On June 16, 2022, the CCI dismissed a complaint filed by Hiveloop Technology Private Limited (‘HTPL’) alleging anti-competitive conduct in violation of Section 3(4) of the Act against Britannia Industries Limited (‘Britannia’). ^[1]

HTPL runs a B2B online trade platform/marketplace called ‘Udaan’, engaged in buying, selling, and trading in different product categories, including Fast Moving Consumer Goods, electronics, pharmaceuticals, lifestyle, home and kitchen appliances, fruits and vegetables, toys, and general merchandise of different brands. Udaan allows retailers to source merchandise from the manufacturers, brands, labels, and importers etc., directly.

HTPL alleged that Britannia: (i) restricted its authorised distributors from dealing with HTPL; (ii) imposed restrictive terms through its supply agreements; (iii) did not supply the requisite quantity of products which were the ‘must have’ stock of certain biscuits; and (iv) did not provide the same terms to HTPL as it provides to its other distributors.

The CCI defined the market as the ‘market for biscuits in India’ and held that Britannia was not dominant in such a market as it only had a 32% market share with Parle being a close competitor.

The CCI noted that HTPL had not provided any evidence that Britannia restricts Udaan from dealing with certain brands and biscuits of Britannia and Udaan has been able to source the biscuits to some extent to fulfil the demand of retailers. The CCI did not assess the allegations on abuse of dominance, as it did not find any abuse, and Udaan failed to establish any right on its part to make the allegation. The CCI specifically dismissed the allegation of discrimination between Udaan and other distributors of Britannia, noting that neither the Udaan nor its group entity can be said to be similarly placed as other, more than three thousand, distributors of Britannia. Further, it observed that Britannia did not have an inherent right to claim any parity in the absence of evidence of any formal relationship between the Udaan and Britannia.

While dealing with the competing issues i.e., (i) Udaan’s right to do business with Britannia, and (ii) Britannia right not to engage with Udaan, the CCI observes that “firms have an autonomy to choose their trading partners as long as the exercise of such autonomy does not affect the fair functioning of the markets.” Refusal to deal may lead to market foreclosure depending upon market power, and on the other hand, could also be based on valid commercial justifications. Britannia contended that biscuits needed to be supplied to its existing distribution system as well and that the demand placed by the Udaan was exorbitant. The CCI also noted that accepting Udaan’s contentions may replace the commercial prudence of an entity by taking away its autonomy. The CCI accepted Britannia’s justifications, noting that, “even a dominant entity, at times, has the freedom to refuse to conclude contracts based on objective justifications.”

[1] Case No. 18 of 2021.