Introduction

The Indian paint industry recently came under scrutiny when the Competition Commission of India (“CCI”), the country’s apex antitrust regulatory body, initiated a probe following a complaint by Birla Opus against Asian Paints for abusing its dominant position. This development reflects the sharp competitive shift in India’s ₹70,000-crore decorative paint sector, where Asian Paints commands over 50% of the market—nearly three times the share and revenue of its closest rival. Meanwhile, Birla Opus (under Grasim Industries) has also rapidly emerged as the third-largest player in the segment within just six months of launching its pan-India operations.

During the proceedings, Asian Paints sought an oral hearing, which the CCI declined at the prima facie stage. The company then appealed before the Bombay High Court, which refused to interfere, thereby allowing the probe to proceed. The High Court, however in its judgement, refused to interfere, thereby allowing the CCI’s probe to proceed.

This piece analyze the Asian Paints dispute as a lens to analyse the ambiguities surrounding Section 26(2A) of the Competition (Amendment) Act, 2023 and to analyse broader systemic challenges faced by the CCI while investigating abuse of dominance (“AoD”) cases.

Decoding Recent Allegations in Light of Past Precedents set by CCI

On July 1, 2025, the CCI directed the Director General (“DG”) to investigate the matter and submit a report in 90 days. Grasim has accused Asian Paints of exercising both exclusionary and exploitative abuse violating Section 4(2)(a), 4(2)(b), 4(2)(c) and 4(2)(d) along with Section 4(1) of the Competition Act, 2002 (“the Act”).

Alleged practices include offering arbitrary incentives like foreign trips to dealers in exchange for exclusivity, restraining suppliers of raw materials from dealing and coercing landlords and transporters to avoid working with rivals. They also coerced dealers to return or avoid Grasim’s tinting machines, which enable instant colour customization and drive brand loyalty through subsidized promotion.

This isn't the first time that Asian paints has been accused of being involved in anti-competitive practices. In JSW Paints Pvt. Ltd. and Another v. Asian Paints Ltd. too, JSW Paints alleged that Asian Paints abused its dominance in southern markets. Thus the investigation was held under the alleged violation of Section 3(4) and Section 4 of the Act. During investigation, DG noted that the share of dealers discontinuing business with Asian Paints was higher than those discontinuing with JSW Paints. Hence, no prima facie case of abuse of dominance was established, resulting in the dismissal of the complaint. Even though there was no abuse, it was observed that Asian Paints enjoys a position of dominance in the relevant market. Similarly, in S. Kannan v. Asian Paints Limited & Ors , Asian Paints was accused of violating similar provisions. However, the Commission closed the case under Section 26(2) of the Act, stating that no competition concern arose. Both of these cases highlight that mere allegations, without strong proof, do not result in any antitrust liability.

Discretion and Vagueness in Section 26(2A) & its Implications

It is evident from prior cases that Asian Paints has been repeatedly accused of misusing its dominant position. The Asian Paints Limited Vs CCI & Ors. judgement has flagged out some issues regarding the Section 26 (2A), which was introduced recently under the 2023 Amendment to the Act. It provides that: “The Commission may not inquire into agreement if the same or substantially the same facts have already been decided by the Commission in its previous order.” The legislative intent behind this provision was to avoid repetition of effort and speed up disposal of matters.

The language of Section 26(2A) remains imprecise, as it does not clarify what degree of factual or legal difference suffices to distinguish a new complaint from a previously adjudicated one. Statutorily, Section 26(2A) empowers but does not compel the CCI to decline inquiries into agreements based on “the same or substantially the same facts” already addressed in a previous order. This ambiguity complicates the CCI’s assessment of when matters warrant dismissal versus investigation, inviting more writ petitions against its decisions. As a result, the very efficiency objective of the amendment stands undermined. Complainants also have very limited recourse to challenge the CCI’s mandate unless they go to the courts, which can be time-consuming and expensive.

The judgment highlights that while Birla Opus invoked sections distinct from those in the JSW case, both cases involve allegations of AoD, illustrating a point of partial overlap. The law, however, remains unclear on how such partial overlaps should be addressed in practice. The CCI is not statutorily required to record express reasons for bypassing Section 26(2A), while it chooses to investigate it. Thus, it functions more as a prudential caution than a true res judicata bar, for while reasons must be recorded when dismissing a complaint, no such duty arises when proceeding with an investigation without addressing earlier proceedings.

The US competition law regime requires a stringent factual and legal analysis before dismissing cases as previously decided, thereby ensuring stronger preclusion standards, consistency in administrative precedents and rigorous judicial scrutiny. In contrast, Section 26(2A) of Indian competition law gives the CCI broad discretion, with no interpretive guidelines, making the standard open-ended and unpredictable in application.

As confirmed in Google v CCI (ADIF), this is an enabling filter rather than a jurisdictional bar, allowing subsequent complaints if fresh material or changed circumstances are demonstrated. Judicial interpretation has clarified that when closing a case under Section 26(2A), the Commission must issue a speaking order with detailed reasoning, articulate how the present facts align with those of earlier proceedings and specifically identify the absence of new evidence.

The significance of this provision was highlighted in Amazon Sellers v. CCI, where the CCI invoked res judicata to prevent re-litigation of settled issues. The Court, however, cautioned that given evolving market dynamics, the principle should not be applied mechanically; yet the CCI’s power to dismiss previously adjudicated matters remains vital.

The Supreme Court in Samir Aggarwal v. CCI also affirmed that “proceedings under the Competition Act are actions in rem, affecting the public at large”. This establishes competition law as a systemic safeguard against market distortions, not merely a dispute resolution tool and demonstrates that public policy shall be in consideration by CCI before the application of 26 (2A).

Systemic Challenges in Enforcing Abuse of Dominance

According to a report by AZB from 2019, the CCI’s penalty framework shows disparity between cartel and abuse of dominance cases. While cartel cases often attract penalties up to 10% of turnover under the Average Turnover Metric, in dominance cases the maximum penalty was applied in only 2 out of 16 instances. This inconsistency raises concerns about uniformity and predictability in enforcement. The 2023 amendment empowers CCI to levy up to 30% of relevant turnover and consider global turnover for fines, though full adoption may take time. In Meta v CCI Case, the Commission rejected Meta’s retrospective argument against global turnover but imposed a moderate 4% penalty on India turnover instead of the maximum 30%, reflecting continued caution in enforcement.

One of the main criticisms of CCI in its conduct is the underutilization of interim orders. Section 33 of the Act gives CCI the power to issue interim orders restraining anti-competitive activities temporarily, serving as its strongest tool to prevent harm. From 2021-24, only 11 interim orders were issued by the commission out of a total 208 cases. In Fast-Track Call Cab v. ANI Technologies, CCI rejected the interim injunction request, holding that such relief requires a strong prima facie case, proof of irreparable injury if denied and a balance of convenience favoring its grant. Not providing an interim injunction may result in delayed relief and reduce confidence in CCI’s effectiveness.

Enforcement of monetary penalties has long challenged the CCI. Since 2011, it has recovered only ₹425 crores of the ₹18,351 crores imposed, just 2.3% of the total. Companies often appeal penalty orders before NCLAT, High Courts and the Supreme Court, creating multiple litigation layers and significant delays. Prolonged proceedings weaken the deterrent effect of penalties, as seen in Belaire Owners' Association vs DLF Limited, where litigation extended for over a decade without upfront deposits and in the Tyre Cartel Case, which took years to establish price manipulation and is still awaiting Supreme Court judgement. Recognizing this enforcement gap, the Competition Amendment Act, 2023 introduced a safeguard requiring companies to deposit at least 25% of the penalty before their appeal is admitted, strengthening the penalty mechanism’s credibility and deterrent effect.

AoD cases often rely on coercion, oral agreements or distributor testimony, which are difficult to prove and may weaken over time. Many firms view penalties as “cost of doing business", as seen in cement cartel cases. Further, NCLAT lacks technical members with competition law expertise since COMPAT’s dissolution.

Conclusion

Over the years, CCI has monitored a lot of cases involving abuse of dominant position, including large corporations like Google, NSE and Coal India and have ordered changes in business methods to prevent recurrences of such practices. Section 26(2A) strikes a balance between efficiency and justice. To enhance its effectiveness, the CCI should adopt clear guidelines, mandate reasoned orders when bypassing prior cases, and consider evolving market conditions. Such provisions must not serve as shields for dominant corporations to evade scrutiny but as instruments for genuine market correction and public interest protection.

CCI must strengthen capacity by engaging experts and using specialists for timely competition law adjudication. CCI should elevate AoD cases to the same level of priority and rigor as cartelisation cases, adopting a robust penalty framework to ensure fairness and deterrence. The Commission must adopt a more proactive stance in granting interim measures more decisively. Through this, CCI can ensure that dominance does not translate into sustained market distortion.

About the Authors

B.A. LL.B. (Hons.) students at Dr. Ram Manohar Lohiya National Law University, Lucknow