Karnataka High Court dismisses Intel plea against CCI order for probe into abuse of dominant position

The Karnataka High Court on Tuesday dismissed a petition filed by Intel Corporation challenging a 2019 order of the Competition Commission of India (CCI) calling for an investigation into allegations of abuse of dominant position in the market for micro-processors [Intel Technology India Pvt Ltd & another v CCI & another]..Justice Krishna S Dixit passed the order while awarding ₹10 lakh in favour of CCI. "In the above circumstances, this petition is liable to be dismissed and accordingly it is, with a cost of Rs.10,00,000/- (Rupees Ten Lakh) only, payable to the 1st respondent – Competition Commission of India within six weeks", read the order..The judge noted that besides being premature and absolutely devoid of merits, the petition was an abortive attempt by the petitioners to scuttle the innocuous statutory proceedings of the Commission.With this, the Court said that it is hoped and expected that the long pending investigation would be accomplished at the earliest..The information before the CCI was filed by Matrix Info Systems, a Delhi-based IT trading company engaged in the business of importing, wholesaling, distributing and supplying a wide range of IT products.The informant imports Intel micro-processors from its authorised distributors in other countries and sells them to Indian consumers at highly competitive prices..The issue arose when Intel amended its warranty policy for India, only entertaining warranty requests for Intel boxed micro-processors in India when they were purchased within the country from an authorised Indian distributor of Intel.As per the informant, such separate warranty terms were arbitrary and unfair towards the Indian market and consumers, since they limited the choice of customers and also affected the business of independent resellers and parallel importers like itself..The CCI had found that Intel's dominant position in markets of micro-processors for desktops and laptop PCs in India was prima facie established.Further, it was found that the unfair warranty policy prima facie amounted to abuse of dominant position in contravention of the Competition Act, 2002."The Commission is of the prima facie opinion that the new differentiated India specific warranty policy of Intel in regard to its Boxed Micro-Processors is in contravention of Section 4 (2) (a) (i) of the Act," the CCI had recorded in its order.Therefore, the Director General (DG) was asked to probe the matter and submit an investigation report within 150 days..Intel argued before the High Court that modification of a warranty policy consistent with observations made in similar cases was part of normal business practice and, therefore, could not be termed as abuse of dominance.It was their concern that investigation of the kind had serious consequences and implications on their business reputation and could not have been casually directed. .The respondents, however, submitted that investigation into the activities of petitioners was necessary in ‘public interest’, regard being had to the abuse potential of warranty policy and of market dominance.It was also stated that matters of this kind did not merit deeper examination at the hands of writ courts since there was no coercive action and the order was more administrative in nature..The High Court observed that while aggrieved can invoke writ jurisdiction, but the same can only be done in case of manifest arbitrariness. There being no such fault in the present order, Justice Dixit refused to interfere. "The petitioners hastily rushed to this Court and unjustifiably secured an interim order that interdicted an inquiry of preliminary nature, for all these years, to the enormous prejudice of public interest," the single-judge stated while imposing exemplary costs. .CCI was represented by Additional Solicitor General N Venkataraman along with Samvad Partners Poornima Hatti and Arjun Krishnan along with Ankur Singh, Aditya Shankar, Suhaas Shenoy.Advocate A Mahesh Chowdhary appeared for the original complainant, Matrix Infosystems.The petitioners were represented by Senior Advocates Dr Abhishek Manu Singhvi and Sajan Poovayya along with advocate Naveen GS and A Mahesh Chowdhary..[Read Judgment]