On
As background,
- Denial of access to dealers and necessary distribution channels:
JSW Paints has been denied access to dealers, which is essential for operating in the relevant market, due to punitive action taken byAsian Paints against the dealers.JSW Paints is stated to have faced problems in the states ofKarnataka ,Tamil Nadu and Telangana. Further, without access to dealers, which is an essential feature of this business, there is no scope for a new or existing entity in this market to survive. - Denial of access to infrastructural facilities: Asian Paints allegedly also pressurized enterprises that provided infrastructure facilities like warehouses to
JSW Paints to not stock products ofJSW Paints . In an instance cited, the enterprise that provided warehouse facility rescinded the contract withJSW Paints on account ofAsian Paints requiring it to choose betweenAsian Paints andJSW Paints for a business relationship. - Enforcing an exclusive supply arrangement by way of reduction in credit limit of dealers: Based on instances highlighted in the States of
Karnataka , Telangana andTamil Nadu , it was alleged that the conduct ofAsian Paints is a case of enforcing an exclusive supply agreement in terms of Explanation (b) to Section 3(4) of the Competition Act and refusal to deal as provided in Explanation (d) to Section 3(4) of the Competition Act.
- Revocation of Critical Retailer Status without prior notice: Soon after Balaji Traders began dealing with
JSW Paints inFebruary 2021 , its 'Critical Retailer' status, given byAsian Paints since 2010, was revoked inMarch 2021 without prior notice. Resultantly, the tinting software installed on Balaji Traders' computer byAsian Paints , which enables a retailer to make critical shades, was also removed. It was alleged that removal of this software has prevented Balaji Traders from placing new orders of the Critical Retailer products ofAsian Paints and from tinting the leftover material to create shades exclusively offered to a Critical Retailer.
The CCI in its analysis delineated the relevant market as “market for manufacture and sale of decorative paints in
While, analysing allegations of abuse of dominant position by Asian Paints, vis-ŕ-vis the denial of access to dealers and distribution channels, the CCI noted that
With respect to the allegation pertaining to denial of access to infrastructural facilities, the CCI took the view that there appears to have existed some inter se disputes between
Lastly, with respect to the imposition of an exclusive supply arrangement by way of reducing credit limits of dealers by
With regards to the complaint filed by
Accordingly, the CCI dismissed the complaint under Section 3(4) and Section 4 of the Competition Act. The CCI observed that there must be evidence which, on balance of probabilities, would point towards a strong entrenched player using tactics to oust a smaller player or even a new entrant to the market (regardless of its size or inherent advantages). This could be done by either incentivizing or coercing downstream players to boycott or not deal with the new players. The CCI noted that in the present case, the balance is not tilted towards
Footnote
1 Case No. 36 of 2019 & Case No. 17 of 2021.
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