Allegations Against Toyota for Changing Car Delivery Times Deemed Inter Se Dispute, Not Market-Wide Issue | CCI

Case Details: Balbir Singh Nagpal v. Toyota Kirloskar Motors (P.) Ltd. - [2024] 164 taxmann.com 332 (CCI)

Judiciary and Counsel Details

• • Ms Ravneet Kaur, Chairperson, Anil Agrawal, Ms Sweta Kakkad & Deepak Anurag, Member

Facts of the Case

In the instant case, OP-1 was the Indian arm of Toyota Motor Corporation, and OP-2 was an authorized dealer of OP-1, having a showroom in Gautam Buddh Nagar District of Uttar Pradesh.

The Informant booked a car with OP2 and filed the information alleging that OP-2 had assured him that the booked car would be delivered to him within two months from the date of booking. However, the same was changed to eight months when receipt of booking was issued to the Informant.

It was also alleged that OP2 was forcing customers to purchase accessories at a price they determined, and thus, there was a violation of section 4 of the Competition Act, 2002. Further, by creating an artificial scarcity, ‘Resale Price Maintenance’ (RPM) was being imposed on end customers, thus having an ‘appreciable adverse effect on competition’ (AAEC) in violation of Section 3(4) of the Act.

It was noted that the primary issue in the matter appeared to revolve around the waiting period for delivery of the car booked by the Informant and the prices of accessories. Such allegations bear the tone and tenor of an inter se dispute between the Informant and OPs and did not have market-wide anti-competitive ramifications in the facts and circumstances of the instant matter.

Normally, long waiting periods could not be subject to antitrust scrutiny as they were dependent upon various factors, including reasons adduced by the OP1 that the shortage of semi-conductors was beyond the control of the manufacturer and was causing delays in the automobile industry.

Further, it was noted that as regards the price of accessories, the same was an outcome of demand and supply forces in the market and consumer preferences, among others. In the instant case, the Informant had failed to highlight whether such prices have an overtone of being ‘unfair’ or ‘discriminatory’ in terms of the provisions of the Act. Accordingly, there was no reason to carry out an analysis of the abuse of the dominant position by OPs.

CCI Held

The CCI held that an allegation pertaining to RPM requires the existence of an agreement amongst enterprises or persons at different stages or levels of the production chain in different markets in respect of production, supply, distribution, storage, sale or price of, trade in goods or provision of services that causes or is likely to cause AAEC in India.

Further, the CCI held that the informant had not substantiated his allegation of RPM by providing evidence of the existence of any such agreement. Thus, no prima facie case of contravention of the provisions of Section 3 of the Competition Act was made against OP.

Thus, no prima facie case of contravention of provisions of sections 3 and 4 was made out against OPs, and therefore, the matter was to be closed forthwith under Section 26(2) of the Act.