Hiveloop Technology Pvt. Ltd. v. Parle Products Private Limited

CCI6 Jul 202228/2021

Case brief

AI extract

What is this about?

The Competition Commission examined an application alleging that Parle Products abused its dominance by refusing to supply its biscuits to the B2B platform Hiveloop. The Commission held the Informant failed to prove AAEC and dismissed the application.

What did the court decide?

Confirmation that the matter be closed forthwith under Section 26(2) of the Act as no prima facie case of contravention of Sections 3(4) and 4 was made out.

What the court decided

AI extract

Hiveloop Technology Pvt. Ltd. Vs. Parle Products Private… — Company and Corporate | CCI (2022)

¶198

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.”

¶203

The Commission observes that the alleged non-dealing of Parle with the Informant appears not to have any adverse effects on competition, as has been canvassed. In this regard, on an appreciation of provisions of Section 19(3) of the Act, the Commission is of the prima facie view that there entails no market foreclosure. There are no allegations that its existing distributors have exited the market on account of any anti-competitive conduct. In the present case, the overall competition is not getting or likely to get adversely affected in any of the markets at this stage. Further, it may also not be reasonable to assume that technological innovation and disruptive technology is introduced only by the Informant, as a similar model has been deployed by others as well. The Commission observes from the public domain that there is the presence of players like JioMart Partner¹ , Arzooo² , Flipkart Wholesale³ , Amazon Business⁴ , and other competitors in the online B2B segment. The Commission also notes that most B2B platforms apparently follow a similar business model as that of the Informant, and there appears to be no unique strategy followed by the Informant in terms of extending facilities like credit, logistics, etc. , similar to those claimed by the Informant as part of its B2B ecosystems.⁵ The Commission further notes that there are apparently no barriers to entry either in the manufacturers’ market or in the distributors’ market, considering the presence of large number of biscuit manufacturers (including foreign entrants in recent years) in the upstream as well as presence of Parle’s distributors in the downstream market. Moreover, there appears to be no existential threat or foreclosure as regards the Informant, considering that the Informant is an online B2B platform catering to multiple product segments pan-India and is not significantly dependent on Parle’s products. As per the news report, more than 5 lakh products are curated across 2500 brands that are available on the Informant’s platform, and it

Hiveloop Technology Pvt. Ltd. v. Parle Products Private Limited

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Hiveloop Technology Pvt. Ltd. v. Parle Products Private Limited

Case brief

What is this about?

What did the court decide?

What the court decided

Issues for consideration

Cases cited

Parties & counsel

Coram

Case details

Similar cases

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