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1. The information in the present case has been filed by M/s Shubham Sanitarywares (hereinafter, the „Informant‟) under section 19(1)(a) of the Competition Act, 2002 (hereinafter, the „Act‟) against M/s Hindustan Sanitarywares & Industries (HSIL) Limited (hereinafter,the „Opposite Party‟) alleging contravention of the provisions of section 3(4) of the Act in the matter.

2. The Informant is stated to be a partnership firm engaged in the dealership business of sanitaryware, faucetware and tiles of various brands in the city of Indore, Madhya Pradesh. The Opposite Party is a public limited company incorporated under the Companies Act, 1956 and has been engaged in the business of manufacturing and selling of bathroom fittings such as sanitarywares, faucetware, ceramic tiles, kitchen appliances, etc.

11. While determining the relevant geographic market, the Commission is guided by section 19(6) of the Act. The Commission is expected to have due regard to all or any of the factors mentioned therein. The factor that is relevant in the instant case is 19(6) viz. transport cost, all other factors being similar throughout India in respect of the relevant product. The dominance of the Opposite Party has to be determined with reference to the smallest geographic area where conditions of competition are similar. The Informant has not provided any evidence as to the structure of the relevant market. The Commission does not see any reason other than to define the relevant geographic market as „India‟, since except for the transport cost (which itself does not get reflected in the MRP that is uniform throughout India in respect of branded products of most of the major competitors of the Opposite Party), conditions of competition are similar throughout India. Thus, the relevant market in the instant case may be considered as the "the market of branded ceramic sanitarywares and bathroom fittings in India".

13. The Informant has alleged that the Opposite Party has been dictating the amount of discount at every level of supply chain and indulging in tie-in arrangement. It is alleged that the Opposite Party has also been engaged in resale price maintenance by regulating the discount structure.

14. In this regard, the Commission perused Clause 10 of the „Agreement‟ which states "We shall advise you maximum retail prices from time to time for selling HINDWARE products to your customers. Under no circumstances, you will charge prices higher than our recommended MRP." In this regard, the Commission notes that the said clause does not raise any competition concern. The definition of „resale price maintenance‟ as provided in explanation (e) to section 3(4) of the Act clearly states that prescribing/setting maximum resale price is not prohibited under the Act. Moreover, since such price does not restrict the resellers to sell below a particular price, the same does not raise any competition concern to require any intervention by the Commission.

15. As far as the price lists issued by the Opposite Party with respect to discounts to be offered to sub-dealers and retail customers is concerned, it has been alleged that the Opposite Party had sent communications to its dealers/ distributors that discounts more than the limit stipulated by it should not be given to the customers. From a perusal of e-mails sent by Opposite Party to the Informant, the Commission observes that through such e-mails, the Opposite Party conveyed to its dealers/ distributors that if they want to give more discount then the Opposite Party should be kept informed by routing such proposals through it. After careful examination of the emails exchanged between the Parties, the Commission notes that there is no absolute restriction or prohibition imposed by the Opposite Party on the Informant. Until and unless regulation of discounts leads to appreciable adverse effect on competition, such practices do not become anti-competitive per se. As such, in view of the facts and circumstances of the present case, prima facie there seems to be no contravention of section 3(4) read with 3(1) of the Act.