- Competition Commission of India fined HP India for cartelisation in GeM government tenders from 2017-2020
- HP coordinated with resellers on bids for laptops, desktops, workstations, and accessories via MAF control
- Emails showed HP directing bid prices and restricting reseller participation in government procurement tenders
The Competition Commission of India (CCI) on Monday fined HP India Sales Pvt. Ltd., the Indian arm of personal computer maker HP Inc., Rs 126.87 Crore for cartelisation and bid-rigging in government procurement tenders conducted through the Government e-Marketplace, or GeM.
The watchdog held that HP India coordinated with certain resellers in tenders for personal systems products such as laptops, desktops, workstations and related accessories during 2017-2020. The case originated from a leniency application filed by HP India itself, which triggered a wider investigation into GeM tenders floated by Delhi-based government buyers.
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CCI found that HP used its control over Manufacturer Authorisation Forms, or MAFs, and transfer pricing to influence which resellers participated in bids. The regulator cited emails and witness statements showing HP officials communicating specific bid prices to resellers, directing participation in certain tenders and, in some instances, restricting participation by withholding authorisations.
HP argued that GeM's reverse-auction system disrupted legacy reseller relationships and that any coordination affected only competition among HP channel partners rather than competition between brands such as Dell, Acer and Lenovo. Several resellers contended that communications relating to MAFs and pricing were routine industry practices within a vertical manufacturer-distributor relationship.
Rejecting those submissions, CCI held that HP and its resellers became competitors whenever they bid in the same tender and therefore could be examined under cartel provisions of the Competition Act.
The regulator found HP India, Delphi Infosolutions, Digitech Computers, Orbit Techsol, Hind Technocare and Krishna Computer guilty of contravention, while clearing Comnet Vision, Softlabs, Thoughtsol Infotech, Intensity Global Technologies and M Integraph Systems for lack of sufficient evidence.
After granting leniency benefits, CCI imposed a penalty of Rs. 126.87 crore on HP India. It also imposed penalties of Rs. 9.52 lakh on Delphi Infosolutions, Rs. 17.97 lakh on Digitech Computers, Rs. 86.32 lakh on Orbit Techsol, Rs. 6.72 lakh on Hind Technocare and Rs. 1.91 lakh on Krishna Computer, besides penalties on certain individuals.
The companies and responsible officials have been directed to cease and desist from similar conduct, pay penalties within 60 days and conduct competition-law compliance training programmes, with compliance reports to be filed with the regulator within 60 days.
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