Antitrust Law Daily Wrap Up, ANTITRUST NEWS: India fines auto makers for restricting ability of independent repairers to compete, (Aug 26, 2014)

By Jeffrey May, J.D.

India's Competition Commission (CCI) has imposed fines totaling approximately Rs 2545 Crores (more than U.S. $420 million) on 14 auto makers for restricting the ability of independent repair shops to service their vehicles. The 14 companies also were ordered to refrain from engaging in the challenged conduct, such as restricting the availability of spare parts and the technical know–how needed to repair, maintain, or service the automobiles.

The CCI began its investigation into the challenged practices more than three years ago. The probe began looking into three companies: Honda Siel Cars India Ltd., Volkswagen India Pvt Ltd., and Fiat India Auomobiles Ltd. The investigation was later expanded to cover: BMW India Pvt. Ltd., Ford India Pvt. Ltd., General Motors India Pvt. Ltd., Hindustan Motors Ltd., Hyundai Motor India Ltd., Mahindra & Mahindra Ltd., Mahindra Reva Electric Car Company (P) Ltd. (Reva), Maruti Suzuki India Ltd., Mercedes-Benz India Pvt. Ltd., Nissan Motor India Pvt Ltd., Skoda Auto India Pvt. Ltd., Tata Motors Ltd., and Toyota Kirloskar Motor Pvt. Ltd. CCI's current order does not involve Hyundai, Reva, and Premier. The agency said that it wanted to afford these three auto makers a reasonable opportunity to make their submissions in respect of the findings. Specific findings were issued regarding the other manufacturers.

In conducting its analysis, the CCI concluded that there were two separate relevant markets: (1) the manufacture and sale of cars; and (2) the sale of spare parts and repair services in India's automobile market. It rejected the auto makers' argument for a “unified systems market.” The CCI determined that the auto makers abused their dominant positions by imposing unfair terms and prices and by denying market access to independent repairers. In addition, the auto makers were found to have entered into anticompetitive agreements with dealers.

Fines. The fines were based on two percent of each auto maker’s total turnover in India. They ranged from as low as Rs 1.63 Crores against Nissan Motor India (P) Limited—a subsidiary of Japan-based Nissan—to as much as Rs 1346.46 Crores (almost U.S. $223 million) against India-based Tata Motors.

Companies: Honda Siel Cars India Ltd.; Volkswagen India Pvt Ltd.; Fiat India Auomobiles Ltd.; BMW India Pvt. Ltd.; Ford India Pvt. Ltd.; General Motors India Pvt. Ltd.; Hindustan Motors Ltd.; Hyundai Motor India Ltd.; Mahindra & Mahindra Ltd.; Mahindra Reva Electric Car Company (P) Ltd.; Maruti Suzuki India Ltd.; Mercedes-Benz India Pvt. Ltd.; Nissan Motor India Pvt Ltd.; Skoda Auto India Pvt. Ltd.; Tata Motors Ltd.; Toyota Kirloskar Motor Pvt. Ltd.

News: Antitrust