1. Competition Commission slaps Rs 87 crore fine on Hyundai Motor India

Competition Commission slaps Rs 87 crore fine on Hyundai Motor India

Competition Commission today imposed a penalty of Rs 87 crore on Hyundai Motor India for unfair business practices with respect to providing discounts for cars.

By: | New Delhi | Published: June 14, 2017 10:58 PM
Competition Commission, CCI fine, Competition Commision fine, fine on Hyundai, Hyundai Motor India, anti-competitive practices, car maker, non-recommended lubricants and oils Among others, CCI said the company contravened competition law through arrangements which resulted into resale price maintenance.(Photo: PTI)

Competition Commission today imposed a penalty of Rs 87 crore on Hyundai Motor India for unfair business practices with respect to providing discounts for cars. Besides, the company has been directed to cease and desist from such anti-competitive practices. In a 44-page order, the regulator said the company’s anti-competitive conduct include putting in place arrangements that resulted in resale price maintenance by way of monitoring of maximum permissible discount level. This was done through discount control and penalty mechanisms for non-compliance of the discount scheme, it added. “Such conduct pertains to and emanates out of a sale of motor vehicles.

Hence, for the purposes of determining the relevant turnover for this infringement, revenue from a sale of motor vehicles alone has to be taken into account,” CCI noted. It was alleged that the company has discount control mechanism whereby dealers are permitted only to provide a maximum permissible discount and not beyond the recommended range. The watchdog has slapped a fine of Rs 87 crore on the car maker. The penalty amount translates to 0.3 percent of the company’s average relevant turnover in the last three financial years from 2013-14.

Also watch:

Among others, CCI said the company contravened competition law through arrangements which resulted in resale price maintenance and by mandating its dealers to use “recommended lubricants/ oils and penalising them for use of non-recommended lubricants and oils”.

  1. M
    MM Sharma
    Jun 15, 2017 at 11:37 am
    It is the first order passed by CCI against the ongoing practice of re price maintenance . This practice is quite common in India and this first order by the fair market regulator should send right signals to manufacturers across all sectors. MM Sharma , Head Compe ion Law Practice Vaish Associates
    Reply

Go to Top