This complaint was filed by Shri Suresh Goel (‘the complainant’) before the Office of DGIR, MRTP Commission on 13.2.2008 under the MRTP Act, 1969 (‘the MRTP Act’). Upon receiving the complaint, the DGIR decided to conduct a preliminary investigation under section 11(2) of the MRTP Act. Consequent upon the repeal of the MRTP Act, this complaint has been transferred to the Competition Commission of India (‘the Commission’) under the provisions of section 66(6) of the Competition Act, 2002 (‘the Act’).

2. As per the averments made in the complaint, the respondent which is a multinational company having its registered office in Caymon Island is operating as a full-fledged company/establishment in India in the guise of a liaison office. It has been further alleged that historically the respondent had a dominant market share in the Hard Disk Drive (HDD) industry in India. As per the allegations made in the complaint, the respondent has abused its market dominance in multiple ways in India and thus has violated the provisions of the MRTP Act. It is further alleged that the respondent had been indulging in anti-competitive trade practices whereby its officials have openly threatened ‘termination’ in case its distributor is found selling HDDs of any other brand other than that of the respondent. It is further alleged that by not allowing its distributors to work and grow with other vendors, the respondent makes the distributors dependent upon it. It has also been alleged that the respondent has indulged in cartel like activity with other HDD manufacturers. Apart from these allegations, the complainant has also alleged violation of other laws like labour laws, FEMA Regulations, RBI guidelines, custom laws etc., in the complaint.

3. A copy of this complaint was sent by DGIR to the respondent who vide letter dated 4.4.2008 denied all the allegations and made detailed submissions. The respondent has filed copies of the memorandum and articles of association of the company and also copies of agreements entered into between the respondent and its distributors. It has been contended by the respondent that the allegations made in the complaint are beyond the scope of enquiry by the DGIR. Para wise comments on the allegations made by the complainant have also seen submitted by the respondent.

4. The DGIR sent the reply of the respondent dated 4.4.2008 to the complainant for comments. The complainant in his reply dated 18.11.2008 reiterated the allegations made in the complaint and provided further details against the respondent with regard to (i) sales activities being carried out under the guise of a liaison office; (ii) evasion of corporate tax, service tax and other taxes; (iii) monopolistic behaviour, price fixing and anti-competitive business practices; (iv) establishment of service centres and import of refurbished HDDs; (v) violation of the provisions of FEMA; and (vi) violations of labour laws.

5. With regard to alleged monopolistic behaviour, price fixing and anti-competitive business practices of the respondent, the complainant stated that the respondent’s share was 72.4% in 2004 and 73.7% in 2006. It is further alleged that the distributors are not being allowed to work and grow with other vendors and that the respondent has colluded with other HDD manufacturers to increase prices of HDD.

6. Comments of the respondent were again sought by DGIR vide letter dated 10.7.2009, who submitted its detailed reply dated 28.8.2009. In the reply, the respondent denied all the allegations and reiterated its earlier submissions. It is averred that the complainant is not a customer of the respondent nor it is affected by the alleged violations in any way. The respondent also made point-wise submissions on merits and questioned the data submitted by the complainant regarding its market share and termed the same as outdated and unreliable. It also annexed the distribution agreement with one of its distributors under which the distributor was permitte