June, 14 2017:
Company mandated its dealers to only use “recommended lubricants & oils and penalised them in case of violation.
Competition Commission on Wednesday imposed a penalty of Rs 87 crore on the Hyundai Motor India for unfair business practices with respect to providing discounts for cars.
Besides, this Hyundai has been further directed to cease and desist from such anti-competitive practices.
In its 44-page order, Regulator expounded that the company’s anti-competitive conduct include putting in place arrangements that resulted in the resale price maintenance by way of monitoring of the maximum permissible discount level.
This was done through discount control and the penalty mechanisms for the non-compliance of discount scheme, the order states.
It was alleged that company has discount control mechanism whereby the dealers are permitted only to provide a maximum permissible discount and not beyond recommended range.
Watchdog has thus slapped a fine of Rs 87 crore on Hyundai.
Penalty amount translates to the 0.3 per cent of company’s average relevant turnover in last three financial years from 2013-14.
Among others, CCI further enunciated that Hyundai contravened the competition law through the arrangements which resulted into the resale price maintenance and by mandating its dealers to use the “recommended lubricants/ oils and penalising them for the use of the non-recommended lubricants and oils”.
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