Asian Paints cleared on anticompetitive practices allegations by CCI

Asian Paints cleared on anticompetitive practices allegations by CCI

The Competition Commission of India (CCI) has cleared Asian Paints of allegations relating to anticompetitive trade practices pursuant to a JSW Paints complaint.

The CCI said it probed allegations of anticompetitive practices against the decorative paints market leader. Upon investigation, it concluded that the actions of Asian Paints were "based on objective criteria and uniformly applicable practice of Asian Paints to protect its business interest."

JSW Paints is a unit of the steel-to-cement JSW Group, a recent entrant into the decorative paints market where Asian Paints holds about 40% share. It was alleged by the Company in 2020 that Asian Paints was using its dominant position in the market to block its entry into the states of Karnataka, Telangana and Tamil Nadu.

It was further alleged that Asian Paints reduced the credit limit and tier of several dealers in these states following their dealings with JSW Paints. Additionally, they further added the dominant player threatened to stop business with such dealers and forced them to discard or less-prominently display the promotional material of the complainant.

"The facts and circumstances of the case and based on evidence on record, (the CCI) notes that the investigation has returned a finding that the reduction in credit limit in almost all cases of dealers would have been necessitated on account of business considerations, either due to reduction in off-take by the dealer concerned or on account of unpaid accumulated overdue over a period, which is stated to be as per a laid down policy of Asian Paints," said the watchdog's report.

Similarly, the competition watchdog found that the retail tiers of dealers were restored prior to the filing of information in the case. The report stated that Asian Paints did not pressurize or influence any dealer to remove the JSW promotional material or tinting machines.

The CCI said that the letter submitted by a dealer alleging coercion on part of Asian Paints obtained by JSW Paints without giving the dealer the true context and the same dealer later dismissed the allegations against Asian Paints in an affidavit.