Hyundai case: A lesson for CCI

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Atul Dua and Anupam Sanghi analyse why the competition regulator’s order was set aside

A photo of Atul Dua
Atul Dua

The automobile industry is prominent for a high incidence of alleged anti-competitive conduct on the part of car manufacturers and their dealers. The Competition Commission of India (CCI) recently penalized Hyundai Motor India for indulging in such behaviour through vertical agreements with its dealer via: (1) resale price maintenance (RPM) i.e. imposing price levels and maximum permissible discount at which the passenger car should be sold; and (2) tie-in arrangement i.e. tying-in lubricants/oils to buy from specified vendors and imposing penalties for non-compliance.

Upon appeal, National Company Law Appellate Tribunal (NCLAT) set aside the CCI order stating that the competition regulator should have drawn up its own opinion, and based its decision on relevant evidence; analysis of competition concerns; and provide an explanation of whether the evidence on record is reliable.

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The views are of partner ATUL DUA and managing associate ANUPAM SANGHI at Advaita Legal, and not to be taken as an opinion. Associates Ankush Walia and Param Tandon provided inputs for the article.

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