Fair trade regulator CCI has ordered an investigation against global chip maker Intel Corporation for allegedly abusing its dominant position in Indian market by restricting the production of servers.
Fair trade regulator CCI has ordered an investigation against global chip maker Intel Corporation for allegedly abusing its dominant position in Indian market by restricting the production of servers. The direction comes following a complaint by Bangalore-based Velankani Electronics, engaged in the business of design and manufacture of electronic products in India.
Intel is a leading technology company engaged in the designing, manufacturing and distribution of a wide range of IT components as well as electronic devices relating to communications and computing such as processors, chipsets, mother-board/server-board among others.
It was alleged that Intel refused to provide complete reference design files to Velankani Electronics and by doing this Intel has successfully prevented and precluded the Bangalore-based from designing/manufacturing its own server-boards.
In an order dated November 9, the Competition Commission of India (CCI) said it is of the opinion that “there exists a prima facie case of contravention of the provisions of Section 4 of the Act by the OP in the matter”. Section 4 of the Competition Act, 2002, relates to abuse of dominant position by enterprises.
As per CCI, Intel “being in a dominant position in the market for ‘processors for servers in India’ has, by refusing to provide access in a non-discriminatory manner to the complete set of files/ information necessary for the informant (Velankani Electronics) to design its own server-boards which are compatible with the micro-processor manufactured by the OP (Intel), prima facie, denied market access to the informant in contravention of the (Competition) Act”.
Further, it noted that Intel through its conduct has also prima facie, limited and restricted the production of servers and the market therefor and has also limited the technical/ scientific development relating to servers in the market in violation of the Competition Act.
Consequently, CCI’s probe arm, Director General (DG) has “directed to cause an investigation into the matter to ascertain whether the OP has abused its dominant position in contravention of the provisions of …the Act by denying to the Informant access to its reference design files for Server-Boards and/or simulation files for the same, in a discriminatory manner, not at par with the ODMs/ OEMs,(Original Design Manufacturers/Original Equipment Manufacturers) without any reasonable justification for the same”. The relevant market in the instant case would be the market for ‘processors for servers’.