The Competition Commission of India (CCI) has found Hyundai Motor India Limited (HMIL) to be in contravention of the provisions of Section 3(4)(e) read with Section 3(1) of the Competition Act, 2002 for imposing arrangements upon its dealers which resulted into Resale Price Maintenance in sale of passenger cars manufactured by  it. Such arrangements also included monitoring of the maximum permissible discount levels through a Discount Control Mechanism. Further, HMIL was found to have contravened the provisions of Section 3(4)(a) read with Section 3(1) of the Act for mandating its dealers to use recommended lubricants/ oils and penalising them for use of non-recommended lubricants and oils.

The final order has been passed today on informations filed by the dealers of HMIL viz. Fx Enterprise Solutions India Pvt. Ltd. and St. Antony’s Cars Pvt. Ltd.

Apart from issuing a cease and desist order against HMIL, CCI has imposed a penalty of ₹ 87 crore upon HMIL for the anti-competitive conduct. The penalty has been levied @ 0.3% of the average relevant turnover of HMIL of preceding three years. CCI noted in its order that for the purposes of determining the relevant turnover for the impugned infringement, revenue from sale of motor vehicles alone have been taken into account.

A copy of the CCI’s order passed in Case Nos. 36 & 82 of 2014 has been uploaded on the website of CCI at www.cci.gov.in.

Resale price maintenance prohibited - penalty and cease and desist for manufacturer enforcing discount controls and mandated lubricant use. The Commission found Hyundai Motor India Limited responsible for imposing resale price maintenance through contractual discount controls and for mandating use of recommended lubricants, thereby restricting dealer pricing and product choice; the Commission issued a cease and desist order and imposed a monetary penalty calculated on relevant turnover derived from motor vehicle sales.