Udaan: The marketplace submitted that Parle has refused to supply its Parle-G biscuits and has spurned all advances made by Udaan seeking a relationship with it. Refusal to deal and exclusive distribution agreements in violation of Section 3(4) of the Competition Act As for the “must-stock item” argument, the Commission said that it is not inclined to agree with Udaan “that one brand’s biscuits are ‘must stock’ or so indispensable that not directly dealing with Parle would pose an existential threat to the Informant in the biscuits market.” Given these, CCI noted that there is no merits for the abuse of dominance allegation made by Udaan under Section 4 of the Competition Act. who also offer products similar to Parle, do pose competitive restraints on it,” CCI analysed. But the existence of other big competitors like Britannia, ITC, Cremica, Patanjali, etc. “Broadly, as per the material available on record, Parle has a market share of approximately 27% in the overall biscuits category, and it cannot be said that it does not have market power. (Udaan) and Britannia, in which it deemed that a narrow segmentation is not warranted. Without dominance there can be no abuse of dominance, Parle pointed out.ĬCI: The regulator relied upon the judgements passed in an earlier case involving Hiveloop Technology Pvt. Parle: Parle stated that such a narrow market of glucose biscuits cannot be delineated and that the relevant market should be the “market for biscuits in India” and even at the narrowest level could be only “market for sweet biscuits in India.” And in these two markets, Parle submitted data to CCI to argue that it holds no market power, let alone dominance. The e-commerce marketplace also submitted that Parle-G is a must-stock item on the platform and that these biscuits are akin to “essential.” For these reasons, it is necessary to secure direct access to procure the same, Udaan claimed. Udaan: The e-commerce platform submitted that the relevant market is the “market for glucose biscuits in India” and that Parle commands approximately 83% of this market. “Parle, through its brand Parle-G, has substantial market power and dominance, which it is abusing by refusing to supply to the Informant, and therefore, the conduct of Parle needs to be investigated,” Udaan alleged. Sign up for our morning newsletter, with a “Free Read of the Day”, to experience MediaNama in a whole new way.Īrguments presented to CCI and CCI’s analysis Relevant market and dominant position Never miss out on important developments in tech policy, whether in India or across the world. Against this backdrop, the CCI order offers some reprieve to distributors by establishing that manufacturers can choose to not directly deal with e-commerce platforms. However, e-commerce platforms have argued that consumers benefit from their practice as they can find products at a lower price and that the Competition Act disallows manufacturers from refusing to deal with downstream players. As a result, distributor bodies have had frequent run-ins with manufacturers demanding that they are not bypassed. Why does this matter? Distributors have been some of the most adversely affected by the growth of e-commerce as platforms prefer to directly engage with manufacturers for procurement of goods, cutting the middlemen out. Thus, the Commission is of the opinion that there exists no prima facie case of contravention of the provisions of Sections 3(4) and Section 4 of the Act against Parle, and therefore, the matter be closed.” - CCI “The Commission is of the prima facie view that, in the present case, the Informant has not been able to demonstrate any exclusionary practice on behalf of Parle within the purview of the Act, which may hinder the development of a competing supply chain for the products of Parle. The Business-to-Business (B2B) e-commerce marketplace wanted to buy the popular Parle-G biscuits directly from Parle and not from distributors, but Parle refused, following which Udaan approached CCI arguing Parle’s conduct is anti-competitive. The Competition Commission of India (CCI) on July 6 ruled that biscuit manufacturer Parle did not violate any competition laws by refusing to sell its products directly to Udaan.
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