CCI ordered probe against alleged unfair practices against Tata Motors

The Competition Commission has ordered a detailed inquiry against Tata Motors for misuse of the lead position in relation to dealership agreements. The order came on two complaints filed against Tata Motors, Tata Capital Financial Services Limited and Tata Motors Finance Limited (opposite party).

The Competition Commission of India (CCI) observed that the complainants are mainly unhappy that Tata Motors has imposed unfair terms and conditions in the dealership agreement for commercial vehicles in violation of the provisions of Section 4 of the Competition Act. Section 4 deals with the misuse of the dominant position.

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To assess the two complaints, watchdog Prima-Fesi portrayed the ‘market for the manufacture and sale of commercial vehicles in India’ as relevant. In a 45-page order dated 4 May, the regulator stated that it is of the view that Prima has made a case against Tata Motors for violation of the provisions of Section 3 (4) and Section 4. “The case requires investigation”.

The sentinel has directed its Director General, Director General, Investigation Branch to investigate the matter in detail. In cases where there is evidence of violation of competition norms, they are sent to the Director General for a detailed investigation.

Before examining the issues on the merits, the regulator stated that it was constrained to note that various clauses of the agreements were challenged and in a ubiquitous manner challenged the conduct by informants or from the preceding Theto is. “In this backdrop, considering the dominance of Tata Motors in the relevant market … the Commission considered it appropriate to limit the investigation with respect to the clause of dealership agreements and conduct in relation to commercial vehicles … of dealers and Tata Motors Executed between, ”it said.

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Furthermore, the CCI made it clear that it was not examining Tata Capital and Tata Motors Finance’s conduct or the agreements they entered into with dealers for channel financing, commanding any significant market power in those verticals Do not appear to do where they are working. In the dealership agreement alleging that the dealer is not related to the automobile industry, even if the dealer is not starting, acquiring or engaging in any new business (product or services), the CCI stated that it appears to be restrictive and restrictive. Interferes with its coverage and in the freedom of trade.

Tata Motors submitted that the said clause does not demand a blanket ban on the dealer for seeking the NOC. The opposite parties had also argued that the disputes involved in the present cases are purely contractual and commercial with no competition concerns and, therefore, CCI does not have jurisdiction to investigate the issues raised by the informers.
The regulator stated that it had “no hesitation that simply because the disputes raised are contractual in nature and as such the Commission does not have jurisdiction, devoid of any force and dismissed accordingly”. According to the watchdog, nothing stated in this order will be the same as the final expression on the merits of the case.

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