CCI revises probe order against Asian Paints, removes previous findings

The Competition Commission of India revises its probe order against Asian Paints, removing references to previous findings of dominance, amid a complaint by Grasim Industries

In a move seen to be unusual, the Competition Commission of India (CCI) has revised its order of investigation into Asian Paints’ alleged abuse of  dominant position in the market. 

The order had been in response to a complaint filed by Grasim Industries, which belongs to the Aditya Birla group. 

A comparison of the original and the revised orders shows that the CCI had removed the reference to a similar complaint filed by JSW Paints against Asian Paints. In its revised order, the CCI said that it found Asian Paints to be prima facie in a position of dominance in the delineated relevant market, in 2024-25. 

In its initial or the original order, the antitrust watchdog had said that “it finds no reason to depart from its earlier finding of dominant position of the OP (opposite party, which is Asian Paints) in the delineated relevant market”. 

Asian Paints, in a filing on July 3, informed the stock exchanges that the CCI had revised its July 1 order a day after it was issued.

“The order has been revised by the CCI yesterday (July 2) and is available on the website of the CCI … The company is currently reviewing the order and will take appropriate legal recourse,” the firm said. 

Section 38 of the Competition Act, 2002, deals with the rectification of orders passed by the CCI. It allows the organisation to amend its orders to correct any mistakes apparent from the record, either on its own initiative or on a party’s request. 

“The CCI has the authority to change its order. Somebody could have challenged the commission saying it cannot rely on its previous order to establish dominance since that the markets have changed in the last four-five years. They have typically corrected the order,” a senior competition law expert said. 

Experts said such a revision in CCI orders was not very common. “The dominance of an enterprise in the relevant market is at a particular point in time. Over time, the landscape of market dynamics may undergo change, which may impact the extent of dominance,” said G R Bhatia, partner and head of competition law, Luthra & Luthra. 

Grasim had accused Asian Paints of engaging in exclusionary practices aimed at stifling its entry and growth in the Indian decorative-paint segment. 

In the complaint of JSW Paints in 2019, the firm alleged that immediately after the launch of its decorative paint business, Asian Paints began arm-twisting dealers who had agreed to stock and display decorative paints manufactured by JSW Paints. 

At the time, the CCI, however, disposed of the JSW Paints plea and said: “The commission is of the view that the balance is not tilted towards JSW Paints. Asian Paints has been able to demonstrate that some of its conduct or practices adopted qua the dealers was in furtherance of its terms of doing business with such dealers and not to keep JSW Paints away from the market.”

It is not dominance but abuse of it that is prohibited in the Competition Act. The CCI order had also clarified that observations made were not a final view on the case merits and directed the director-general to conduct the probe without being swayed by observations.