Competition Commission imposed a whopping penalty of Rs 87 Crore for unfair business practice in accordance with the discount practices on its offerings.
In a 44-page order, the regulatory organization said that the company’s anti-competitive practice included putting in place arrangements that resulted in resale price maintenance by way of monitoring of maximum permissible discount level. This was undertaken by the way of discount control and penalty mechanisms for non-compliance of the discount scheme
"Such conduct pertains to and emanates out of sale of motor vehicles. Hence, for the purposes of determining the relevant turnover for this infringement, revenue from sale of motor vehicles alone has to be taken into account," CCI noted.
Allegedly, the company played on a discount control mechanism wherein the dealers were not allowed to go beyond a permissible level of discount range.
The watchdog organization imposed a fine of Rs 87 crore on the South Korean company. The penalty amount is calculated to 0.3 per cent of the company's average relevant turnover in the last three financial years from 2013-14.
CCI said the company contravened competition law through arrangements which resulted in resale price maintenance and by mandating its dealers to use "recommended lubricants/ oils and penalizing them for use of non-recommended lubricants and oils".
