CCI Orders Probe into Asian Paints for Alleged Abuse of Dominance Following Birla Paints Complaint
CCI orders probe into Asian Paints for allegedly abusing its market dominance after a complaint by Grasim Industries, part of the Aditya Birla Group
The Competition Commission of India (CCI) has ordered an investigation into Asian Paints for allegedly abusing its dominant position in the decorative paints market in India, following a complaint filed by the Birla Paints Division of Grasim Industries. Grasim Industries, the informant, is part of the Aditya Birla Group and entered the decorative paints market under the brand...
The Competition Commission of India (CCI) has ordered an investigation into Asian Paints for allegedly abusing its dominant position in the decorative paints market in India, following a complaint filed by the Birla Paints Division of Grasim Industries.
Grasim Industries, the informant, is part of the Aditya Birla Group and entered the decorative paints market under the brand ‘Birla Opus Paints’. Grasim argued that Asian Paints, the largest player in the decorative paints market, used its dominant position to block Grasim’s entry by enforcing exclusivity on dealers, threatening to reduce credit limits, delaying services, and using other pressure tactics if dealers stocked Grasim’s products.
The informant also argued that Asian Paints coerced dealers to return or avoid installing Grasim’s advanced tinting machines, which are smaller and equipped with modern technology for better inventory management. The informant claimed that Asian Paints offered arbitrary incentives like foreign trips and extra discounts to dealers to secure exclusivity, and pressured suppliers, landlords, and transporters to avoid working with Grasim, thereby restricting its market access.
Asian Paints (the opposite party) countered by arguing that India’s paint market is highly competitive, with several players and low barriers to entry, citing Grasim’s rapid market expansion as evidence.
The CCI observed that Asian Paints holds a dominant position in the organized decorative paints market, noting its significant market share, extensive dealer network, and strong financial capacity compared to competitors. The commission observed that the practices alleged by Grasim, if proven, could amount to the imposition of unfair conditions on dealers, denial of market access, and imposition of supplementary obligations, potentially harming competition in the market.
The CCI found a prima facie case of violation under Section 4 of the Competition Act and directed the Director General to investigate the matter within 90 days. It explained that these findings are preliminary and do not represent its final views on the merits of the case. The matter will now proceed for detailed investigation.
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