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The Competition Commission has dismissed allegations of abuse of dominant position against BMW India with regard to non-renewal of a dealership agreement. Besides BMW India, the complaint -- filed by a Gujarat-based former car dealer of the German luxury carmaker -- was also against BMW India Financial Services.
BMW India Financial Services is a group company of BMW India and financially supports the sales of the latter.
The complainant was a dealer for BMW vehicles for the territory of the state of Gujarat under a dealership agreement with BMW India since 2007 which was being renewed from time to time.
In December 2017, BMW India intimated the complainant through a letter about not renewing the dealership agreement which was to expire at the end of the month.
Among others, it was alleged that BMW India abused its dominant position by not renewing the dealership agreement.
In an order dated May 30, CCI said from the information available in the public domain, it appears 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," the Competition Commission of India (CCI) said.
"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," it added.
Noting that "no case of contravention of the provisions of Section 4 of the (Competition) Act" is made out against BMW India and BMW India Financial Services, the regulator disposed of the complaint.
Section 4 pertains to abuse of dominant market position.
CCI also noted that it does not find any reason whereby the letter of BMW intimating the complainant about not renewing the dealership agreement beyond December 31, 2017, can be faulted.