Published On: 7th October 2026
Authored By: Vanshika Gupta
Gitarattan International Business School, GGSIPU
ABSTRACT
The way the Competition Commission of India handled those cancellation fees for Air India and IndiGo back in March 2026 highlights a huge gap between laws for competition and the rules designed to protect users. A complaint was made stating the costs were far too steep and looked almost the same across airlines, but the case was closed using section 26(2) of the Competition Act 2002 because the commission felt there was no immediate evidence of behavior against competition. This study wants to examine if the standard required to trigger a Director General investigation was truly appropriate or maybe the strategy used was simply too narrow for assessing parallel prices in a market that is so heavily concentrated. There is a need to separate illegal coordination mentioned in section 3 from what is known as honest conscious parallelism particularly since finding actual proof of silent agreements at early stages is famously difficult. Further this whole dispute exposes a hole in regulation because some actions may not technically break competition laws even though they appear completely unfair to a normal passenger. That is why this work proposes looking at the Consumer Protection Act 2019 and specific aviation rules alongside the Competition Act to prove that solving these disputes over fees requires a combined method using sector oversight and consumer rights. All things considered the ruling shows that competition law cares mostly about keeping markets open and does not really worry about whether a specific price point or a contract term is fair. Maybe the law cannot manage both roles completely.
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INTRODUCTION
Cancellation fees are basically something almost every air passenger just has to deal with because they are hidden in the fine print. One might cancel a ticket just minutes after buying it but the refund given back usually has almost nothing to do with what the airline actually lost. This common frustration for consumers took on a new legal twist lately involving competition law when a complaint went to the Competition Commission of India known as the CCI against Air India Ltd and InterGlobe Aviation Ltd which runs IndiGo. The claim was that these companies set cancellation charges that were arbitrary and excessive plus anti competitive. Also the person filing the complaint argued that since the fee structures looked so similar it showed they were acting together and that their huge market share made it easy for them to force these unfair terms on everyone.[1]
But then again on 11 March 2026 the CCI decided to close the complaint under section 26(2) of the Competition Act 2002 since they held that no prima facie case of contravention regarding sections 3 or 4 was actually established.[2] There was no material discovered by the Commission showing an agreement among the airlines to manipulate cancellation charges and they emphasized that passengers got various fare categories having different refund conditions which were made known in advance.[3] This order is quite significant! It is not important because it proves cancellation charges are always fair but instead it clarifies what competition law is and is not intended to police.
Since section 26(2) works right at the threshold of the investigative process for the CCI closure simply meant the allegation was not worth even a Director General investigation. It was not a final finding based on a full check of how airlines handle pricing.[4] The main question here is actually much more nuanced than simply asking if the charges were unfair. Does this decision prove that competition law is structurally not fit for handling complaints about pricing fairness in the aviation sector or was the CCI too restrictive in how they applied the prima facie threshold when dealing with parallel behavior from two of the biggest airlines in the nation? This specific point brings to light a wider regulatory gap between how competition law looks at market conduct and how consumer law focuses on the fairness of contracts.
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LEGAL ANALYSIS
(a) What Section 26(2) Actually Requires
Section 26 is basically the gateway that info regarding alleged infringements of the Competition Act 2002 has to go through. According to section 26(1) the CCI will order the Director General to investigate if they believe a prima facie case exists. On the other hand section 26(2) says the Commission must shut the matter down when no such case can be proven.[5] The The Supreme Court described this particular stage as being a preliminary examination instead of a final decision on the merits which is meant to figure out if more investigation is actually needed.[6] This means the threshold is not the same as proving a law was broken though it is not totally toothless either. The Commission has to really think about the material they have and decide if the allegations show a competition problem that deserves a full look.
The importance of the current order is found exactly right here. The CCI did not tell the Director General to go ahead and investigate how airlines handle cancellations only to find out later that no rule was broken. Instead it decided right at the start that there was not enough material available to even justify starting an investigation.[7] The importance of this distinction comes from the fact that an investigation could have gone deeper into pricing decisions and internal communications plus industry data and the actual commercial reasons behind how airlines decided to structure their cancellations. Because the matter was ended under section 26(2) the Commission basically restricted its own evaluation to the material which happened to be available during the initial preliminary stage.
(b) Cartel Conduct vs Parallel Pricing
But now we come to the more complicated problem regarding the allegation made under section 3. While section 3(1) deals with banning agreements that result in or might possibly lead to an appreciable adverse effect on competition section 3(3) focuses specifically on arrangements between businesses in similar lines of trade that set prices either directly or indirectly among other things.[8] But then again the statutory prohibition is directed specifically at an agreement. Under section 2(b) an agreement does not have to be formal or written and it may include an arrangement or an understanding or even action in concert.[9] This means that the absence of a signed cartel agreement does not immunise coordinated pricing.
On the other hand the opposite point is just as important because similar prices do not by themselves establish that an agreement exists. Competitors who operate in the same market might independently arrive at prices that are similar because they face comparable costs and demand conditions and regulatory constraints or maybe consumer expectations. This kind of conscious parallelism can be economically suspicious but it does not automatically become legally actionable.
The CCI made this distinction very expressly. It noted that the presumption under section 3(3) requires an agreement and found that the Informant had not supplied any evidence or conduct that showed IndiGo and Air India had entered into a formal or informal agreement to influence cancellation charges. [10] On this specific point the reasoning of the Commission is doctrinally defensible. Treating parallel cancellation charges as sufficient evidence of cartelisation would basically convert similarity of commercial conduct into proof of coordination.
That said the order leaves room for criticism regarding how the prima facie threshold is applied in practice. The Informant alleged that the two airlines which together account for more than 90 per cent of the domestic market according to the information before the Commission maintained cancellation practices that were strikingly similar.[11] It is unsurprising that there was no direct evidence of communication at the threshold stage since cartel evidence is frequently concealed and often emerges only through a full investigation. The question then is whether the alleged market structure and the similarity in pricing were sufficient circumstantial indicators to justify opening the investigative door? The CCI answered no. Critics might argue that these risks requiring an informant to produce the very evidence that only a DG investigation is realistically capable of uncovering.
(c) The Consumer-Protection Gap
Viewing the order from a passengers perspective makes things seem quite different. For the Informant the core issue was not merely that airline charges were nearly identical but that funds kept during cancellations seemed’ completely disproportionate to any actual loss sustained. Regarding the particular transaction discussed the Informant stated that tickets costing 12,488 rupees resulted in a refund of just 3,054 rupees once those deductions were made.[12] But then again, the CCI noted the existence of several fare tiers and that cancellation policies are shared upfront and handled consistently which served as primary grounds for deciding no abuse occurred.[13]
Such reasoning highlights the divide between fairness and matters of competition. Generally, competition law focuses on whether market conduct damages the broader competitive environment rather than whether a specific contractual clause feels excessively pricey or severe. That is why the CCI concluded that mere dissatisfaction with contract terms or a desire for improved conditions does not inherently signify a violation of the Competition Act.[14] Also, the decision to decline ruling on the application of section 74 of the Indian Contract Act 1872 by the Informant only serves to widen the distance between these two bodies further.
So where is a traveler supposed to turn when a cancellation charge feels exorbitant but does not truly distort the competitive landscape? It is a question that stays unanswered. Perhaps laws regarding consumer protection provide a different route particularly if corporate habits are viewed as unfair trade practices or fall within the broad consumer protection framework. Sector specific aviation rules might likewise govern these policies on refunds and cancellations. We are looking at a regulatory environment that is broken into pieces. While competition law tosses out the claim due to lack of evidence showing coordination or abuse the consumer is still left wondering if the contract term is actually fair? To sum up the IndiGo Air India order does not establish that cancellation fees are lawful in every conceivable sense. It demonstrates something far more modest though still crucial! A grievance from a customer does not magically transform into a competition law breach simply because the activity takes place in a market dominated by a handful of large firms.
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SUPPORTING AUTHORITY
The statutory framework is where one starts when assessing the approach taken by the CCI. Section 3 of the Competition Act 2002 prohibits agreements that cause or are likely to cause an appreciable adverse effect on competition but section 3(3) specifically identifies price determination between competitors as conduct presumed to have such an effect.[15] This provision though remains anchored predominantly to whether an agreement exists. For this reason section 26(1) requires the CCI to direct a Director General investigation only if it forms a prima facie opinion that some contravention exists. If that threshold is not met then section 26(2) requires closure of the matter.[16] The The decision made by the Supreme Court in Competition Commission of India v Steel Authority of India Ltd confirms that this stage is preliminary and investigative in character rather than being a final adjudication on the merits.[17]
Against this statutory background the order from March 2026 in Kannadiputhur Sundararaman Suresh v InterGlobe Aviation Ltd and Air India Ltd provides the immediate authority for this analysis. It was alleged by the Informant that IndiGo and Air India imposed excessive cancellation charges which were substantially similar. These two airlines together accounted for more than 90 per cent of the domestic aviation market according to information before the Commission.[18] Both sections 3 and 4 were invoked in the complaint with arguments that the conduct reflected coordination and abuse of market power. Even so the CCI found insufficient material indicating concerted action or an agreement between the airlines and closed the case under section 26(2).[19] All things considered the order is important less as an authoritative declaration on fairness of fees and more as an illustration of the evidentiary boundary between parallel commercial conduct and prohibited coordination.
The Consumer Protection Act 2019 brings about a way of looking at things that is quite a different path for analysis. In Section 2(47) the way unfair trade practice is defined is quite broad so that it covers habits which are deceptive or unfair when services are provided and this also includes price representations that mislead in a material way.[20] Further Section 2(11) talks about deficiency in service by describing it as the shortcomings or inadequacies related to the quality and nature of how a service is performed as the law or a contract requires.[21] These parts of the act do not make a cancellation fee illegal right away especially if the terms were clear, but they do show that consumer law is interested in a different query than what competition law looks at. Specifically, it wants to know if the consumer was subjected to a service practice that was unfair or deficient.
At the same time there are regulations for aviation that add a further level of protection. The Directorate General of Civil Aviation or DGCA has used its Civil Aviation Requirements to set out certain needs for passengers concerning how ticketing works and refunds and cancellations.[22] The fact that these different systems exist together actually supports the main point of this piece! A cancellation charge might fall outside of section 3 because proving coordination is difficult, but it still raises big questions about consumer fairness or regulatory compliance within a separate legal setup. This means that the IndiGo Air India order does not show that legal oversight is missing but instead shows that such scrutiny is spread across various regulatory bodies.
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CONCLUSION
The decision made by the CCI in the case of Kannadiputhur Sundararaman Suresh v InterGlobe Aviation Ltd and Air India Ltd basically shows where the fundamental boundary of Indian competition law sits. To a passenger those cancellation fees can seem far too high and quite frustrating or even totally out of proportion. But these feelings alone don’t really mean the Competition Act 2002 was violated. While Section 3 focuses mostly on coordinated actions and agreements that damage how markets compete the initial check under section 26 is simply to see if there is sufficient data to launch a probe. Because there was no proof of a concerted effort or a real agreement the CCI concluded in this instance that similar policies across airlines didn’t actually cross that legal line.[23]
That is why we shouldn’t think of this ruling as the CCI saying these charges are okay or suggesting that travellers are powerless. Rather it highlights the basic limitations of competition laws especially when dealing with issues that are fundamentally about whether a contract is fair. Requiring proof of coordination before calling similar prices a competition problem makes sense from a legal theory standpoint, but it causes a real headache in practice. Evidence of coordination is often exactly what an investigation is supposed to find in the first place! This leaves the CCI struggling to tell the difference between companies just acting similarly and actual secret deals without setting the bar so high that important cases are dismissed before they even get started. People who buy tickets might find much better options away from competition law. Will consumers start using these other routes more often? Whether this happens depends on future fights and if the folk’s regulating aviation decide that tighter rules on these fees are required. Ultimately the ruling involving Air India and IndiGo teaches us something valuable about where one regulator ends, and another begins. Not every price that feels unfair is an anti competitive price and not every consumer complaint is a case for competition law! The main difficulty is ensuring that if one legal path is blocked another remains available to fix the actual damage caused.
REFERENCES
[1] Kannadiputhur Sundararaman Suresh v InterGlobe Aviation Ltd and Air India Ltd, Case No 42 of 2025 (CCI, 11 March 2026) 1–5.
[2] ibid 8.
[3] ibid 6–8.
[4] Competition Act 2002, s 26(1)–(2); Competition Commission of India v Steel Authority of India Ltd (2010) 10 SCC 744 [97].
[5] Competition Act 2002, s 26(1)–(2).
[6] Competition Commission of India v Steel Authority of India Ltd (2010) 10 SCC 744 [97].
[7] Kannadiputhur Sundararaman Suresh v InterGlobe Aviation Ltd and Air India Ltd, Case No 42 of 2025 (CCI, 11 March 2026) paras 12–21.
[8] Competition Act 2002, s 3(1), s 3(3)(a).
[9] Competition Act 2002, s 2(b).
[10] Kannadiputhur Sundararaman Suresh v InterGlobe Aviation Ltd and Air India Ltd (n 3) para 12.
[11] ibid paras 2–3.
[12] ibid paras 6–7.
[13] ibid paras 15–16.
[14] ibid para 17.
[15] Competition Act 2002, s 3(1), (3).
[16] Competition Act 2002, s 26(1), (2).
[17] Competition Commission of India v Steel Authority of India Ltd (2010) 10 SCC 744 [97].
[18] Kannadiputhur Sundararaman Suresh v InterGlobe Aviation Ltd and Air India Ltd, Case No 42 of 2025 (CCI, 11 March 2026) paras 2–5.
[19] ibid paras 12–21.
[20] Consumer Protection Act 2019, s 2(47).
[21] ibid, s 2(11).
[22] Directorate General of Civil Aviation, Civil Aviation Requirements, Series M, Part II: Refund of Airline Tickets to Passengers of Public Transport Undertakings (as amended).
[23] Kannadiputhur Sundararaman Suresh v InterGlobe Aviation Ltd and Air India Ltd, Case No 42 of 2025 (CCI, 11 March 2026) paras 12–21.
