Mahindra, Tata Motors to challenge CCI penalty

Auto majors Mahindra & Mahindra and Tata Motors today said they would challenge the CCI penalty on them for violation of trade norms in the spare parts and after services market.
Reacting to the Competition Commission of India's (CCI) order that yesterday slapped a total penalty of Rs 2,545 crore on 14 car makers in India, the two companies said they would file appeals against the order "before the appropriate authorities".
"The company aggrieved by this order proposes to appeal against it before the appropriate forum," Mahindra & Mahindra M&M said in a filing to NSE.
Similarly, in a filing to BSE, Tata Motors said it "would be filing an appeal against this order before the appropriate authorities".

As per the Competition Act 2002, orders passed by the Competition Commission of India can be challenged before the COMPAT (Competition Appellate Tribunal) within 60 days.
While M&M was imposed a penalty of Rs 292.25 crore, Tata Motors was slapped a fine of Rs 1,346.46 crore by CCI.

A spokesperson of Honda Cars India Ltd (HCIL) said: "We are aware of order. However, there is no official communication from CCI to Honda Cars India as yet. Once we receive the same, we will evaluate the order and respond accordingly."
The other companies fined by CCI are Maruti Suzuki India, Volkswagen India, Fiat India Automobiles, BMW India, Ford India, General Motors India, Hindustan Motors, Mercedes-Benz India, Nissan Motor India, Skoda Auto India and Toyota Kirloskar Motor.

CCI found that auto firms violated competition norms with respect to its agreements with local Original Equipment Suppliers (OESs) as well as with authorised dealers.
Through these agreements, the car makers "imposed absolute restrictive covenants and completely foreclosed the after market for supply of spare parts and other diagnostic tools", CCI has said.
The regulator had also ordered the Automobile companies to undertake certain compliances within 180 days from the receipt of the Order and has directed them to submit a report within 60 days of receipt of the Order on the action initiated for compliance with the Order.