India - CCI Dismisses Allegations Of Anti-Competitive Agreements And Abuse Of Dominant Position Against Home Automation Solution Providers.

Legal News & Analysis - Asia Pacific - India - Competition & Antitrust

6 July, 2019

 

On April 22, 2019, CCI dismissed allegations (made by Sun Electronics Private Limited, (‘Informant’)) of infringement of Sections 3 and 4 of the Act against certain home automation solution providers, namely, ElecTek Solutions Private Limited, Mumbai (‘ElecTek’), Miantic AV Distribution Private Limited, Hyderabad (‘Miantic’), RTI India Private Limited, Bengaluru (‘RTI’) and Remote Technologies Incorporated, Minnesota, USA (‘Remote Technologies’).[1] ElecTek is an integrator and supplier of RTI products, Miantic is RTI’s sole authorised dealer and a supplier to ElecTek and RTI is the Indian subsidiary of Remote Technologies.

 

The Informant alleged deficiencies in service and non-completion of work resulting in breach of the purchase order under which ElecTek was bound to provide RTI with home automation solutions.

 

According to the Informant, ElecTek made unreasonable demands, such as forcing it to purchase additional equipment and pay additional fees. The Informant also alleged that when it sought to engage the services of Miantic, it was refused and was asked to get a no-objection certificate (‘NOC’) from ElecTek. The Informant argued that this conduct of the home automation solution providers infringed Section 3(3) (anticompetitive horizontal agreements), Section 3(4) (anticompetitive vertical restraints) and Section 4 (abuse of dominance) of the Act.

 

CCI did not find any ‘agreement’ between ElecTek, Miantic, RTI and Remote Technologies, and accordingly dismissed the allegation of anticompetitive agreement (i.e., breach of Section 3(3) of the Act).

 

Since the Informant was not part of the vertical production chain for home automation solutions (and was essentially an end-customer), CCI did not find any merit in allegation of breach of Section 3(4) of the Act. Analysing the allegation of abuse of dominance, CCI reiterated that ‘collective dominance’ was not envisaged under Section 4 of the Act. Further, CCI noted that none of the impugned enterprises could be considered dominant in the relevant market for ‘supply and installation of smart home solutions in India’. Therefore, no case of abuse of dominance could stand against them.

 

For further information, please contact:

 

Zia Mody, Partner, AZB & Partners

zia.mody@azbpartners.com

 

[1] Case No. 2 of 2019