CCI orders probe into market abuse charges against Asian Paints

New Delhi: The Competition Commission of India (CCI) on Tuesday ordered an investigation against Asian Paints for allegedly abusing its dominant position in the market for manufacturing and sale of decorative paints.

The direction follows a complaint filed by Grasim Industries (Birla Paints Division), which allegedly 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 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 cause an investigation to be made into the matter and submit an investigation report within a period of 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 market, it said.

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

The order clarified that 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.