AUTOMOBILE INDUSTRY: 2ND STAGE AFTER BUYING A CAR
BECOMES COMPETITION/CONSUMER FRIENDLY
ABSTRACT
To a consumer, buying a car is not a simple task. A great deal of thought, price-comparison, cross-brand research and several other factors go into buying a car; not to mention the high costs of buying and maintaining it. What happens when the costs of car-repair eventually outweigh the cost of buying a car? What happens when the consumer has no option but to pay the high-costs of repair, because the spare-parts and repair services are unavailable anywhere else in the market except from the seller of the car? Is the customer locked-in, in an unfavorable market, which cannot be escaped from? Can the consumer afford to sell the new car at a significant …show more content…
The foundation of the Competition Law exists on battling anti-competitive behavior in the various markets that exist throughout India. The Competition Act, 2012, broadly categorizes the anti-competitive behavior as between players under anti-competitive agreements and abuse of dominant position . Under the ambit of anti-competitive agreements, the CCI scrutinizes actions, amongst others, such as cartelization, price-fixing, bid rigging, limiting supply of goods, allocating of markets and those that have an appreciable adverse effect on competition (AAEC) in India; whereas under the ambit of abuse of dominant position, the CCI looks into the actions of a dominant entity who abuse their dominant position, including dominance in resources or wealth, to gain an unfair advantage in the market such as creating entry barriers, imposing unfair conditions for sale/ purchase etc. Essentially, when any player in the market involves in actions which are solely for the purpose of gaining an unfair advantage by either causing a significant adverse effect on the market or using their dominant position in the relevant to further overpower and oust other players, who can’t defend themselves effectively from such …show more content…
It was the opinion of the CCI that the automobiles sold by the OPs needed custom-made spare parts and services, specifically for the vehicle, and the spare parts and services available in the open market could not satisfy the requirements of repair. It was further discovered that the said spare parts were manufactured by independent original equipment suppliers (OESs) but they were restricted by the OPs to sell those spare parts into the open market, and even the authorized dealers were restricted to sell the spare parts over-the-counter without the prior consent of the respective OP, consent which had pragmatically never been given even once in the past. It was the opinion of the CCI that by doing as aforementioned, the OPs became a dominant entity in the aftermarket, where the consumer was essentially locked-in by virtue of his purchase in the primary market. The CCI did not fail to notice that the consumer was definitely locked-in, since
BECOMES COMPETITION/CONSUMER FRIENDLY
ABSTRACT
To a consumer, buying a car is not a simple task. A great deal of thought, price-comparison, cross-brand research and several other factors go into buying a car; not to mention the high costs of buying and maintaining it. What happens when the costs of car-repair eventually outweigh the cost of buying a car? What happens when the consumer has no option but to pay the high-costs of repair, because the spare-parts and repair services are unavailable anywhere else in the market except from the seller of the car? Is the customer locked-in, in an unfavorable market, which cannot be escaped from? Can the consumer afford to sell the new car at a significant …show more content…
The foundation of the Competition Law exists on battling anti-competitive behavior in the various markets that exist throughout India. The Competition Act, 2012, broadly categorizes the anti-competitive behavior as between players under anti-competitive agreements and abuse of dominant position . Under the ambit of anti-competitive agreements, the CCI scrutinizes actions, amongst others, such as cartelization, price-fixing, bid rigging, limiting supply of goods, allocating of markets and those that have an appreciable adverse effect on competition (AAEC) in India; whereas under the ambit of abuse of dominant position, the CCI looks into the actions of a dominant entity who abuse their dominant position, including dominance in resources or wealth, to gain an unfair advantage in the market such as creating entry barriers, imposing unfair conditions for sale/ purchase etc. Essentially, when any player in the market involves in actions which are solely for the purpose of gaining an unfair advantage by either causing a significant adverse effect on the market or using their dominant position in the relevant to further overpower and oust other players, who can’t defend themselves effectively from such …show more content…
It was the opinion of the CCI that the automobiles sold by the OPs needed custom-made spare parts and services, specifically for the vehicle, and the spare parts and services available in the open market could not satisfy the requirements of repair. It was further discovered that the said spare parts were manufactured by independent original equipment suppliers (OESs) but they were restricted by the OPs to sell those spare parts into the open market, and even the authorized dealers were restricted to sell the spare parts over-the-counter without the prior consent of the respective OP, consent which had pragmatically never been given even once in the past. It was the opinion of the CCI that by doing as aforementioned, the OPs became a dominant entity in the aftermarket, where the consumer was essentially locked-in by virtue of his purchase in the primary market. The CCI did not fail to notice that the consumer was definitely locked-in, since