CCI Dismisses Allegations of Abuse of Dominance against Security Printing and Minting Corporation of India and Security Paper Mill

On November 12, 2020, CCI dismissed information alleging contravention of the provisions of the CA02 against Security Printing and Minting Corporation of India (‘SPMCI’) and its unit, Security Paper Mill (‘SPM’) (collectively, ‘OPs’). [1]

The informant alleged that SPM included unfair terms in a tender for the procurement of various types of bearings. The terms of the tender required bidders to be either: (i) one of the four original equipment manufacturers (‘OEMs’); or (ii) their authorized industrial distributors. This effectively limited the tender to the four OEMs and their authorized industrial distributors.

The informant delineated the relevant market as the market for procurement of bearings in the Territory of India. On dominance, CCI observed that OPs cannot be said to be a monopsonist or a buyer with significant market power as bearings are of a wide variety, used across different industries and there are numerous buyers and sellers of this product in the market and some of the bearings are even imported into India.

On conduct, CCI observed that while calling out certain brands (either by themselves or only through one of its authorized distributor) to bid and supply, prejudicially affects both inter-brand and intra brand competition, in this case there appeared to be no concerns as: (i) the procurer/consumer, based on its requirement and other commercial considerations, has the right to specify the kind of product, quantity thereof, timelines, mode and the manner in which it requires the same and the same cannot be dictated by the bidders/suppliers; (ii) OPs were not the only buyers in the market for the relevant product and the market seemed to be fragmented; and (iii) bearings were widely used in many industries including automobile, agriculture, earth moving equipment, energy and power industries, manufacturing plants units and not by the OPs alone.

Accordingly, CCI rejected the information.

 

[1] Case No. 41 of 2020, order dated November 12, 2020

Published In:Inter Alia Special Edititon - Competition Law - December 2020 [ English
Date: December 18, 2020