The Supreme Court on Monday declined to entertain a plea by Asian Paints challenging an order of the Competition Commission of India (CCI) that directed an investigation into alleged anti-competitive practices by the company in the decorative paints market.
A bench of Justices J K Maheshwari and Vijay Bishnoi refused to interfere with a Bombay High Court order that had earlier upheld the CCI’s decision to initiate the probe. As the court was not inclined to entertain the petition, Asian Paints withdrew its plea, and the matter was dismissed as withdrawn.
The CCI order was issued following a complaint filed by Grasim Industries Ltd (Birla Paints Division), which entered the decorative paints segment in February 2024 under the ‘Birla Opus Paints’ brand. Grasim accused Asian Paints of using exclusionary tactics to restrict its entry and expansion in the market.
After examining the complaint, the CCI held that a prima facie case of violation of Section 4(2)(a)(i), 4(2)(c) and 4(2)(d) of the Competition Act, 2002 was made out. Section 4 of the Act prohibits the abuse of dominant market position.
According to the regulator’s order, Asian Paints allegedly restrained its dealers from associating with competitors such as Grasim by imposing exclusive dealing arrangements, amounting to unfair conditions on them.
The Commission further observed that the company allegedly pressured suppliers of essential raw materials, landlords, clearing and forwarding agents, and transporters to avoid working with competitors. Such conduct, it noted, appeared to create entry barriers and partially foreclose competition in the decorative paints market.
The CCI has directed its Director General (DG) to conduct a detailed investigation and submit a report within 90 days. It also clarified that its observations were preliminary and should not influence the investigation’s outcome.
