Competition LawRulings

CCI sets BMW India free for not being dominant player in the passenger car segment

CCI Updates

CCI holds that any company with negligible share in any respective market cannot be a dominant player hence cannot violate Section 4 Competition Act, 2002.

In the present case, Parsoli Motor Works Pvt. Ltd (Informant), a dealer for BMW vehicles for the territory of the State of Gujarat alleges that BMW India Private Limited has abused its dominant position by not intimating the Informant for renewing the existing dealership agreement and not providing the sufficient time to exit from the business.  In addition, Informant alleges that it has suffered financial losses and BMW India has been defrauding the State exchequer by not paying entry tax on sales where the dealers based outside the State of Gujarat are allowed to sell BMW cars to customers based in the State of Gujarat.

After observing that facts and circumstances, CCI defines ‘dominant position’ as a position of strength, enjoyed by an enterprise, in the relevant market which enables it to operate independently of competitive forces prevailing in the relevant market; or affects its competitors or consumers or the relevant market in its favour.

Thereafter, CCI observes that BMW India has negligible share in the passenger car segment in India which is dominated by a number of players. As a result, in the dealership network also, BMW India would not have spread much as compared to that of Maruti, Hyundai, Tata etc, who command a significant market share. In such a market construct, BMW India cannot be said to be a dominant player and as such the question of abuse of dominant position will not arise. In addition, CCI holds that Informant has not provided any document or data wherefrom the dominance of the OPs can even be prima facie established in any relevant market.

In reference to BMW India evasion of entry tax, CCI holds that the respective issue does not raise any competition concern.

Hence, CCI dismisses that case stating that BMW India has not contravened under Section 4 Competition Act, 2002.

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