The Competition Commission of India (CCI) has imposed a cumulative penalty of INR 138.85 crore on HP India Sales, and a combined INR 3.52 crore on several of its authorised resellers, for orchestrating a cartel to manipulate Government e-Marketplace (GeM) tenders between 2017 and 2020.
The regulator passed two separate orders, one covering personal system products such as laptops, desktops and workstations, and another covering printer supplies like ink and toner cartridges.
The CCI found that HP India coordinated bids among its reseller network by selectively issuing Manufacturer Authorisation Forms (MAFs), a mandatory certificate needed to bid on government tenders, effectively blocking outside competitors while favouring cooperative resellers.
The collusion traced back to the 2017 transition to the GeM portal, which threatened the Most Valuable Customer (MVC) status that incumbent resellers had built through legacy relationships with government departments before open bidding began.
To preserve these accounts, resellers engaged in “cover bidding,” where sister concerns or competing resellers submitted deliberately non-competitive or inflated bids to create an illusion of the minimum three-bidder competition required on GeM, without any genuine price rivalry. The Director General’s investigation, which examined email and WhatsApp communications between HP India and its resellers, corroborated this coordinated conduct.
HP India argued it was not the ‘kingpin’ of the cartel and claimed it was pressured into the arrangement because resellers threatened to switch to counterfeit products if support was withheld, while resellers contended that coordinating bids was necessary to retain business and meet sales targets set by HP India. The CCI rejected both defences, holding that the transparent GeM bidding framework had been deliberately subverted, depriving government departments of genuinely competitive pricing.
Penalty breakdown
In the personal system products matter, HP India was fined INR 126.87 crore, while resellers Delphi Infosolutions, Digitech Computers, Orbit Techsol, Hind Technocare and Krishna Computer received individual penalties ranging from INR 1.91 lakh to INR 86.32 lakh.In the printer supplies matter, HP India was fined INR 11.98 crore, and 16 resellers together bore a combined penalty of about INR 2.30 crore, with the CCI also penalising named individual executives under Section 48 of the Competition Act, though several MSME resellers received a full 100 percent leniency reduction citing cooperation and absence of prior violations. Resellers such as Comnet Vision, Softlabs, Thoughtsol Infotech, Intensity Global Technologies and M Integraph Systems were cleared in the personal-systems matter for lack of sufficient evidence.
The Commission directed HP India, along with the liable resellers and individuals, to cease and desist from such anti-competitive conduct and deposit the respective penalty amounts within sixty days of receiving the order.
The order has also mandated that the companies conduct competition-law compliance training programmes and file compliance reports with the CCI within the same sixty-day window. Both orders arose from Section 46 leniency applications filed by HP India, which subsequently admitted to the violations and cooperated throughout the DG’s investigation.
What this means for India’s leniency regime
Legal experts say the order highlights that CCI’s leniency framework is calibrated, not automatic. Apoorva Pandey, Advocate at the Delhi High Court, notes that despite being the first to disclose the cartel and cooperate with investigators, HP India did not receive a full penalty waiver because of its role in the conduct.
“The decision indicates that the regime strongly incentivises self-reporting and cooperation, while ensuring that principal architects of anti-competitive conduct remain subject to meaningful sanctions, thereby preserving both deterrence and enforcement effectiveness,” said Pandey.
“Equally important, the order confirms that leniency is not absolution. The finding of contravention, monetary penalty and compliance obligations remain intact. That balance is critical if the regime is to encourage whistleblowing without diluting deterrence,” said Ekta Rai, Advocate at the Delhi High Court
CCI’s tightening grip on manufacturer-reseller arrangements
Both advocates agree that the order signals closer regulatory scrutiny of commercial arrangements, long treated as routine channel-management practices in public procurement.
“The Commission has treated mechanisms such as Manufacturer’s Authorisation Forms (MAFs), transfer pricing, and protection of “Most Valuable Customer” (MVC) accounts as potential tools for bid-rigging rather than merely routine commercial practices. Its reliance on emails, WhatsApp chats, and internal communications further indicates an increasing focus on informal coordination channels. The order serves as a clear warning that the CCI will closely scrutinise manufacturer-led influence over bidding behaviour on GeM and other public procurement platforms,” noted Pandey.
“Practices such as MVC allocation or selective issuance of MAFs are not unlawful per se, but where they become tools for customer allocation, bid coordination or exclusion of competing bidders on GeM, they may attract liability under the Competition Act. The order is likely to prompt manufacturers to revisit their channel management and tender participation protocols from an antitrust compliance perspective,” concluded Rai.
