Regulators must stay ahead in the AI era to combat algorithmic collusion, says CCI Chairperson Ravneet Kaur

Speaking at the 10th National Conference on Economics of Competition Law in the capital, Kaur emphasized that AI is no longer theoretical but a dominant force shaping modern markets. “AI is influencing pricing strategies, decision-making, and operational efficiencies across industries,” she said, adding that while AI brings efficiency and innovation, it also introduces new risks that require proactive regulatory intervention.

According to Kaur, AI has enabled new forms of market distortions, including: Cartels without human communication: Algorithms can independently adjust prices based on market signals, mimicking cartel-like behavior without explicit coordination among firms. Price coordination without agreements: AI-driven pricing models can lead to synchronized price increases without traditional collusion and Algorithmic discrimination under dynamic pricing: AI can set different prices for consumers based on their personal data, sometimes leading to unfair or discriminatory pricing.

Kaur warned that many of these issues are not necessarily new but are harder to detect due to the opacity of AI decision-making. “Regulators must strengthen their capabilities to identify and address these emerging threats before they become entrenched,” Kaur asserted.

Kaur highlighted the need for regulators to move from reactive enforcement—where action is taken after violations occur—to proactive regulation, which focuses on anticipating market distortions before they escalate into systemic failures. She outlined a three-pronged approach for modern competition regulation: Real-time, data-driven market intelligence: Regulators must embrace AI and data analytics to detect competition issues early; Anticipating risks through market studies:

In-depth studies can provide an evidence-based understanding of market dynamics, identifying anti-competitive trends before they become widespread and finally a collaborative regulatory strategy where Traditional enforcement models must evolve to include greater engagement with businesses, policymakers, and academics to build a more resilient competition framework...Outlining the future direction of competition regulation, Kaur emphasized the need for a collaborative strategy rather than purely adversarial enforcement...Regulators, businesses, and policymakers must break free from outdated paradigms and build a competition framework fit for the modern economy, she emphasised.