Why in the News?

The Competition Commission of India (CCI) has introduced new Cost Regulations 2025 to check if companies are selling below cost to unfairly drive out competitors.

About Competition Commission of India (CCI):

• The CCI was established on 14 October 2003 and became fully operational in May 2009.
• It aims to eliminate anti-competitive practices, prevent abuse of dominant positions, and promote fair competition.
• It was formed under the Competition Act, 2002, later amended in 2007, replacing the Monopolies and Restrictive Trade Practices Act, 1969 based on Raghavan Committee recommendations.
• The headquarters is located in Kidwai Nagar (East), New Delhi, and the Commission includes 1 Chairperson and up to 6 Members, all appointed by the Central Government.
• Members must have at least 15 years of experience in areas such as law, economics, business, finance, or public administration.
• Jurisdiction of CCI:
  • It is a quasi-judicial statutory body under the Ministry of Corporate Affairs.
  • It has the authority to initiate cases suo motu or respond to public/institutional complaints, and can impose penalties for violations.
  • Its jurisdiction spans all sectors across India, and it is empowered to frame its own regulations under the Act.

New Cost Definitions under Cost Regulations, 2025:

• Under the Cost Regulations 2025, Average Variable Cost (AVC) is used to measure cost, calculated by dividing total variable costs by total output.
• Variable cost excludes fixed costs and overheads and varies with production.
• Although a sector-specific approach was considered, the CCI adopted a case-by-case evaluation after stakeholder feedback.
• The new framework is sector-agnostic, allowing flexibility for diverse industries, including the digital economy, and supports better adaptation to market dynamics.

Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

Attend Now