Trouble is brewing for global computer hardware giant Intel in India, with the country’s competition watchdog — Competition Commission of India (CCI) — ordering a probe into its new warranty policy.
According to the CCI’s order dated August 9, the commission has found prima facie that Intel’s India-specific warranty policy for its micro-processor chips (Boxed Micro-Processors or BMP) is “unfair and discriminatory, especially when seen in the light of the fact that such differential treatment is not meted out by Intel in other jurisdictions”.
“... (This) also prima facie results in limiting or restricting the market for Boxed Micro-processors for Desktop and Laptop PCs in the territory of India... as well as results in denial of market access to parallel importers…. Consequently, the Commission directs the Director General to cause an investigation into the matter and submit an investigation report within a period of 150 days of receipt of this order,” CCI said.
The CCI had taken up the case after a complaint filed by Matrix Info Systems Pvt Ltd, which is engaged in importing and supplying various IT products, against Intel Corporation and its Indian subsidiary Intel Technology India Pvt Ltd. Matrix, in its petition, had informed the CCI that Intel’s agreement with its authorised Indian distributors gives them exclusive selling rights and its new warranty policy, revised in 2016, offers warranty only if its products are bought from authorised dealers.
“(The) blanket ban on after-sales warranties if purchased from other sources is resulting in total deprivation of consumer choice,” Matrix had said.
Intel does not offer warranty service to consumers in India on products purchased by them from parallel importers even when such parallel imports have been made from authorised distributors of Intel abroad. Matrix had also alleged that denial of market access to other resellers and parallel importers due to the unreasonable condition of warranty is in contravention of the Competition Act, since Intel is the dominant player in the market.
Intel had contended that its policy was compatible with Indian laws and that it served to ensure that its customers could buy authentic Intel products since there was a “large unorganised market and parallel importers (like the Informant) often under-invoice goods or import old and salvaged parts disguised as new products”.
However, the CCI said it was of the “prima facie opinion that the India specific warranty policy... has the potential to lead to denial of market access to the parallel importers and resellers of Intel BMPs in India, who are competitors of Intel’s authorised distributors” and went on to point out that “that such a differentiated policy... also limits the choice for the Indian consumer”.
limited warranty
No warranty service if BMP bought from parallel importers, even if they have been bought from authorised foreign vendors
Counterfeit products
One of Intel’s contentions is that its warranty policy keeps fake goods in check