CCI imposes $65.8 million fine on Hyundai
Hyundai was fined with $65.8 million by the Competition Commission of India (CCI). This penalty was imposed as Hyundai was found be involved in anti-competitive practices. Mahindra Reva Electric Car Company and Premier Ltd. too were proven of such violations. However, they have not been fined. The fine is to be deposited with 60 days and corrective measures have to be undertaken.
CCI: An overview
The Competition Commission of India (CCI) was set-up on 14 October 2003. The organization however began to function in full swing from May 2009. CCI is an arm of the Government of India and is the apex body to enforce the Competition Act, 2002. The body aims to minimize and cut-down on all such activities which do not comply with the Competition Act.
Competition Act 2002, paves way for CCI establishment
The Competition Act, 2002 came into force after replacing the Monopoly and Restrictive Trade Practices Act, 1969. Competition Commission of India came into enforcement through this legislation only to regulate the market competition.
DG zeroes-in on manufacturers over restrictive practices
Accusations were made against three car manufacturers for being engaged in anti-competitive practices. The allegations stated that the manufacturers sourced spare-parts from authorized equipment suppliers. This restrained the trade of other independent suppliers and almost created a monopoly like situation for the spare-parts. The Director General prodded over the matter and found 14 other manufacturers also engaged in such restrictive practices.
Unfair trade practice draws fine for GSK
CCI slapped a Rs.60 crore fine on pharmaceutical company GlaxoSmithKline over unfair trade practices in 2015. It was found that the company had a cartel to source meningitis vaccines.
Hyundai files petition over CCI penalty
The CCI imposed a fine on 14 automobile manufacturers totalling to Rs.2,544 crore. Hyundai filed a petition in the Madras High Court over the CCI verdict and the petition was dismissed by a judge. Later, the same appeal was taken to a Division Bench. Hyundai also challenged the Director General to re-investigate other manufacturers whose names were earlier not mentioned.
CCI verdict creates difference of opinion
Vikram Kirloskar, the President of Society of Indian Automobile Manufacturers, criticized the CCI for ignoring the customer's safety. He said that the issue of quality had not been addressed. Vinnie Mehta, the Director General Automotive Component Manufacturers Association, meanwhile countered that an open-market system was suitable for the Indian market. He felt that organising the market would increase the overall quality of products.
CCI widens its net to airline companies too
The CCI is not focussed on the automobile industry alone. Airlines such as IndiGo, Jet Airways, Spicejet, Go Air and Air India are under its radar for introduction of fuel surcharge for cargo transportation.