UNDER SECTION 26(2) OF THE COMPETITION ACT, 2002

1. The instant information has been filed on 16.11.2009, against the opposite parties under Section 19 (1)(a) of the Competition Act, 2002. It has been stated that all the above mentioned manufacturers/opposite parties Nos. 2 to 13 are members of Indian Automobile Manufacturers (SIAM) and are leading manufacturers of four-wheelers who sell their product through their extensive dealers network that extend throughout the length and breadth of the country. Besides selling new four-wheelers, the opposite parties No.2 to 13 have entered into the market for the sale and purchase of old/used four-wheelers using various names such as True Value Car, Advantage, Assured, Certified Used, Certified Pre-owned Auto Terrace, Renault Used Cars, JDM Auto (P) Ltd. etc. Many of the aforementioned manufacturers/members of the opposite party no. 1 have acquired dominant position as defined under Section 4 of the Act and have through their used car forays extended their market penetration vis-a-vis the various small second hand car dealers in the market.

2. It has been further alleged that the opposite parties no. 2 to 13 by abusing their dominant position are imposing unfair and discriminatory conditions in purchase or sale of cars by offering 'loyalty discount' to those customers of new cars who are willing to sell their old existing car to the car dealer of car manufacturing companies. The opposite parties by introducing loyalty discount scheme have entered into exclusive arrangement with their dealers and thereby not only they are directly or indirectly determining the purchase price of old used car but by indulging into such practices they are denying market access to the second hand car dealers as well as to the consumers. This has also been alleged that this practice amounts to tie-in arrangement whereby the customer in order to avail the loyalty discount at the time of purchase of a new car is lured to sell his old car. The unfair practices-adopted by the opposite parties have resulted into wiping out competition and the small players from the market and the consumers have also been denied best prices for their existing old cars. On the basis of above averments, violation of section 3 & 4 of the Competition Act, 2002 has been alleged.

3. The informant has prayed as under:-

ITo issue notice of enquiry against the members of the opposite party/opposite party.

IITo direct opposite parties to discontinue abuse of its dominant position.

IIITo direct the opposite parties to discontinue the loyalty bonus scheme.

IVTo direct the opposite party to submit the agreements between its members and dealers in respect of territorial restrictions.

4. The information was considered by the Commission in its meeting held on 24.11.2009, 2.2.2010, 23.2.2010, 4.3.2010, 25.3.2010, 26.5.2010 and 15.6.2010.

5. During the meeting of the Commission held on 2.2.2010, it was decided to ask the informant to appear before the Commission on 23.2.2010 to explain his case. However, counsel for the informant vide his letter dated 22.2.2010 requested for adjournment of the matter. The request of the counsel for the informant was considered and the Commission acceding to the request of the informant adjourned the case for 4.3.2010 to explain his case.

6. However, counsel for the informant vide his letter dated 3.3.2010 again requested a further period of 60 days or any time thereafter to file additional evidence in support of the case. The request of "the counsel to the informant was considered and the Commission noted that though ample opportunity has already been given to the informant, it decided to give a last opportunity to the informant.

7. During the meeting of the Commission held on 25.3.2010, Mr. Gaurav M. Liberhan and R. Sudhinder, counsel for the informant appeared before the Commission and explained the case. After hearing, the informant was asked to furnish some additional information in regard to second hand car market in