CCI Fines Intel ₹27.38 Crore For Abuse Of Dominance Through India-Specific Warranty Policy
Pranav B Prem
The Competition Commission of India (CCI) has imposed a penalty of ₹27.38 crore on Intel Corporation for abusing its dominant position in the market for boxed desktop microprocessors in India through an India-specific warranty policy that restricted warranty services to products purchased from authorised distributors within India. The order was passed by a coram comprising Chairperson Ravneet Kaur and Members Anil Agrawal, Sweta Kakkad and Deepak Anurag.
The proceedings arose from an information filed by Matrix Info Systems Pvt. Ltd., a Delhi-based IT trading firm engaged in the import and sale of Intel microprocessors through parallel import channels. The informant alleged that Intel had imposed discriminatory warranty conditions in India which adversely affected traders dealing in genuine Intel processors sourced from overseas markets.
The Commission noted that until 25 April 2016, Intel offered a worldwide warranty on its boxed microprocessors. However, Intel subsequently amended its warranty policy to provide warranty support in India only for products purchased from authorised Indian distributors. As a result, processors imported through parallel channels, despite being genuine products, were denied warranty services in India.
After examining the material on record, the Commission defined the relevant market as “Boxed Microprocessors for Desktop PCs in India.” It found Intel to be dominant in this market, taking into account its consistently high market share and the limited competitive constraint posed by AMD during the relevant period.
The Commission held that Intel’s India-specific warranty policy imposed unfair and discriminatory conditions on purchasers of boxed microprocessors and amounted to abuse of dominance in violation of Section 4(2)(a)(i) of the Competition Act. The Commission observed that denial of warranty solely on the basis of the place of purchase placed Indian consumers and parallel importers at a disadvantage.
It further held that the impugned policy limited the market and denied market access to parallel importers in contravention of Sections 4(2)(b)(i) and 4(2)(c) of the Act. The Commission observed that refusal to honour warranty on genuine processors purchased abroad discouraged lawful parallel imports and restricted price competition in the Indian market.
The Commission noted that Intel had not imposed similar restrictions in certain other jurisdictions and that the policy was specific to India. It rejected Intel’s justification that the policy was necessary to address counterfeit and grey-market products, observing that Intel already possessed mechanisms to verify product authenticity. The Commission found that the denial of warranty was based solely on the location of purchase rather than on any issue relating to genuineness of the product.
The Commission also distinguished earlier decisions including Ashish Ahuja v. Snapdeal and Kapil Wadhwa v. Samsung, holding that the factual and legal context of those cases was materially different and therefore not applicable to the present matter. In determining the penalty, the Commission considered Intel’s average relevant turnover from boxed microprocessors in India for the preceding three financial years and imposed a penalty at the rate of eight percent of such turnover. The Commission noted that Intel had withdrawn the India-specific warranty policy with effect from 1 April 2024 and treated the withdrawal as a mitigating factor while determining the quantum of penalty.
Accordingly, the Commission directed Intel Corporation to deposit the penalty amount of ₹27.38 crore within 60 days and to widely publicise the withdrawal of the impugned warranty policy. The Commission also deleted Intel Technology India Private Limited from the array of opposite parties after finding that it was not engaged in the manufacture or sale of microprocessors in India.
Cause Title: In Re Matrix Info Systems Pvt. Ltd. and Intel Corporation
Case Number: Case No. 05 0f 2019
Coram: Ms. Ravneet Kaur Chairperson Mr. Anil Agrawal Member Ms. Sweta Kakkad Member Mr. Deepak Anurag Member
