CCI Finds HP Guilty Of Rigging Government Tenders, Imposes ₹138 Cr Fine

The Competition Commission of India (CCI) has found HP India guilty of rigging bids on the government's electronic procurement platform and ordered the company, along with 21 of its resellers, to stop the practice and pay penalties totalling ₹142.72 crore. Of this, HP India accounts for ₹138.85 crore, while the remaining ₹3.87 crore has been imposed on its resellers and officials.

The CCI passed two orders on July 13, fining HP India ₹126.87 crore in the personal systems case and ₹11.98 crore in the printer supplies case. Separate penalties were imposed on resellers and company officials involved in both matters.

The orders were passed by CCI chairperson Ravneet Kaur along with members Anil Agrawal, Sweta Kakkad and Deepak Anurag.

"The Commission is of the view that HP has engaged in dictating bid prices to resellers, and manipulated participation of resellers in the GeM tenders by withholding MAFs in order to benefit itself," the CCI said, referring to Manufacturer's Authorisation Forms.

Both cases originated from a lesser penalty application filed by HP India in 2020, after which the CCI directed its Director General to investigate Delhi-based tenders. Former HP official Manoj Grover and reseller Delphi Infosolutions also sought lesser penalties during the proceedings.

Personal Systems Case

This case involved laptops, desktops, workstations and accessories. The Director General examined 60 tenders, of which 41 met the threshold of ₹1 crore in the Delhi region, and found incriminating emails related to seven tenders.

The CCI concluded that HP controlled the authorisation forms and transfer prices required by resellers to participate in tenders. It held HP India, Delphi Infosolutions, Digitech Computers, Orbit Techsol, Hind Technocare and Krishna Computer guilty of bid rigging under Sections 3(3)(d) and 3(1) of the Competition Act.

Apart from HP's penalty, Orbit Techsol was fined ₹86.32 lakh, Digitech Computers ₹17.97 lakh, Delphi Infosolutions ₹9.52 lakh, Hind Technocare ₹6.72 lakh and Krishna Computer ₹1.91 lakh.

Printer Supplies Case

This case concerned ink and toner cartridges, covering 29 tenders exceeding ₹20 lakh in the Delhi region. The Director General relied on tender documents, emails, WhatsApp chats, recordings and witness statements, including two WhatsApp groups and a meeting held at HP's Connaught Place office in May 2019.

The CCI found evidence of cover bidding, price fixing and customer allocation between 2017 and 2020. HP and all 16 resellers named in this case were held to have violated the Competition Act. DD Enterprises received the highest reseller penalty at ₹77.26 lakh, followed by Kaypee Enterprises at ₹21.94 lakh, International Computer Resources at ₹17.94 lakh and Pioneer Technologies at ₹17.73 lakh.

HP India sought a full reduction in penalty, citing that it was the first to disclose the arrangements. The CCI rejected this request, citing HP's central role in devising and facilitating the cartel and its position as the main beneficiary.

"Complete reduction in penalty would defeat the objectives of the Act," the CCI held.

HP received a partial reduction for admitting the violation and cooperating with the investigation, though the exact percentage was redacted. Grover received a full penalty reduction in the supplies case.

The CCI has directed all parties to stop the anti-competitive practices, pay the penalties within 60 days, and undergo competition law compliance training.