1. PUZZLE
• This is the place where you can go very far by just
sitting inside it.
• Beggar cannot buy it , bur richer cant live without
it
Who am I ????
7. AUTOMOBILE SECTOR
• Core manufacturing sector
• The automobile sector is one that has never ceased to demand
• The phasing out of quantitative trade restrictions lead to the
growth of automobile industry
8. Components production and assembly sector grew fastest
between the period of 1990 and 1997
Unit sales and production of automobiles rose from being
3,57,000 and 3,64,000 in 1990 to 7, 61,000 and 7, 70,000 in
1997 respectively
These figures established India’s robust appetite and
encouraged further investment and subsequent growth in the
automobile industry
10. Post 1999 saw the expansion of domestic market for passenger cars
Annual number of production rose from 609,000 in 2002-03 to
1,620,000 in 2008-2009
Domestic demand for motorcycle also increased constantly from
648,000 in 1994-95 to 6,802,000 in 2008-09
Annual production of auto components rose from 4,470 million US
dollars in 2001-02 to 18,000 million US dollars in 2007-08
The resultant upsurge in the last few years has seen more entrants and
local manufacturing in the automotive sector has therefore become a
success story
13. WHY IT IS IMPOSED
• To engender fair play & ultimately promote
consumer welfare
• In 90s production units increased in large
numbers and demand for cars and bikes
increased more in 2000
14. • Drafted in competition Act 2003 and replaced the
MRTP Act 2009
• CCI. COMPAT. SUPREME COURT
15. OBJECTIVE
• To prevent practices having adverse effect on
competition, promoting & sustaining
competition in market
• Protecting interest of consumer & ensuring
freedom of trade.
16. 3 WAYS TO MAXIMIZE CONSUMER WELFARE
• Prohibiting anti competitive agreements and practices that
harmfree trade & competition
• Preventing abuse of dominant position and anti competition
practices that lead to such a dominant position
• Regulating MRA
17. SOLUTIONS
• Vertical Agreement and Horizontal agreement
• Vertical agreements in the car industry were treated more
restrictively by EU competition law, than agreements
falling under the general verticals block exemption
18. WHAT IS CCI…
• Competition Commission of India is a body of the
Government of India responsible for enforcing The
Competition Act, 2002 throughout India and to prevent
activities that have an adverse effect on competition in
India
19. COMPOSITION…
• The commission shall consist of a Chairperson which
should not be less than two and not more than six other
Members to be appointed by the Central Government
• The Chairperson and other Members shall be whole time
Members
20. DUTIES OF COMMISSION…
• Subject to the provisions of the Act, it shall be the duty of
the commission to eliminate practices having adverse
effect on completion
• Protect the interest of consumers and ensure freedom of
trade carried on by other participants, in market
21. POWERS OF COMMISSION…
• Impose penalty up to 10% of turnover
• Cease and desist order
• Recommend to government the division of dominant
enterprise
22. • For those who would want to know more about C.C.I. visit
http://www.competition –commission-india.nic.in
24. CASE STUDY
CASE NO :- 03/2011
DATE: 27/07/2015
ORDER UNDER SECTION 27 OF
THE COMPETITION ACT, 2002
25. BACKGROUND
Filed by Mr. Shamsher Kataria, On 18.01.2011
Under Section 19 (1)(a) of the Competition Act, 2002
Filled against
1. Honda Siel Cars India Ltd
2. Volkswagen India Pvt Ltd
3. Fiat India Automobiles Ltd
Because of anti-competitive practices
Non availability of genuine spare part in open market
26. MAIN DG REPORT FINDINGS1.
1. Regarding passenger vehicle sector market
Primary
Manufacturing
Sales
Secondary
Complementary
products
Secondary
Products
e.g. Spare parts
27. MAIN DG REPORT FINDINGS
2. Regarding aftermarket of passenger vehicle
Subsegment-1
Supply of spare
parts, diagnostic
tools etc.
Technical
manuals,
Catalogues
Subsegment-2
Aftersales Service
Maintenance and
Repaires
28. MAIN DG REPORT FINDINGS
3. Regarding Price of Spare Parts
OEM had escalated the price of spare parts
imposing unfair prices in the sale of spare parts in terms of section
4(2)(a)(ii) of the Act
29. FINDINGS RELATED TO HYUNDAI
Dealers are permitted to purchase spare parts from Hyundai or from vendors
Dealer are not allowed to purchase from OEMs who are suppliers
Restriction on dealers ability to deal in competing brand
Hyundai has leveraged its dominance in one relevant market (supply of spare
parts) to protect the other relevant market (market for repair services)
violation of section 4(2)(e) of the Act
30. HUNDAI’S REPLY
Hyundai has largest service and sales network
412 dealers and more than 1,087 service points located across
India
Hyundai has argued that the sector is unorganized and
characterized by a lack of skills and proper training
Hyundai claimed that DG has misconstrued Hyundai’s
relationship with its OESs
31. RULING
The parties are asked to cease and desist from indulging in conduct which has been
found to be in contravention of the provisions of the Act
Building efficient network to make spare parts and diagnostic tools easily available
OESs are allowed to sell spare parts in the open market without any restriction, on
prices, under their own brand name
All the restrictions or impediments on the operation of independent repairers/garages are
removed
32. RULING
Standardization of parts so that they can be used across different
brands (e.g. tyres, batteries etc.)so as to give choice to consumers and
repairers/service providers
OPs are directed not to impose a blanket condition that warranties
would be cancelled if the consumer avails the services of any
independent repairer
OPs may cancel the warranty only when the damage has been caused
because of faulty repair work outside their authorized network
33. • In view of foregoing, a penalty of 2% of the total turnover in India may be
imposed on Hyundai
As such, the penalty imposed on Hyundai is as follows:-
*last decimal point in the figures
has been rounded offName
Turnover for
2009-10 (in Rs.
crores)*
Turnover for
2010-11 (in Rs.
crores)*
Turnover for
2011-12 (in Rs.
crores)*
Total
Turnover for
3 years (in
Rs. crores)*
Average
turnover (in
Rs. crores)*
Penalty @ 2%
of the average
Turnover (in
Rs. crores)*
Hyundai 20269.37 20269.71 22499.99 63039.07 21013.02 420.2605
