On December 18, India's only all-economy fair-trade regulator, the Competition Commission of India (CCI), issued a press release taking cognisance of IndiGo's cancellation of a quarter of its 17000-plus domestic flights in India. These cancellations stemmed from IndiGo's inability to comply with the Directorate General of Civil Aviation's (DGCA) new Flight Duty Time Limitations norms, which restricted pilot duty hours. Thousands of IndiGo passengers were stranded, flight prices surged abnormally, and India's other aviation companies faced acute capacity shortages. IndiGo, which controls 65 per cent of India's domestic aviation market, was booked under section 4 of India's Competition Act for abusing its dominant market power by imposing unfair service conditions on its consumers.

Most antitrust lawyers will agree that framing this issue as a competition law violation would be incorrect. Section 4 of India's Competition Act targets exclusionary or exploitative market abuses by a dominant company, including denial of market access or imposition of unfair prices or terms of service. IndiGo's non-compliance with DGCA's regulations does not fall within this framework of abusive market behaviour.

However, the IndiGo incident should serve as a wake-up call, exposing the vulnerabilities of many sectors of the Indian economy and highlighting the CCI's failure to be an effective watchdog of contestable markets. What happened to India's aviation consumers in early December could easily happen if, due to regulatory or technological issues, Jio's telecom services, Flipkart's e-commerce services, Zomato's food delivery services, or PhonePe's online payment services, become temporarily unavailable. Consumers would scramble for alternative service providers, who would no doubt be overwhelmed by the surge in demand. That is because many of these sectors, be it those of old or the new economy, essentially operate as duopolies with much of the markets being concentrated in the hands of two (or a few players), and much of this market concentration has happened over the last several years, under the watchful eye of a lackadaisical CCI. Such that in August 2025, just months before the IndiGo fiasco, the Lok Sabha's 25th report of the Standing Committee on Finance warned the CCI about the growing problem of duopolies in India's critical sectors, requesting that the CCI outline its long-term strategy for regulating and mitigating them.

Let us look at India's aviation sector. When the Tata group announced the merger of Air India with Vistara in November 2022, with IndiGo being the only other viable competitor, the CCI feared that the proposed merger could create a "near monopoly" market share in favour of the merging parties on specific aviation routes. The regulator was sceptical that the merger could deprive consumers of effective choice, facilitate collusive pricing, market allocation and unilateral price hikes. Notwithstanding such antitrust concerns, the regulator approved the merger without imposing any restrictive conditions or divestitures. CCI was satisfied with certain voluntary commitments from the Tatas to maintain "minimum capacities" on specific domestic and international routes to combat flight scarcity, without determining what such "minimum capacities" should be, and allowed the Tatas to self-appoint an independent auditor to report on their compliance. CCI's decision after acknowledging huge entry barriers in the civil aviation industry ultimately paved the way for the current state of India's aviation market, where IndiGo and Air India control almost 91% of revenue passenger kilometres.

The same lacklustre competition law enforcement can be witnessed in India's telecom sector. Today, Jio and Airtel account for 75% of India's total wireless subscriber base. In 2016, when Jio began offering free services to Indian telecom consumers, Airtel complained to the CCI, accusing Jio of engaging in predatory pricing tactics. Despite Airtel's submission that Jio had a subscriber base of 72.4 million, surpassing that of all other telecom brands, the CCI did not find Jio to hold a dominant position in India's telecom sector. According to CCI, there was no evidence of reduction or elimination of competition as a result of Jio's pricing. Ironically, under CCI's watch, as a result of Jio's market disruption and ensuing price war, between 2016 and 2018, Videocon and Tata Docomo sold their assets to Airtel. Idea Cellular merged with Vodafone, and Aircel was forced to exit India's telecom sector.

In a series of cases since 2016 brought by Meru Cabs, alleging predatory pricing strategies by Uber in India's taxi aggregator market, the CCI has on each occasion dismissed Meru's complaints at a prima facie stage – feigning inability to investigate the matter further, despite submission of detailed, documented evidence of Uber's and Ola's substantial losses for their aggressive discounting strategies. CCI held that Uber was not in a dominant position in the Indian taxi aggregator market, given Ola's strong presence. This conclusion was later refuted by the erstwhile Competition Appellate Tribunal and by the Supreme Court of India itself.

In the food-aggregator and instant grocery sector, CCI did not review the acquisition of Uber Eats in 2020 and of Blinkit in 2022 by Zomato, given that the merger did not breach the turnover and asset thresholds under Indian competition law, while approving Swiggy's acquisition of Dineout in 2022. The National Restaurant Association of India later alleged that the resulting duopoly of Zomato and Swiggy was carving out the sector for themselves through exclusive contracts and price parity conditions, depriving consumers of effective competitive choice. In 2024, the Director General of the CCI submitted its report confirming such allegations.

Is there a regulatory lesson to be learnt from all of these?

Creeping consolidations pose a deep peril to the Indian economy, with the IndiGo fiasco demonstrating how they can leave consumers and the State exposed. Regulators like the CCI must be more than a bureaucratic clearinghouse for industry-wide consolidation. While approving mergers or enforcing India's antitrust law, especially in concentrated markets, the CCI must adopt a more proactive role, rather than a passive case-by-case approach, and examine such markets holistically. Duopoly dominance is most problematic in digital markets, where network effects, combined with data advantages, can lock in consumers, creating a "winner-takes-all" dynamic. Market power could easily be entrenched and difficult to undo, making the current ex-post competition law enforcement grossly inadequate. Earlier in 2024, India experimented with the idea of an ex-ante competition law regulation for large digital companies through the introduction of the Digital Competition Law Bill, modelled after the European Union's Digital Markets Act. It attempted to create a framework for making large digital intermediaries accountable for their gatekeeping privileges. With appropriate changes reflecting the local realities of the Indian economy, it is time for the Government to bring the bill back for a national conversation.

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Reference Article - https://crg.jgu.edu.in/post/the-indigo-case-need-for-a-regulator-for-the-aviation-sector

Author : Avirup Bose (Professor of Competition Law and Policy, Jindal Global Law School)


(These are the personal views of the author. They do not necessarily reflect the opinion of OP Jindal Global University or its affiliated institutions)