The Competition Commission of India (CCI) has fined Intel Corporation Rs 27.38 crore for misusing its dominant position in India. The penalty relates to Intel’s “India-Specific Warranty Policy” for boxed microprocessors (BMPs), which was in place from April 25, 2016 to April 1, 2024, according to a report by The Indian Express.
Intel has been asked to deposit the fine within 60 days, widely publicise the withdrawal of the India-specific policy and submit a compliance report to the CCI within the same period, the report said.
The order was passed by a bench headed by CCI Chairperson Ravneet Kaur along with members Anil Agrawal, Sweta Kakkad and Deepak Anurag. The case was filed by Matrix Info Systems Private Limited, a Delhi-based parallel importer of Intel processors.
What the CCI found?
In its February 12 order, the CCI said Intel imposed unfair and discriminatory warranty conditions on boxed microprocessors that were imported into India through authorised distributors outside the country. Because of this policy, Indian consumers who bought genuine Intel processors through parallel importers could not claim warranty services in India. The commission said this practice harmed competition and violated provisions of the Competition Act, 2002, the report mentioned.
Under Section 4 of the Act, companies that hold a dominant position in the market are not allowed to impose unfair or discriminatory conditions in the sale of goods or services. The CCI found that Intel’s India-specific policy fell under this category.
How did the case start?
The case began in 2019 when Matrix Info Systems filed a complaint. The company claimed that Intel’s 2016 policy forced Indian buyers and resellers to purchase processors only from authorised Indian distributors at higher prices. If they bought cheaper imports from abroad, they would not get warranty support in India. Matrix argued that this protected authorised distributors and reduced competition, as per the report.
In August 2019, the CCI initially found Intel to be dominant in the market and ordered an investigation. Intel challenged this before the Karnataka High Court, which stayed the proceedings in 2019 but later dismissed the case in 2022. The CCI’s investigation report, submitted in January 2024, confirmed that Intel was dominant and had abused its position.
Intel withdrew the India-specific warranty policy from April 1, 2024, citing business reasons.
Why the policy was considered discriminatory
The commission observed that Intel follows a worldwide warranty policy but had separate policies for India, Australia and China. It noted that the policies in Australia and China did not have the same restrictive conditions as in India. This meant Indian customers were treated differently compared to buyers in other countries and even within the South Asian region, where customers could access global warranty services.
The CCI also pointed out that India has been one of Intel’s top markets. Between 2016 and 2021, India ranked among the top 10 countries in terms of sales value and volume for Intel microprocessors. Despite overall industry growth, parallel importers in India saw flat or declining sales because customers avoided buying products without warranty support. This limited competition and reduced consumer choice, IE reported.
The commission said warranty is an important factor when buying a boxed microprocessor, as it protects against manufacturing defects, reduces repair costs and gives buyers peace of mind. Denying warranty services to customers who bought genuine products through alternative channels put them at a disadvantage.
After considering that Intel had voluntarily withdrawn the policy, cooperated during the investigation and operated in a fast-changing technology market, the CCI reduced the penalty and fixed it at Rs 27.38 crore.