Key Points
- CCI imposed over ₹142 crore penalties on HP India and 21 resellers for cartelisation
- HP India manipulated GeM bids through pricing, authorisations and coordinated cover bidding practices
- Cases originated from HP India's leniency application exposing anti-competitive conduct in government procurements
New Delhi — The Competition Commission of India (CCI) has imposed penalties totalling more than ₹141 crore on HP India Sales Pvt. Ltd. and several of its authorised resellers after finding they colluded to rig bids in government procurement through the Government e-Marketplace (GeM), according to two separate orders issued on Monday.
In the larger of the two cases, the antitrust regulator imposed a penalty of ₹126.87 crore on HP India and around ₹1.22 crore collectively on five resellers for anti-competitive conduct involving the sale of personal system products, including laptops, desktops, workstations and related accessories.
In a separate but related order, CCI levied a further ₹11.98 crore penalty on HP India and approximately ₹2.30 crore collectively on 16 resellers for cartelisation in the sale of printer consumables such as toner cartridges, ink cartridges and other supplies used with HP printing hardware.
The combined penalties on HP India amount to ₹138.85 crore, while the total penalties on the resellers exceed ₹3.5 crore. The regulator also imposed monetary penalties on certain officials of HP India and the reseller companies under Section 48 of the Competition Act, holding them liable for their role in the violations.
According to the CCI, both cases stemmed from applications filed by HP India under the Competition Act’s lesser penalty provisions, which prompted investigations into alleged bid rigging in government tenders floated on the GeM platform.
Personal systems case
The Commission found that HP India manipulated participation in GeM tenders by dictating bid prices to resellers and controlling the issuance of Manufacturer Authorisation Forms (MAFs) to influence which reseller could participate in specific tenders.
CCI said the company withheld authorisations in certain cases to favour selected resellers, while five resellers—Delphi Infosolutions, Digitech Computers, Orbit Techsol, Hind Technocare and Krishna Computers—colluded with HP India in the arrangement.
The investigation examined GeM tenders for personal system products worth more than ₹1 crore in Delhi and found evidence of collusion in seven tenders through emails and statements recorded during the investigation.
Printer supplies case
In the second case, involving printer consumables, CCI found that HP India played what it described as a central role in facilitating coordination among 16 Tier-2 resellers by arranging support or “cover” bids, allocating customers and influencing bidding strategies.
The investigation covered government tenders for HP supplies products valued above ₹20 lakh on the GeM platform in Delhi. According to the Commission, evidence collected during the investigation—including emails, WhatsApp messages, recorded meetings and witness statements—showed the parties engaged in bid rigging, cover bidding, price coordination and customer allocation between 2017 and 2020.
The Commission held 16 resellers, including DD Enterprises, Ascent Information Systems, Kaypee Enterprises, Britex Enterprises, Alankar Distributors, Vijay Stationery Mart, G R Enterprises, Perfect Innovative Computers, Khandelwal Traders, A Square Technologies, Innovative Solutions, Pioneer Technologies, Delphi Infosolutions, Shakti Marketing Associates, International Computer Resources and Arms Peripherals, liable for submitting support or cover bids in violation of competition law.
HP’s defence
The orders note that HP India acknowledged the existence of coordination among resellers but argued it had not acted as the “kingpin” of the cartel.
The company submitted that the arrangements emerged after the introduction of the GeM procurement platform disrupted long-standing relationships between resellers and government customers. HP said some resellers had requested assistance to preserve their legacy government accounts and prevent business from shifting to counterfeit products.
HP also argued that the conduct affected only competition among HP resellers and did not restrict competition from rival brands. The company further cited its competition compliance programme, cooperation with the investigation and first-time offender status as mitigating factors.
The CCI, however, concluded that HP India and the resellers had violated Section 3(3)(d) read with Section 3(1) of the Competition Act, which prohibits bid rigging and anti-competitive agreements. Besides imposing financial penalties, the Commission directed all parties to cease and desist from engaging in similar conduct in future.
