According to Press Trust of India (PTI), Competition Commission of India (CCI), the government body for enforcing the Competition Act, 2002, has plans to notify seventeen Indian car makers, demanding justification for their anti-competitive exercise of making their spares available only through their own authorised vendors. The consumers then have no option but to buy the spares from the authorised dealerships, who sell the spare parts at a greater price. The names of the car makers have not been disclosed by the body.
Sources involved with the development have revealed that CCI's Director General has submitted the findings after a thorough investigation, in a detailed report. Sources further informed that the fair-trade regulator will proceed by sending show-cause notices to the Indian car makers' offices, if it finds some oddity about them in the report submitted.
Reportedly, CCI will make the final say on the accused car makers' malpractice after it evaluates the probe report submitted by its Director General and the testimonies received from the car makers justifying their actions. CCI is pursuing the situation under Section 4 of the Competition Act that relates to misuse of power by enterprises enjoying commanding position in the market, which in the current case indirectly sold spares to consumers at higher than usual costs.
The government had earlier stated that CCI was in the middle of an investigation regarding some anti-competitive exercises by the Indian car makers.
In a written answer to Lok Sabha, RPN Singh, Minister of State (MoS) for Corporate Affairs, revealed that CCI has some substantial information against few India based car makers. He said, “The CCI, which is a quasi-judicial body, is getting the matter investigated for appropriate action in the matter as per the provisions of the Competition Act, 2002.”
Usually, CCI's Director General evaluates the complete situation relating to a malpractice by an enterprise before executing any legal action. CCI has the authority to reveal, investigate and eliminate any anti-competitive practises that can hurt the interests of consumers or impose an adverse affect on competition. The Commission is formulated to provide an in-depth analysis and opinion on competition issues and new unexpected developments besides, generating public awareness and impart training on competition issues.
If CCI charges the car makers of malpractice and anti-competitive actions, the car companies will be forced to make their spare parts available to local vendors and not just their own authorised dealerships. The move will benefit the common vehicle owners as the spare parts will be available easily and eventually their prices will also see a drop.
