CCI fines Intel ₹27 crore on ‘discriminatory' warranty policy for 8 years

New Delhi: The Competition Commission of India (CCI) has imposed a penalty of ₹27.38 crore on Intel Corp for its “discriminatory” India-specific warranty policy for microprocessors, under which chips sourced from authorized distributors in the rest of the world were not covered, a practice that the regulator held as abuse of dominance.

Intel has 60 days to deposit the penalty amount, the order said.

In a statement, the CCI said the case was based on a complaint by Delhi-based Matrix Info Systems Pvt Ltd that said Intel’s policy for India was amended in 2016, under which warranty requests for microprocessors in India would be entertained only when purchased from an authorized Indian distributor. For boxed microprocessors purchased elsewhere, the company redirected the buyer to the country of purchase to avail warranty, it said.

The antitrust watchdog said this had led to an appreciable adverse effect on competition in the Indian market, preventing Indian consumers from availing after sale warranty service on authentic Intel boxed microprocessors in India from 25 April 2016 to 1 April 2024, when the policy was changed.

Matrix, which imports Intel microprocessors in India, had alleged that Intel’s India-specific warranty policy was “arbitrary and unfair towards the Indian market and consumers.” It said the policy was only intended to protect the market share of its authorized distributors in India.

“Based on the evidence available, the Commission held Intel to be dominant in the relevant market of boxed microprocessors for desktops in India. The Commission found India-specific warranty policy discriminatory in comparison with Intel’s warranty policies in China, Australia and rest of the world,” the CCI said.

The watchdog said it found the policy to have limited consumers’ choice, impacting competition in the Indian market and it found the conduct of Intel in breach of competition law provisions that disallow abuse of dominant market position.

Intel acknowledged the receipt of a query emailed by Mint and said a company representative would respond soon. Queries emailed to Matrix Info Systems on Thursday evening remained unanswered until press time.

Considering the fact that the India-specific warranty policy had been in place for eight years, the CCI imposed penalty at the rate of 8% on the average relevant turnover of Intel. It said that considering the “mitigating factors” including discontinuation of the policy from 1 April 2024, the amount of penalty had been reduced to ₹27.38 crore.

Intel had requested CCI to note its shift to a worldwide warranty policy in India from 1 April 2024 and close the case to save time and resources of the regulator as well as of Intel and other third-parties, the regulator’s order said.

In its order, the CCI asked Intel to widely publicize withdrawal of its India-specific warranty policy, and submit a compliance report.