When AI Fixes Prices: The Need For A New Legal Framework For Algorithmic Collusion In India
Urmilesh Kumar, Adv. Dhanashree WalondreOct 11, 202610.5281/zenodo.23296945pp. 392–42231 pages
Artificial Intelligence (AI) is rapidly becoming a part of modern business. Companies use algorithms to decide prices, understand customer behaviour, predict demand, monitor competitors and improve their business decisions. These technologies can make markets more efficient and can provide benefits to businesses and consumers. At the same time, the increasing use of AI creates new challenges for competition law. One such challenge is algorithmic collusion. In simple words, algorithmic collusion may arise when pricing algorithms used by competing businesses result in coordinated or similar prices, even when there is no traditional agreement or direct communication between the businesses. This creates an important question for competition law: if a computer program or AI system produces an anti-competitive result, who should be legally responsible? The Indian competition law framework is mainly based on the Competition Act, 2002. Section 3 deals with anti-competitive agreements, while Section 4 deals with abuse of dominant position. The law can potentially apply to certain forms of algorithm-assisted anti-competitive conduct. However, autonomous algorithmic coordination creates difficult questions regarding agreement, intention, evidence, responsibility and accountability. These problems become more complicated when AI systems learn from market information and change prices automatically. The Competition Commission of India (CCI), in its 2025 Market Study on Artificial Intelligence and Competition, recognised AI-facilitated collusion as an emerging competition concern. The study also noted that pricing algorithms may facilitate coordination without traditional communication between competitors. This paper examines whether the existing Indian competition law framework is sufficient to deal with algorithmic collusion. It studies the concept of algorithmic collusion, its different forms, the challenges faced by competition authorities, and the lessons that can be taken from international developments. The paper argues that India does not necessarily need an entirely separate competition statute, but it requires clearer legal principles, regulatory guidance, technical investigation capacity and rules relating to accountability and transparency of high-risk pricing algorithms.