2024 (11) TMI 941 - CCI - Law of Competition

CCI dismisses case against automotive manufacturer for alleged dominant position abuse and anti-competitive practices under Sections 3 and 4

In Re: Balbir Singh Nagpal, Toyota Kirloskar Motors Private Limited, Uttam Toyota

CCI dismissed allegations against automotive manufacturer and dealer regarding abuse of dominant position and anti-competitive practices. Informant ... Contravention of provisions of Sections 3 and 4 of Competition Act, 2002 - abuse of dominant position - HELD THAT:- The Commission has perused the Information, including legal notices served by the Informant upon OP-1 and OP-2 and also their respective replies. The Informant appears to be primarily aggrieved by: (i) arbitrary change in delivery time of the car from two months to eight months; (ii) pick and choose policy in delivery of the car; (iii) unlawful demand of premium by DSAs; (iv) imposition of RPM; and (v) forcing customers to purchase accessories. The Informant has alleged that OP-1 has a dominant position in the relevant market of ‘strong hybrid passenger vehicles in the territory of India’ and has violated provisions of Sections 4(2)(a)(ii) and 4(2)(c) of the Act. The Commission is of the view that the primary issue in the matter appears to be revolving around the waiting period in delivery of the car booked by the Informant and prices of accessories. The Commission notes that such kind of allegations bear the tone and tenor of inter se dispute between Informant and OP1/ OP2 and does not have market-wide anti-competitive ramifications, in the facts and circumstances of the instant matter. Normally, long waiting period cannot be the subject matter of antitrust scrutiny as they are dependent upon various factors including reasons adduced by the OP1 - As regard price, the Commission is of the view that the same is an outcome of demand and supply forces in the market and consumer preferences, among others. In the present case, the Informant has failed to highlight whether such prices have overtone of being ‘unfair’ or ‘discriminatory’ in terms of the provisions of the Act. Accordingly, the allegations levelled above do not reveal any anti-competitive concern and consequently, the Commission finds no reason to carry out an analysis of abuse of dominant position by the Opposite Parties. The allegation pertaining to RPM i.e., Section 3(4) of the Act requires the existence of an agreement amongst enterprises or persons at different stages or levels of the production chain in different markets in respect of production, supply, distribution, storage, sale or price of, or trade in goods or provision of services which causes or is likely to cause AAEC in India. The Commission notes that the Informant has not substantiated his allegation of RPM by way of any evidence to show the existence of any such agreement. Thus, no prima facie case of contravention of the provisions of Section 3 or 4 of the Act is made out against the Opposite Parties and the Commission directs that the matter be closed forthwith under Section 26(2) of the Act. Consequently, no case for grant of relief(s) as sought under Section 33 of the Act arises. Issues: Alleged contravention of Sections 3 and 4 of the Competition Act by Toyota Kirloskar Motors Pvt. Ltd. and Uttam Toyota.The judgment pertains to an Information filed under Section 19(1) of the Competition Act, 2002, alleging contravention of Sections 3 and 4 of the Act by Toyota Kirloskar Motors Pvt. Ltd. and Uttam Toyota. The Informant booked a car with Uttam Toyota, alleging that despite being assured of delivery within two months, the timeline was extended to eight months. The Informant also claimed that some customers received their cars before him, leading to his booked car being delivered to someone else. The Informant raised concerns about unfair treatment and arbitrary practices by the dealers. Additionally, the Informant highlighted the role of Direct Sales Agents (DSAs) who allegedly promised guaranteed early delivery for a premium. The Informant accused the dealers of favoring certain consumers, creating artificial scarcity, and imposing Resale Price Maintenance (RPM), affecting competition adversely.The response from the dealers emphasized that the waiting period was communicated to the Informant, and they denied prioritizing other customers over him. They attributed delays to external factors like semiconductor shortages. The dealers refuted the allegations of unfair practices and defended their actions in response to the Informant's legal notices. The Informant sought various reliefs, including investigation by the Director General, cessation of abuse of dominant position, provision of requested information, imposition of penalties, and other appropriate orders.The Commission analyzed the allegations and responses, focusing on the waiting period and accessory prices. It concluded that the issues primarily involved a dispute between the Informant and the dealers, lacking broader anti-competitive implications. The Commission found no evidence of unfair pricing practices or discriminatory behavior that would warrant antitrust scrutiny. The allegation of RPM was not substantiated with evidence of an agreement causing an appreciable adverse effect on competition. Consequently, the Commission closed the matter under Section 26(2) of the Act, stating no prima facie case of contravention of Sections 3 or 4 was established. The decision was communicated to the Informant through the Secretary.