCB applies to systematically significant digital enterprises showcasing substantial similarities in its approach to regulating digital antitrust concerns. 

Hence, at this critical junction in the growing digital market, where the DMA has been in force for two years, and the European Commission has begun investigations likely to impose fines in contrast, the DCB is still in the consultation stage raising significant concerns. EU's proactive approach via regulations has forced gatekeepers to introduce significant changes in its policies regarding products and services like Google, Microsoft and others to be in consonance with the law. Indian regulators need to take steps forward towards more vigilant regulation of digital market which the EU had already initiated.

US antitrust crackdown: An alarm for Indian antitrust regulators

The FTC launched an action against 5 companies seeking information on their investments and partnerships in generative AI and cloud services. This action comes in furtherance of FTC Chair Lina Khan’s stance that “AI is not exempt from existing laws” where the regulator aims to address the issue of distorting innovation and competition by the few dominant firms, aligning with the global approach. Targeting towards a market where the firms cannot use innovation claims to justify the anti-competitive practices.

The report highlights key aspects for scrutiny concerning AI developers and cloud service providers' partnerships where such collaborations could limit access to critical inputs like computing resources and talent; additionally, contractual and technical barriers might raise switching costs for AI developers, restricting their ability to change or use multiple cloud service providers. Furthermore, providing access to sensitive technical and business information could give them a competitive advantage by enabling them to develop their own AI models and applications. The report advocates for a cautious approach by the antitrust regulators, urging them to keep an eye on such exclusive partnerships which might harm the developing AI digital market.

CCI needs to take a lesson from the FTC towards a more cautious and proactive approach towards regulating digital marketspace for ensuring fair play and innovation. Therefore, a similar approach is crucial for India, where AI partnerships between big tech firms and developers remain largely unchecked, calling for strict oversight similar to FTC for ensuring an innovation-driven and competitive digital landscape in India.

Way Forward for India

The appointment of the Committee on Digital Competition Law which proposed the DCB taking inspiration from DMA stands as a positive step towards digital market regulation. However, it is pertinent that all stakeholders involved in consultation and implementation of the DCB need to expedite the enforcement and implementation of the law taking inspiration from the proactive enforcement of the DMA in the EU that has been in force for two years. Further, AI and its increased partnerships need to be given due consideration in the ongoing consultation of the draft DCB. 

Data is the most significant element in the governance of the digital market and its players with data comes privacy and it becomes complex to separate them. Digital privacy needs to be given due legislative and judicial recognition in the digital landscape influenced by AI. With AI being the new frontier in governance of the digital market, it becomes crucial to focus on digital privacy which should not be inherently undermined between the intersection of ensuring innovation and fair play among the market players. With the landmark recognition of data privacy as a crucial factor of antitrust concern, the present appeal by the Meta before NCLAT underscores future prospects which will determine the interplay between data privacy and antitrust regulation. 

The need for quicker enforcement of DCB to catch up with the global regulators for regulating the evolving digital landscape becomes crucial and will pave the way for the CCI to navigate unique complexities which come along with the developing digital marketplace of India where AI is the next frontier to catch upon. With the increasing prevalence and adoption of AI, India needs to establish a clear regulation taking inspiration from the AI law in the EU for ensuring better transparency and fairness in respect to data privacy. Looking at the interconnection of data and privacy, the regulators should thrive to balance innovation and adherence to data regulation while fostering an AI-led digital market.