Ensuring fair play in an AI-driven market

The framework of a modern competitive market is built around the principle of promoting fair and transparent competition among enterprises so that the broadest range of goods and services are made available at reduced cost to consumers, and they also have a wider choice. The adoption of Artificial Intelligence (AI) by producers and marketers has rapidly transformed the marketing ecosystem. It has triggered concerns that efficiency and precision brought by AI could be at the cost of distortion in the level playing field among producers owing to issues of AI accessibility. A “Market Study on Artificial Intelligence and Competition” conducted by the Competition Commission of India (CCI) through the Management Development Institute Society has revealed that India’s AI ecosystem, while demonstrating rapid growth, faces structural challenges that could significantly impact long-term competitiveness and market fairness. If not regulated, such distortion in competition among enterprises runs the risk of diluting the safeguards that protect the consumers from exorbitant cost and limited choice imposed by large enterprises. The mandate of the CCI is to eliminate practices which adversely affect competition and promote and sustain competition so that the interests of consumers are protected. The rapidly changing marketing ecosystem driven by imbalanced AI adoption has made the task tougher for CCI. The study finding is expected to help the regulatory body articulate a new regulatory mechanism, but the CCI equipping itself with AI expertise is crucial to make timely interventions and frameeffective legal safeguards for consumers. The primary concern flagged in the CCI report is the barriers preventing entry of new market players and entrenching leveraging power of the existing players, which reduces the scope of further competition in the market. It explains that “AI development requires significant computational resources, infrastructure, financial capital, access to diverse large-scale datasets and specialised AI talent, which may act as entry barriers” for smaller players and new players such as startups and innovators. The report suggests that promotion of open-source AI frameworks and enhanced access to national AI technology systems would reduce entry barriers and facilitate these smaller players scaling up their businesses, which is pragmatic and deserves the attention of the policymakers to initiate necessary measures. The CCI study rightly emphasises building a skilled workforce proficient in data science and AI development and equipping the Indian workforce with cutting-edge, industry-relevant AI expertise. Integrating AI into India’s skill development programme is an urgent need of the hour to translate this vision into reality. AI adoption leading to significant routine entry-level jobs and repetitive role jobs in the IT sector and in many startup sectors has already pressed the alarm bell on many existing skills becoming obsolete in the fast-changing industrial landscape, both in production and in marketing. Ironically, various skill development programmes are still not focusing much on AI skills, and the syllabus of most professional courses is not prioritising AI teaching and learning, leaving a wide gap between market needs and educational and skill development priorities. Even if CCI updates its regulatory regime to address the challenges of skewed AI adoption in India’s industrial landscape to remove entry barriers for smaller players, a shortage of workforce trained in AI skills will render such a regulatory regime ineffective. The consumers stand to lose the most in such a situation, with existing players imposing their AI- and data-driven prices on them, taking advantage of the lack of new competitors. Such new market realities have put the spotlight on India’s AI Mission launched last year and the pace of its implementation. The country needs more people skilled in a wide range of AI skills, such as AI-Business Intelligence Analyst, AI-Data Architect, AI-Data Engineer, AI-Data Quality Analyst, AI-Data Scientist, AI-Database Administrator, AI-Machine Learning Engineer, AI-Device Installation Operator, etc. States undertaking comprehensive studies to map the availability of such a skilled force is essential to do a reality check on their preparedness to face the new market realities post AI adoption. Industry estimates show that at the current pace of AI skill building, the country will be grappling with a massive shortfall in AI-trained professionals to match the demand for AI jobs in 2027. The CCI report has rightly underscored the importance of continuing its focus on strengthening its own technical capabilities and infrastructure to maintain effective regulatory oversight in the area of AI. The CCI plans to develop specialised expertise in AI technologies, data science and computational methods, which, it says, will allow it to monitor AI-driven market behaviour and identify and address potential AI-driven anti-competitive behaviour. To play an effective role in the capacity of a regulator, recognising the disruptive potential of AI adoption in production and marketing alone will not be sufficient – it must parallelly focus on ensuring accessibility of AI adoption for new and smaller players to create a fair digital marketplace.