Competition Commission of India (Determination of Cost of Production) Regulations, 2025. - F.No. CCI/ Reg-COP/01/ 2025-26 - Competition Law

THE COMPETITION COMMISSION OF INDIA NOTIFICATION New Delhi, the 6th May, 2025 The Competition Commission of India (Determination of Cost of Production) Regulations, 2025 (No. 02 of 2025) F.No. CCI/ Reg-COP/01/ 2025-26. In exercise of powers conferred by clause (a) of sub-section (2) of section 64 of the Competition Act, 2002 (12 of 2003) , the Competition Commission of India hereby makes the following regulations, namely: - 1. Short Title And Commencement. (1) These regulations may be called the Competition Commission of India (Determination of Cost of Production) Regulations, 2025. (2) They shall come into force on the date of their publication in the Official Gazette. 2. DEFINITIONS. (1) In these regulations, unless the context otherwise requires (a) Act means the Competition Act, 2002 (12 of 2003); (b) average variable cost means total variable cost divided by total output during the referred period; (c) Cost as used in Regulation 3 and its derivation may have reference to: i. total cost means the actual cost of production including items, such as cost of material consumed, direct wages and salaries, direct expenses, depreciation, work overheads, quality control cost, research and development cost, packaging cost, administration overheads attributable to the product during the referred period; ii. total variable cost means the total cost referred to in clause (i) minus the fixed cost and share of fixed overheads attributable to the product, if any, during the referred period; iii. total avoidable cost means the cost that could have been avoided if the enterprise had not produced the quantity of extra output during the referred period; iv. average avoidable cost is the total avoidable cost divided by the total output during the referred period, considered for estimating total avoidable cost ; v. long run average incremental cost (LRAIC) means average of all variable and fixed costs including any sunk costs, that are directly or indirectly attributable to the production of a specific product or service, including any product-specific fixed costs incurred before or during the period under investigation. In the case of multi-product enterprises, LRAIC also includes a proportionate share of common costs, to the extent that such costs are caused by or incrementally attributable to the production of the product or service in question; vi. average total cost is total cost divided by total output during the referred period ; (d) Commission means the Competition Commission of India established under sub-section (1) of section 7 of the Act; (e) product means the goods or services, as the case may be, as defined in the Act; (f) marginal cost is the change in total cost that arises when the quantity produced changes by one unit. (2) Words and expressions used but not defined in these regulations shall have the same meaning respectively assigned to them in the Act or the Companies Act, 2013 (18 of 2013), as the case may be. 3. DETERMINATION OF COST. Cost in the Explanation to section 4 of the Act shall, generally, be taken as average variable cost, as a proxy for marginal cost: Provided that in specific cases, for reasons to be recorded in writing, the Commission may, depending on the nature of the industry, market and technology used, consider any other relevant cost concept such as average total cost, average avoidable cost, or long run average incremental cost. 4. ENGAGEMENT OF EXPERTS. (1) In arriving at the figures of costs, the Commission or the Director General, as the case may be, may take the help of suitable experts. (2) Where a party to the proceedings disputes the cost determined by the Commission under regulation 3, it may, for reasons to be submitted in writing, request the Commission to appoint expert (s) for assisting in determining the cost. (3) On consideration of the request made by a party to the proceedings, the Commission may, where it so decides, appoint expert(s) of its choice, at the cost of the party making the request, to enable it to determine the cost. 5. REQUEST FOR CONFIDENTIALITY. Any request for confidentiality of the documents submitted to the Commission or the Director General, as the case may be, shall be duly considered in accordance with the procedure laid down in the Competition Commission of India (General) Regulations, 2024. 6. REMOVAL OF DIFFICULTY. In a situation not provided for in the Act, rules or these regulations or in the matter of their interpretation, the procedure for determining the cost shall be determined by the Commission. 7. REPEAL AND SAVINGS. (1) The Competition Commission of India (Determination of Cost of Production) Regulations, 2009, stand repealed from the date on which these regulations come into force. (2) Notwithstanding such repeal, (a) anything done or any action taken or purported to have been done or taken, or any proceedings or decision, inquiry or investigation commenced under the repealed regulations, prior to such repeal, shall be deemed to have been done or taken under the corresponding provisions of these regulations; (b) the operation of the repealed regulations or anything duly done or suffered thereunder, any right, privilege, obligation or liability acquired, accrued or incurred thereunder, or any investigation, legal proceeding or remedy ensued thereunder, shall remain unaffected as if the repealed regulations have never been repealed; (c) after the repeal of the Competition Commission of India (Determination of Cost of Production) Regulations, 2009, any reference thereto including in any regulations, direction or decision issued by the Commission, shall be deemed to be a reference to the corresponding provisions of these regulations. INDER PAL SINGH BINDRA, Secy. [ADVT.-III/4/Exty./82/2025-26]