Automobile companies under CCI’s scanner for restrictive and monopolistic trade practices

After tyre companies, competition Watchdog, the Competition Commission of India (CCI) has now shifted its focus to car makers for alleged restrictive and monopolistic trade practices. Further towards this development, the commission has initiated a probe against automobile companies for anti-competitive practice, which includes restricting dealers to sell rival brands and availability of spares to consumers, which in turn impact the prices and services provided to automobiles on use.

Complaints received by ministry of labour and employment on this score mainly triggered an investigation by competition watchdog, which last time imposed a hefty penalty of Rs 6307 crore on Cement companies guilty of cartelization. The commission will be investing whether auto dealers could diversify their offerings as per their customer’s choice. CCI besides looking into complaints on limiting access to services of automobiles to their ‘authorised outlets’ at exorbitant rates, will probe on the aspect whether the customers are able to received their insurance claims and other damages repaired only if done through the companies’ authorized service centre’s.

Further, towards the fag end of the last month, CCI also accused tyre companies on forming cartel. The Monopolies and Restrictive Trade Practices (MRTP) report on the matter alleged five tyre companies, controlling over 95% of the market share, too have acted in a concerted manner.