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The Supreme Court yesterday stayed the penalty imposed by the Competition Commission of India (CCI) against car manufacturer Hyundai Motor India Ltd of Rs. 420.26 crore, for allegedly violating antitrust laws in the supply of genuine spare parts and diagnostic tools.
The Hyundai Motors has appealed to the Supreme court against the CCI’s 27 July 2015 order. A two-judge bench consisting of justices A.M. Khanwilkar and Deepak Gupta, stated: “The directions by CCI are ‘extreme, vague, impractical and irreversible in nature’.
The statement added, “These directions, which include putting into place a system to ensure that independent repairers have access to spare parts, technical manuals and diagnostic tools, training for independent dealers, and standardization of spare parts, are disproportionate to the alleged contravention.”
As per the CCI order, Hyundai was penalized 2% of its annual turnover in India for 2009-10, 2010-11 and 2011-12. CCI had also found Mahindra Reva Electric Vehicles Pvt. Ltd, a subsidiary of Mahindra and Mahindra Ltd, and Doshi Holding Pvt. Ltd-promoted Premier in violation of competition laws but were exempted from penalties.
The CCI order stated that the three companies had entered into agreements where the genuine spare parts of automobiles manufactured by these companies were not made available in the open market, which affected independent mechanics who compete with authorized service stations.
