Competition Commission slaps Rs 87 crore penalty on Hyundai for anti-competitive conduct

Key highlights:

• CCI finds Hyundai Motor guilty of imposing arrangements on its dealers leading to resale price maintenance
• CCI imposes penalty of Rs 87 crore on Hyundai
• Hyundai Motor also mandated its dealers to use recommended lubricants or oils

The Competition Commission of India (CCI) on Wednesday issued an order against Hyundai Motor India for anti-competitive conduct and has imposed a penalty.

The CCI found Hyundai guilty of imposing arrangements on its dealers leading to resale price maintenance in sale of its manufactured passenger cars and imposed a penalty of Rs 87 crore on it.

The Ministry of Finance in a series of tweets said that the CCI found Hyundai Motor India Limited (HMIL) to be in contravention of provisions of Secon 3(4)(e) read with Sec 3(1) Competition Act, 2002.

It further said that such arrangements with dealers by the second largest car manufacturer in India, Hyundai, included monitoring of the maximum permissible discount levels through a Discount Control Mechanism.

Hyundai Motor also mandated its dealers to use recommended lubricants or oils and penalised them for use of non-recommended lubricants and oils, it further said.

The final order was passed today on information filed by Hyundai Motor dealers namely by Fx Enterprise Solutions India Pvt Ltd and St Antony’s Cars Pvt Ltd.

Apart from issuing a cease and desist order against HMIL,CCI has imposed a penalty of Rs 87 crore upon HMIL for the anti-competitive conduct. The penalty has been levied at 0.3% of the average relevant turnover of Hyundai Motor of preceding three years, it said.

This is a big blow to Hyundai Motor and could prove to be costly for the company.