Mahindra & Mahindra to challenge CCI over INR 292.25 crore penalty

A day before, the Competition Commission of India (CCI) imposed a penalty of INR 2,544.65 crore on the country's leading 14 car manufacturers. And in response to that, auto major Mahindra & Mahindra, which was fined with INR 292.25 crore for violation of trade norms in the spare parts and after services market., said it would challenge the trade regulator CCI.

The home grown auto major will be challenging the CCI under the Competition Act 2002, in which orders passed by the Competition Commission of India can be challenged before the COMPAT (Competition Appellate Tribunal) within 60 days. The CCI imposed INR 292.25 crore fine on M&M, based on 2 percent of the average of the annual turnover for FY 2007-08, FY 2008-09 and FY 2009-10.

M&M said it had "furnished all information and clarification requested by the authorities in the context of the investigation".

Also, CCI found that automobile manufacturers violated competition norms with respect to its agreements with local Original Equipment Suppliers (OESs) as well as with authorised dealers.

The homegrown automaker Tata Motors suffered the highest, with INR 1,346.46 crore penalty, while the market leader Maruti Suzuki was fined with an amount of INR 471.14 crore. Other companies fined by CCI includes Honda Cars India, Volkswagen India, Fiat India Automobiles, BMW India, Ford India, General Motors India, Hindustan Motors, Mercedes-Benz India, Nissan Motor India, Toyota Kirloskar Motor and Skoda India.

According to CCI, "The 14 car companies were found to be indulging in practices resulting in denial of market access to independent repairers as the latter were not provided access to branded spare parts and diagnostic tools which hampered their ability to provide services in the aftermarket for repair and maintenance of cars," CCI said.

“The Commission also found that these companies, which were found to be dominant in the after markets for their respective brands, abused their position affecting around two crore car consumers”, it added.

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