CCI dismisses case alleging unfair business practices against Fangs Technology

The Competition Commission has dismissed a case alleging unfair business practices against Fangs Technology, engaged in the business of trading and distribution of 'Vivo' mobile handsets, with regard to distributorship agreement.

Noting that "no contravention of either section 3 or section 4 of the Act is made out" against Fangs Technology Pvt Ltd, the Competition Commission of India (CCI) ordered the closure of the matter.

While Section 3 deals with anti-competitive agreements, Section 4 pertains to abuse of dominant market position.

The ruling came on the complaint filed by Tamil Nadu Consumer Products Distributors Association alleging unreasonable and unfair conditions imposed on distributors after entering into ''Vivo distributorship agreement" with Fangs Technology.

For the case, the fair trade regulator considered the 'market for smartphones in India’, as the relevant one and also observed that Fangs was not in the dominant position in it.

On the allegation with regard to Fangs imposing restriction on its distributors in doing business with 'Oppo' and 'Honor', CCI said the conduct is not "anti-competitive" as the agreement allows its distributors to do business with other competing brands except the two and that several distributors are dealing in other competing brands as well.

Regarding other allegations like resale price maintenance, prior approval for appointment of a retailer by a distributor, no credit facility been given to the distributors, distributor to perform corporate sales only after prior intimation, the regulator observed that “no evidence has been adduced” by the complainant to substantiate them.

Further the complainant "has failed to show that the clauses of the distributorship agreement have anti-competitive effects in the market," CCI said in an order dated Oct 4.

Accordingly, CCI held that no contravention of either section 3 or section 4 of the Competition Act is made out against Fangs Technology and thereby "closed" the matter.

(With inputs from agencies.)