The Competition Commission of India (CCI) on Tuesday ordered an investigation against Asian Paints for allegedly abusing its dominant position in the market for manufacturing and sale of decorative paints.
The direction follows a complaint filed by Grasim Industries (Birla Paints Division), which allegedly accused Asian Paints of engaging in exclusionary practices aimed at stifling its entry and growth in the Indian decorative paints segment.
What is the matter?
The Competition Commission of India’s (CCI) initial review showed Asian Paints had breached competition laws, the order showed. Birla has alleged that Asian Paints was abusing its dominant market position by offering discounts and incentives such as foreign travel to dealers in exchange for exclusivity.
CCI observed that Asian Paints is restraining its dealers from dealing with Birla Paints by imposing unfair conditions upon deals. Further, CCI noted that Asian Paints is restraining the suppliers from supplying essential raw materials to Birla Paints.
Order by CCI
Upon hearing the arguments from both parties, CCI directed the Director General to initiate an investigation into the matter and submit its report within 90 days. CCI noted that all observations made in the order are at the prima facie stage and will not affect the investigation by the Director General.
“The Commission is of the opinion that a prima facie case of contravention of the provisions of section 4(2)(a)(i), 4(2)(c) and 4(2)(d) of the Act by the OP (Asian Paints) is made out in the present matter,” CCI said in the order.