BMW India not being a ‘Dominant player’ did not contravene Section 4 of the Competition Act, 2002: CCI

Competition Commission of India (CCI): The four-member bench comprising of Devender Kumar Sikri, Chairperson and Sudhir Mital, U.C. Nahta, and G.P. Mittal, Members, ordered closure of the matter filed against BMW India Private Limited (OP-1) under Section 19(1)(a) of the Competition Act, 2002 alleging ‘abuse of dominance’.

The brief facts of the matter state that ‘Informant’ was a dealer for selling BMW cars in the State of Gujarat and was continuing to be one for almost 9 years. The primary allegation which in accordance to the ‘Informant’ constitutes to ‘abuse of dominant position’ is that OP-1 abused their dominant position by selling their cars through dealers outside Gujarat to the customers based in the State of Gujarat. Another averment was that BMW India seems to have been carrying out a fraudulent/illegal arrangement as no ‘entry tax’ is being paid on entering of the cars in the State of Gujarat from outside the State.

Therefore, the Commission on noting the stated allegations and facts, analysed the issue placed by the ‘Informant’ and concluded by stating that, BMW India had in advance, before the renewal of the agreement of dealership between the parties, sent a notice of ‘non-renewal’ which made the ‘Informant’ well aware of the expiry of the agreement and the fact that BMW India has negligible share in the passenger car segment in India clearly leads to BMW India not being a dominant player. Hence the Commission opined that nowhere OP-1 contravened Section 4 i.e ‘abuse of dominant position’  and pronounced an order of closure under the provisions of Section 26(2) of the Competition Act, 2002. [Prasoli Motor Works (P) Ltd. v. BMW India (P) Ltd.,2018 SCC OnLine CCI 39, dated 30-05-2018]

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