Complaint against Volkswagen Group alleging abuse of dominant market position, dismissed

Competition Commission of India (CCI): India’s competition watchdog, CCI had rejected a complaint filed by Delhi-NCR based Bhasin Motors alleging that Volkswagen Group Sales India Pvt. Ltd. was abusing its dominant market position with regard to dealership agreements. Bhasin Motors had alleged in the complaint that by virtue of its dominant position in the market, Volkswagen Group has exploited the complainant by forcing it to sign a dealership agreement having unilateral terms and conditions, Bank Guarantee, high penal interest, higher sales target to another dealer etc. It was further alleged that clauses in the agreement were unfair and one sided and have excluded Volkswagen Group from any obligation and liability thereunder. After perusing the material on record, CCI noted that the issues arising out of and related to the dealership agreement does not disclose any competition concern. CCI further observed that Volkswagen Group has a very negligible share in the passenger car segment in India which is dominated by a number of players and in such a market construct, Volkswagen Group cannot be said to be a dominant player and as such the question of abuse of dominance will not arise. (Bhasin Motors (India) Pvt. Ltd. v. Volkswagen Group Sales India Pvt. Ltd., 2015 CCI 1, decided on February 11, 2015)

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