CCI rejects abuse of dominance complaint against BMW India

Competition Commission has dismissed allegations that BMW India abused its dominant position related to replacement of tyres of luxury cars sold to customers.

A complaint had alleged that BMW India abused its dominant position by forcing a 'run-flat tyre technology' on its customers and had misused the same to market an insurance policy through its subsidiary BMW India Financial Services.

According to the complainant, these actions by BMW India had adversely affected the competition to sell insurance policies for the cars.

In an order dated February 28, the Competition Commission of India (CCI) said that in the primary market, although BMW India is a major player in the industry with significant market power, it is not a dominant player with an ability to act independently of its competitors and customers.

Accordingly, the fair trade watchdog said, "there is no prima facie case of violation of...The (Competition) Act".

The complaint filed by an individual had averred that BMW India does not provide a spare tyre in the trunk of the cars manufactured by them.

It was stated by the complainant that the BMW cars employ a run flat tyre technology which allows the vehicle to operate in flat tyre running mode at a speed of 80 km/hour and a distance of 80 km.

It was alleged that BMW India used 'deceptive trade practices' by not informing prospective consumers about the employment of the run flat tyre technology by BMW vehicles and the customer often realises the absence of a spare tyre only after the delivery of the purchased car.

Further, the company bundled the sale of BMW cars with a specialised insurance policy called 'BMW Secure Advance' from its subsidiary with onerous terms, which increased the tyre replacement costs for BMW consumers.

Such bundling of insurance policy with the sale of BMW branded cars had also allegedly caused "denial of market access" to other insurance companies as well as tyre makers, the complainant had alleged.

Further, the insurance policy by BMW India was priced higher compared to similar insurances provided by other entities.