CCI to probe Nilpeter, Sai Com for unfair trade practices

NEW DELHI: Competition Commission will probe alleged unfair business practices of Nilpeter India and Sai Com Codes Flexo with respect to providing services for printing label machines.

The probe has been orderd on a complaint by Magnus Graphics, a firm engaged in label printing, which alleged that both the enterprises had entered into an anti-competitive agreement with each other. The complaint also alleged that Nilpeter had abused its dominant market position.

Besides, the company the probe will be carried out against Nilpeter's Managing Director and Sales Manager.

Finding prima facie evidence of unfair trade practices, Competition Commission of India ( CCI) in an order dated December 12 said it "considers it a case in which thorough investigation should be done into the violation of Competition Act by opposite parties (Nilpeter and Sai Com Codes Flexo)".

The Commission had prima facie found that as per the agreement Nilpeter could not provide maintainance services of its printing machine to Magnus as the entity was a competition to clients of Sai Com Codes Flexo.

"Such an agreement directly affects competition in the market of printing labels etc within India and is in violation of...the (Competition) Act," CCI said in an order dated December 12.

The fair trade regulator also said Nilpeter had prima facie abused it dominant market position.

It noted that the firm was the sole service provider for one of its machine' as they were not made by any other person.

"Prima facie since opposite party-1 (Nilpeter) had monopoly over servicing market of this machine, it was a dominant player in this market," CCI said.

"Refusal of opposite party-1 (Nilpeter) to execute the AMC (Annual Maintenance Contract) despite first making an offer to informant for executing AMC on the ground that informant was doing business of Patanjali Ashram was on the face of it a glaring abuse of dominant position," it added.

As per details in the order, the anti-competitive agreement between the Nilpeter and Sai Com Codes Flexo was an unwritten one.

However, under the Competition law an agreement includes any arrangement or understanding whether or not it is formal or in writing, CCI said.