Competition Commission of India dismisses case against Tata Motors

24 Aug 2023 , 11:15 AM

The Competition Commission closed a probe against Tata Motors on Wednesday for suspected abuse of its dominant position in agreements with its authorized dealers. For the purposes of this case, the market for the manufacture and sale of commercial vehicles in India was deemed relevant.

Tata Motors, Tata Capital Financial Services, and Tata Motors Finance were named in the case.

The regulator directed the Director General (DG) to conduct a thorough investigation into the claims in May 2021. The DG, the regulator’s investigation arm, had submitted its report in September 2022.

The CCI stated in its 32-page ruling that it cannot agree with the DG’s assessment that Tata Motors compelled its dealers to offtake automobiles in accordance with the company’s demands.

Furthermore, the regulator stated that there is insufficient evidence on record to conclude that Tata Motors violated Section 3(4)(c) of the Competition Act by enforcing its territory clause, resulting in an appreciable adverse effect on competition.

According to the order, CCI took note of Tata Motors’ submissions that it imposed restrictions on active sales outside the designated territory to ensure, among other things, that dealers do not free-ride another dealer’s marketing and investments, that dealers are incentivized to invest in the dealership, that intra-brand competition is enhanced, and so on.

CCI decided to limit the examination to the clauses of the dealership agreements and conducts in respect of commercial cars executed between the authorized dealers and Tata Motors exclusively when developing the prima facie opinion.

For feedback and suggestions, write to us at [e-mail]