The Competition Commission of India (CCI), in an order passed under Section 27 of the Competition Act, 2002 in Case No. 05 of 2019, has held that Intel Corporation abused its dominant position in the market for boxed microprocessors for desktop PCs in India.
The Commission found that Intel’s India-specific warranty policy imposed unfair and discriminatory conditions on consumers and parallel importers.
The Bench comprised Chairperson Ravneet Kaur along with Members Anil Agrawal, Sweta Kakkad and Deepak Anurag.
Background of the Case
The proceedings arose from an information filed by Matrix Info Systems Pvt. Ltd., a Delhi-based IT trading company engaged in parallel imports.
The informant alleged violations of Sections 3 and 4 of the Competition Act. The challenge related to Intel’s revised warranty policy introduced on April 25, 2016.
Before 2016, Intel offered a global warranty on its boxed microprocessors. However, the revised policy restricted warranty services in India to products purchased only from authorised Indian distributors.
CCI Defines Relevant Market and Finds Dominance
The Commission defined the relevant market as:
- Product Market: Boxed microprocessors for desktop PCs
- Geographic Market: India
It rejected Intel’s argument that broader substitutability existed across devices.
The CCI observed that Intel consistently held a significantly higher market share than its competitor, AMD, between 2016 and 2021. It also noted high entry barriers due to intellectual property, capital requirements, and research intensity.
Accordingly, the Commission held Intel to be dominant in the relevant market.
Warranty Policy Held Unfair and Discriminatory
The Commission examined whether Intel’s warranty restrictions violated Section 4(2)(a)(i).
It found that genuine products purchased from authorised distributors abroad were denied warranty services in India solely because they were not sourced locally.
The CCI rejected Intel’s justification that the policy aimed to prevent counterfeit products. It noted that verification mechanisms already existed, including diagnostic tools and product identification systems.
Restriction on Market Access and Consumer Choice
The Commission also found violations under Sections 4(2)(b)(i) and 4(2)(c).
It observed that the warranty policy:
- Restricted market access for parallel importers
- Limited consumer choice
- Enabled price disparities
Evidence showed price differences ranging from 44% to 133% between imported products and those sold through authorised Indian distributors.
Proceedings and Investigation Timeline
- CCI ordered investigation under Section 26(1) on August 9, 2019
- Intel challenged the order before the Karnataka High Court
- The High Court dismissed the challenge on August 23, 2022
- DG submitted report on January 25, 2024
During proceedings, Intel informed the Commission that it would restore global warranty services from April 1, 2024. However, the CCI proceeded to decide the matter on merits.
Deletion of Intel India Entity
Intel Technology India Pvt. Ltd. (ITIPL) was removed as a party.
The Commission found that ITIPL had no role in the formulation or implementation of the warranty policy. It was engaged primarily in research and support services.
Final Findings
The CCI concluded that Intel’s conduct amounted to abuse of dominant position under:
- Section 4(2)(a)(i)
- Section 4(2)(b)(i)
- Section 4(2)(c)
The Commission passed directions under Section 27 of the Competition Act.
