The Competition Commission of India (CCI) has recently approved acquisition of Samsung Electronics’ printer business by HP Inc., the agreement for which was entered in to between the parties in September 2016.  The $1.05 billion deal included acquisition of around 6,500 printing technology patents of Samsung and transfer of 6,000 Samsung employees including its researchers and engineers. With this acquisition, HP aims at leveraging Samsung's multifunction printer technology. As regards Samsung, the divestiture is a part of the corporate overhaul to focus on its core competence of smartphone, television, and memory chip business.

The CCI while inquiring into the proposed acquisition noted that printers can be broadly categorised as Regular Format Printers (RFPs), which are used in home and office for printing/copying on A3 and A4 papers, and Large Format Printers (LFPs), used for printing signage and display items, computer aided design or graphic arts.  The CCI found no overlap between the activities of the parties in respect of LFPs. As regards RFPs, the CCI noted that the market share of the HP and Samsung in India for year 2015 was in the range of (35-40) percent and (0-5) percent respectively. It also noted that RFP segment is characterised by the presence of major players like Canon, Epson, Ricoh and Konica Minolta. Pertinently, the CCI also noted that RFPs could be further segmented based on (a) functionality - as Single Function Printers (SFPs) and Multi-Function Printers (MFPs); (b) colour - Black & White (mono) and colour printers and (c) speed - pages printed per minute.

The CCI further observed that lately there has been convergence between SFP and MFP as the absolute price differential between them was narrowing down. It also observed that mono printers were being replaced by colour printers as the cost-per-page from demand side perspective was converging. As regards speed, it observed that there had no uniform standard for sub-segmenting printers on this basis. As regards supply side substitution, the CCI observed that the manufacturers can switch production across various segments of RFPs in short term without incurring significant incremental costs. It also observed that the R&D activities for RFPs are spread across multiple printer models with the basic technology (IP and know-how) being common to many types of printers. In view of the above, the CCI decided not to define the relevant product market in detail. As the CCI did not find any appreciable adverse effect on competition in RFPs segment or in any of the sub-segments of RFPs, it approved the combination.  Significantly, upon consideration of certain queries raised by the CCI, HP volunteered to reduce the non-compete obligation upon Samsung to 3 years for both printer as well as printer-related consumable business.