Competition Commission to investigate Honda 2Wheeler India’s trade practices

Apex trade regulatory body, Competition Commission of India, is probing allegations against Honda Motorcycle & Scooter India (HMSI) for various anti-competitive provisions in its agreement with dealers, according to PTI.

According to the complaint, HMSI had perpetuated tie-in arrangements, imposed resale price maintenance and maintained a discount control mechanism through under its standard form of dealership agreement. The news report further states that the industry watchdog, after finding prima-facie evidence of competition norm violations, has decided to carry out a detailed probe against the OEM. CCI has noted that a prima -facie case of contravention of Section 3 and 4 of the Competition Act is made out against the company, the sections pertains to anti-competitive agreements and abuse of dominant market position, respectively.

It is understood that, following a complaint from an Aurangabad-based dealer of HMSI, CCI has called for carrying out a detailed probe. For the case, CCI has considered market for manufacture and sale of scooters in India as the relevant one. According to one of the allegations, the company had abused its dominant position and imposed unfair conditions for purchase or sale of goods. Furthermore, the watchdog has noted that it is finds that the restrictions imposed by HMSI for sale of oil, lubricants and batteries are ‘unfair’.

Among other findings, it stated that the mandatory requirements imposed by HMSI on its dealers for purchase of oil and consumables, genuine accessories, advertising services, merchandise items, batteries, insurance and finance options, from designated sources appear to be in the nature of anti-competitive restraints.

According to PTI, the CCI has said, "Nothing stated in this order shall tantamount to expression of final opinion on the merits of the case and the DG shall conduct the investigation without being swayed in any manner whatsoever by the observations made herein."