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Matrix info systems Pvt Ltd v. Intel Corp and Other

Matrix info systems Pvt Ltd v. Intel Corp and Other

Matrix info Systems Private Limited vs Intel Corporation & Other.

Facts- 

 

  • Matrix Info Systems Pvt. Ltd. filed this information  under Section 19 (1) (a) of the Competition Act, 2002 , against Intel Corporation and Intel Technology India Pvt. Ltd., alleging contravention of the provisions of Sections 3 and 4 of the Act 
  • Prior to 2016, Intel used to provide manufacturer’s warranty within India on its Boxed Micro-Processors that may have been purchased from any country in the world. However, w.e.f. 25.04.2016, Intel amended its warranty policy for India. As per this new policy, Intel would entertain warranty requests for Intel Boxed Micro-processors in India only when the same are purchased from an authorised Indian distributor of Intel that too within the country. As a result of this country-specific warranty for India, Intel does not acknowledge warranty requests on its Boxed Micro-Processors that are purchased from anywhere else in the world (even if these purchases are made from the authorised distributors of Intel in other nations). 
  • The informant has alleged Intel of differential behavior towards India and adverse effect on competition. Intel, however, stated in its reply that such allegations have no merit and that “warranty” and “warranty of service” are distinct terms. It also stated that its distributers are not exclusive and hence no case under Section 3 can be made out. 

Issues-

  • Whether a prima facie case can be made out against Intel under Section 3 of the act?
  • Whether a prima facie case can be made out against Intel under Section 4 of the act?

Applicable Laws-

  • Section 3(4)
  • Section 4(2)(a)(i), Section 4(2)(b)(i) Section 4(2)(c)

Application-

  • The agreement between Intel and its authorised distributors is not in the nature of exclusive distribution agreement as its authorised distributors may sell Micro-processors of any other brand as well, as already stated by Intel. Therefore no case can be made out against section 3(4).
  • The contention of Intel that it has not denied to provide warranty in India but only ‘warranty service’ in India does not have any merit because it has formulated a differential policy for India which limits the choice for Indian customers. Therefore it is in contravention of Section 4(2)(a)(i) of the act. 
  • The same also prima facie results in limiting or restricting the market for Boxed Micro-processors for Desktop and Laptop PCs in the territory of India, which is in contravention of Section 4 (2) (b) (i) of the Act 
  • The informant already stated that parallel importers are required to maintain competition. Absence of competition from parallel importers may lead to the risk higher prices for Intel Boxed Micro-Processors in India and denial of market access to parallel importers , which is in contravention of Section 4 (2)(c) of the Act.

Conclusion-

  • Based on the allegations of the informant and the prima facie contravention of section 4 of the act, the Commission directed the Director General (‘DG’) to cause an investigation to be made into the matter under the provisions of Section 26(1) of the Act.