BMW approaches Madras HC against Competition Commission

The Madras High Court on Friday asked the fair trade watchdog Competition Commission of India (CCI) not to take any action against luxury car maker BMW, as it (the Court) decided to hear the carmaker's plea along with other car manufacturers’ petitions against the CCI Order.

In August 2014, CCI slapped a combined penalty of Rs 2,554 crore on 14 car makers including BMW (Rs 20.41 crore) for failing to sell spare parts in the open market. The watchdog said it wanted to make the components market more broad based, user friendly and less expensive for consumers.

Some of the major OEMs, including Maruti, Hyundai, Nissan, Mercedes-Benz, BMW and others have approached various courts.Maruti Suzuki India, Mercedes-Benz and BMW approached the Delhi High Court against the order. The court in turn stayed a Rs 471.14 crore fine imposed on Maruti Suzuki, the country’s largest carmaker, by the antitrust regulator.

The court stayed CCI’s order against BMW and Mercedes-Benz for three weeks and asked them to move the Madras High Court, which was already hearing the matter for other OEMs, according to earlier reports.

While the Delhi High Court's three weeks protection will end on October 12, BMW filed a writ petition at the Madras High Court today. After accepting the petition, the Madras High Court has asked the CCI not to take any steps to execute the order and to not issue any letter or make any demand, failing which the court will interfere.

The court said it will take up the BMW case along with Hyundai's petition. Nissan withdrew its petition last month with liberty to approach the Appellate Tribunal.

Like other OEMs, BMW also argued that CCI had suo motu expanded the scope of its investigations to include the entire car industry even though it had originally received a complaint against three automobile firms - Honda, Volkswagen and FIAT. It also questioned whether the anti-trust regulator had the authority to expand its investigations on its own even if the complainant had not named a company in the original complaint.

CCI's investigation arm, the Director General (DG) showed the OEMs had violated competition norms with respect to their agreements with local Original Equipment Suppliers and the terms of their pacts with authorised dealers.

The complaint against Honda, Volkswagen and FIAT was filed in January 2011. In April 2011, CCI extended its probe to other manufacturers it found were following a similar practice.

Hyundai obtained a stay order from the Madras High Court against CCI's proceedings in February 2013. Subsequently, Nissan had also moved the Madras High Court, which in September 2013 stayed the DG investigation against all 14 car makers.

The Madras High Court’s single-judge bench in June 2014 disposed the car makers' plea. Nissan thereafter filed an appeal before a division bench of the Madras High Court which had referred the matter back to the single judge while staying the fine imposed. Later, the company withdrew its petition. It has the option of approaching the Appellate Tribunal.

The penalties have been imposed on Mahindra’s, Tata Motors, Toyota Kirloskar, Honda, Volkswagen India, Fiat, Ford India, General Motors India, Nissan Motor India, Hindustan Motors, Mercedes-Benz India, Maruti Suzuki, Skoda Auto India and BMW.