The Competition Commission of India has imposed a penalty of ₹420 crore on Hyundai Motor India Ltd, and held Mahindra Reva Electric Car Company (P) Ltd and Premier Ltd to be in contravention of the provisions of the Competition Act.
The Commission has 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 and authorised dealers whereby they imposed absolute restrictive covenants and completely foreclosed the after-market for supply of spare parts and other diagnostic tools.
The companies were found to be indulging in practices resulting in denial of market access to independent repairers as well as using their dominant position in the market for spare parts and diagnostic tools, thereby distorting fair competition.
Hyundai has been asked to deposit the penalty within 60 days of receipt of the order. Considering the mitigating factors that worked in favour of Reva and Premier, the two car companies have been absolved from monetary penalty.
The watchdog further stated that the three car companies, which were found to be dominant in the after-markets for their respective brands, abused their dominant position under Section 4 of the Act.
“The order is in continuation of the Commission’s main order in the same case dated August 25, 2014, under which the watchdog had imposed penalties on 14 out of the 17 car companies under Section 27 of the Act,” it said in a statement.
The order against Hyundai had remained pending pursuant to the writ petition filed in the Madras High Court challenging the jurisdiction of the Commission.
With respect to Reva and Premier, the order remained pending because of the applications filed by them requesting for striking out of their names from the array of parties.