CCI rules out anti-competitive action against Snapdeal & SanDisk

Rejects complaint alleging abuse by the two firms of their dominant market position for portable small-sized consumer storage devices

The Competition Commission of India (CCI) has rejected a complaint alleging that online marketplace Snapdeal.Com and SanDisk Corporation abused their dominant market position for portable small-sized consumer storage devices.

The complaint filed by one Ashish Ahuja, who sells among others SanDisk products, alleged that e-commerce player Snapdeal.Com had stopped the sale of his items from earlier this year through its online portal saying that only authorised partners could sell SanDisk items on its site.

It was averred by the complainant that Snapdeal.Com and the Indian sales office of US-based SanDisk Corporation, a leading supplier of flash data storage card products, in agreement with each other were compelling him to become the authorised dealer for SanDisk.

Further, the complainant had accused that SanDisk and Snapdeal.Com in collusion with each other were trying to stop him from offering competitive pricing which was much below than the other sellers of the same product.

In an order released today, CCI said that "no case of contravention of the provisions of the (Competition) Act is made out against the opposite parties and the information is ordered to be closed forthwith...".

The watchdog noted that "insistence by SanDisk that the storage devices sold through the online portals should be bought from its authorised distributors by itself cannot be considered as abusive as it is within its rights to protect the sanctity of its distribution channel".

Further, the Commission observed that SanDisk had in a circular only clarified that the full range sales and warranty services offered by it is limited to those products brought from its authorised national distributors.

"The conduct of SanDisk in issuing such circular can only be considered as part of normal business practice and cannot be termed as abuse of dominance," CCI said.

"As far as Snapdeal.Com is concerned, it is not engaged in the purchase or sale of storage devices, rather it owns and manages a web portal that enables those sellers who stock storage devices to sell such devices through its web portal for a commission,"

It also said that Snapdeal.Com had various competitors in the e-commerce space, and that the sector thrived on discounts and deals.

"Considering these facts Snapdeal.Com prima facie cannot be termed as a dominant player," the watchdog said.