CCI penalises HP India in Hub-and-Spoke Bid Rigging Case
On July 13, 2026, the Competition Commission of India (CCI) penalised HP India Sales Private Limited (HP India) and several Tier-2 resellers for bid rigging in government tenders. The CCI’s orders cover activities occurring between 2017 and 2020, addresses bid rigging in two specific product categories: Personal Systems Products (e.g., laptops and desktops) and HP Supplies Products (e.g., ink and toner cartridges). The CCI imposed a cumulative penalty of INR 138.95 crores (INR 1.38 billion) on HP India, in addition to penalties on various resellers.
The Core Issue: Hub-and-Spoke Cartelisation
The investigation revealed that HP India and its resellers coordinated their participation in tenders on the Government e-Marketplace (GeM) portal. The CCI considered this to be a “hub-and-spoke” arrangement involving the following elements:
Price Control: HP India dictated final bid prices to its resellers.
Access Restriction: HP India restricted the issuance of Manufacturer’s Authorisation Forms (MAFs), a mandatory requirement for participation in GeM tenders, to control which resellers could participate.
Cover Bidding: The parties orchestrated cover bids or support bids to ensure that specific resellers retained legacy “Most Valuable Customer” accounts, creating a “façade of competition” that deprived government procurers of competitive pricing.
The CCI rejected the argument that this was merely a standard vertical supplier-distributor relationship. It ruled that by participating in the same tenders as its resellers, HP India stepped into the role of a horizontal competitor, violating Section 3(1) read with Section 3(3)(d) of the Competition Act.
Key Legal Takeaways from the CCI Order
The CCI’s findings provide several important takeaways on cartel liability:
Broad scope of bid rigging: Bid rigging includes conduct such as withholding necessary documentation or approvals required for participation, impacting the extent of participation in tenders.
Independent pricing decision as a defence: The CCI exonerated certain resellers who were able to establish that they did not act on HP India’s instructions and determined bid prices independently.
Leniency applicant limitations: While HP India admitted to the conduct and applied for leniency, it did not receive a full penalty waiver. The CCI noted that HP India’s “prominent role” in orchestrating the cartel, combined with its direct control over reseller participation, justified a partial reduction rather than total immunity.
No de minimis threshold: Cartel liability applies regardless of the tender’s monetary value. The CCI’s directive to investigate tenders above certain thresholds in this case was purely for “administrative convenience”.
Read our detailed analysis here.