2024 (11) TMI 1000 - CCI - Companies Law

Alleged contravention of Section 4 of the Competition Act, 2002 by Maruti Suzuki India Limited regarding pricing strategy for the 'Jimny' SUV - abuse of dominant position - HELD THAT - In the opinion of the Commission, the OP does not hold a market share large enough to enable it to operate independently of competitive forces prevailing in the market or to affect its competitors or consumers or the market in its favour, especially in the SUV segment of passenger vehicles. As such, the OP does not appear to be a dominant player in the market. Therefore, in the opinion of the Commission, a case of violation of the provisions of Section 4 of the Act cannot be made out against the OP. Further, the Commission also notes that the grievance raised by the Informant is an inter-se dispute between the Informant and the OP regarding price of the product sold by the OP to the Informant. In the opinion of the Commission, on the basis of the grievances alleged by the Informant, no competition issue or concern seems to arise from the facts and allegations stated by the Informant. Once a buyer purchases a product from a seller at a given price, it cannot insist to avail benefit of any future discount which may be offered on such product by the seller. The discounted price alleged also does not seem to be predatory in nature. The Commission is of the considered opinion that no prima facie case of contravention of the provisions of Section 4 of the Act is made out against the OP in the present matter. Hence, the matter is directed to be closed in terms of the provisions contained in Section 26(2) of the Act.

Summary

Issues:
Alleged contravention of Section 4 of the Competition Act, 2002 by Maruti Suzuki India Limited regarding pricing strategy for the 'Jimny' SUV, abuse of dominant position, refusal to refund excess charged amount, and request for interim relief to stop selling 'Jimny' cars.

Analysis:
The Informant filed a complaint against Maruti Suzuki India Limited (OP) under Section 19(1)(a) of the Competition Act, 2002, alleging contravention of Section 4. The Informant, a customer of OP, booked 2 'Jimny' SUVs and raised concerns about the booking process, pricing, and delivery timelines. The OP allegedly created artificial hype, leading to high bookings without disclosing prices and delivery dates, causing customers to purchase without proper consideration.

The Informant claimed that OP later launched the 'Jimny' at a higher price than expected, with dealers pressuring customers to buy additional accessories and services. Subsequently, OP discounted the price of the base 'Jimny' model, causing a significant depreciation in value within a short period. The Informant communicated with OP regarding these issues, including a demand for a refund, which OP refused.

The Informant alleged that OP's pricing strategy and conduct amounted to an abuse of dominant position and unfair trade practice, benefiting OP at the expense of customers. The Informant sought a penalty against OP and a refund for the excess charged amount. Additionally, the Informant requested interim relief to halt the sale of 'Jimny' cars until the inquiry was completed.

The Competition Commission of India analyzed the allegations, focusing on the introduction of the 'Thunder' model, pricing discrepancies, and OP's market dominance. The Commission assessed OP's market share in the passenger vehicle segment, particularly in the SUV category, comparing sales figures with competitors. Despite OP's significant market share, the Commission determined that OP did not hold a dominant position in the SUV segment, ruling out a violation of Section 4.

Furthermore, the Commission viewed the Informant's grievance as a contractual dispute over pricing, without raising significant competition concerns. The Commission concluded that there was no prima facie case of contravention of Section 4 against OP. Consequently, the matter was closed under Section 26(2) of the Act, and the Secretary was directed to inform the Informant accordingly.