Madras High Court asks CCI not to proceed with any action against Hyundai

CCI had slapped a combined penalty of Rs 2,554 cr on 14 car makers for failing to sell spare parts in the open market

The high court here has asked the Competition Commission of India (CCI) not to proceed with any action against Hyundai, one of the 14 carmakers slapped with a combined penalty of Rs 2,554 crore for failing to sell spare parts in the open market.

The fair trade watchdog had summoned the company on Tuesday, against which HMIL moved the court.

After hearing Hyundai’s plea, judge V Ramasubramanian reserved the order and asked  CCI not to proceed with the matter till he gave the final order.

In an hour-long argument, Hyundai’s counsel argued the director-general of CCI did not have the power to initiate investigation and that no materials, facts or figures were produced by CCI.  The counsel also questioned the “selective approach” by CCI, whose order excluded 12 original equipment manufacturers, including Renault, Jaguar and Volvo.  The additional solicitor general, who appeared for CCI, argued the CCI Act was an enabling one to protect consumers from anti-competitiveness.

Some of the major OEMs, including Maruti, Hyundai, Nissan, Mercedes-Benz, BMW and others have approached various courts.

Maruti Suzuki India, Mercedes-Benz and BMW approached the Delhi High Court against the order. The court in turn stayed a Rs 471.14 crore fine imposed on Maruti Suzuki, the country's largest carmaker, by the antitrust regulator. The court stayed CCI's order against BMW and Mercedes-Benz for three weeks and asked them to move the Madras High Court, which was already hearing the matter for other OEMs.

CCI's investigation arm, the Director General (DG) showed the OEMs had violated competition norms with respect to their agreements with local Original Equipment Suppliers and the terms of their pacts with authorised dealers.The complaint against Honda, Volkswagen and FIAT was filed in January 2011. In April 2011, CCI extended its probe to other manufacturers it found were following a similar practice.

The penalties have been imposed on Mahindra, Tata Motors, Hyundai Motor India Pvt Ltd, Toyota Kirloskar, Honda, Volkswagen India, Fiat, Ford India, General Motors India, Nissan Motor India, Hindustan Motors, Mercedes-Benz India, Maruti Suzuki, Skoda Auto India and BMW.