Grasim Industries Ltd. (Birla Paints Division) Vs Asian Paints Ltd. (Competition Commission of India)
The Competition Commission of India (CCI) has initiated an investigation into Asian Paints Limited (OP) based on information filed by Grasim Industries Limited (Birla Paints Division) (Informant). The Informant, which recently entered the decorative paints market, alleges that Asian Paints, as the market leader, is abusing its dominant position in the “market for manufacture and sale of decorative paints in the organized sector in India.” The allegations include Asian Paints offering discriminatory discounts and incentives to dealers in exchange for exclusivity, threatening dealers who stock Birla Paints products with reduced credit limits, increased sales targets, and loss of customer leads. Furthermore, Asian Paints is accused of coercing dealers to return or not use Birla Paints’ tinting machines and restricting third-party suppliers, landlords, and transporters from engaging with the Informant, along with conducting a smear campaign.
Grasim Industries presented evidence including a third-party market survey, affidavits from its employees, and an audio recording, which prima facie suggest that Asian Paints is imposing unfair conditions on dealers to enforce exclusivity. The Informant highlighted that its tinting machines are technologically advanced, and Asian Paints’ actions of discouraging their use could restrict market development. The CCI, drawing from a previous case involving JSW Paints, reaffirmed Asian Paints’ dominant position in the relevant market, citing its consistent market share, extensive dealer network, significant resources, and high entry barriers in the organized decorative paints sector. Based on the initial assessment of the evidence, the CCI has found a prima facie case of abuse of dominant position by Asian Paints under various provisions of Section 4 of the Competition Act, 2002, warranting a detailed investigation.
