Motive Irrelevant In Abuse Of Dominance; CCI Orders Probe Against Intel For Anti Competitive Practise [Read Order]
"The Commission is not required to go into the intent or motive of the OP in indulging into the alleged conduct that has been, prima facie, found to be abusive. Otherwise also the language of Section 4 does not impose any such obligation on the Commission", the CCI held
The Competition Commission of India has entered a prima facie finding that Intel Corporation has abused its market dominance as its conduct had restricted the production of computer servers by a domestic manufacturer. On that basis, enquiry by the Director General has been ordered against Intel by the CCI under Section 26(1) of the Competition Act.
The Commission was acting on an information supplied by M/s Velankani Electronics Pvt Ltd, a domestic producer of computer servers, which was enlisted under the 'Make In India' project of the Government of India. The processors manufactured by Intel Corporation are dominant in the market and hence the 'server board' component of the servers has to be compatible with the processors of Intel. Therefore, the informant sought information from Intel so as to design server boards in a manner compatible with them. However, abusing its dominant position, Intel refused to give access to information. Although Intel is giving access to such information to other server manufacturers in market, the informant was discriminated against. On these allegations, the CCI was moved.
Intel Corporation defended itself stating that the information sought for was provided to the informant. However, on this the CCI found that information was provided in a piecemeal manner and complete access to necessary materials was denied. The Intel also contended that the informant had to enter into special agreement with it for accessing information. It was also advanced by Intel that the informant lacked necessary manpower, technical expertise and financial backing to develop servers competitively.
The CCI held that hold that such submissions of the Intel do not explain as to why it could not have asked the Informant at the first instance when it approached Intel for information that it has to enter into agreement with the Corporation like other manufacturers. The delay caused by Intel in that regard affected the prospects of Informant under the 'Make In India' project. The Commission also expressed the opinion that unless Intel has to undertake some special efforts or incur any costs or risks to provide the requisite files for designing to the Informant, it cannot decline to provide the same only because it does not think that the Informant is capable enough to do such designing work.
For dealing with the matter, the CCI took the relevant market as 'Processors for Servers in India' and held that Intel was dominant in the relevant market.
Intel also submitted that it had no incentive to deny access to anyone to information. It's interests are aligned with maximising production of servers and hence it has nothing to gain by obstructing the informant. In this regard, the Informant has submitted that abuse of dominance provisions under the Act do not insist on motive or intent on part of the dominant entity. On this, the CCI coram of Chairperson Sudhir Mithal, and Members Augustine Peter and U C Nahta held :
"The Informant can only establish the conduct of the OP. The intention/ motive behind the OP’s such conduct can only be explained by the OP and anyhow, this fact would not be relevant in the instant matter. The Commission in this regard is of the view that at this stage the Commission is not required to go into the intent or motive of the OP in indulging into the alleged conduct that has been, prima facie, found to be abusive. Otherwise also the language of Section 4 does not impose any such obligation on the Commission."
In the order passed on November 9, the Commission held that Intel, being in a dominant position in the market for “Processors for Servers in India”, has, by refusing to provide access in a non-discriminatory manner to the complete set of files/information necessary for the Informant to design its own Server-Boards which are compatible with the Micro-Processor manufactured by it, prima facie, denied market access to the Informant in contravention of Section 4 (2) (c) of the Act. Further, Intel through its conduct has also prima facie, limited and restricted the production of Servers and the market therefor and has also limited the technical/ scientific development relating to Servers in the market in violation of Section 4 (2) (b) of the Act. The DG has been directed to investigate the matter and submit a report.