Synopsis
A cross-section of companies may challenge AI platforms over the diversion of users away from their websites and excluding them from AI-generated responses without explanation or recourse, writes ET.Lawyers and policy analysts say a wave of lawsuits is likely, with companies expected to push back against AI platforms for diverting users away from their websites and excluding them from AI-generated responses without explanation or recourse.
The issue has come into focus after IndiaMART moved the Calcutta High Court against OpenAI late last December, alleging that ChatGPT selectively excluded its platform from responses, causing reputational and commercial harm. The court found a strong prima facie case of discrimination, though it declined interim relief without first hearing OpenAI.
Experts say the case may be an early signifier of a wider conflict. “There is going to be a wave wherein more such lawsuits would be filed, with ecommerce companies suing platforms over selective or opaque summarisation,” said Pavan Duggal, a technology policy lawyer.
“The Indian legal framework today is not adequate to deal with these issues.” Duggal said the Information Technology Act 2000 was never designed for generative AI and that courts may have to fill the gap through case-by-case rulings until a dedicated regulatory framework emerges, with AI accountability becoming a key issue.
The concern goes beyond factual inaccuracies. Experts say businesses face risks from being left out of AI responses, from having their content summarised in ways that reduce the need to visit their websites, and from having traffic redirected to competitors. “The IndiaMART case illustrates the core tension,” said Subimal Bhattacharjee, a technology policy analyst. “A business excluded from AI search results with no notice, no explanation and no recourse short of litigation.”
He added that India’s regulatory response, including the Competition Commission of India’s light-touch approach and the stalled Digital Competition Bill, has not kept pace. As AI interfaces become discovery layers, disputes over opaque and potentially discriminatory exclusion are likely to increase.
Consumer protection concerns are also emerging as AI systems move from passive tools to active decision-makers. “The moment a chatbot starts summarising, curating, ranking or recommending products or suppliers, it is no longer a neutral bystander,” said Rohit Kumar Singh, former chairperson, Consumer Affairs Department. “It becomes an active gateway to discovery.”
Singh said once AI systems begin influencing consumer choices, principles on accuracy, transparency and grievance redress must follow. He added that AI systems may trigger tensions similar to those seen with digital platforms, but in a more complex form.
For companies, the shift is also about adapting to a changing competitive landscape where discovery is increasingly conversational and personalised. A spokesperson for MakeMyTrip said the nature of consumer interaction is evolving.
“The real game is who is going to win this war and leverage AI,” the spokesperson said. “There can be no standard answer to any query. Everything needs to be customised. Platform knowledge, domain knowledge and context of every customer, we combine all that and leverage AI to make experience better. It’s not a commodity, it’s an experience. We don’t just aggregate, we have a much better understanding of the customer’s history.”
Others see both opportunity and risk as AI tools become a new layer of discovery.
Murugavel Janakiraman, founder of BharatMatrimony, said AI search systems rely on scraped information, which is not always accurate. “OpenAI or any other AI search tool uses information that is based on scraping the internet… sometimes some of it is not even correct,” he said.
Janakiraman said the shift from traditional search to AI-driven discovery is already underway. “Earlier it was about SEOs, now the game is all about GEOs. If visibility is impacted, that will lead to potential issues,” he said.
Companies will need to evolve alongside the technology. “LLMs and AI are inevitable. As a brand, you have to work extra hard to understand the algorithm and make decisions accordingly,” he said. “At the same time, brands that do not have partnerships with AI tools face a potential threat of losing visibility. We are moving from form factor to a conversation factor and such issues will emerge.”
Bharat Matrimony fought a legal battle in 2012 against Google and rivals Shaadi.com and Jeevansathi over keyword advertising, with the Supreme Court of India restraining competitors from using its trademark.
Legal experts say the transition from links to answers is at the heart of the conflict. “The shift from search engines pointing users to websites toward AI systems generating answers directly is sharpening these tensions,” said Ankit Sahni, partner at Ajay Sahni and Associates. “Questions around traffic diversion and economic impact are likely to intensify,” he said, adding that proving harm purely from lost traffic would remain difficult under current law.
As AI systems become the first point of interaction for users online, the battle over visibility, control and accountability is only just beginning.
