Competition Commission of India (CCI) has ordered a probe against Intel Corp for alleged “unfair and discriminatory” provisions in warranty policy for boxed micro-processors sold in India. Boxed micro-processor (BMP) is a Central Processing Unit (CPU) used for self-assembled computers.
The complaint was filed by Matrix Info Systems Pvt Ltd, engaged in the business of importing and supplying various IT products, against Intel Corporation and its Indian subsidiary Intel Technology India Pvt Ltd.
Matrix alleged that Intel Technology India had entered into an agreement with its authorised Indian distributors which gives them exclusive selling rights in India.
The imposition of the condition to purchase from only certain distributors for claiming warranty in India and a blanket ban on after-sales warranties if purchased from other sources is resulting in total deprivation of consumer choice, the complainant alleged.
Further, the complainant alleged that Intel has been behaving in differential manner with respect to Indian market by implementing a warranty policy specifically for India with regard to BMP.
As per the new policy of 2016, Intel does not offer warranty service to consumers in India on products purchased by them from parallel importers even when such parallel imports have been made from authorised distributors of Intel abroad, it alleged.
The complainant further alleged that denial of market access to other resellers and parallel importers due to unreasonable condition of warranty put by Intel is in contravention of Section 4 of the Competition Act, which pertains to abuse of dominant position.
Intel in its submissions to the Commission mentioned that India specific warranty policy for BMP of the IT firm is compatible with the Indian legal position.
CCI considered micro-processors market for desktops and laptops in India as the relevant one for the case and found the IT giant to be ‘prima-facie’ in dominant position.
The Commission observed that the amended warranty policy of Intel in India seems to be aimed at disincentivising the purchase of BMP from distributors other than its authorised distributors in India even when they can get it at cheaper rates from Intel’s authorised distributors abroad.
Based on this, CCI said Intel’s India specific warranty policy is “prima facie unfair and discriminatory, especially when seen in the light of the fact that such differential treatment is not meted out by Intel in other jurisdictions.”
In this regard, the Commission has directed the Director General, its investigation arm, to conduct a probe into the matter and submit an investigation report within a period of 150 days. PTI VHP