The Draft Competition Commission of India (Determination of Cost of Production) Regulations, 2025 (“Regulations, 2025”) lays out the proposed legal framework for how the Competition Commission of India (“CCI”) will determine the cost of production under the Competition Act, 2002 (“Act, 2002”). The Regulations, 2025 repeal the Competition Commission of India (Determination of Cost of Production) Regulations, 2009 (“Regulations, 2009”) and will take effect upon publication in the Official Gazette.
These Regulations, 2025 clarifies terms such as “average variable cost,” “total cost,” “total variable cost,” “avoidable cost,” “marginal cost,” and others related to cost calculation.
According to Regulation 3 of the Regulations, 2025, “cost” may refer to various concepts depending on context, including total cost, variable cost, avoidable cost, and long-run average incremental cost.
Key Provisions
🔸 Determination of cost
Generally, “cost” under Section 4 of the Act, 2002 is considered to be average variable cost as a proxy for marginal cost. In special cases, the CCI, depending on the nature of the industry, market and technology used, may adopt other cost measures (like average total cost, avoidable cost, or long-run average incremental cost), with recorded reasons.
🔸 Engagement of Experts
The CCI or the Director General may engage experts to seek their assistance in cost determination. Enterprises disputing cost determined by the CCI can request appointment of an expert, which may be approved at the enterprise’s expense.
🔸 Request for Confidentiality
Requests for confidentiality regarding documents submitted to the CCI will be handled in accordance with the procedure enshrined under the CCI (General) Regulations, 2025.
🔸 Removal of Difficulty
The CCI is empowered to adopt procedures for determining costs in cases not explicitly covered by the Act, 2002 or these regulations.
🔸 Repeal and Savings
The Regulations, 2009 are repealed as soon as the Regulations, 2025 come into effect. Any past actions or references under the Regulations, 2009 will continue to be valid and will be interpreted under the corresponding provisions of the new regulations.
The Regulations, 2025 are intended to provide a structured and flexible approach for cost determination in antitrust cases, particularly those involving abuse of dominant position under Section 4 of the Act, 2002.
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