Fuelling Compliance with Competition Law: Competition Commission of India and the Automobile Sector

– Soumya Hariharan, Nandita Sahai, Sakshi Agarwal & Akrathi Shetty

The automobile sector has undergone significant consolidation, witnessed the entry of new players and joint ventures amongst automobile companies and proliferation of innovative distribution models for sale of automobiles in India. Antitrust regulators across the globe have undertaken detailed scrutiny of the automobile sector, owing to its significant economic value, distribution models, aftermarkets1 and consumer interest. From an enforcement standpoint, the CCI has assessed the automobile sector for cartels, anti-competitive vertical arrangements, i.e., exclusive dealing, resale price maintenance (RPM), tie-in arrangements and refusal to deal, and abuse of dominance. The CCI has imposed significant penalties on automobile companies found guilty of indulging in anticompetitive conduct.

The CCI has assessed approximately 40 combination cases until 2019, under its merger control regime, covering a number of players such as automobile component manufacturers, Original Equipment Manufacturers (OEMs), Original Equipment Suppliers (OES), manufacturers of tyres, etc. While assessing the automobile sector from a merger control perspective, the key parameters considered by the CCI include, market shares of the parties to the combination, number of players, existing and potential vertical relationships, vertical foreclosure, nature of operations, and overlaps between the parties, etc.

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