This issue of LexCognito, which in Latin means 'awareness about law', seeks to provide you an insight into significant legal and regulatory developments that have taken place very recently in India.
Date: 16 August 2019
“Unfair and Discriminatory” Warranty Policies amounting to abuse of Dominant Position – CCI probe against Intel India
The Competition Commission of India (“CCI”) has decided to undertake a detailed investigation against Intel Corporation and its Indian subsidiary Intel Technology India Pvt. Ltd. (collectively “Intel”) for their alleged “unfair and discriminatory” Warranty Policy in respect of their products namely Boxed Micro-processors bought by customers in India from unauthorized resellers / parallel importers. Boxed Micro-processor (“BMP”) is a central processing unit used in self-assembled computers.
In its Order dated 09.08.2019, CCI has given a prima facie finding that Intel’s India specific Warranty Policy denying warranty services to BMP bought by customers in India from unauthorized resellers / parallel importers is unfair and discriminatory amounting to abuse of “dominant position” in Indian market.
The aforesaid Order has been passed pursuant to a complaint filed by Matrix Info Systems Pvt. Ltd. (“Matrix”) against Intel under Section 19(1)(a) of the Competition Act, 2002 (“Act”). In its complaint, Matrix had alleged that Intel has been abusing its “dominant position” in “relevant market” by way of practicing unfair and discriminatory Warranty Policy whereby Intel denies warranty services in respect of products in question bought by customers in India from unauthorized resellers / parallel importers even though such products were procured by the importers from Intel’s authorized distributors out of India. Matrix had thus alleged that the aforesaid business practices of Intel are in contravention of Sections 3 & 4 of the Act which deal with Anti-competition Agreements and abuse of “dominant position”.
After conducting a preliminary investigation in the matter, the CCI has held a prima facie view that Intel does enjoy a “dominant position” in the “relevant market” for the products in question. The CCI has further held, inter-alia, that the India-specific Warranty Policy of Intel in respect of the subject products bought by customers from unauthorized resellers / parallel importers is unfair and discriminatory and amounts to “abuse” of its “dominant position” in contravention of the provisions of Section 4 of the Act. Consequently, the CCI has directed the Director General of Investigation to conduct an investigation into the case and submit an Investigation Report within a period of 150 days.
This case is very important for global electronics and IT companies who often resort to denying warranty services of their own products bought by Indian customers from outside country because of their lower prices abroad.
Chambers of Rajan & Indraneel
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Chambers of Rajan & Indraneel is a premier full service law firm headquartered at New Delhi, India. The Firm represents amalgamation of vast experiences and practices of two eminent lawyers. Indranil Ghosh is highly reputed as a disputes lawyer. He was a senior partner and head of litigation practice in one of the oldest Indian law firm Fox Mandal for several decades before setting up his own practice. Rajan D Gupta is a rank holder Chartered Accountant turned Corporate Lawyer. He is also a licensed Insolvency Resolution Professional. He has been associated with internationally renowned big law firms in past and has held senior level positions in firms like PwC, Fox Mandal, Khaitan & Co. and SRGR Law, etc. before starting the Firm.
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