CCI Closes JSW Paints Complaint Against Asian Paints: Dominance Is Not the Same as Abuse
In JSW Paints (P.) Ltd. v. Asian Paints Ltd. (Case Nos. 36 of 2019 and 17 of 2021), the Competition Commission of India (CCI) examined complaints that Asian Paints Limited had used its position in the decorative paints market to keep dealers away from a new competitor. After a Director General (DG) investigation, the Commission concluded that the allegations were not established and found no contravention of Section 3(4) or Section 4 of the Competition Act, 2002.
How the complaints arose
JSW Paints Private Limited, part of the JSW Group, entered the decorative paint segment in 2019 and, according to the informant, grew quickly in southern Indian cities by offering attractive dealer incentives and marketing support. It alleged that soon after its launch Asian Paints began pressing dealers to cut ties with it, through threats of stopping supply, a fall in service quality, withdrawal of incentives and removal of credit lines.
A second informant, Sri Balaji Traders, alleged that after it began dealing with JSW Paints it was demoted in Asian Paints' internal hierarchy of retailers. Both informants said the conduct violated Section 3(4) (anti-competitive vertical agreements) and Section 4(2)(c) (abuse of dominant position). The CCI clubbed the two matters and, at the first stage, directed the DG to investigate.