9911796707
TMI Blog2024 (11) TMI 1004X X X X Extracts X X X X X X X X Extracts X X X X ..... reement on the edifice of which the entire allegations rest - A bare perusal of the said Propel Agreement reveals that it is only an agreement to meet the requirements of the end consumers through the assistance imparted by the manufacturers to the processors by way of supply of raw materials, imparting technical and marketing training, rendering services to the customers as per the requirements, among others. With regard to the allegation of exclusive supply obligation, the Commission observes that exclusive purchase obligation is said to be imposed on processors only in respect of High Performance Glass Allied Products and Clear Tempered Glass . However, no such imposition of exclusivity is observed from the submitted Propel Agreement, in respect of clear float glass/other glass, thereby implying that the processor has a choice to procure clear float glass from other glass manufacturers. With regard to allegation of forced co-branding, the Commission has perused clause 3.3 of the said Propel Agreement which reveals that the OP-1 would facilitate the processor to use its own trademark/brand name alongside trademark/brand name of OP- 1 under certain terms and conditions. Thus, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereof. - MS. RAVNEET KAUR CHAIRPERSON, MS. SWETA KAKKAD MEMBER AND MR. DEEPAK ANURAG MEMBER Order under Section 26(2) of the Competition Act, 2002 1. An Information was filed under Section 19(1)(a) of the Competition Act, 2002 (hereinafter, Act ) alleging certain anti-competitive practices in violation of Section 3(4) and Section 4 of the Act by Saint Gobain India Pvt. Ltd. ( OP-1 ) and Compagnie De Saint- Gobain ( OP-2 ). Facts and allegations as stated in the Information 2. The Informant is stated to be a public-spirited person. 3. As stated in the Information, Saint Gobain Group comprises of OP-2 (a France-based parent entity) and companies/ entities affiliated to it. OP-1 is engaged in the business of designing, manufacturing and distributing materials and services for construction and industrial markets. It is stated to have a pan-India presence with 26 manufacturing sites, sales offices in all cities major industrial towns, and an extensive dealer network. On its website, OP-1 has listed names of over 90 establishments as its processors and over 200 establishments as its fabricators. The Informant has stated that OP- 2, directly or indirectly, owns 99.03 percent shares o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssors/ distributors are being offered significant discounts if they purchase exclusively from OP-1; however, processors who deal with competitors of OP-1 are not given the products by OP-1. This allegedly falls foul of Section 3(4)(d) as well as Sections 4(2)(a)(i), 4(2)(b)(i) and 4(2)(c) of the Act. d) Resale price maintenance: In certain cases, OP-1 directly approaches large customers (real estate companies) and negotiates prices directly with them. The processors and distributors are then forced to issue invoices at these prices. This allegedly falls foul of Section 3(4)(e) as well as Section 4(2)(a)(ii) of the Act. 8. In furtherance of the aforesaid allegations, the Informant has proposed two relevant markets: (i) Market for production and sale of clear float glass in India and (ii) Market for production and sale of coated glass in India . The Informant has requested the Commission to conduct assessment and investigation in the said relevant markets. 9. As regard the first relevant product market, i.e., market for production and sale of clear float glass , the Informant has submitted that the Commission has already accepted this market as a separate product market in Case No. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Competition Commission of India (General) Regulations, 2009 ( General Regulations ). The Informant has also prayed for any other order which the Commission deems fit in the facts and circumstances of the case. Additional submission of the Informant 15. On 16.10.2023, the Commission considered the Information in its ordinary meeting and decided to seek responses/comments from the Informant on the following: a) business model of glass manufacturers and processors and their inter-se relationship, b) copy of an actual agreement signed between manufacturers and processors in view of unsigned and undated draft agreement submitted with information, c) whether the referred agreement is an industry practice and required to be entered upon between manufacturer and processor in the clear glass market? d) a copy of a subsisting agreement, if available, e) is it mandatory for all the processors to enter into Propel Project Participation Agreement having exclusivity conditions with any manufacturer, if they intend to deal with them? f) what kind of technical and other training are being provided by the manufacturer to the processors? whether such technical assistance is indispensable for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s proposed to be entered between the OP-1 and one of its processors. Additionally, the Informant has provided a copy of a signed License Agreement entered into between OP-1 and one of its processors whose identity has been concealed. iii. On the question whether the practice referred in Propel Agreement is an industry practice, the Informant has submitted that as per its knowledge, the concerned agreement is not an industry practice. Propel Agreement is a binding agreement on processors to buy glass only from OP-1. Further, Technical Agreements between Processor and Manufacturer provide a framework for collaboration, quality assurance, and for the successful delivery of processed glass products to the market/ consumers. However, those do not impose a requirement to buy glass from only one manufacturer. iv. With respect to the question whether it is mandatory for all the processors to enter into the said Propel Agreement, the Informant submitted that Propel Agreement is name of an agreement by OP-1. Other manufacturers do not have such binding agreements with exclusivity conditions. v. Regarding technical and other training being provided by the manufacturer to the processors and wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y obligation, (ii) force co-branding (iii) refusal to deal, and (iv) resale price maintenance in case of bulk orders. These are alleged to have violated provisions of section 3(4) and 4 of the Act. Further, it appears that the allegation of the Informant is based on a document that is yet to be signed by OP-1. 19. The Commission notes that the Informant has primarily relied upon an undated and unsigned document titled Propel Agreement to allege exclusive supply obligation and forced co-branding . The Commission also notes that other two allegations i.e., refusal to deal and resale price maintenance are stated to be imposed through oral directions. Accordingly, the Commission directed the Informant to furnish a copy of an actual agreement signed between the OP-1 and a processor. The Informant, in its response dated 07.02.2024, stated that it does not have access/ possession of a signed agreement. 20. Despite being given the opportunity, the Commission observes that the Informant has not been able to produce a valid and subsisting copy of the said Propel Agreement on the edifice of which the entire allegations rest. The Informant has submitted an unsigned and undated agreement whose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o allegation of forced co-branding, the Commission has perused clause 3.3 of the said Propel Agreement which reveals that the OP-1 would facilitate the processor to use its own trademark/brand name alongside trademark/brand name of OP- 1 under certain terms and conditions. Thus, the Commission is of the view that co- branding, in itself, does not raise competition issue. 24. As regards allegations of refusal to deal, it has been submitted by the Informant that processors/ distributors are being offered significant discounts on products of OP-1, if they purchase exclusively from OP-1. Additionally, the processors who are dealing with competitors of OP-1 will not be sold products of OP-1. The Commission is of the view that the Informant has merely alleged the conduct to be carried out through oral directions and has not substantiated the same with any evidence. It may be noted that offering discounts on the basis of volume of purchase may not be anti-competitive, per se. 25. In relation to allegation of resale price maintenance ( RPM ) being practiced through oral direction, the Informant has claimed that in certain cases, OP-1 is stated to have directly approached the large bulk cus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commission is of the view that conditions imposed on processor, as per the said agreement, have objective justifications as dealt in preceding paragraphs. Given the facts and circumstances of the case, the Commission refrains from delineating relevant market and assessing dominance of OP-1 therein. 29. In view of the material placed on record and analysis carried out in preceding paragraphs, the Commission is of the view that no prima facie case is made out against OP-1 in respect of either Section 3(4) or 4 of the Act. Accordingly, the Information filed is directed to be closed forthwith under Section 26(2) of the Act. 30. Before parting with the order, the Commission deems it appropriate to deal with the request of the Informant seeking confidentiality over his identity and certain documents/ information filed by it under Regulation 35 of the General Regulations. Considering the grounds put forth by the Informant for the grant of confidential treatment, the Commission grants confidentiality to such documents/ information in terms of Regulation 35 of the General Regulations read with section 57 of the Act for a period of three years from the passing of this order. The Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
