SC on Asian Paints CCI Probe: Market Abuse Charges

New Delhi, Oct 13 (PTI) The Supreme Court on Monday refused to entertain a plea by Asian Paint against the Competition Commission of India's order directing an investigation against it for allegedly abusing its dominant position in the market for manufacturing and sale of decorative paints.

A bench of Justices JK Maheshwari and Vijay Bishnoi refused to interfere with the Bombay High Court order, which upheld the CCI probe.

As the apex court was not inclined to entertain the matter, the matter was dismissed as withdrawn.

The CCI direction followed a complaint filed by Grasim Industries (Birla Paints Division), which accused Asian Paints of engaging in exclusionary practices aimed at stifling its entry and growth in the Indian decorative paints segment.

"The Commission is of the opinion that a prima facie case of contravention of the provisions of section 4(2)(a)(i), 4(2)(c) and 4(2)(d) of the Act by the OP (Asian Paints) is made out in the present matter," CCI had said in the order.

Section 4 of the Competition Act, 2002, prohibits abuse of dominant position.

Accordingly, the fair trade regulator directed the Director General to get it investigated and submit a report within 90 days.

Grasim, a part of the Aditya Birla Group, forayed into the decorative paints segment under the 'Birla Opus Paints' brand in February last year.

The competition regulator observed that "OP (Asian Paints) by way of restraining its dealers from dealing with the OP's competitors like the informant (Grasim Industries Ltd) by enforcing exclusivity upon such dealers is imposing unfair conditions upon them, which is found to be in the nature of exploitative conduct".

Further, by "restraining suppliers of essential raw materials from providing goods and services to the OP's competitors like the informant, as well as by coercing landlords, C&F agents and transporters to refrain from engaging with competitors like Grasim, Asian Paints seems to be prima facie creating barriers to new entrants in the market as well as partially foreclosing competition in the marke", it said.

Thus, the conduct of Asian Paints seems to be prima facie causing an appreciable adverse effect on competition in India, the regulator had added.

The order clarified that the observations made were not a final view on the case merits and directed the DG to conduct the probe without being swayed in any manner whatsoever by the observations made herein.