The order came after JSW Paints filed a complaint alleging that Asian Paints threatened various dealers in Karnataka, Telangana and Tamil Nadu from dealing with JSW Paints.
The Competition Commission of India (CCI) has ordered an investigation into allegations made by JSW Paints, among the newest entrants in the country's paints industry, against Asian Paints, the largest player.
JSW Paints, part of the JSW Group, has alleged that its bigger peer has resorted to actions making use of its dominant position in the country's paints market, and also of cartelisation.
"The Commission is of the opinion that there exists a prima facie case which requires an investigation by the Director General...The Commission also directs the DG to complete the investigation and submit the investigation report within a period of 60 days...," the statutory body said in a statement on January 14.
Listing out instances, which JSW Paints alleged were against the provisions of the Competition Act, the company charged that Asian Paints had pressurised dealers to "stop dealing with JSW Paints".
"Asian Paints targeted dealers/distributors/retailers partnering with JSW Paints directing them to stop dealing with JSW Paints... dropping service levels by delaying supplies and deliveries, asked dealers to remove display of JSW Paints products from their retail shelves and dealer signboards," the Commission notes in its order of the allegations.
"The company is currently examining the order and will take appropriate legal recourse. The company will extend full co-operation to CCI in the matter," Asian Paints said in a statement.
JSW Paints, which was set up in 2016, had launched its products in most of the southern states. It is said to have faced 'problems' in Karnataka, Telangana and Tamil Nadu, so far."Asian Paints allegedly also pressurised enterprises that provided infrastructure facilities like warehouses to JSW Paints to not keep products of JSW Paints," said the statement from the CCI.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.