Bhagwant Singh Bishnoi DECISION
Order under Section 26(2) of the Competition Act, 2002
1. The present Information has been filed by Mr. Neeraj Arora on behalf of Accessories World Car Audio Private Limited ('the Informant') under Section 19(1) (a) of the Competition Act, 2002 ('the Act') against Sony India Private Limited ('Opposite Party No. 1' / 'OP-1') and Sony Corporation, Japan ('Opposite Party No. 2' / 'OP-2') (collectively referred to as 'the OPs') alleging inter alia contravention of the provisions of Section 3 and 4 of the Act.
2. It is stated that the Informant is a distributor of Sony car audio products and is engaged in the business of sale and marketing of car audio and related accessories. OP-1 is a private limited company incorporated in India and has footprints across all major towns and cities in India through a distribution network comprising of over 20,000 dealers and distributors; 300 exclusive outlets and 25 branch locations. OP-2 is holding company of OP-1 incorporated under laws of Japan.
3. It is stated that the Informant operated in the car audio products market in Delhi and dealt with several brands including Pioneer, Blaupunkt, Kenwood, JVC etc. Further in 2005, the Informant was offered dealership of car audio products of OP-1. Subsequently, vide letter dated 28.08.2006, the Informant was appointed as the distributor of OPs car audio products for the territories of South, East, and Central Delhi.
4. It has been averred that prior to entering into distributorship agreement, the Informant was specifically asked to surrender sale of other brands and deal exclusively with Ops' car audio products. The Informant has alleged that such condition was specifically made applicable to it only, while the other distributors had no such restrictions and the same came to the notice of the Informant at later stage. The Informant also alleged that a condition as to 'not to deal with competing brands' was implemented in 2012 that caused immense losses to the Informant and that finally led to ouster of the Informant from relevant market.
5. Further, the Informant has alleged that around 2013, OP-1 in collusion with OP-2 started engaging in abusive practices by imposing unfair/ discriminatory conditions on similarly placed distributors in the car audio products segment by allowing all other distributors in the market to deal with products of its competitors, except the Informant. The Informant also averred that OPs in collusion charged different prices (higher price from the Informant) for similarly placed distributors in the car audio products segment. Moreover, OPs also imposed discriminatory targets for similarly placed distributors by mandating 42% increase in target for the financial year 2009-2010 in comparison to other distributors.
6. Further, as per the Informant, arbitrary condition of territorial restriction/ territorial exclusivity was imposed only on it and that led remaining distributors to cause market infiltration in territories assigned to the Informant, without having to suffer any penal consequences at the hand of OPs. Thus, the Informant has alleged that such terms and conditions fall foul of the ethos of the provisions of the Act and also showed that the OPs wanted its ouster from the market.
7. The Informant has claimed that any violation of such terms and conditions was followed by steps such as denial of incentives, denial of billing and finally termination of distribution agreement. Additionally, the Informant has also alleged that OP-1 fixed the selling prices for the dealers (retaining distributor mark-up and incentive).
8. The Informant also stated that considering the fact as to dominance enjoyed by the OPs in the market for car audio products, there was a special responsibility on the OPs not to abuse their dominant position, which it wholly failed to discharge i........