Artificial intelligence poses a challenge for competition regulators, which must balance a desire for innovation and economic growth with the possibility that monopolistic, AI-driven markets could develop, leading to the exclusion of some segments of society.
If regulators are unable to get this balance right, they could stifle the economic growth promised by AI.
This is according to Hardin Ratshisusu, deputy commissioner of the Competition Commission, who was speaking at the Brics International Competition Conference in Cape Town last week. The conference was led by competition authorities from Brazil, Russia, India, China and South Africa under the theme of “competition law in uncertain times”.
“AI is no longer a niche input; it is becoming the indispensable infrastructure for the functioning of markets. In fact, markets as we know them today are transforming at a rapid pace. Some markets will disappear, others will expand, and new ones will emerge,” said Ratshisusu.
“If competition authorities get regulation wrong on AI, two things are possible: the actions of regulators may inhibit the effectiveness of AI; or leading firms in AI may attain unassailable market power.”
He said the opposite is also true: if regulators can set rules for AI effectively, there is “potential to increase firm productivity” and the possibility that new markets may be “unlocked”. He added that given the right regulatory environment, AI could help foster economic inclusion, drive innovation and “simplify things to make life better for society”.
Easier said than done
But reaching these goals is easier said than done. Regarding inclusive growth, for example, access to AI tools across the various strata of society is predicated on a stack of services and technologies being available beforehand. These include a cheap and reliable energy supply, access to high-speed broadband internet and the skills to use AI resources where they are accessible, he added.
The difficulty regarding AI regulation is the technology’s novelty, putting competition authorities in a position where they are likely mitigating against imagined future threats whose occurrence may be unlikely.
In an October 2024 report by TechCentral, Bronwyn Howell, a telecommunications and public policy researcher at the Victoria University of Wellington in New Zealand, said the “risk management approach” taken by regulators regarding AI could cripple the technology before it takes off.
Read: South Africa publishes national AI policy framework
“The question we must ask is this: are we trying to create something to regulate not a real harm that we are aware of but a feared harm by stopping anyone from actually going into the jungle in the first place? Are we using regulation to assuage anxious consumers that we are seen to be doing something before we fully understand it? Have we overreacted when it would have been better to wait and gather more information?”
In May, Martin van Staden, head of policy at the Free Market Foundation, argued that AI does not need to be regulated at all.
“Do we need AI regulation? Most people, upon learning that there is a social, commercial or technological space that is not covered by the blanket of some or other state regulation, will answer ‘yes, of course’, before any actual thinking has occurred. But the notion that absolutely everything must be controlled by government fiat is a dangerous one,” Van Staden said in a report in May.
One area of particular interest is how competition authorities can use AI to advance their own priorities and perform their duties to greater effect. Carlos Gomes, commissioner of Brazil’s Administrative Council for Economic Defence, who also spoke at the conference, said his country has implemented an AI-driven analysis tool that monitors public procurement databases to minimise cartel activity in the government tendering system.
“The project carries out data mining and applies economic filters to detect cartels. This is one of the authorities’ most important achievements in this fight. With around 60 000 public procurement processes carried out every year, the system priorities data associated to traditionally problematic markets and those where cartel reports have been filed,” said Gomes.
Ratshisusu said South Africa’s competition regulators will continue to collaborate with their Brics counterparts to strengthen AI policy and regulation as the technology advances. He admitted the complexity of these systems is a challenge for regulators.
“It is a very interesting dynamic, regulating something when you don’t even know how it thinks. This is the complexity from a competition regulation point of view,” said Ratshisusu. – © 2025 NewsCentral Media
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