Warranty as abuse? Rethinking discrimination in CCI’s Matrix v. Intel

The Competition Commission of India’s (CCI) recent decision in Matrix Info Systems Pvt. Ltd. v. Intel Corporation has generated debate not merely because of its outcome, but because of its potential implications. The CCI held that Intel abused its dominant position by introducing an India-specific warranty service policy for its boxed microprocessors, finding the policy to be unfair and discriminatory, to limit or restrict the market for sellers and consumers, and to deny market access to parallel importers, in violation of Sections 4(2)(a)(i), 4(2)(b)(i), and 4(2)(c) of the Competition Act, 2002, respectively.

At first glance, the conclusion regarding discrimination appears intuitive. Intel provided worldwide warranty service in most jurisdictions but restricted local warranty service in India to processors purchased through authorised Indian distributors. Genuine processors purchased abroad were not covered by a warranty in India. Indian consumers were therefore treated differently from consumers elsewhere. The CCI characterised this geographic differentiation as discriminatory and violative of Section 4(2)(a)(i).

But the legal question is deeper: does differential treatment across jurisdictions automatically amount to discriminatory abuse under Indian competition law? Or must discrimination under Section 4 be tied to distortion of competitive conditions within the defined relevant market (in this case, India)? 

This article examines the discrimination finding, and argues that discrimination under Section 4(2)(a)(i) must be understood as discrimination that harms competition, and not merely conduct that produces unequal outcomes. By conflating geographic differentiation with likely anti-competitive effects, the decision risks expanding Section 4 into a general parity code, thereby unsettling the boundaries of abuse of dominance law.

Section 4(2)(a)(i) prohibits a dominant enterprise from imposing an unfair or discriminatory condition in the sale of goods or services. To establish discriminatory abuse, two elements must be shown: (i) dissimilar treatment of equivalent transactions; and (ii) an anti-competitive effect arising from such discrimination.

The Supreme Court in Competition Commission of India v. Schott Glass India Pvt. Ltd. clarified that not every instance of differential treatment by a dominant enterprise constitutes abuse. Conduct must be assessed in its economic context, and the analysis must focus on its impact on competition, not merely on the presence of unequal treatment.

A critical but overlooked issue in the Intel case concerns the discipline imposed by market definition. The CCI defined the relevant geographic market as “India”. The Supreme Court in CCI v. Co-ordination Committee of Artists and Technicians of W.B. Film and Television & Ors clarified that market definition serves a structural function: it identifies the arena within which competitive constraints operate. It follows that once defined, the competitive assessment must remain confined to that market.

European jurisprudence offers clarity here. In United Brands v. Commission, the Court held that abuse must be assessed within the relevant market and with regard to the structure of competition prevailing there. Accordingly, conduct is abusive only if it affects competition within that defined market.

Applying this principle, once India is delineated as the relevant geographic market, the discrimination inquiry should have focused on competitive effects within India. The fact that Intel maintained different policies in Australia, China, or elsewhere should not be determinative unless that difference distorts competition in India.

However, the CCI’s reasoning relies heavily on cross-jurisdictional comparison. It emphasised that other countries did not have similar warranty restrictions, and therefore India was being treated differently. But competitive harm cannot be inferred merely from international inconsistency. If the benchmark for discrimination becomes global uniformity, market definition loses meaning.

Geographic differentiation is not an anomaly but may be a commercial necessity. Firms operating in multiple jurisdictions may tailor their policies for numerous legitimate reasons, including regulatory differences, distribution channel designs, the prevalence of grey markets, or local compliance obligations. Competition law does not demand global symmetry. To impose such a requirement would be economically inefficient and administratively unrealistic.

An analogy may help illustrate this concern. Consider a global clothing brand that offers a 30-day no-questions-asked return policy in the United States but limits returns to 7 days in India due to higher reverse-logistics costs. If the brand happens to hold a dominant position in India, would competition law require it to replicate its American return policy in India? Or would the proper inquiry be whether the Indian return policy distorts competition within India?

As seen above, a relevant geographic market is defined as a region where competition is distinctly homogenous. If competition conditions outside the market are distinct, treating market participants outside the market differently from those inside the market cannot be considered dissimilar treatment of equivalent transactions. Therefore, there is inherent inconsistency in applying anti-discrimination rules across distinct markets.

The Intel policy applied uniformly to all purchasers in India. Every consumer who purchased a processor outside authorised Indian channels was subject to the same warranty rule. There was no differential treatment among similarly placed Indian consumers. Therefore, the existence of anti-competitive effects within the Indian context, whether actual or likely, becomes questionable.

Competition law traditionally scrutinises discrimination that disadvantages certain trading partners or consumers relative to others within the same market, thereby distorting competitive conditions. It should not treat cross-border variation as discriminatory per se.

In the present case, Intel justified its different warranty policy in India on grounds including heightened grey-market risks, undervaluation, resale of salvaged goods, and counterfeit circulation. It submitted that restricting local warranty service to products sourced through authorised Indian distributors ensured traceability and supply chain integrity. The CCI rejected these explanations, noting inter alia that Intel had mechanisms to test the authenticity of its products, that counterfeit risks are not unique to India and that similar restrictions were not imposed in several other jurisdictions (with little or no evidence cited in support of this position).

If this position is held to be correct, and discrimination under Section 4 is interpreted to include any geographic variation, the consequences could be far-reaching. Dominant firms may hesitate to design market-specific policies; compliance risks may increase due to uncertainty about global parity; and investment decisions may become more cautious in emerging markets. If parity is imposed as a strict obligation, it may inadvertently deter investment and discourage international trade in sectors where India maintains comparatively more liberal regulatory frameworks, thereby undermining the competitive advantage such openness is intended to create. The result may ironically harm competition by deterring jurisdiction specific efficient distribution and service models.

The Intel warranty decision reflects the CCI’s vigilance toward dominant enterprises and its concern about protecting consumer interests. Yet, the discrimination analysis would have been stronger had it been firmly anchored in a robust effects analysis within the relevant market. Unequal policies, without demonstrable harm to competition in India, should not automatically constitute abuse.

If cross-border variation alone is sufficient to trigger liability, the boundaries between competition law and general regulatory fairness risk dissolving. As Indian abuse jurisprudence evolves, preserving the discipline of market definition and grounding discrimination in competitive harm will be essential to maintaining clarity, economic coherence, and business certainty.

About the authors: Yaman Verma is a Partner and Shivek Sahai Endlaw is a Senior Associate at Shardul Amarchand Mangaldas & Co.

The views expressed in this article are personal. They do not purport or reflect the opinions or views of SAM & Co or its members.

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