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HC stays CCI fine for alleged trade norms violation against Maruti

On 25 August, Competition Commission of India (CCI) had fined Maruti and 13 other companies Rs 2,554 crore for violating trade norms in the spare parts and after services market.

(Photo: Reuters) (Photo: Reuters)

The Delhi High Court on Wednesday put on hold the Competition Commission of India's (CCI) order imposing a fine on Maruti Suzuki India for allegedly violating trade norms in the spare parts and after services market.

Justice Vibhu Bakhru said the August 25 order of CCI "will not be given effect to" till final disposal of similar pleas before the Madras High Court filed by car manufacturers Hyundai and Nissan and listed the matter for further hearing on January 15, 2015.

On 25 August, CCI had fined Maruti and 13 other companies Rs 2,554 crore for violating trade norms in the spare parts and after services market and the same was to be deposited within 60 days.

For each entity, the individual fine amounted to two per cent of their average turnover.

Maruti had challenged CCI's order saying that it has been stayed by the Madras High Court in the case of car manufacturer Nissan.

Apart from Maruti and Nissan, Honda Siel Cars India, Volkswagen India, Fiat India Automobiles, BMW India, Ford India, General Motors India, Hindustan Motors, Mahindra and Mahindra, Mercedes-Benz India, Skoda Auto India and Toyota Kirloskar Motor have also been penalised.

As per CCI's order, the car companies were found to have violated competition norms with respect to their agreements with local Original Equipment Suppliers (OESs) as well as in terms of pacts with authorised dealers.

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

The fair trade watchdog had also directed the car makers to "cease and desist" from anti-competitive practices.