Intel fined ₹27cr for discriminatory warranty policy in India
What's the story
The Competition Commission of India (CCI) has slapped a fine of ₹27.38 crore on Intel Corporation for its "discriminatory" warranty policy in India. The penalty was imposed under Section 27 of the Competition Act, 2002, for violating provisions of Section 4 of the Act. The case was filed by Matrix Info Systems Private Limited, which alleged that Intel's warranty policy was amended on April 25, 2016.
Policy details
Warranty policy redirected claims for globally purchased processors
The amended policy by Intel allowed warranty claims in India only for products bought from authorized Indian distributors. It redirected claims for globally purchased processors to the country of purchase. This was seen as an abuse of dominance, with the CCI noting it had an appreciable adverse effect on competition in the Indian market.
Discriminatory practice
Policy limited consumers' choice, impacted competition: CCI
The CCI found Intel's India-specific warranty policy to be discriminatory when compared to its policies in other countries such as China and Australia. The regulator said the policy limited consumers' choice and impacted competition in the Indian market. It also noted that this conduct by Intel was a breach of competition law provisions prohibiting abuse of dominant market position.
Penalty details
Penalty imposed at rate of 8% on Intel's average turnover
The CCI imposed the penalty at the rate of 8% on Intel's average relevant turnover, considering that the India-specific warranty policy had been in place for eight years. However, taking into account "mitigating factors" such as discontinuation of this policy from April 1, 2024, the penalty amount was reduced to ₹27.38 crore. The commission also directed Intel to widely publicize its withdrawal of this contentious warranty policy and submit a compliance report.