HC extends order preventing coercive action by CCI against Maruti

The Delhi High Court today extended till a final decision its interim order preventing competition watchdog CCI from taking any coercive action against car-maker Maruti Suzuki in connection with a levy of Rs 471 crore penalty on it for alleged abuse of its dominant position in the spare parts market.

Justice Rajiv Shakdher passed the order after being told by Maruti that a similar matter was being heard by a division bench of the high court which has put on hold the effect of a August 2014 Competition Commission of India (CCI) order imposing penalties on various other vehicle manufacturers on the same issue.

The court today said its March 15, 2016 interim order in Maruti's plea "is made absolute" till the division bench finally decides the issue.

On August 25, 2014, the CCI had slapped a total penalty of Rs 2,545 crore on 14 car manufacturers in India after finding them guilty of violating trade norms in the spare parts and after-services market.

While other car makers moved the division bench challenging the constitutionality of the CCI decision, Maruti in its plea before a single judge has claimed that the watchdog had expanded the scope of the probe to the entire car industry, even though it had originally received a complaint against three automobile firms - Honda, Volkswagen and FIAT.

The complaint was filed in January, 2011 against Honda, Volkswagen and FIAT. In April 2011, CCI extended its probe to other manufacturers it found were following a similar practice.

Apart from Maruti and Nissan, Honda Siel Cars India, Volkswagen India, Fiat India Automobiles, BMW India, Ford India, General Motors India, Hindustan Motors, Mahindra and Mahindra, Mercedes-Benz India, Skoda Auto India and Toyota Kirloskar Motor have also been penalised.

As per the CCI order, these car companies were found to have violated competition norms with respect to their agreements with local Original Equipment Suppliers (OESs) as well as in terms of pacts with authorised dealers.

The Commission had also found that these companies, which were found to be dominant in the after-services markets for their respective brands, abused their dominant position affecting around two crore car customers.