Regulations
Competition Commission slaps Rs2,545 crore penalty on carmakers

The CCI penalised 14 carmakers, including Tata Motors, Maruti Suzuki, Honda and General Motors for abusing their dominant position by making available spare parts only through their authorised dealers, who in turn sell them at higher rates

 

The Competition Commission of India (CCI) has slapped a penalty of Rs2,545 crore on 14 carmakers for violating trade norms in the spare-part and after-sale service market.

 

As per the complaint filed by Samsher Katatia in 2011, Honda Siel Cars India Ltd, Volkswagen India Pvt Ltd and Fiat India Auomobiles Ltd were accused of abusing their dominant position by making available spare parts only through their authorised dealers, who in turn sell them on high rates.

 

The companies penalised by the Commission include Maruti Suzuki, Tata Motors, Honda Siel Cars India, Volkswagen India, Fiat India, BMW India, Ford India, General Motors India, Hindustan Motors, Mahindra & Mahindra, Mercedes-Benz India, Nissan Motor India, Skoda Auto India and Toyota Kirloskar Motor.

 

“...the Commission’s primary objective is to correct the distortions in the after market, to provide corrective measures to make the market more competitive, to eradicate practices having foreclosure effects and to put an end to the present anti-competitive conduct of the parties. The aim of the Commission is to provide more freedom to Original Equipment Suppliers (OESs) in sale of spare parts, and more choice to consumers and independent repairers. The Commission considers it

necessary to (i) enable the consumers to have access to spare parts and also be free to choose between independent repairers and authorized dealers and (ii) enable the independent repairers participate in the after market and provide services in a competitive manner and to have access to essential inputs such as spare parts and other technical information for this purpose, as part of a more competitive eco-system which is equally fair to the OPs and their authorized network also,” the CCI mentioned in its order.

 

The penalty - 2% of these companies' average turnover in the past three years - will have to be deposited within 60 days of receipt of the order, the CCI said.

 

Tata Motors is penalised the maximum of Rs1,346 crore followed by Maruti Suzuki at Rs471 crore. Mahindra & Mahindra is asked to pay Rs292 crore, General Motors Rs85 crore and Honda Car India Rs78 crore by the Competition Commission.

 

In its order, the Commission said, "...anti-competitive conduct of the opposite parties impacts a very large number of consumers in the country estimated to be around two crore. Further, the anti-competitive conduct of the opposite parties has restricted the expansion of spare parts and independent repairers segment of the economy to its full potential, at the cost of the consumers, service providers and dealers. It is also noted that despite the fact that most attractive markets for the automobile manufacturers and some OPs (carmakers) have made consumer-friendly commitments in other jurisdictions like Europe, they have failed to adopt similar practices in India which would have gone a long way in significantly diluting their present anti-competitive conduct. This makes their conduct even more deplorable."

 

Earlier, in 2012, the Director General of CCI submitted a report after its investigation into the matter. The Commission was pursuing the case under Section 4 of the Competition Act that relates to abuse of dominant position by enterprises.

 

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COMMENTS

Dev

3 years ago

Great ruling by CCI

Shri Shamsher Kataria - Informant

Sh. Sameer Oberoi, Sh. Aditya Patni, Advocates for Informant

Mr. Ashok Chawla, Chairman
Mr. Anurag Goel,Member
Mr. M. L. Tayal,Member

Thank you all



Veeresh Malik

3 years ago

The full judgement can be read here

http://www.cci.gov.in/May2011/OrderOfCom...

MoneyLife has written on this subject from 2010 onwards.

Some points which may be of interest to readers are listed here-

# Inherent right of buyer to free usage and upgrades of all proprietory software on single user basis for life-cycle of product as is the case with OS in computers. This has not been addressed at all.

# Safety aspect of not being provided with the above usage and upgrades of proprietory software which is installed in a vehicle purchased by consumer.

# The enquiry does not appear to include two-wheelers, three-wheelers and medium/heavy vehicle manufacturers in its ambit.

# 3.9.6 - even some generics like batteries are now make / model specific thanks to intervening technologies between battery and vehicle.

# 3.9.16 deals with refusal to manufacture or supply parts of a particular (type of) automobile which is still in use.

# 3.9.28 - transfer of an intellectual property right is not automatic from parent to subsidiary if it is only a technology transfer agreement, since IPRs are territorial in nature. Brilliant point!!!

# 3.9.29 - likewise, copyright protection claimed on design whether Indian or foreign is not automatic, needs to be registered in India, and if not registered, then ceases to exist once the said design has been used once the concerned design has been applied more than 50 times by industrial process by the owner of the copyright or his licensee.

# 3.9.30 "Confidentiality" protection is not automatic between OEM and OES, and need to be under the CCI Section 3 be satisfied that these are "trade secrets" , and trade secrets are not protected under IPR.

# 3.9.31 "Prior consent" is required by OES from OEMs for direct selling of spare parts which brings into question the issue of IPR, copyright, confidentiality or trade secret.

# 3.9.34 is the analysis of "appreciable adverse effect on competition" (AAEC) and for the first time possible, FADA (Federation of Automobile Dealers Associations) have come out in "c" against the manufacturers cause an AAEC to the dealers too! Not just the customers. Interesting.

Dev

3 years ago

I was not aware of this fact.

Now onwards if spare parts of my car is over charged I will take them to Court.

Who is the Petitioner?

I really think he SHOULD be awarded

Veeresh Malik

3 years ago

Some points on this order.

# Inherent right of buyer to free usage and upgrades of all proprietory software on single user "per vehicle" basis for life-cycle of product as is the case with OS in computers. This has not been addressed at all.

# Safety aspect of not being provided with the above usage and upgrades of proprietory software which is installed in a vehicle purchased by consumer.

# The enquiry does not appear to include two-wheelers, three-wheelers and medium/heavy vehicle manufacturers in its ambit.

# 3.9.6 - even some generics like batteries are now make / model specific thanks to intervening technologies controlling power supply and safety between battery and vehicle.


MOHAN

3 years ago

Car makers were indeed guilty of violating trade norms as they failed to make their genuine spare parts available freely in the open market.

Great Order.

Why settlements don’t fix wrongful convictions

The wrongly convicted Jabbar Collins from Brooklyn will get his millions, but he won’t get his life back, and neither will his children or his family

 

It may seem to some a happy ending: A Brooklyn man wrongly convicted in a 1994 murder is at last cleared -- after serving 16 years in prison -- and then reaches a $10 million settlement with the city in the case.


Perhaps, says Senior Editor Joe Sexton, but it’s far from justice. “He will get his millions, but he won’t get his life back, and neither will his children or his family,” Sexton says, joining Managing Editor Robin Fields in the Storage Closet Studio to talk about the settlement.


While Collins’s family now has some measure of financial security, and the city has admitted wrongdoing, Sexton says, “there isn’t any real remedy that is committed to. The remedies that many people think are required really can only be brought about by legislation that would, you know, create a better, more effective way for making sure that prosecutors, in doing their vital jobs for society, don’t abuse their authority.”

 

 

Collins’s case, which was resolved more quickly than many wrongful convictions, illuminates so many of the problems that plague the system, Sexton says: He fought for years just to get the information to make his case, and many of the judges he appealed to seemed disinclined to even hear him out.


Indeed, Fields says, there have been many cases in the news recently dating back to the tenure of long time Brooklyn District Attorney Charles Hynes’s tenure -- and in particular, one of his top prosecutors, Michael Vecchione. Vecchione, who handled Collins’s case, has been accused of a variety of misconduct in the case, including suborning perjury and lying about it for years. Those accusations, which ProPublica has investigated as part of its Out of Order series, have resulted in no sanctions.


“At this point, Hynes has been voted out, which was an unusual outcome in and of itself, and Mr. Vecchione has retired,” Fields, says, “Is that enough to essentially clean up the problems in Brooklyn, or in the system at large?” And if not, is there a way to quantify the amount of misconduct perpetrated by prosecutors?


Sadly, Sexton says, ProPublica’s reporting has revealed the answer to both questions to be “a resounding ‘no.’ ”


“Part of it is that so much of what prosecutors do in today’s justice system goes on outside of the courtroom,” he says, including plea bargains and prosecutors’ investigations themselves.


As long as that’s the case, Sexton says, there will be work to do.


Hear the full podcast on iTunes, SoundCloud and Stitcher. See our Out of Order series for more of ProPublica’s reporting on prosecutorial misconduct.

 

Courtesy: ProPublica.org

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COMMENTS

Patrick

3 years ago

We often assume that the "Bad" guy is the accused and the "Good" guy is part of the prosecuting team. Is there any inclination to investigate the "Good" guys, just in case one of them is pretty smart is not "Good" and has found a way of hiding in the open. I think the term is "Snakes in Suits" or something very similar.

Nifty, Sensex headed lower – Monday closing report

Nifty may give up some more gains. It is too early to say where the support lies

 


We had mentioned in Friday closing report that the indices are at present overbought which may result in the benchmark giving up gains although the trend is up. Today, the market opened largely in the positive and the uptrend continued upto around 2.00 pm.

 

However, the indices fell sharply giving up all the intra day gains. Part of the reason was that Supreme Court today declared that the entire allocation of coal blocks from 1993 till 2010 was illegal, arbitrary, non-transparent and without application of mind and guidelines.


Sensex opened at 26,490 while the Nifty opened at 7,932. Both the benchmark hit its new life time high today at 26,631 and 7,968. However, giving up all the gains by the close of the session the indices entered negative zone and hit intra-day lows at 26,402 and 7,898. The indices closed almost at the day’s low with Sensex closing marginally up while the Nifty closing marginally lower. Sensex closed at 26,437 (up 17 points or 0.07%) while the Nifty closed at 7,906 (down 7 points or 0.09%). The NSE recorded a volume of 79.36 crore shares. India VIX rose 1.23% to close at 13.7875.


The top five gainers among the other indices on the NSE were FMCG (1.10%), IT (0.97%), Pharma (0.44%), Auto (0.20%) and Consumption (0.17%) while the top five losers were Metal (4.64%), Commodities (2.11%), Realty (2.06%), Nifty Midcap 50 (1.61%) and PSU Bank (1.57%).


Of the 50 stocks on the Nifty, 21 ended in the green. The top five gainers were TCS (2.33%), Hindustan Unilever (2.13%), Maruti (2.00%), Bhel (1.76%) and Cipla (1.74%). The top five losers were Jindal Steel (15.13%), Hindalco (9.97%), Tata Steel (5.11%), Sesa Sterlite (4.22%) and Tata Power (3.68%).


Of the 1,617 companies on the NSE, 587 companies closed in the positive, 972 companies closed in the negative while 58 companies closed flat.


There are reports that the Reserve Bank of India may relax its recently issued norms related to lending against shares to allow non-banking finance companies to lend against all categories of shares. Recently, RBI announced that NBFCs can lend only against Group 1 shares.


Finance Ministry today said it is considering bifurcation of the post of Chairman and Managing Director in public sector banks to strengthen corporate governance in the light of recent cases of corruption.


Emami which hit its 52-week high today was the top gainer (6.03%) in the ‘A’ group on the BSE. The Supreme Court declared that the entire allocation of coal blocks from 1993 till 2010 was illegal and that the government has allowed diversion of coal from ultra-mega power projects(UMPP) for commercial exploitation. The court directed that the coal blocks allocated for UMPPs would be used only for those projects and no diversion of coal for commercial exploitation would be permitted.  Among the stocks worst affected were Jindal Steel (13.97%), top loser in the ‘A’ group on the BSE while Hindalco (9.56%) among the top two losers in the ‘A’ on the BSE and top loser in Sensex 30 stock.


Tata Consultancy Services announced a partnership with Cloudera, enterprise analytic data management powered by Apache Hadoop™, certifying TCS’ global team of Big Data experts through the Cloudera Certified Professional (CCP) program. TCS (2.42%) was the top gainer in Sensex 30 pack.


US indices closed mostly lower on Friday. Federal Reserve Chairwoman Janet Yellen in her speech on Friday said that the US economy has made considerable progress in recovering from the largest and most sustained loss of employment since the Great Depression. Yellen reiterated that early rate hikes are possible, but it will depend on how the economy evolves in the next few months.


Except for Shanghai Composite (0.51%), Jakarta Composite (    0.27%) and KLSE Composite (0.46%) all the other Asian indices closed in the positive. Nikkei 225 (0.48%) was the top gainer.


Financial markets in the UK are closed today, 25 August 2014, for a bank holiday. US Futures were trading in the green. German business confidence declined for a fourth month, reflecting a faltering euro-area economy that European Central Bank President Mario Draghi says might need more stimulus. The Ifo institute's business climate index, based on a survey of 7,000 executives, fell to 106.3 in August from 108 in July.

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