CCI Dismisses Complaint Against Karagiri Studio: Does Not Raise Any Competition Law Concern

CCI Dismisses Complaint Against Karagiri Studio: Does Not Raise Any Competition Law Concern

The Competition Commission of India comprising of Ravneet Kaur (Chairperson), Sangeeta Verma (Member), and Bhagwat Singh Bishnoi (Member) dismissed a complaint against Karagiri Studio for contravention of the provisions of Section 4 of the Competition Act, 2002 (Act).

The Commission held that the complaint had no competition law concern rather appeared to be a consumer issue and therefore, no the Commission had authority to decide the dispute lies as per the Act.

In the present case, the informant claimed to be a customer of Karagiri Studio, an e-commerce business that sells ethnic wear such as silk sarees like Kanjeevaram and Paithani, which are labeled with a Geographical Indication (GI) tag. The Informant had made two pre-paid orders on the Karagiri Studio website for two sarees with GI tags: one Ultrapeach Kanjeevaram saree priced at Rs. 4594.40 and another Fusica Pink Paithani saree priced at Rs. 5877.60.

The Informant accused Karagiri Studio of defrauding them by providing two counterfeit (polyester) sarees instead of genuine silk sarees with GI tags, as confirmed by chemical test reports from the Northern India Textile Research Association. The test reports indicated that the sample of the Kancheepuram saree had a composition of 72.87 per cent polyester and 27.13 per cent silk, while the sample of the Paithani saree had a composition of 78.43% polyester and 21.57 per cent silk.

The Informant also alleged that Karagiri Studio is charging predatory prices for their products. According to the Informant, these actions constitute an abuse of dominant position by Karagiri Studio, violating Section 4 of the Act.

Furthermore, the Informant referred to Section 3(5) of the Act and mentioned that Section 40 of the Geographical Indication of Goods (Registration and Protection) Act, 1999, imposes penalties for selling goods with false GI tags.

The Informant pleaded before the Competition Commission to conduct an inquiry into the practices of Karagiri Studio to determine if they engage in unfair trade practices and to impose penalties for violating the Act and the GI Act. The Informant also requested the Commission to order the seizure of counterfeit goods produced by Karagiri Studio. Additionally, the Informant has sought interim relief by requesting the Commission to direct Karagiri Studio to pay a compensation of Rs. 67,000/- for the sarees' price, lab test expenses, filing fees, and other related costs.

The CCI observed that the Informant had only made unsubstantiated allegations of unfair trade practices and abuse of dominant position without providing any specific details about the relevant market or specific conduct of Karigari Studios that would fall under the scope of Section 4 of the Act. Additionally, the allegation of predatory pricing was not supported with evidence.

The Commission determined that the dispute between the Informant and Karigari Studios seems to be more of a consumer issue related rather than a competition concern covered by the Act.

The Commission deemed that the Informant’s references to Section 3(5)(d) of the Act and provisions of the GI Act were also irrelevant and did not require intervention.

Consequently, the Commission closed the matter and concluded that no violation of the Act has been established against Karigari Studios, and recommended the Informant to seek redressal through an appropriate forum.