Case Law Details
Hexa Communications Private Limited Vs Atos India Private Limited (Competition Commission of India)
The Commission, in the facts and circumstances of the present case, observes that there shall not be any requirement of defining a precise relevant market for the assessment of dominance of the Opposite Party. The products of the Opposite Party, namely, enterprise communications platforms consisting of core telephony switch, which includes hardware, software, and peripherals and end devices like digital and internet protocol telephone, are offered for sale by many players like Google, Cisco, Avaya, Microsoft, IBM, Polycom, Alcatel Lucent, Airtel, Reliance, Tata Tele Business, BSNL, etc., in India, and there appears to be sufficient competition in the market qua such products and services. Further, the Opposite Party has stated that it holds a minuscule market share qua such products and services and does not have any market power. This is coupled with the assertion by the Opposite Party that its products have inter-brand compatibility with various degrees of substitutability and there are no restrictions in respect of availability of spares/services of its products. The Commission notes that the Informant has not stated whether it was denied spares by the distributor of the Opposite Party. On the contrary, it appears from the submissions of the Opposite Party that the Informant was more interested in dealing in refurbished products of the Opposite Party, for which the Opposite Party has stated that it is under no obligation to provide any warranty qua such refurbished products to end consumers. The Commission does not prima facie find any difficulty with such proposition.
The Commission is further of the view that there is no inherent right with the Informant to become an authorised channel partner of the Opposite Party, especially when the Opposite Party has expressed its apprehensions qua the bonafide business dealings of the Informant. The Commission is not in any manner endorsing such apprehension which is a subject matter of parties inter se. The Commission is of the view that, in the presence of other major players offering similar products and services with which the Informant can possibly enter into business relationship(s), the non-dealing with the Opposite Party which claims to have a very small market share does not tend to indicate any foreclosure effects, much less absolute restraints.
Thus, in view of the analysis supra, the Commission is of the prima facie view that the allegations under Section 3(4) read with Section 3(1) of the Act remain unsubstantiated in the facts and circumstances of the instant matter. The Commission is also of the view that no case of violation of any of the provisions of Section 4 of the Act is made out in any manner against the Opposite Party.
FULL TEXT OF THE ORDER OF COMPETITION COMMISSION OF INDIA
Order under Section 26(2) of the Competition Act, 2002
1. The present Information has been filed by Hexa Communications Private Limited (hereinafter, the “Informant”) under Section 19(1)(a) of the Competition Act, 2002 (hereinafter, the “Act”) alleging contravention of the provisions of Sections 3 and 4 of the Act, by Atos India Private Limited (hereinafter, “Atos”/ “Opposite Party”).
Facts and allegations in brief
2. The Informant is stated to be a company registered under the provisions of the Micro, Small and Medium Enterprise Development Act, 2006 and is engaged in the business of hardware and software products, including telecommunication devices and related support services.
3. It has been stated that the Informant has executed several contracts, including annual maintenance contracts (“AMCs”) for several government and private undertakings over a decade and has thereby carved a niche in relation to the products and services that it offers. Amongst other things, the Informant supplies spares and provides after-sales services under AMCs or otherwise, in respect of products manufactured and sold by the Opposite Party.
4. It has been stated that the Opposite Party is an original equipment manufacturer (“OEM”) that specialises in hi-tech transactional services, unified communications, cloud, big data, and cyber security services. The Opposite Party enjoys a position of strength in the market in respect of its products such as Hipath and Openscape. It has been alleged that the Opposite Party in concert with its authorised channel partners has indulged in anticompetitive practices and has demonstrated an unequivocal intent to regulate and restrict free market with a view to foreclose competition.
5. The Informant also avers that in respect of the products manufactured and/or sold by the Opposite Party (primary market), there exists a secondary market comprising of complementary products and/or provision of maintenance and repair services. Though the primary product manufactured and sold by the Opposite Party through its authorised channel partner may, per se, be substitutable, however, once the products are acquired by a consumer, the support services in relation thereto are not substitutable in view of inter-brand incompatibility of spares, i.e., spares of brand A cannot be used as spares for brand
B. Therefore, if an equipment (primary product) of brand A is acquired by a consumer, the consumer is forced to avail spares/maintenance services (secondary market) of the same brand as A, and thus, spare parts and after-sales services provided by the Opposite Party constitute a distinct relevant product market.
6. The Informant further avers that genuine spares and support services in relation to the products Hipath and Openscape, irrespective of their versions, are not made freely available to consumers in the open market, leaving the Opposite Party or its authorised channel partners the only viable source for supply and/or provision of products and/or services.
7. It has been alleged that the Informant is not authorised to sell, install, and support any “Unify” products (manufactured by the Opposite Party) in India and that the Opposite Party does not warrant any service and support in respect of any Unify products in India, thereby intentionally dissuading customers from acquiring services/products from the Informant. Thus, it has been averred that the ability of independent repairers and/or service providers such as the Informant, who are technically and commercially qualified and desirous of supplying the products and/or providing services, are severely hindered.
8. It has been stated that the Opposite Party has circulated various communications by which market access of the Informant has been restricted. It has been stated that the contents of the communications/letters appear to be innocuous at first blush; however, the communications have been circulated with a view to disrupt existing relations of the Informant with its customers and also bolster the Opposite Party’s dominance in the market for complementary products such as spares and/or provision of maintenance and repair services, and that, owing to such communications, the offers submitted by the Informant in response to several tenders have been rejected by customers. Though in the past, several such contracts had been successfully executed by the Informant, organisations are now apprehensive regarding the quality of the services which the Informant provides.
9. The Informant further avers that the Opposite Party has imposed upon the consumers stringent warranty conditions which require customers to get their Atos-Unify Systems serviced only through authorised channel partners, and if such services are not availed, the warranty for such products is invalidated.
10. The Informant has further alleged that the Opposite Party has used its dominant position in the market for supply of its spare parts to protect its dominance in the market for its repair and maintenance services and that it has unduly escalated the prices of the spares, which demonstrates its ability to impose unfair prices in sale of spares, in which regard the Informant has made reference to the following tenders floated by North-Eastern Railway:
i) 602046064A for Supply of Analog Subscriber Line Card
ii) 602046065A for Supply of PRI Line Card
iii) 60206066A for Supply of LTU Shelf Power Supply Card suitable for Siemens HiPath 4000 System Digital Electronic exchange
11. In respect of the tenders stated above, the Informant states that the difference between the prices quoted by an independent service provider such as the Informant and an authorised channel partner of the Opposite Party is the most striking, for instance:
i) Rate quoted for the product NS-Analog Subscriber Line Card for Siemens Hipath 3000/4000 System Digital Electronic Exchange (to be compatible with existing Siemens Hipath Exchange-accepted make- Unify) by the Informant was Rs. 37,760/-, whereas by Narmada Telecom (authorised channel partner of Opposite Party) was Rs. 76,700/-.
ii) Rate quoted for the product NS-LTU Self Power Supply Card for Siemens Hipath 3000/4000 System Digital Electronic Exchange (to be compatible with existing Siemens Hipath Exchange with OEM support- accepted make- Unify) by the Informant was Rs. 33,040/-, whereas by Narmada Telecom was Rs.1,08,560/-.
iii) Rate quoted for the product NS-PRI Card (30 CH) for Siemens Hipath 3000/4000 System Digital Electronic Exchange (to be compatible with Existing Siemens Hipath Exchange Make-Unify or Equivalent with OEM support-accepted make Unify) by the Informant was Rs.44840/- whereas by Narmada Telecom was Rs. 112100/-.
12. It has been further stated that, though the prices quoted by the Informant were the lowest, the work in respect of the tenders so stated was awarded to Narmada Telecom Private Limited, an authorised channel partner of the Opposite Party, which in turn resulted in an additional cost implication to the tune of Rs.5,19,036/- to the exchequer. It has been stated that the purported justification provided to the Informant in respect of award of tender to the authorised channel partner of the Opposite Party was that the said agency claimed to be having an authorisation to deal in the said products from the Opposite Party.
13. Furthermore, it has been stated that, in certain cases, tenders stipulated the requirement of an OEM authorisation; however, in a few cases, such requirement was dispensed with considering the substantial savings in cost. In cases where the requirement was not dispensed with, the bids of independent service providers such as the Informant were rejected though the quoted rates under the tenders were significantly lower than those quoted by the Opposite Party or its authorised channel partner.
14. Thus, it has been averred that the Opposite Party, being an OEM, possesses the ability to impose unfair prices in the sale of spares. The Informant states that there is no difference between the quality of products and/or services provided by it and provided by the OEM or its authorised channel partner. However, such refusal on the part of tendering authorities is pursuant to a concerted action on the part of the Opposite Party and its authorised channel partners to protect their dominance in the market.
15. Further, it has been stated that, more recently, it has come to the knowledge of the Informant, that, in respect of tenders which require bidders to provide an OEM authorisation, the Opposite Party has been provided a right of approval by several tendering authorities. Therefore, by exercising its dominance and standing in the market, the Opposite Party has been successful in ensuring that the independent repairers/service providers such as the Informant are not awarded contracts under the pretext of not having an OEM authorisation.
16. The Informant thus alleges that the Opposite Party has contravened the provisions of Sections 3 and 4 of the Act.
17. The Informant has sought interim relief, wherein it has requested the Commission to temporarily restrain the Opposite Party and its authorised channel partners and/or any person claiming through or under them from circulating communications which have the effect and/or tendency to disrupt the business of the Informant until the conclusion of inquiry or until further orders, without giving notice to the Opposite Party.
18. The Informant has, inter alia, prayed to the Commission as under:
(i) To direct the Opposite Party and its channel partners and/or a person claiming under them, as the case may be, involved in such agreement, and/or abuse of position, to discontinue and not re-enter such agreement, or to discontinue such abuse of dominant position, as the case may be;
(ii) To impose such penalty on Opposite Party and its authorised channel partners and/or any person claiming through or under them, as it may deem fit;
(iii) To direct the enterprise concerned to abide by such other orders as the Commission may pass, and comply with the directions, including payment of costs to the Informant;
(iv) To pass such other order or issue such directions as it may deem fit in the facts and circumstances of the case.
19. The Information was considered by the Commission in its ordinary meeting held on 23.02.2022. The Commission directed to seek parawise response/reply of the Opposite Party on the Information filed along with certain additional information/documents, to be filed. Liberty was also granted to the Informant to file its further response, if any, to the reply of the Opposite Party.
20. The Opposite Party filed its response in confidential and non-confidential versions along with an application seeking confidentiality qua certain information/documents in terms of Regulation 35 of CCI General Regulations 2009. The Informant filed its further response on 25.04.2022. The Commission considered the Information and the subsequent pleadings in the ordinary meeting held on 18.05.2022 and decided to pass an appropriate order in due course.
Summary of Opposite Party’s Response
21. The Opposite Party is a subsidiary of Atos SE, which is headquartered in Paris, France. Atos SE specialises in telecommunication and media equipment and related services, whereas Unify Software and Solutions GmBH and Co. KG (Unify) is a subsidiary of Atos SE since January 2016 and operates worldwide. Unify operates in India through Atos Unify/Opposite Party. Products and services offered by the Opposite Party include Unify Openscape communication platforms, Unify Openscape devices, Openscape applications, Openscape management applications, etc.
22. It has been stated that the Informant is misrepresenting a trademark dispute as a competition issue. The Opposite Party is the registered owner of the trademark “Unify”. Atos S.E., having acquired Unify, has gained worldwide right to sell products under the trademark “Unify”.
23. It has been further stated that, in 2019, the Opposite Party became aware that the Informant, though not an authorised partner, had been offering sales and support services to consumers in India, including Indian defence forces and other departments of the Government of India, while claiming to be an authorised channel partner of the Opposite Party. Since the Informant was not an authorised channel partner of the Opposite Party, it reached out to the Informant to request for the information on the distributor channels and partners through which the Informant had procured and/or is procuring the products and their spare parts, to ensure that genuine products and spare parts were offered by the Informant to the consumers of the Opposite Party.
24. It has been further stated that, as the Informant asserted that it was procuring Unify products from authorised distributors in India, the Opposite Party reached out to its only authorised distributor in India, Inflow Technologies Private Limited, which confirmed that it had not made any sales to the Informant.
25. Further, it came to the notice of the Opposite Party that, on the Government of India’s e-marketplace, GeM, the Informant was misrepresenting itself as the Original Equipment Manufacturer for Opposite Party’s products. Consequent upon which, the Opposite Party sought a clarification from the Informant. In its reply dated 26.04.2019, the Informant acknowledged the same and asserted that it had discontinued the practice. Relevant extract from the aforesaid letter of the Informant is reproduced below:
“We hereby confirm that we are reselling unify products duly procuring from authorized distributors in India. As far OEM is concerned, it was erroneously done by our Junior executive staff on the website http://www.gem.gov.in which we have discontinued after receipt of email notification from your end which you are aware of”.
26. It has been submitted that many end users, including the Indian Army, reached out to the Opposite Party stating that the Informant, in its communications with them, was claiming that it had procured authorisation through the Opposite Party’s authorised channel partner, MF Communications. The Opposite Party further submitted that MF Communications Limited, though an authorised channel partner of the Opposite Party till October 2021, was not sanctioned to give further authorisation to any third party. It has been further stated that MF communications on its website claims that it provides “new, refurbished and remanufactured parts for the Opposite Party’s products”.
27. In the aforesaid context, the Opposite Party issued a cease and desist notice dated 15.04.2019 to the Informant for infringement of trademark which it chose to ignore and continued with its fraudulent conduct. It has been further stated that the Informant still shows Opposite Party’s products on its website (various product series like Openstage, Optipoint, Openscape, and Hipath) and offers them for sales and post-sales services, and that the Opposite Party is in the process of taking requisite legal action against the Informant for its illegal conduct.
28. It is further submitted that the Informant, on several occasions, both prior and subsequent to filing the Information, expressed its desire to be a channel partner of the Opposite Party in India. However, due to its aforesaid fraudulent and patently illegal practices, it was never considered a reliable business partner.
29. In relation to the averment of there being a separate market of spares and after-sales services in respect of the Opposite Party’s primary products, it has been contended that the market for “Unified communication and collaboration (“UC”) solutions” does not have a primarya nd secondary market. Rather, it is a set of complementary products (hardware), applications, and services with various degrees of substitutability across the brands. Substitutability can be established from the fact that: a) Atos Unify IP phones can work with any open protocol on any communication platform; b) for Atos Unify softwares, IP and Analog Devices could be from any manufacturer working on open standards; c) Atos Unify OpenScape 4000 system can work on various types of servers. It can be operated from Atos Unify own Eco Servers or an industry standard server, including that of competitors like Dell. Due to interchangeability of hardware, applications, and services, consumers are not dependant on any one enterprise in this market. At the slightest increase in price or degradation in the quality of application or services, consumers can shift to competing enterprises.
30. It has been further averred that the UC Solutions market is in fact a unified systems market, wherein consumers engage in a detailed lifecycle costing before deciding the hardware, applications, and services that they intend to procure before purchasing the product and services. In fact, the consumers can choose products, applications, and services from different brands depending on the substitutability between the brands. Applications are licences, and hence, consumers have a fair idea of their cost burden. Similarly, the cost of services is determined based on tenders, hence, the consumer has a precise estimate of the financial burden for such services.
31. Thus, it has been stated that, taking the relevant market as unified systems market for “Unified communications and collaborations (“UC”) solutions in India”, the Opposite Party competes with players such as Google, Cisco, Avaya, Microsoft, IBM, Polycom, Alcatel Lucent, Airtel, Reliance, Tata Tele Business, and BSNL, and it has had a minuscule market share in the years 2018, 2019, 2020, 2021, respectively, in the market of UC applications and UC services, each taken separately (with a market share running in less than 5% in the year 2017).
32. In relation to the restriction of sale of spare parts to the Informant, it has been stated that, considering the technical nature of the product and services, consumers themselves prefer a single enterprise to be responsible for the sale, installation, upgradation, and maintenance of UC Solutions, and that the Opposite Party has not restricted sales of spare parts to independent service providers. Any independent service provider can source genuine spare parts from the authorised distributors of the Opposite Party. The Opposite Party has never prevented sale of genuine spare parts to independent service providers or prohibited its consumers from taking support and services from independent service providers.
33. In relation to the after-sales services and warranty, the Opposite Party has stated that it gives an industry standard warranty of 12 months along with its hardware and 90 days along with its software, with no extra charges. Hence, a consumer has no incentive to get after-sales services for that period from any third party, and, subsequent to the initial warranty period, the consumer is free to take services from any third party, and that it does not impose any restrictions on the consumer in this regard.
34. It has been stated that reputational effects deter market players from setting supra competitive prices for any of their products, applications, or services as it will have a negative impact across the value chain. Moreover, since the consumers can always shift from one application to another competing application at similar price points or change their service provider, UC Solution providers are not in a position to charge supra-competitive prices.
35. It has been further stated that UC Solutions are highly technical in nature and require specialised skills for distribution and after-sales service. The Opposite Party offers UC Solutions, including server-based architecture and legacy-based switches, which need special capability and training to operate, manage, and service. Hence, the Opposite Party, along with Unify, has a specialised training program along with an employee certification and partner program to ensure that there are channel partners with the requisite technical capability to service maintenance contracts of the Opposite Party’s end consumers. In fact, in order to ensure proper service for its end users, the Opposite Party maintains an online learning portal called “Unify Academy”, which provides a detailed list of curricular and product wise certifications available for its channel partners.
36. It has been stated that the real grievance of the Opposite Party, vis- à- vis, the Informant is the misuse of its trademark and its misrepresentation to various consumers that it was an authorised channel partner of the Opposite Party. The Informant has misrepresented itself as an authorised channel partner of the Opposite Party and, on one occasion, even as an original equipment manufacturer for the Opposite Party’s products, and Opposite Party would not incur liability for the quality of service or support provided by the Informant.
37. Thus, in view of the Informant’s conduct, the Opposite Party deemed it necessary to warn its consumers through its communication dated 02.11.2020 that the Informant was not its authorised channel partner and that the Opposite Party cannot take responsibility for any service or support provided by the Informant.
Summary of the Informant’s Rejoinder
38. The Informant contended that the Opposite Party has only one authorised distributor for its products in India; thus, customers are constrained to rely only on the sole distributor for after-sales service support and that the Opposite Party regulates the conduct of its authorised channel partners by fixing the prices of the products which are sold to end consumers.
39. The Informant reiterates that spares and service support are not made freely available in the open market, leaving the Opposite Party/its authorised channel partners as the only viable source for supply and/or provision of services. The spare parts can be acquired by independent services providers exclusively from the authorised distributors of the Opposite Party. Consequently, the ability of independent service providers like the Informant is severely hampered.
40. In respect of the unified systems market of “Unified communication and collaboration solutions”, the Informant has submitted the same to be incorrect as, at the time of procurement of the products manufactured and sold by the Opposite Party: i) customers are not in a position to engage in whole life costing; and (ii) reputation effects do not deter the Opposite Party from setting supra competitive prices for the secondary product, since the consumer is already locked in by virtue of the primary product.
41. The Informant further claimed that consumers are not in a position to easily switch to a competing brand, as the cost of primary product usually runs in more than Rs. 50 lakhs and that the Opposite Party is entirely dominant in the aftermarket for its genuine spare parts and repair services, and due to inter-brand incompatibility of spares, the spares and after- sales services are per se non-substitutable, the owner of the primary product cannot easily switch to another competing primary product given the huge capital outlay involved in first procuring a system manufactured and sold by the Opposite Party.
42. The Informant further averred that the end consumer is not in a position to estimate the cost of after-sales services during which the consumer intends to use the products manufactured by the Opposite Party and that the same depends upon several factors such as the make of the product, the novelty of the versions and/or accompanying software, manufacturing of spares, periodicity of maintenance services, etc.
43. The Informant further averred that after-sales services in respect of the Opposite Party’s products are provided exclusively through its network of authorised channel partners, which itself indicates that there exists a separate product market for after-sales maintenance and repair services.
44. The Informant further submitted that the allegation of the Opposite Party that the products sold by the Informant are remanufactured, refurbished, etc. is unfounded and baseless and, in view of the restrictive covenants and practices in India, the Informant was compelled to intermittently procure products from overseas dealers, such as, amongst others, MF Communications (U.K.), an admitted authorised channel partner of the Opposite Party till October 2021, and the products were imported in India for onward sale to customers of the Informant.
Analysis by the Commission
45. At the outset, the Commission notes that the crux of the Informant’s allegation is that Opposite Party, an OEM of telecommunication and media equipment and related services which also specialises in hi-tech transactional services, unified communications, cloud, big data, and cyber security services, (Hipath-Real time IP phones system and Openscape-IP communication platform), in concert with its authorised channel partners, has indulged in anti-competitive practices whereby it restricts supply of its spares and provision of after -sales services in the open market.
46. The Informant has alleged that the Opposite Party has precluded the Informant from providing support services in respect of its products by circulating various communications to the Informant’s customers and also the public at large by publication of communication on the GeM portal.
47. It has also been alleged that, in respect of the products manufactured and/or sold by the Opposite Party (primary market), there exists a secondary market comprising complementary products and/or provision of maintenance and repair services and that though the primary product manufactured and/sold by the Opposite Party through its authorised channel partner may, per se, be substitutable, however, once the products are acquired by a consumer, the support services in relation thereto are not substitutable in view of inter-brand incompatibility of spares, and thus, spare parts and after-sales services provided by the Opposite Party therefore constitute a distinct relevant product market.
48. It has been alleged that genuine spares and support services in relation to Hipath and Openscape products, irrespective of their versions, are not made freely available to the consumers in the open market, leaving the Opposite Party or its authorised channel partners the only viable source for supply and/or provision of products and/or services.
49. Upon conjoint reading of the reply/rejoinder received from the Parties, the Commission takes note of the averment of the Opposite Party that, in the year 2019, it became aware that the Informant, though not an authorised partner, had been offering sales and support services to consumers in India, including Indian defence forces and other departments of the Government of India, while claiming to be an authorised channel partner of the Opposite Party. The Commission further notes the averment of the Opposite Party in this regard that it had reasons to believe that the products as offered by the Informant are refurbished products and thus, of questionable quality, and are offered while claiming to be an authorised channel partner of the Opposite Party, which implies that any failure of such products or deficiency in services would lead to loss of goodwill and legal claims against the Opposite Party, with serious repercussions, if arising from any of the departments of the Government of India.
50. Further, many end users, including the Indian Army, reached out to the Opposite Party, stating that the Informant was claiming that it had procured the authorisation from the Opposite Party’s authorised channel partner (till October 2021), namely MF Communications. The Opposite Party submitted that MF Communications was not sanctioned to issue authorisation to any third party, and its services were terminated by the Opposite Party in 2021.
51. The Commission further notes that, as per its website, MF Communications (UK) supplies business telecoms solutions, business phones, PBX systems, remanufactured parts, equipment and business telecommunications services to companies in over 125 countries, worldwide. MF communications, on its website claims, that it provides new, refurbished and remanufactured parts for the Opposite Party products. The Commission also notes that the Opposite Party apparently reached out to its authorised distributor, viz., Inflow Technologies Private Limited, which had confirmed that it had not made any sales to the Informant.
52. In relation to the allegation of the Informant that the Opposite Party does not warrant any service and support in respect of its products in India as provided by the Informant, the Commission is of the view that a manufacturer has no legal obligation to warrant genuineness of products (spares)/services (after-sales) offered outside its distribution channel, and any insistence that the same be bought from its authorised distributors/partners in itself cannot prima facie be considered abusive/exclusionary. The Commission notes the rights available to a manufacturer to protect the sanctity of its distribution channel and its goodwill in relation to the goods/services offered under its brand names.
53. The Commission also notes that the Informant, on several occasions, both prior and subsequent to filing the Information, had expressed its desire to be a channel partner of the Opposite Party in India. However, the Opposite Party did not dispense any favourable deposition to such request, citing fallible conduct of the Informant, who was not considered a reliable business partner by the Opposite Party.
54. Under the given state of facts and circumstances, the Commission prima facie finds no violation on the part of the Opposite Party which apparently has made communications to various government undertakings/departments stating that it does not have approved/authorised channel partner in India by the name of Hexa Communications Private Limited (Informant) and that it does not warrant any service or support to any of the Opposite Party’s products in India as the Informant is not authorised to sell, install, and support any of the Opposite Party’s product(s) in India.
55. In relation to the allegations of restriction of sale in the open market, the Commission takes note of the reply of the Opposite Party that it has not restricted sales of spare parts to independent service providers and any independent service provider can source genuine spare parts from the authorised distributor of the Opposite Party and that it has never prevented sale of genuine spare parts to independent service providers or prohibited its consumers from taking support and services from independent service providers.
56. In relation to the after-sales services and warranty, the Commission notes the averment of the Opposite Party that it gives an industry standard warranty of 12 months along with its hardware and 90 days along with its software at no surplus cost and, subsequent to the initial warranty period, the consumer is free to take services from any third party.
57. Further, the Commission also takes note of the submissions of the Opposite Party that: a) the Opposite Party’s IP phones can work with any open protocol on any communication platform; b) for Atos Unify softwares, IP and Analog Devices could be from any manufacturer, working on open standards; and c) Atos Unify OpenScape 4000 system can work on various types of servers. It can be operated from Atos Unify’s own EcoServers or an industry standard server, including that of competitors like Dell. The Commission takes note of the averment of the Opposite Party that it has a set of complementary products (hardware), applications, and services with various degrees of substitutability across the brands. Thus, the allegations of restrictions of inter-brand operability does not stand to reason, nor has any evidence been submitted by the Informant to that effect.
58. The Commission, in the facts and circumstances of the present case, observes that there shall not be any requirement of defining a precise relevant market for the assessment of dominance of the Opposite Party. The products of the Opposite Party, namely, enterprise communications platforms consisting of core telephony switch, which includes hardware, software, and peripherals and end devices like digital and internet protocol telephone, are offered for sale by many players like Google, Cisco, Avaya, Microsoft, IBM, Polycom, Alcatel Lucent, Airtel, Reliance, Tata Tele Business, BSNL, etc., in India, and there appears to be sufficient competition in the market qua such products and services. Further, the Opposite Party has stated that it holds a minuscule market share qua such products and services and does not have any market power. This is coupled with the assertion by the Opposite Party that its products have inter-brand compatibility with various degrees of substitutability and there are no restrictions in respect of availability of spares/services of its products. The Commission notes that the Informant has not stated whether it was denied spares by the distributor of the Opposite Party. On the contrary, it appears from the submissions of the Opposite Party that the Informant was more interested in dealing in refurbished products of the Opposite Party, for which the Opposite Party has stated that it is under no obligation to provide any warranty qua such refurbished products to end consumers. The Commission does not prima facie find any difficulty with such proposition.
59. The Commission is further of the view that there is no inherent right with the Informant to become an authorised channel partner of the Opposite Party, especially when the Opposite Party has expressed its apprehensions qua the bonafide business dealings of the Informant. The Commission is not in any manner endorsing such apprehension which is a subject matter of parties inter se. The Commission is of the view that, in the presence of other major players offering similar products and services with which the Informant can possibly enter into business relationship(s), the non-dealing with the Opposite Party which claims to have a very small market share does not tend to indicate any foreclosure effects, much less absolute restraints.
60. Thus, in view of the analysis supra, the Commission is of the prima facie view that the allegations under Section 3(4) read with Section 3(1) of the Act remain unsubstantiated in the facts and circumstances of the instant matter. The Commission is also of the view that no case of violation of any of the provisions of Section 4 of the Act is made out in any manner against the Opposite Party.
61. In view of the foregoing, the Commission is of the opinion that there exists no prima facie case of contravention of any of the provisions of either Section 3 and/or Section 4 of the Act against the Opposite Party and therefore, the matter be closed forthwith under the provisions of Section 26(2) of the Act. Consequently, no case for grant for relief(s) as sought under Section 33 of the Act arises, and the same is also rejected. Further, the Opposite Party also submitted an application dated 06.04.2022 under Regulation 35 of the General Regulations 2009 read with Section 57 of the Act, seeking confidentiality on certain portions of the response which shall be disposed of vide separate order.
62. The Secretary is directed to communicate to the Informant and the Opposite Party accordingly.
