CCI Rejects Complaint Against Honda For Abuse Of Dominant Position
CCI Rejects Complaint Against Honda For Abuse Of Dominant Position
Notes that the allegations were insufficient to establish Competition Act norms
The Competition Commission of India (CCI) has dismissed a complaint alleging that Honda Motorcycle & Scooter India (HMSI), a subsidiary of Japan's Honda Motor Co, abused its dominant position while dealing with a Kerala-based individual.
The CCI stated that the allegations of coercion and unfair practices were related to contractual disputes and commercial matters. These were beyond the scope of the Competition Act. It added, “The Commission directs that the matter be closed forthwith under Section 26(2) of the Act.”
Section 26(2) of the Competition Act pertains to the case closure of a matter if a prima facie case is not made out.
The complaint was filed by a former dealer of Suzuki Motorcycle India claiming that the company engaged in anti-competitive practices.
He alleged that in 2017, HMSI coerced him into terminating his Suzuki dealership to secure an HMSI dealership. It forced him to stock unpopular two-wheeler models, denying him business flexibility. Moreover, in January 2024, without justification, it abruptly terminated the dealership agreement.
The CCI noted that the allegations were insufficient to establish abuse of dominance under Section 4 of the Act.
It held, “The allegations seem to be related to transactions that are commercial and do not fall under the provisions of the Act. The sale and purchase of a particular model or a make by any authorized agency of a vehicle manufacturer are business-related aspects of the agreement. They do not give rise to anti-competitive conduct.”
The competition watchdog highlighted that the person entered the dealership agreement with HMSI, voluntarily, It included provisions for termination under specific conditions.
The CCI observed that the two-wheeler company issued multiple warnings and notices to the individual regarding the dealership's performance and adherence to quality standards.
Dating to 2021, the communications included letters of caution, improvement requirements and several warnings. The termination was in accordance with the agreement terms and commercial considerations and was not an anti-competitive conduct.
