CCI Dismisses Swarna Properties’ Complaint Against Vestas Wind Technology India Private Limited

On August 7, 2018, CCI dismissed information filed by Swarna Properties (‘SP’) – owner of a wind energy generator system in Karnataka against Vestas Wind Technology India Private Limited (‘Vestas’). Vestas is engaged in the business of manufacture, sales, marketing and maintenance of wind power systems in India.

SP contended that Vestas made the supply of wind turbines equipment conditional upon executing an annual maintenance contract (‘AMC’) with Vestas. This exclusivity condition, SP alleged, resulted in a contravention of Section 3 and resulted in a denial of market access under Section 4 of the Act. It was also alleged that Vestas was using its dominant position in one market to enter into or protect other market in contravention of Section 4(2)(e) of the Act.

CCI noted that the generation of electricity using wind turbines, owing to their distinct way of functioning, cannot be substituted with any other form of power generating equipment. Accordingly, CCI defined the relevant market as the “market for supply of wind turbines in India”. As there existed several players in the market, many of which had a greater or similar market share as Vestas, CCI concluded that Vestas was not in a dominant position. Absent dominance, CCI found no case of abuse of dominance may be said to exist.

CCI also noted that there existed no prima facie case for an anti-competitive tie-in arrangement or exclusive supply agreement. CCI noted that even if Vestas made the sale of wind turbines contingent on entering into an AMC with it, there existed several other suppliers of wind turbines. SP therefore had the choice to procure wind turbines from vendors that didn’t require similar conditions to be satisfied. Noting that SP was restrained for a period of five years from procuring services or spare parts from other vendors, CCI held that SP had the additional option of terminating the agreement for non-performance of duties. As there existed several other vendors in the market, CCI held that SP was not precluded from switching to another vendor. Observing that vertical restrictions were not a per se contravention and having found no evidence of the agreement resulting in AAEC. CCI dismissed the information against Vestas.

Published In:Inter Alia Special Edition Competition Law October 2018 [ English
Date: October 30, 2018