New Delhi : The Competition Commission of India on Wednesday closed the case against Tata Motors over alleged abuse of dominant position in relation to agreements with its authorized dealers. The matter was considered relevant to the market for manufacture and sale of commercial vehicles in India. The complaint was filed against Tata Motors, Tata Capital Financial Services and Tata Motors Finance. In May 2021, the regulator ordered the Director General (DG) to conduct a detailed inquiry into the allegations. The DG, the investigation wing of the regulator, submitted its report in September 2022.
32 pages order
In a nearly 32-page order, the CCI said it was unable to agree with the DG’s finding that Tata Motors forced its dealers to buy vehicles as per the company’s demands. Further, the regulator said that there is not sufficient material on record to conclude that Tata Motors invoked its territory clause in violation of Section 3(4)(c) of the Competition Act, causing material adverse effect on competition. had an effect. This section deals with exclusive distribution agreement.
CCI took note of the arguments of Tata Motors
According to the order, the CCI noted the submissions of Tata Motors that it has, inter alia, imposed restrictions on active sales outside the designated area to ensure that dealers do not arbitrarily market and invest in any other dealer, Dealers should be encouraged to invest in and expand the dealership. The Commission is of the view that in arriving at the conclusion of contravention of Section 3(4) of the Act, it is necessary to assess the factors mentioned under Section 19(3) to determine whether the alleged competition is likely to have an appreciable adverse effect. Likely or not.
what is the charge
The order states that in the absence of any factual basis or substantial evidence brought by the DG in this regard, the Commission is unable to conclude appreciable adverse effect on competition arising out of the impugned conduct. It was alleged that the company abused its dominant position and engaged in anti-competitive conduct with its authorized dealers.
What is the decision of CCI
Forming a prima facie opinion, the CCI had decided to limit the investigation in respect of clauses of dealership agreements and conduct in respect of commercial vehicles to only between authorized dealers and Tata Motors. The CCI order said that it was made clear that the commission is not examining the conduct of Tata Capital and Tata Motors Finance or the agreements entered into by them with dealers for channel financing, as the sector in which they operate do, they do not have any significant market power.
Competition Commission of India issued draft rules
Let us tell you that CCI on Wednesday issued draft rules for commitment and settlement provisions under the Competition Act. According to the CCI, the provisions introduced in the Competition Act through amendments made earlier this year are aimed at ensuring faster market reforms. According to the statement issued by the regulator, the concerned parties can clarify the stand on the draft rules from 24 August to 13 September. The undertaking system will enable those enterprises against whom investigation is underway for alleged infringement of competition law to offer undertakings before the CCI. Similarly, the settlement system will allow such enterprises to apply for settlement before the regulator. The regulator said that the intention to create a process for commitment was taken in line with the need to ensure speedy market recovery. CCI is empowered to curb unfair trade practices and promote competition in the market.