#CompetitionLaw #CCI #CompetitionCommissionOfIndia #Cartel #BidRigging #GeM #PublicProcurement #Antitrust #HubAndSpokeCartel #CompetitionCompliance
Can an OEM’s legitimate control over its Manufacturer’s Authorisation Form (“MAF”) become a competition-law liability?
The Competition Commission of India (“CCI”) has provided a significant answer through two orders dated 13 July 2026 concerning HP India and its resellers on the Government e-Marketplace (“GeM”).
The two proceedings are:
Suo Motu Case No. 07/2020 — Personal System Products; and
Suo Motu Case No. 08/2020 — Supplies Products.
The cases are particularly significant because they examine the uncomfortable space between legitimate vertical channel management and facilitation of horizontal collusion among competing resellers.
Let me discuss the key features which make these two orders as unique and unprecedented till date in the competition law jurisprudence in India so far.
- The common thread: MAF + TP + competing resellers
HP India supplied its products through Tier-2 resellers.
Two commercial instruments became central to the proceedings:
Manufacturer’s Authorisation Form (MAF) — an important eligibility document enabling a reseller to participate in a GeM tender; and
Transfer Price (TP) — the price at which HP supplied the product to the reseller, who would then add its margin before bidding.
Ordinarily, there is nothing inherently anti-competitive about either mechanism.
The difficulty arose when, according to the evidence considered by the CCI, these mechanisms were used to influence:
- who would participate in a particular tender;
- who should ultimately win;
- what price a reseller should quote;
- whether another reseller should submit a bid; and
- whether a reseller should submit a support/cover bid.
That is where a vertical OEM-reseller relationship can acquire a horizontal cartel dimension.
2.Case No. 07/2020 — a tender-specific evidentiary approach
The Personal System Products case concerned desktops, laptops, workstations, notebooks and related products. The CCI examined tender documents, emails and statements concerning GeM tenders.A particularly important finding was that HP officials had communicated bid prices to certain resellers and restricted MAF issuance so as to influence reseller participation.
The CCI’s treatment of one of the reseller is instructive. The official of the reseller admitted furnishing support bids in five tenders. An HP email also communicated the transfer price and the specific bid price to be quoted. The CCI relied upon Delphi’s own admission, corroborated by the email and HP India’s admissions concerning coordination.At the same time, the Commission refused to rely upon an uncorroborated part of the statement implicating other resellers.
This is important because the CCI did not simply adopt every DG finding wholesale. It assessed the evidence entity-by-entity and tender-by-tender. The result was that findings were sustained against HP India and certain resellers, while findings against some other resellers were not sustained.
3.Case No. 08/2020 — the fuller “hub-and-spoke” picture
The Supplies Products case presents a much broader evidentiary record. It involved HP India and 16 Tier-2 resellers dealing principally in ink and toner cartridges and related consumables. The DG examined 29 qualifying Delhi GeM tenders exceeding ₹20 lakh. The evidence went far beyond conventional tender documents and emails.
It included:
- statements of 26 individuals;
- WhatsApp communications in the “Delhi GeM Group Chat” and “GeM Tender Group”;
- and a video recording of a reseller meeting held on 14 May 2019 at HP India’s Connaught Place office.
The alleged arrangement was also linked to the legacy “Most Valued Customer” (MVC) system, under which particular Government accounts had traditionally been associated with particular resellers.
The evidence suggested that the MVC allocation was sought to be preserved after GeM introduced a more open bidding environment.
The alleged mechanisms included:
Selective MAF issuance — controlling which reseller could participate;
Cover/support bids — creating an appearance of competition while protecting the designated reseller;
Price “hygiene” — monitoring or coordinating reseller pricing; and
Dispute resolution — HP personnel allegedly intervening when resellers disagreed over customer/tender allocation.
This broader evidentiary mosaic gave the CCI the basis for treating HP as a central facilitator of the arrangement.
4. The important legal question: vertical or horizontal?
This is perhaps the most interesting aspect of the two orders. HP and its resellers were, structurally, in a vertical relationship. But the resellers were also horizontal competitors when bidding against each other for the same Government tender.
The CCI therefore adopted a functional approach.
The fact that HP was the OEM did not prevent the conduct from attracting Section 3(3)(d) where the underlying conduct involved bid rigging among competing resellers.
In Case No. 07/2020, the CCI found HP’s conduct of dictating bid prices and manipulating reseller participation through MAF restrictions to contravene Section 3(3)(d) read with Section 3(1).
Case No. 08/2020 went further by examining the resellers’ horizontal coordination under Section 3(3)(d), while considering HP’s facilitation under Section 3(1).
The practical proposition emerging from the orders is therefore:
An OEM does not have to submit the bid itself to incur competition-law exposure. Facilitating collusion between those who do submit the bids may be sufficient.
5. What about the 2023 hub-and-spoke amendment?
This is where the orders leave an important issue unresolved.
The conduct investigated principally related to 2017–2020.
The Competition Act was amended in 2023 to expressly address facilitation of cartel arrangements. Rather than deciding whether that amendment could operate retrospectively, the CCI relied upon Section 3(1), read with Section 3(3)(d), to address the conduct. That approach allowed the Commission to avoid the retrospectivity question.
But it also leaves an important issue for appellate consideration:
6. Can Section 3(1) independently capture pre-2023 hub-and-spoke conduct where Parliament subsequently introduced express statutory language dealing with such arrangements?
The answer could have significant consequences beyond the HP cases.
“We were protecting our commercial interests” — why the defence failed ?
HP sought to explain the conduct by reference to commercial realities surrounding GeM’s reverse-auction process and the concerns of its resellers. It also relied upon the fact that resellers themselves had sought assistance in protecting their Government accounts and avoiding aggressive price competition.
But there is a crucial distinction between:
legitimate channel management
and
facilitating collusion among competing resellers.
An OEM can legitimately:
- verify authorised distributors;
- protect warranties;
- combat counterfeit products;
- establish objective MAF criteria; and
- prescribe product-quality standards.
What becomes problematic is using those mechanisms to:
- allocate customers;
- decide which reseller should win;
- suppress competing participation;
- dictate bid prices; or
- arrange cover bids.
The message for OEMs is therefore not “do not control MAFs”.
It is:
Do not use legitimate control over authorisation as a mechanism for controlling competition among authorised resellers.
7. The “kingpin” paradox — HP was also the leniency applicant
One of the most intriguing features of these cases is that HP India itself approached the CCI under the leniency provisions.
In Case No. 08/2020, HP was effectively portrayed as the central facilitator — the “hub” connecting the downstream resellers.
Yet it was also the first leniency applicant.
The CCI rejected the proposition that a central participant or “kingpin” is automatically disentitled from a penalty reduction.
But the Commission took HP’s central role into account while determining the extent of the benefit.
This creates an interesting competition-law paradox:
The participant most deeply involved in a cartel may still have a strong incentive to disclose it first.
From an enforcement perspective, that is precisely what a leniency regime is designed to achieve.
8. Section 48: another important distinction
The two orders also demonstrate different approaches to individual liability.
In Case No. 07/2020, the CCI made relatively granular findings concerning individual HP officials. Some officials were held liable where evidence demonstrated active participation, while others were exonerated where their role was insufficiently established.
Case No. 08/2020 adopted a broader approach towards HP’s identified personnel.
This raises an important question for future cases:
What is the evidentiary threshold for fixing personal liability upon an employee under Section 48 where the employee operates within a larger corporate structure facilitating the arrangement?
That issue could assume considerable significance in any appellate review.
9. The MAF is no longer merely an authorisation document
The most important message emerging from the two orders is perhaps deceptively simple.
An MAF is ordinarily a legitimate commercial and quality-control instrument.
But where an OEM controls access to the MAF and uses that control to decide which competing reseller will participate in a tender, coordinates the prices at which resellers bid, facilitates cover bids, or preserves a pre-existing customer allocation, the MAF can become an instrument of cartelisation.
The two HP orders, therefore, mark an important development in the CCI’s treatment of OEM-facilitated collusion.
Case No. 07/2020 demonstrates the Commission’s willingness to scrutinise the conduct tender by tender and entity by entity.
Case No. 08/2020 demonstrates how a much wider evidentiary mosaic — emails, WhatsApp messages, statements, meetings and video evidence — can support a hub-and-spoke theory of facilitation.
Together, the orders send a clear warning:
The vertical label attached to an OEM-reseller relationship will not immunise conduct that, in substance, suppresses competition among downstream rivals.
For OEMs, the compliance question is therefore no longer simply: “Who is authorised to sell my product?” It is also: “Am I using my authorisation system to determine who competes — and who wins — in the market?”
That is where legitimate channel management can cross the line into competition-law liability.
The two CCI orders of 13 July 2026 make that line considerably clearer — and considerably more important for every OEM and distributor participating in India’s digital public-procurement ecosystem.
10. What should OEMs and resellers take away?
The two HP orders provide some immediate compliance lessons.
A. Take away For OEMs
- MAF criteria should be objective and transparent.
- Authorisation decisions should, as far as possible, be separated from tender-specific sales strategy.
- Employees should never dictate the price at which competing resellers bid.
- OEM personnel should not decide which reseller should win a tender.
- “Protected customer” or “MVC” arrangements require particular scrutiny in open public procurement.
- WhatsApp and other informal communications are not outside the scope of competition-law compliance.
- Channel-management personnel should receive specific antitrust training.
B. Take away For resellers
Resellers should be equally cautious about:
- exchanging bid prices;
- requesting or providing cover bids;
- discussing who should win;
- coordinating participation;
- using sister entities to create artificial competition; or
- approaching an OEM to facilitate allocation of Government customers.
The fact that an OEM is involved does not make an otherwise horizontal arrangement lawful.
11. Why these orders matter beyond HP
The two orders demonstrate an important evolution in cartel enforcement.
Digital procurement does not necessarily mean genuine competition.
A GeM tender may be technically transparent while competition has already been compromised before the bids are submitted.
The relevant evidence may lie in:
- emails;
- WhatsApp messages;
- internal authorisation decisions;
- meetings;
- bid histories;
- pricing communications; and
- statements of employees and participants.
The CCI’s two HP orders show how these apparently disparate pieces of evidence can collectively establish a coordinated arrangement.
12. The larger message
The real significance of the two orders lies in the changing role of the OEM. An OEM may traditionally regard itself as sitting above the competition between its distributors. But once it uses its control over MAFs, pricing information and reseller participation to influence which downstream competitor wins a public tender, it risks becoming part of the competitive harm itself. The question for an OEM is , therefore , no longer merely:
“Who is authorised to sell my product?”
It must also ask:
“Am I using my authorisation system to determine who competes — and who wins?”
That is the line between legitimate channel management and competition-law liability.
Primary sources
CCI — Suo Motu Case No. 07/2020, Personal System Products
CCI — Suo Motu Case No. 08/2020, Supplies Products
#CompetitionLaw #CCI #CompetitionCommissionOfIndia #Cartel #BidRigging #GeM #PublicProcurement #Antitrust #HubAndSpokeCartel #CompetitionCompliance
