TaxTMI 
TaxTMI 
2024 (11) TMI 1004
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....offices in all cities & major industrial towns, and an extensive dealer network. On its website, OP-1 has listed names of over 90 establishments as its processors and over 200 establishments as its fabricators. The Informant has stated that OP- 2, directly or indirectly, owns 99.03 percent shares of OP-1. 4. The Informant has averred that the conduct of OP-1 has previously been examined by the Commission in case no. 51 of 2011 [HNG Float Glass Ltd. vs Saint Gobain Glass India Ltd.] wherein, the Commission had passed an order under Section 26(1) of the Act directing investigation into the alleged anti-competitive conduct by OP-1 in the clear float glass market in India during the period 2010-11. Eventually, the Commission, based on the report by the DG, had passed an order under Section 26(6) of the Act on finding that OP-1 had not contravened the provisions of the Act. 5. In the present Information, it is alleged that the OP-1 has entered into agreements with the processors/ fabricators/ distributors, through which certain conditions have been imposed upon these players in the distribution network of glass products. These conditions are stated to be resulting into violations ....
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....in India'. The Informant has requested the Commission to conduct assessment and investigation in the said relevant markets. 9. As regard the first relevant product market, i.e., 'market for production and sale of clear float glass', the Informant has submitted that the Commission has already accepted this market as a separate product market in Case No. 51 of 2011, wherein, the dominant position of OP-1 was examined. Further, the Informant has also submitted that the market for coated glass, based on factors such as physical characteristics, production process, end-use of goods, consumer preferences and prices of goods or services, has been considered to be a separate relevant product market by competition authorities in other jurisdictions. In this regard, the Informant has cited a case of European Commission titled COMP/M.6557- AGC Glass Europe/ Interpane International Glas. 10. With regard to the relevant geographic market, the Informant has proposed it to be the 'whole of India', as trading conditions, regulations, consumer preference etc. do not vary significantly enough across the country, with respect to sale and distribution of coated glass and clear float glass in Ind....
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.... clear glass market? d) a copy of a subsisting agreement, if available, e) is it mandatory for all the processors to enter into 'Propel Project Participation Agreement' having exclusivity conditions with any manufacturer, if they intend to deal with them? f) what kind of technical and other training are being provided by the manufacturer to the processors? whether such technical assistance is indispensable for processors to work in the glass market? g) how can processors utilize their capacity in alternative manner? Can processor tie up with more than one glass manufacturer? h) information, if available, about other major glass manufacturers who have their own processing facility? i) other relevant information, if any. 16. After seeking extension of time, the Informant filed its responses/ comments on 07.02.2024 and a summary of the response is as under: i. On the aspect of business model of glass manufacturers and processors and their inter- se relationship, the Informant has submitted that the sale and distribution business model of glass manufacturer involve several key steps such as: (i) production process, (ii) ....
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....cts to the market/ consumers. However, those do not impose a requirement to buy glass from only one manufacturer. iv. With respect to the question whether it is mandatory for all the processors to enter into the said Propel Agreement, the Informant submitted that 'Propel Agreement' is name of an agreement by OP-1. Other manufacturers do not have such binding agreements with exclusivity conditions. v. Regarding technical and other training being provided by the manufacturer to the processors and whether such technical assistance is indispensable for processors, the Informant has stated that technical training provided by glass manufacturers to processors is important to ensure that the glass products meet the required quality standards and specifications. The extent and nature of the training may vary depending on the complexity of the processing techniques involved, the type of glass being used, and the specific requirements of the customers. Some common types of technical and other training that manufacturers provide to processors include: (a) product knowledge (b) processing techniques, (c) quality control and assurance, (d) equipment operation and maintenance, ....
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....hrough oral directions. Accordingly, the Commission directed the Informant to furnish a copy of an actual agreement signed between the OP-1 and a processor. The Informant, in its response dated 07.02.2024, stated that it does not have access/ possession of a signed agreement. 20. Despite being given the opportunity, the Commission observes that the Informant has not been able to produce a valid and subsisting copy of the said Propel Agreement on the edifice of which the entire allegations rest. The Informant has submitted an unsigned and undated agreement whose authenticity could not be established. Nevertheless, keeping in view the contention of the Informant that the furnished copy of the Propel Agreement is the final version proposed to be signed between OP-1 and processor, the Commission examined the terms/ clauses of the same under the framework of competition law. A bare perusal of the said Propel Agreement reveals that it is only an agreement to meet the requirements of the end consumers through the assistance imparted by the manufacturers to the processors by way of supply of raw materials, imparting technical and marketing training, rendering services to the customers a....
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....cessors who are dealing with competitors of OP-1 will not be sold products of OP-1. The Commission is of the view that the Informant has merely alleged the conduct to be carried out through oral directions and has not substantiated the same with any evidence. It may be noted that offering discounts on the basis of volume of purchase may not be anti-competitive, per se. 25. In relation to allegation of resale price maintenance ('RPM') being practiced through oral direction, the Informant has claimed that in certain cases, OP-1 is stated to have directly approached the large bulk customers and negotiated prices directly with them. The processors and distributors are then forced to issue invoices at such prices. In this regard, the relevant clause of the submitted Propel Agreement reads as under: "The Processor acknowledges that SGIPL (OP-1) shall have full rights to determine its product pricing as payable by the Processor to SGIPL. Any charges for the processing etc., undertaken by the Processor shall be charged by the Processor from the end -user over and above the price of the Products. SGIPL shall not be liable for any charges for processing of the Products to the Pro....