WhatsApp messages gave the game away. According to the Competition Commission of India, chats between HP India and 16 of its second-tier resellers showed the group “bid rigging, including cover bidding, price fixation, and customer allocation during 2017–2020” on government tenders. This month the regulator made HP pay for it.
On a Monday in July, the CCI issued two orders that together put an aggregate penalty of ₹142.37 crore on HP India Sales Private Limited and its resellers, Business Standard reported. Ars Technica, which described the total as 1.4 billion rupees, said the commission announced the action in the same week.
Two cases, one pattern
Both cases came out of the Government e-Marketplace, the online portal India’s public bodies use to buy. One covered tenders for personal computers. The other, a case the commission opened on its own initiative in 2020, covered ink cartridges, toner and other printing supplies in Delhi.
In the computer case, the CCI found that HP India worked with five resellers to coordinate their bid prices so that an HP partner would be more likely to win. HP India was fined ₹126.87 crore there. Delphi Infosolutions, one of the resellers, got ₹9.52 lakh. Digitech Computers, Orbit Techsol, Hind Technocare and Krishna Computer were also found in breach. Five other firms, Comnet Vision, Softlabs Solution, Thoughtsol Infotech, Intensity Global Technologies and M Integraph System, walked away: the commission said it lacked enough evidence against them. Certain officials at HP India, Delphi and Orbit were held personally liable.
In the printing-supplies case, all 17 parties, HP India and 16 resellers, were found to have broken the bid-rigging provisions of the Competition Act. HP India’s penalty came to ₹11.98 crore. Ars Technica put the fine on HP at 119.8 million rupees and said 21 resellers together were fined 35.2 million rupees.
The regulator’s reading
The CCI did not treat HP India as a bystander. “HP India seems to have indulged in customer allocation when there was no e-tendering,” the commission wrote, “and ensured that such allocation continued even after introduction of e-tendering at GeM portal.” It said the company played a central role in facilitating and monitoring the arrangements.
HP India told a different story, according to the order as Ars Technica quoted it. High printing-supply prices, it said, had pushed some resellers to threaten a move to “low-cost counterfeit products to compete on price,” and it “was commercially forced into a position where it had to support the collusive arrangement.” It also objected to being called the “kingpin” of the scheme.
The company still got a discount. Both proceedings began with lesser-penalty applications filed by HP India itself, and under Section 46 of the Competition Act a cartel member that discloses fully and early can have its penalty cut or waived. The CCI noted that HP India was the first to come forward when the commission had no material to form even a prima facie view that a cartel existed. Delphi received a reduction too.
Beyond the money, the commission told HP India and its channel partners to “cease and desist from anti-competitive conduct” and to hold competition compliance training programs within 60 days. Business Standard said emails and calls to HP went unanswered. Ars Technica reported that HP had not commented publicly on the fines.
Sources
- CCI fines HP India and resellers in govt emarketplace cartel case | India News – Business Standard
- HP fined 1.4 billion rupees for “cartelization” of ink cartridges, toner, PCs – Ars Technica
