HC imposes ₹10 lakh cost on Intel for hastily rushing to court against investigation ordered by competition watchdog

CCI had in 2019 ordered investigation on company’s ‘India-specific warranty policy’ for boxed microprocessors

August 26, 2022 11:48 pm | Updated 11:48 pm IST - Bengaluru

The High Court of Karnataka has imposed a cost of ₹10 lakh on Intel Technology India Pvt. Ltd. and Intel Corporation, U.S., for hastily rushing to the court against a decision of the Competition Commission of India (CCI) to investigate their ‘India-specific warranty policy’ for boxed microprocessors.

“The petitioners hastily rushed to this court and unjustifiably secured an interim order that interdicted an inquiry of preliminary nature, for all these years, to the enormous prejudice of public interest,” the court said.

‘Abortive attempt’

“This writ petition, besides being premature and absolutely devoid of merits, is an abortive attempt by the petitioners to scuttle the innocuous statutory proceedings of the commission. Therefore, this is a fit case for dismissal with exemplary costs,” Justice Krishna S. Dixit has said in his order while directing the petitioner to pay the cost to the CCI within six weeks.

The CCI on August 9, 2019 directed its Director-General to conduct an investigation to find out whether Intel’s warranty policy has potentially resulted in denial of market access to parallel importers and resellers of boxed microprocessors for desktop and laptop personal computers, and the risk of higher pricing for the such microprocessors in India.

The competition watchdog had issued the direction on a complaint lodged by Matric Info Systems Pvt. Ltd., New Delhi. It was complained that the ‘India-specific warranty policy’ was in contravention of sections 3 and 4 of the Competition Act, 2002, they were refusing to provide the warranty in India for boxed microprocessors which were imported from authorised sources abroad by restricting warranty for microprocessors purchased only from an authorised Indian distributor of Intel within India.

However, the investigation could not proceed due to the stay granted by the High Court in November 2019.

Meanwhile, the court said it hoped and expected that the long-pending investigation shall be accomplished at the earliest.

Decisions of apex court

Citing various decisions of the apex court on the CCI’s power to hold investigation through its D-G, the High Court said the petitioners had failed to demonstrate that the CCI’s decision was arbitrary and ureasonable.

“There may be damage to person, property or reputation but there is no legal injury to complain of. If the petitioners’ contention of ‘grave consequences’ is accepted, then almost invariably, no preliminary inquiry at the hands of the commission or investigation at the hands of the Director-General can be undertaken and that would render the very scheme of section 26 of the Act virtually otiose,” the court observed.

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