Case Study: The HP India Reseller Cartel Orders, 13 July 2026

On 13 July 2026 the Commission passed two orders under Section 27 against HP India Sales Private Limited and its resellers, in Suo Motu Case No. 07 of 2020 concerning personal system products and Suo Motu Case No. 08 of 2020 concerning supplies products, meaning toner, cartridges and other consumables used with print hardware. Penalties of about one hundred and thirty-eight crore eighty-five lakh rupees were imposed on HP India and about three crore fifty-two lakh rupees collectively on twenty-one resellers, with cease and desist directions and personal penalties on officials under Section 48. The orders are worth studying because they bring together bid rigging in public procurement, the vertical and horizontal boundary, and the working of the leniency programme.

1. How the Cases Began

Both proceedings originated in lesser penalty applications filed by HP India itself under Section 46, read with the lesser penalty regulations then in force, disclosing the arrangements. On the basis of the disclosure the Commission formed a prima facie opinion of contravention of Section 3 and took the matters up suo motu. In the personal system products case the Director General was directed on 17 November 2020 to investigate tenders floated on the Government e-Marketplace portal by procurers in Delhi for personal system products valued at one crore rupees or more.

2. The Conduct Found

1. Bid rigging on a public procurement platform. The tenders in question were floated on the Government e-Marketplace portal, the central channel for public purchasing, so the buyer in every affected transaction was a government entity.
2. Dictation of bid prices. The Commission found that HP India dictated the prices at which its resellers were to bid and manipulated their participation in the tenders, so that the apparent competition between resellers was arranged rather than real.
3. Cover or support bidding. In the supplies products case the arrangement was found to rest on support bidding, the classic technique by which a designated loser submits a bid that is deliberately uncompetitive so that the designated winner appears to have prevailed in a genuine contest.
4. The provisions contravened. Section 3(3)(d) read with Section 3(1) in both cases, that is bid rigging and collusive bidding, which carries the presumption of appreciable adverse effect on competition.

3. The Orders

The orders were passed by a bench comprising the Chairperson and three Members, and the detailed orders are available on the Commission's website, which should be consulted for the reasoning on quantum, on the treatment of the leniency applications and on the role attributed to each reseller.

4. Why the Cases Matter Doctrinally

4.1 The vertical and horizontal boundary

HP India is a vendor and its resellers are its customers, so the relationship between them is vertical. The resellers, however, compete with one another when bidding for the same tender, so the relationship between them is horizontal. What the Commission found was a horizontal arrangement among the resellers in which the vendor played a central role, dictating prices and allocating participation. That is the structure of a hub and spoke arrangement: the vertical relationships are the spokes, the coordination among the resellers is the rim, and the vendor is the hub.

• The significance. A vendor cannot avoid Section 3(3) merely by pointing out that it is not in the same trade as its resellers, if it is the party organising the coordination between them.
• The timing. The conduct and the initiation of these cases predate the amendment of 2023, which added the provision presuming an enterprise not engaged in identical or similar trade to be a party to such an agreement where it actively participates in furthering it. The cases are therefore useful for showing how the Commission approached the question before that amendment, and the amendment now puts the position beyond argument for conduct after it came into force.
• The practical lesson for vendors. Channel policies that specify the price at which a partner must bid, or that allocate tenders among partners, convert ordinary distribution management into cartel facilitation, however the arrangement is described internally.

4.2 Public procurement

Every feature that makes a public tender accountable also makes collusion easier: published outcomes, standard specifications, repeated requirements and a limited pool of authorised resellers. A procurement platform aggregates those features. Where a single manufacturer's product is specified or preferred, competition in the tender is competition between resellers of that manufacturer, and if the manufacturer controls what they bid there is no competition at all. These orders are the clearest recent illustration of that risk.

4.3 Personal liability

Officials of both the vendor and the resellers were held liable under Section 48 and penalised personally. Sub-section (1) fixes liability on a person in charge of and responsible to the company for the conduct of its business, subject to the defence of absence of knowledge or due diligence, and sub-section (2) on any director, manager, secretary or officer with whose consent or connivance, or by whose neglect, the contravention occurred. The orders are a reminder that competition liability in cartel cases is not confined to the corporate entity, which is itself one of the pressures that makes a leniency application attractive.

5. Compliance Points to Draw

1. Channel pricing policy. A vendor may set its own selling price to a reseller; it may not set the price at which resellers bid against each other, and a recommended bid price enforced through authorisation, supply or discount is resale price maintenance at best and bid rigging at worst.
2. Tender allocation. Deciding which partner will pursue which tender, whether described as registration, lead protection or deal registration, is market allocation if it removes competition between partners for the same tender.
3. Support bidding. Asking a partner to submit a bid it is not intended to win, in order to meet a minimum number of bidders or to shape the outcome, is the commonest form of bid rigging and is not made lawful by the buyer's own requirement of three bids.
4. Information flows. A vendor that collects and passes on partners' intended bid prices is supplying the mechanism of a cartel, whatever its intention.
5. Leniency readiness. An enterprise that discovers such conduct internally must decide quickly whether to apply, since the value of a disclosure falls as the investigation progresses and only the first applicant can obtain the highest reduction.

6. Related Topics and Provisions