Electric two-wheeler manufacturers cleared of manipulating FAME subsidies under Section 4 - no dominant position found

CCI examined allegations of abuse of dominant position under Section 4 of Competition Act, 2002, concerning electric two-wheeler manufacturers allegedly manipulating FAME policy subsidies through under-pricing and separate charging for essential components. The relevant market was delineated as manufacture and sale of electric two-wheelers in India. CCI found no single player could exert market power or operate independently of market forces in the relevant market. Consequently, none of the opposite parties held dominant positions. CCI concluded no prima facie case of contravention existed and ordered closure of information under Section 26(2).

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Issues:
Alleged contravention of Section 4 of the Competition Act, 2002 by Ola Electric Ltd., VIDA Hero Moto Corp Limited, TVS Motors, and Ather Energy Private Limited regarding the Faster Adoption and Manufacturing of Electric & Hybrid Vehicles Policy (FAME).

Detailed Analysis:

1. Allegations and Background:
The Informant, under Section 19(1)(a) of the Act, filed a complaint against the OPs for violating Section 4 of the Act by taking advantage of the FAME policy. The FAME policy aimed to promote electric and hybrid vehicles to reduce fossil fuel dependence and air pollution. The OPs allegedly sold essential components separately to stay within the subsidy limit, undermining the policy's intent.

2. Abuse of Policy and Competition Impact:
The OPs are accused of abusing the FAME policy by pricing essential components separately, leading to market distortion and denial of benefits to genuine manufacturers. This practice allegedly resulted in adverse effects on market competition and consumer interests, impacting small manufacturers' ability to compete.

3. Relevant Market and Dominance Assessment:
The relevant market was identified as the market for Electric Two Wheelers (ETWs) in India. The dominance of OPs in this market was evaluated based on market share data. However, the Commission noted that no OP demonstrated a stable market share or dominance, with intense competition expected due to market growth and new entrants.

4. Dominance Determination and Conclusion:
After assessing market dynamics, the Commission found that none of the OPs had a dominant position in the relevant market. As a result, no prima facie case of contravention of Section 4 of the Act was established against the OPs. The Commission ordered the closure of the case under Section 26(2) of the Act, rejecting the relief sought under Section 33.

5. Confidentiality and Order Conclusion:
The Informant's request for confidentiality was granted for three years, as per Regulation 35(1) of the CCI (General) Regulations, 2009. The Secretary was directed to communicate this decision to the Informant. The order was concluded, stating that no relief was warranted against the OPs based on the findings of the Commission.

This detailed analysis outlines the key aspects of the judgment involving allegations of competition law violations related to the FAME policy and the Commission's decision regarding the lack of dominance by the OPs in the relevant market, leading to the closure of the case.

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