The Competition Commission of India (CCI) chairperson Ravneet Kaur on Wednesday flagged concerns over the growing use of artificial intelligence (AI) across different sectors, warning that as AI tools become more sophisticated, the regulator is finding it difficult to detect and establish their anti-competitive effects on the markets.
Speaking at the 17th anniversary event of the CCI, Kaur said that even though the rapid adoption of AI is bringing in a lot of efficiencies, promoting innovation, and improving customer experiences, there are potential concerns stemming from the concentration of market power across different levels of the AI value chain.
“There is a rapid adoption of AI in various spheres of the economy – whether it is logistics, healthcare, education, agriculture, transportation, supply chain. There could be (instances of) ecosystem lock-ins, self-preferencing and algorithmic collusion. The AI systems which are being used are opaque. So that makes it difficult to detect what actually is happening in various cases,” she said.
Ecosystem Lock-Ins
Experts said that the CCI head’s comment on AI comes on the back of AI systems taking a prominent role in pricing, ranking, recommendations and access across digital markets. “As the CCI’s own market study examined, the CCI will remain focussed on examining whether concentration across the AI stack, including compute infrastructure, data, cloud services and foundational models, could create risks of foreclosure and self-preferencing. The need of the hour is engagement between regulators, industry and technical experts, coupled with greater transparency, auditability and compliance-by-design measures from AI developers and deployers,” said Pranjal Prateek, partner at Khaitan & Co.
The CCI chairperson also said the competition watchdog had undertaken a structured market study focused specifically on AI and competition issues, describing it as a first-of-its-kind initiative globally. The study, conducted by MDIS, looked into the impact of AI on competitive behaviour. “We are not looking at AI as a field. We have restricted ourselves, and did a focused study on AI and what will be its impact,” Kaur noted.
Corporate Liability
According to Kaur, one of the suggestions of the study is to hold the boards and managements of companies accountable for AI-driven violations. Further, the study has proposed self-audits, and prepared a guidance note which is a checklist detailing compliance requirements at different stages of AI deployment in an enterprise, she stated.
The CCI chief said that the regulator is looking to hiring people in areas like data science, data analytics and forensic audits as AI could potentially distort competition. “While I have a team which is looking at the law and economic analysis, we also need to build up insights when it comes to understanding the AI tools and the way digital markets are functioning,” she said.
Meanwhile, the Comptroller and Auditor General (CAG) K. Sanjay Murthy said that the apex national auditor is deploying AI and machine learning tools to improve public sector auditing by analysing government audit data at scale and moving beyond traditional sampling-based methods.
“The CAG LLM (large language model) is being developed as a sovereign AI platform for public sector auditing and institutional knowledge management. These LLM platforms are expected to significantly improve the quality, speed, and analytical depth of public auditing by assisting officers in identifying risk areas, designing audit plans and detecting systemic vulnerabilities,” he said.