CCI slaps over Rs 140-cr penalties on HP India, resellers for breach of antitrust rules

New Delhi: The Competition Commission of India (CCI) on Monday imposed penalties totaling Rs 142.37 crore on HP India and its resellers in two separate cases of alleged indulgence in cartelisation and bid-rigging in the supply of IT products to Delhi buyers who had floated tenders through the government e-marketplace (GeM).

Through two orders, the regulator has now directed HP India and the resellers to immediately cease and desist from such anti-competitive practices.

Both the cases originated on the basis of lesser penalty applications filed by HP India under Section 46 of the Competition Act. The section allows the regulator to grant leniency or lower penalty to a cartel member for voluntarily coming forward with disclosure and providing full, true, and vital information about the cartel's operations.


Supply of personal system products

In this case, the CCI slapped a penalty of Rs 126.87 crore on HP India and a combined Rs 1.22 crore on five resellers for “indulging in the cartelisation in sale and supply of personal system products”, the regulator said in a statement. The resellers are Delphi Infosolutions, Digitech Computers, Orbit Techsol, Hind Technocare and Krishna Computers.

The regulator found that HP India was “engaged in dictating bid prices to resellers and manipulated participation of resellers in the GeM tenders by withholding authorization, in order to benefit itself”, in violation of rules.

The five resellers were found to be colluding with HP India. This conduct, the Commission assessed, is a contravention of the competition law provision that prohibits bid-rigging and collusion.

Supply of print hardware

In a separate case, the CCI imposed Rs 11.98 crore on HP India and a total of Rs 2.30 crore on 16 resellers for “indulging in cartelization” in the sale of products, such as toner, cartridges and other consumables used with print hardware products.

The resellers, the regulator found, indulged in submitting “support or cover bids” for creating an illusion of competition in tenders. HP India, the CCI held, played a central role in the cartel arrangement among these resellers, in breach of competition regulations.

The 16 resellers named in the CCI order are DD Enterprises, Ascent Information, Kaypee Enterprises, Britex Enterprises, Alankar Distributors, Vijay Stationery Mart, G R Enterprises, Perfect Innovative, Khandelwal Traders, A Square Technologies, Innovative Solutions, Pioneer Technologies, Delphi Infosolutions, Shakti Marketing, International Computer Resources and Arms Peripherals.

In both the cases, the regulator also found officials of HP India and the resellers liable under Section 48 of the Act and imposed monetary penalties on them, as per its statements.