The Competition Commission of India (“CCI”) has notified the CCI (Determination of Cost of Production) Regulations, 2025 (“New Regulation”) superseding the CCI (Determination of Cost of Production) Regulations, 2009 (“Old Regulation”). The New Regulation provides for the determination of cost of production by CCI to evaluate predatory price* under the Competition Act, 2002 (“Act”). This is effective immediately.

Key Highlights:

1. The New Regulation defines key terms like “Cost” which contains various types of cost such as:

1. 1. total Cost;
   2. total variable cost;
   3. total avoidable cost;
   4. average avoidable cost;
   5. long run average incremental cost; and
   6. average total cost.
2. Further, “Product” is defined under the new Regulation to mean the goods or services, as the case may be, as defined in the Act;.
3. In specific cases, the CCI, depending on the nature of industry, market and technology used, may consider any other cost concept like average total cost (total cost divided by total output), average avoidable cost, or long-run average incremental cost.
4. The CCI or Director General may engage suitable experts for arriving at figures of cost. The party disputing the cost determination can request CCI for appointment of expert to determine cost of the product. Further, the party may also request CCI to appoint expert to determine the cost at their own expense.
5. CCI will duly consider the request for confidentiality of the documents submitted to CCI or Director General in accordance with the procedure laid down in Competition Commission of India (General) Regulations, 2024.
6. CCI will determine the procedure for determining the cost, for situations not covered by the Act, rules, or regulations, or in cases of interpretation disputes.

Source: Competition Commission of India

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*“predatory price”- It means the sale of goods or provision of services, at a price which is below the cost, as may be determined by regulations, of production of the goods or provision of services, with a view to reduce competition or eliminate the competitors.

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