The Competition Commission of India (CCI) on Monday levied an aggregate penalty of ₹142.37 crore on HP India Sales Private Limited and its resellers for cartelisation through two separate orders concerning bid rigging in government procurement through the Government e-Marketplace (GeM).
Both proceedings, which related to tenders for personal computers and printing supplies, originated from lesser-penalty applications filed by HP India.
While granting HP India reductions for its disclosure and cooperation, the CCI probe found that the company had played a central role in facilitating and monitoring the anti-competitive arrangements.
“HP India seems to have indulged in customer allocation when there was no e-tendering, and ensured that such allocation continued even after the introduction of e-tendering on the GeM portal,” the antitrust watchdog said in its order.
Section 46 of the Competition Act allows the CCI to reduce or waive penalties for cartel members who voluntarily report their illegal activities. Also known as the leniency programme, the cartel member is required to provide full, true and vital disclosure regarding the existence and operations of the cartel before the investigation report is filed.
Delphi Infosolutions, Digitech Computers, Orbit Techsol, Hind Technocare and Krishna Computer were also found to have contravened the Act. The Commission did not find sufficient evidence against Comnet Vision, Softlabs Solution, Thoughtsol Infotech, Intensity Global Technologies and M Integraph System. Certain officials of HP India, Delphi and Orbit were also held personally liable.
The CCI imposed a penalty of ₹126.87 crore on HP India and ₹9.52 lakh on Delphi, apart from separate penalties on the other liable resellers and officials. HP India and Delphi received reductions under the lesser-penalty framework for their disclosures and cooperation.
In its second order, passed in a suo motu case of 2020 related to GeM tenders in Delhi for HP ink cartridges, toner cartridges and other printing supplies, the Commission found that HP India and 16 resellers had manipulated tenders between 2017 and 2020.
On the issue that, being the orchestrator of the cartel arrangement, HP India should not be allowed any concessional treatment, the CCI noted that HP India came forward and was the first to report and file for leniency before the Commission when it had no material to form a prima facie view regarding the existence of the alleged cartel conduct in the matter.
Finding all 17 opposite parties in contravention of Sections 3(3)(d) and 3(1), which deal with bid rigging, the CCI imposed a penalty of ₹11.98 crore on HP India after granting it a lesser-penalty reduction. Separate penalties were imposed on the participating resellers and responsible officials under Section 48 of the Act.
The CCI, in its order, directed the contravening parties to cease the anti-competitive practices, deposit the penalties within 60 days and conduct competition compliance training. The regulator also asked them to submit compliance reports to the Commission within the same period.
