The Competition Commission of India (CCI) has rejected JSW Paints’ allegation that Asian Paints is misusing its dominant position by denying market access.

Based on JSW Paints’ complaint that Asian Paints had threatened dealers in some southern States and misused its dominant position to restrict its entry, the CCI had order a probe in 2020. Following the investigation, CCI on Friday ruled that Asian Paints was able to make a net addition of 1,217 dealers in FY20 and FY21 against the new entrant JSW Paints’ net addition of 1,591 in the same period.

Therefore, CCI said net addition of dealers during the relevant period contradicts the allegation of denial of market access.

The directorate general of CCI also found that even the allegation of dealers being under pressure from Asian Paints to not to deal with JSW Paints was not substantiated, as the percentage of dealers who discontinued their relationship with Asian Paints is much higher than that of JSW Paints. The DG concluded that the allegation further stood depreciated as only 15 dealers out of 1,378 alleged common dealers came forward and levelled allegations against Asian Paints.

Further, none of them submitted enough evidence to substantiate their allegations, so that contravention could be legally demonstrated.

As regards to the allegations of attempts by Asian Paints to pressurise the dealers to return JSW Paints’ tinting machine, the DG could not unearth credible evidence.

The DG observed that, prima facie, Asian Paints’ conduct may seem anti-competitive from a plain reading of some of the allegations and submissions of the dealers, but these allegations lose their sheen when read in consonance with specific responses to each allegation submitted by Asian Paints and when the same was confronted by it following the principles of natural justice, said the CCI order.

All the allegations made by the dealers appear to be misconceived and motivated, as Asian Paints was able to adduce substantive evidence to prove that the act of reduction in credit of a dealer was not due to the alleged business association of a dealer with a competitor but their own mutual business relationship, it added.

With regards to the alleged stoppage of supplies to dealers who started business with the competitor brand, Asian Paints was able to justify its specific action in almost all cases. Asian Paints’ conduct did not show any abnormal trends in terms of orders serviced for any specific dealer during the period of 13 months, said the CCI order.

Hence, it added that the allegations against Asian Paints could not be substantiated and are untenable.

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