Delhi High Court grants 3-weeks

protection to BMW India from CCI's

order
NEW DELHI: The Delhi High Court today granted to BMW India three weeks interim protection
from Competition Commission ofIndia (CCI) order imposing a penalty of Rs 20.41 crore on the
luxury car maker for allegedly violating trade norms in spare parts and after-services market.

Justice Vibhu Bakhru said the order by CCIwill not take effect for three weeks by when BMW
has to challenge the report of the anti-trust regulator before the Madras High Court which had
already issued a "blanket order" on September, 2013 staying the investigation in the matter.

"As far as September, 2013 order is concerned, it's a blanket order. The dispute is not here, so
we give them (BMW) three weeks interim protection. They are directed to go to Madras High
Court.

"Today, the3 entire case is at Madras High Court, so this court will not interfere in the issue," the
judge said.

On August 25, 2014, CCI had fined BMW and 13 other companies Rs 2,554 crore for violating
trade norms in the spare parts and after-services market and the same was to be deposited
within 60 days.

For each entity, the individual fine amounted to two per cent of their average turnover.

Apart from seeking a stay on the fine, BMW has also challenged CCI's legal proceedings on
alleged anti-competitive practice of selling spare parts at higher prices.

It said Maruti Suzuki India Ltd has already got a stay order from the Delhi High Court, so it too
should be treated on par with them.

BMW argued CCI had suo motu expanded the scope of investigations into the entire car
industry even though it had originally received a complaint against three automobile firms -
Honda, Volkswagen and FIAT.

It questioned whether the anti-trust regulator had the powers to expand the scope of
investigations on its own even if the complainant had not named a company in the original
complaint.

The Director General's (DG) investigation showed these car companies violated competition
norms with respect to its agreements with local Original Equipment Suppliers (OESs) as well as
in terms of pacts with authorised dealers. The DG is the investigation arm of CCI.

The complaint was filed in January, 2011 against Honda, Volkswagen and FIAT. 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 HC which had in September 2013 stayed the
DG investigation against all the 14 car makers.

The Madras HC's single-judge bench had in June 2014 disposed of the car makers' plea.

Nissan had thereafter filed an appeal before a division bench of the Madras HC which had
referred the matter back to the single judge while staying the fine imposed.

Besides BMW, the other companies on which penalties have been imposed were Mahindra and
Mahindra Ltd, Tata Motors Ltd, Toyota Kirloskar Motor Pvt. Ltd, Honda Cars India Ltd,
Volkswagen India, Fiat Group Automobiles India Pvt. Ltd, Ford India Pvt. Ltd, General Motors
India Pvt. Ltd, Nissan Motor India Pvt. Ltd, Hindustan Motors Ltd, Mercedes-Benz India Pvt. Ltd,
Maruti Suzuki and Skoda Auto India Pvt. Ltd.

The Commission had also found that these companies, which were found to be dominant in the
after services markets for their respective brands, allegedly abused their dominant position
affecting around two crore car consumers.

The fair trade watchdog had also directed the car makers to "cease and desist" from anti-
competitive practices.

Meanwhile, CCI opposed BMW's plea saying the final order has already been passed, so
addressal of the petition should be before the Competition Appellate Tribunal.