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Delhi HC allows 14 carmakers to move NCLAT against CCI Rs 2,544-crore fine

The Delhi High Court on 10.04.19 has allowed 14 carmakers  including Tata Motors, Maruti Suzuki, Mahindra & Mahindra, Honda Cars India, Volkswagen India, Ford India, Mercedes–Benz and Toyota Kirloskar to move National Company Law Appellate Tribunal (NCLAT) for challenging CCI’s  Rs 2,544-crore penalty imposed up on them for indulging in practices having an Appreciable Adverse Effect of Competition.

In August of 2014, the CCI had imposed a net penalty on the carmakers for indulging in unfair practices in the spare parts market, thereby restricting supply of spares in the Indian After-market while observing that the companies did not make genuine spare parts freely available in the open market in exercise and abuse of their Dominant Position.

The court has provided nine weeks’ time to the companies to approach the NCLAT for challenging the matter.

In its 2014 order, the CCI had noted in its order that companies were abusing their dominant position with respect to spare parts manufacturers, which it observed was aiding these companies in making exorbitantly high profits margins and at the cost of car owners.

The fair trade regulator further observed that Carmakers tacitly controlled the spare-parts business and were in turn making extraordinary margins.

The Car manufacturers provided the defence that they have a restrictive spare-parts policy in place to ensure that customers buy only genuine and quality checked spare parts. Counterfeits were widely available in the market and that authorities were failing to stop the sale of the same.

The CCI initially admitted the case on a complaint filed by one Shamsher Kataria in 2011, against three carmakers namely Honda, Volkswagen and Fiat. He alleged that these companies were selling spares only through their dealers and not in the open market and were earning extraordinary margins through such a policy.

 

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