TATA Motors is alleged to have imposed unfair terms and conditions in the dealership agreement for commercial vehicles, taking advantage of the strong position in the market.
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The Competition Commission has ordered an inquiry against Tata Motors for alleged misuse of a strong position in the market in dealership agreements. The order has been given in two complaints against Tata Motors, Tata Capital Financial Services Limited and Tata Motors Finance Limited, taking action.
The Competition Commission of India (CCI) observed that the complainant in its complaint, leveraging the strong market position on Tata Motors, imposed unfair terms and conditions in the dealership agreement for commercial vehicles which is in violation of the provisions of Section 4 of the Competition Law.
On May 4, the CCI said in a 45-page order that prima facie the case appears to be in violation of the provisions of Section 3 (4) and 4 of the Competition Act by Tata Motors. “In this case, the matter needs to be investigated.” The regulator has asked its investigating unit director general (DG) to investigate the matter in detail.
CCI made it clear that it was not examining the activities of Tata Capital and Tata Motors Finance or the agreements they had signed with the dealers for funding. The reason for this is that it does not appear that these two companies have a very strong position in their fields.
Tata Motors gave this answer
To this, a Tata Motors spokesperson said, “They have come to know that CCI has ordered its director general to investigate the commercial vehicle business of Tata Motors Limited.” We understand that the CCI has passed a prima facie order and has not given any final verdict regarding the allegations leveled against TML. TML is currently reviewing the copy of the order available in the public sector and will consult its legal advisors to take necessary steps. ”
CCI has said in its order that Tata Motors has rejected all the allegations. The Investigation Team has to submit its final report in 60 days. Explain that currently Tata Motors has a 40 percent stake in the commercial vehicle segment and is the largest seller of commercial vehicles in India. The company offers many tracks and buses in India and competes with Ashol Leyland and Mahindra & Mahindra.
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