Hiveloop Technology Pvt. Ltd. v. Britannia Industries Ltd.

CCI16 Jun 202218/2021

Case brief

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What is this about?

The Commission examined an allegation by an online B2B platform regarding refusal to deal by a respondent food manufacturer. The Commission rejected the allegations, finding no prima facie case of contravention of Sections 3(4) or 4 of the Competition Act and ordered the matter be closed.

What did the court decide?

The matter is closed forthwith under Section 26(2) of the Act for lack of a prima facie case of contravention.

What the court decided

AI extract

Hiveloop Technology Pvt. Ltd. Vs. Britannia Industries Ltd. — Company and Corporate | CCI (2022)

Hiveloop Technology Pvt. Ltd. v. Britannia Industries Ltd.

CCI16 Jun 202218/2021

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Case brief

AI extract

What is this about?

What did the court decide?

The matter is closed forthwith under Section 26(2) of the Act for lack of a prima facie case of contravention.

What the court decided

AI extract

¶49

City	Article Description	Plan Shared April	Allocation	Allocation Percentage
Asansol	MG 300	7,14,972.5	2,19,648.0	31%
Asansol	Arrowroot 300	1,68,228.8	59,584.0	35%
Asansol	GD Butter 200	1,26,171.6	55,200.0	44%
Asansol	GD Butter 33	1,26,171.6	45,696.0	36%
Bhopal	GD Butter 33	8,28,951.2	4,71,072.0	57%
Bhopal	Tiger 58	6,90,792.7	3,01,824.0	44%
Bhopal	GD Butter 53	3,68,422.8	2,29,824.0	62%
Bhopal	GD Cashew 53	3,68,422.8	1,77,408.0	48%
Bhopal	Bourbon 60	1,84,211.4	1,16,000.0	63%
Indore	Tiger 58	6,61,161.2	3,68,640.0	56%
Indore	GD Butter 33	29,38,494.2	2,68,800.0	9%

¶53

Indore	Bourbon 60	3,67,311.8	1,25,600.0	34%
Jabalpur	GD Butter 53	2,06,449.2	1,17,504.0	57%
Lucknow	GD Butter 53	23,08,425.7	7,80,480.0	34%
Lucknow	Tiger Krunch CC 32	30,00,953.4	6,49,440.0	22%
Lucknow	GD Butter 33	13,85,055.4	6,00,768.0	43%
Lucknow	50-50 47	3,91,706.0	2,74,960.0	70%
Vadodara	GD Butter 33	3,79,120.8	1,56,576.0	41%
Varanasi	GD Butter 33	3,75,643.8	2,74,176.0	73%
Varanasi	GD Butter 53	2,68,317.0	1,65,312.0	62%

¶334

The Commission observes that, in the present case, resolution of two competing rights has been posited. On the one hand, the Informant is seeking a right to do business with Britannia with respect to certain products, and on the other hand, Britannia has asserted its right not to engage with the Informant on the premise that no such positive right rests with the Informant. According to Britannia, it has the autonomy to choose its partners in the vertical chain and it has freedom of choice as to whom to contract with as well as its level of engagement. In the realm of competition law, it is widely understood that firms have an autonomy to choose their trading partners as long as the exercise of such autonomy does not affect the fair functioning of the markets. Depending upon the market power held by entities, their conduct on refusal to deal may lead to foreclosure of market for other players. This, thus, is a mixed question of law and fact. Further, refusal to deal need not be absolute and ought to be seen in the context of the factual setting coupled with the factors under Section 19(3) of the Act. A refusal, either total or partial, could also have underlying valid justifications with commercial consideration, especially in the backdrop that it makes little economic sense for businesses to take a restrictive approach when it comes to expanding their horizon and reach. Though refusal to deal may be, inter se , two or more parties, its anti-competitive effect would have to be seen in the context of the overall market conditions that exist at the relevant point of time. Distribution networks are built and strengthened over a period of time, with sound underlying commercial consideration, trust, adequacy and performance, and a manufacturer cannot be forced to onboard any person/entity in the chain on an asking. It is also no ground that can be forcefully argued that, but for entry into the network, the new entrant will likely perish. What would tend to weigh is the impact actual or likely on existing competition and the benefit, if any, that accrues to the stakeholders upon a new entrant entering the market. A careful balanced approach is, thus, required to deal with the issue, having regard to the fact that what is the ill (perceived or actual) that can be likely remedied. From a competition perspective, business decisions to engage or not to engage with a downstream entity such as the Informant has to be seen in the context of likely AAEC, should the upstream entity choose not to deal with the downstream entity. As discussed supra , the distribution network of Britannia appears to be quite wide and no foreclosure seems to have arisen in the facts and circumstances of the case.

Hiveloop Technology Pvt. Ltd. v. Britannia Industries Ltd.

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Hiveloop Technology Pvt. Ltd. v. Britannia Industries Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

Issues for consideration

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Coram

Case details

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