CCI fines Hyundai Rs420 cr; Reva, Premier also face flak

Tribune News Service

New Delhi, July 28

The Competition Commission of India (CCI) has imposed a penalty of Rs 420 crore on Hyundai Motor India for abusing its dominant position in the spare parts and after sales market.

The Commission imposed a penalty calculated at the rate of 2% of its average turnover on Hyundai amounting to Rs 420.26 crore which is to be deposited within 60 days of receipt of the order.

The penalty has been imposed for violating the provisions of the Competition Act, 2002.

Along with Hyundai, CCI found other two car companies —Mahindra Reva Electric Car Company and Premier to be in contravention of the provisions of the Act.

The CCI ordered Hyundai, Reva and Premier to ‘cease and desist’ from anti-competitive practices and allow open market sale of spare parts.

The Commission found their conduct to be in violation of the provisions of Section 3(4) of the Act with respect to their agreements with local Original Equipment Suppliers (OESs) and agreements with authorised dealers whereby they imposed absolute restrictive covenants and completely foreclosed the aftermarket for supply of spare parts and other diagnostic tools, a statement issued by the Ministry of Corporate Affairs said.

Further the Commission found that the said car companies, who were found to be dominant in the aftermarkets for their respective brands, abused their dominant position by indulging in practices resulting in denial of market access to independent repairers as the latter were debilitated to provide services in the aftermarket for repair and maintenance of cars for want of genuine spare parts.

These companies were also found to be using their dominant position in the market for spare parts and diagnostic tools to protect their market for repair services, thereby distorting fair competition. The order is in continuation of Commission’s main order dated August 25, last year when it had inter alia imposed penalties on 14 out of the 17 car companies under Section 27 of the Act.