Hyundai to challenge CCI’s Rs 87 crore penalty for unfair business practices

Following the Competition Commission of India (CCI)’s imposition of a Rs 87 crore penalty on Hyundai Motor India for unfair business ways with respect to discounts on passenger cars, the carmaker has said it would challenge the ruling.

CCI has directed Hyundai Motor India cease and desist from such anti-competitive practices, as per a PTI report. The watchdog’s penalty amount translates to 0.3 percent of the company’s average relevant turnover in the last three financial years from 2013-14.

"Such conduct pertains to and emanates out of sale of motor vehicles. Hence, for the purposes of determining the relevant turnover for this infringement, revenue from sale of motor vehicles alone has to be taken into account," CCI noted.

CCI has found Hyundai Motor India to be in contravention of the provisions of Section 3(4)(e) read with Section 3(1) of the Competition Act, 2002 for imposing arrangements upon its dealers which resulted into resale price maintenance in sale of passenger cars manufactured by  it. Such arrangements also included monitoring of the maximum permissible discount levels through a discount control mechanism. Further, HMIL was found to have contravened the provisions of Section 3(4)(a) read with Section 3(1) of the Act for mandating its dealers to use recommended lubricants / oils and penalising them for use of non-recommended lubricants and oils.

In a statement, Hyundai Motor India said, "We are really surprised with this order. We are studying the order in detail and will take necessary course of action to challenge the order at appropriate level to protect the interest of our customers and channel partners by abiding (with) all the laws of land.”