Parl panel urges CCI to review deal value threshold, address lack of resources & funding concerns

CCI is struggling with tech complexity, cross-jurisdictional matters & lack of resources, 'influencing' its ability to regulate markets in digital era, panel said in a report Monday.

Competition Commission of India headquarters in Delhi | cci.gov.in

New Delhi: The Competition Commission of India (CCI) is struggling with technological complexity, cross-jurisdictional matters and a lack of resources, which have “significantly influenced” its ability to regulate India’s markets in the digital era, a parliamentary panel said in a report tabled Monday.

The Standing Committee on Finance, headed by Bharatiya Janata Party MP Bhartruhari Mahtab, recommended that the Ministry of Corporate Affairs (MCA) and the CCI review the current Deal Value Threshold (DVT) of Rs 2,000 crore, warning that it may allow large corporations to acquire Micro, Small and Medium Enterprises (MSMEs) without regulatory scrutiny. Under the DVT rule, any deal in the digital industry valued at Rs 2,000 crore or less does not require the CCI’s regulatory scrutiny.

The committee added that a lower threshold for acquisitions involving MSMEs could be considered if market studies support its need.

“This reassessment (to review DVT) is crucial to ensure the threshold does not inadvertently facilitate the acquisition of MSMEs by larger corporations without regulatory scrutiny, thereby preventing the creation of monopolies or duopolies that harm fair competition,” the committee said in its report, titled “Evolving role of Competition Commission of India in the economy particularly the digital landscape”.

Secondly, the committee noted that CCI should continue its proactive investigations into predatory pricing and deep discounting by dominant online platforms to prevent these practices from harming small retailers.

“Specific guidelines could be developed to clarify when such practices become anti-competitive. Finally, mechanisms should be put in place to ensure data access for smaller businesses, enabling them to compete effectively against large digital enterprises that control vast amounts of data,” the committee said in the report.

 

Human resource & funding crunch

Highlighting the shortage of manpower, particularly for specialised roles in the CCI’s Digital Markets Division (DMD), the parliamentary panel noted that as of 31 March, 2024, only 113 out of 195 sanctioned posts in the CCI were filled, indicating a significant vacancy rate.

In the director general’s office, out of 41 sanctioned posts, only 17 were filled in 2020-21. The number rose to 23 in 2022-23, but dropped to 16 in 2023-24, and further to 13 in 2024-25, the report said.

In its submission before the parliamentary panel, the MCA, under which CCI comes, has also acknowledged a “huge gap” between the sanctioned strength and the actual staff.

The committee has recommended that the MCA, in collaboration with the CCI, must expedite a cadre restructuring proposal and increase the sanctioned strength of the CCI, particularly for specialised roles in the Digital Markets Division (DMD).

Formed in September 2024 with a strength of seven people, the CCI’s DMD is a specialised unit to address the challenges of regulating digital markets. There is a proposal under consideration with the MCA to create an additional 55 posts to address the shortage of resources.

“Efforts should be made to attract and retain top talent, including data scientists, technologists, and market analysts, by exploring flexible engagement models (e.g., short-term contracts for experts),” the committee said.

The panel noted that rapid adoption of digital technologies presents both “immense opportunities and significant challenges for competition regulation”, but at the same time, the unique characteristics of digital markets, such as network effects and data advantage, have led to a concentration of economic power in a few large technology platforms that act as “gatekeepers”.

“This necessitates a nuanced regulatory approach to balance innovation incentives with the imperative of maintaining fair competition,” the report reads.

‘CCI imposing penalty, but not realising it’

While acknowledging the CCI’s effectiveness in disposing of cases and imposing penalties, the parliamentary panel also highlighted its ineffectiveness in realising those penalties due to litigation.

In 2022-23, the CCI imposed penalties of Rs 2,672 crore, while realising only Rs 1,340 crore (50 percent). The rest was stalled due to litigation, the report said.

“As of April 30, 2025, out of a total imposed penalty of Rs 20,350.46 crore, a massive amount of Rs 18,512.28 crore has been either stayed or dismissed by appellate courts,” the committee stated in the report. “While the CCI is effective at collecting penalties that are not under litigation, its overall enforcement is significantly undermined by legal challenges.”

To address this, the CCI is planning to implement a “new provision mandating a 25 percent pre-deposit for appeals”. This would enable the company to deposit 25 percent of the penalty amount before filing an appeal.

The committee endorsed this provision, but also asked the CCI to “adopt robust legal defence strategies” that would translate actions into tangible deterrence.

(Edited by Sugita Katyal)