The Competition Commission of India (CCI) has dismissed an information filed by an authorized Nissan dealer alleging anti-competitive practices and abuse of dominance under Sections 3(4) and 4 of the Competition Act, 2002. The Commission held that Nissan, with less than 1% market share in passenger cars, does not occupy a dominant position, rendering further analysis under Section 4 unnecessary. The case underscores the threshold requirement of establishing dominance before examining abuse allegations.
Background & Facts
The Dispute
The Informant, Shri Rajeev Bakshi, a partner in M/s You We and Cars, filed information under Section 19(1)(a) of the Competition Act, 2002 against Nissan Motor India Pvt Ltd (OP). The Informant alleged that the OP unilaterally terminated its dealership agreement dated 01.10.2024, despite substantial investments exceeding INR 10 crore in infrastructure, inventory, and manpower. The termination notice dated 05.09.2025 invoked Clause 16 of the agreement, which allowed mid-term termination without cause or opportunity for hearing.
Key Facts
- The Informant was an authorized Nissan dealer since 2016, operating in South Delhi and Faridabad.
- The dealership agreement was non-negotiable, executed on a standard-form basis.
- The Informant alleged coercive pricing, forced investments, delayed reimbursements, and bypassing of dealer networks.
- The OP holds 0.48% market share in passenger car sales in India (FY 2026).
- The Informant acquired another dealership with Vinfast while still under contract with Nissan.
Procedural History
- 17.06.2026: CCI considered the matter in its ordinary meeting.
- 07.07.2026: CCI passed the present order under Section 26(2) of the Act, closing the information and rejecting the interim application.
Relief Sought
The Informant sought:
- Direction to the Director General for investigation under Section 26(1).
- Declaration of contravention of Sections 3(4) and 4 of the Act.
- Cease-and-desist orders and penalties under Section 27.
- Interim relief under Section 33 restraining the OP from giving effect to the termination notice.
The Legal Issue
The central question was whether the OP’s conduct - including unilateral termination of dealership, resale price maintenance, exclusive supply arrangements, and refusal to deal - constituted:
- Anti-competitive vertical agreements under Section 3(4) of the Act, or
- Abuse of dominant position under Section 4 of the Act.
Arguments Presented
For the Informant
- The dealership agreement was one-sided, reflecting imbalance of bargaining power.
- Termination without notice or opportunity for hearing violated Section 4(2)(a)(i) (unfair conditions) and Section 4(2)(c) (denial of market access).
- The OP’s conduct, including resale price maintenance and exclusive supply arrangements, violated Section 3(4).
- The OP’s dominance was established by its control over supply, branding, and dealership continuation.
For the Opposite Party
- The Commission did not explicitly record the OP’s arguments but relied on publicly available data and precedents to assess dominance and vertical restraints.
The Court's Analysis
Vertical Agreements Under Section 3(4)
The Commission examined Clause 3.3.3 of the dealership agreement, which prohibited dealers from selling competing brands without the OP’s consent. It relied on Fx Enterprise Solutions India Pvt. Ltd. v. Hyundai Motor India Ltd (Case Nos. 36 and 82 of 2014), where a similar clause was held not to impose exclusive supply obligations or refusal to deal under Section 3(4)(b) or (d). The Commission noted:
"The avowed objective of the clause appears to ensure that HMIL dealers do not free ride on facilities and services provided by HMIL. Further, such stipulation ensures that HMIL is kept posted with the financial and investment activities of its dealers to ensure that funds meant for functioning of the dealership business are not diverted elsewhere."
The Commission observed that the Informant had acquired another dealership (Vinfast) while still under contract with Nissan, demonstrating the clause’s non-enforcement in practice. Thus, no violation of Section 3(4) was established.
Resale Price Maintenance
The Commission analyzed Clause 6-2 of the agreement, which capped dealer sales at the Maximum Recommended Retail Price (MRRP) but allowed discounts. It held that the absence of a minimum price condition negated allegations of resale price maintenance under Section 3(4)(e).
Refusal to Deal
The termination was governed by Clause 16, which permitted either party to terminate the agreement with 90 days’ notice without assigning reasons. The Commission held that freedom of contract and selection of trading partners are standard commercial practices, not anti-competitive conduct under Section 3(4)(d).
Abuse of Dominance Under Section 4
The Informant proposed the relevant market as "distribution and sale of Nissan branded passenger vehicles and related after-sales services in India." The Commission rejected this, delineating the relevant market as "distribution and sale of passenger cars in India." It relied on sales data showing Nissan’s 0.48% market share, far below competitors like Maruti Suzuki (39.71%) and Hyundai (12.29%).
The Commission applied the dominance test under Section 19(4) of the Act
