CCI fines Intel ₹27 crore on ‘discriminatory’ warranty policy for 8 years

New Delhi: Competition Commission of India (CCI) imposed the following penalty: ₹27.38 crore penalty for Intel Corp’s India-specific “discriminatory” warranty policy for microprocessors; chips purchased from authorized distributors in the rest of the world were not covered under this policy; This is a practice that the regulatory authority considers an abuse of dominance.

The decision stated that Intel had 60 days to pay the penalty amount.

The case is based on a complaint by Delhi-based Matrix Info Systems Pvt Ltd, which stated that Intel’s India policy was changed in 2016 and warranty claims for microprocessors in India would be honored only when purchased from an authorized Indian distributor, CCI said in a statement. For boxed microprocessors purchased elsewhere, the company said it directs the buyer to the country of purchase to benefit from the warranty.

The antitrust watchdog said this resulted in a significant adverse impact on competition in the Indian market and prevented Indian consumers from availing after-sales warranty service for original Intel boxed microprocessors in India from April 25, 2016, when the policy was changed, to April 1, 2024.

Matrix, which imports Intel microprocessors to India, had claimed that Intel’s India-specific warranty policy was “arbitrary and unfair towards the Indian market and consumers”. He said the policy is only aimed at protecting the market share of its authorized distributors in India.

“Based on the available evidence, the Commission found that Intel has a dominant position in the relevant market of boxed microprocessors for desktop computers in India. The Commission found the India-specific warranty policy to be discriminatory when compared to Intel’s warranty policies in China, Australia and the rest of the world,” CCI said.

The watchdog said it found the policy affected competition in the Indian market by limiting consumers’ choices and that Intel’s behavior violated competition law provisions that do not allow abuse of dominant market position.

Intel confirms receipt of an emailed inquiry Mint and said a company representative would respond soon. Questions emailed to Matrix Info Systems on Thursday evening remained unanswered by press time.

Considering that the India-specific warranty policy has been in force for eight years, CCI imposed a penalty of 8% of Intel’s relevant average turnover. The amount of the penalty will be adjusted taking into account “mitigating factors”, including the discontinuation of the policy from April 1, 2024. ₹27.38 crore.

The regulator’s order stated that Intel has requested CCI to note its transition to a worldwide warranty policy in India from April 1, 2024, and close the case to save time and resources of the regulator as well as Intel and other third parties.

In its order, CCI asked Intel to widely publicize the withdrawal of its India-specific warranty policy and submit a compliance report.