Market Power Test: Competition Commission Clears Nissan Motor India in Dealer Dispute Over Alleged Anti-Competitive Conduct

Market Power Test: Competition Commission Clears Nissan Motor India in Dealer Dispute Over Alleged Anti-Competitive Conduct​

The Competition Commission of India (CCI) has directed the closure of an informational case against Nissan Motor India Pvt. Ltd (NMIPL), concluding that the company does not hold a dominant position within the relevant market, thereby nullifying allegations of anti-competitive abuse by the automaker. The decision follows a comprehensive review where the CCI assessed claims made by a dealer partner, M/s You We and Cars, concerning coercive practices and termination of their dealership agreement.

The matter centered on whether NMIPL's actions constituted an abuse of dominance or violations of competition law within the context of its vertical market relationship with authorized dealers across India.

Review of Anti-Competitive Allegations Against Nissan​

Shri Rajeev Bakshi, a partner of M/s You We and Cars (the Informant), alleged that NMIPL engaged in a pattern of anti-competitive conduct. The dispute arose after the OP issued a unilateral termination notice dated 05.09.2025 for the dealership agreement, despite the contract being valid until March 31, 2026.

The Informant submitted evidence detailing substantial investments exceeding INR 10 Crore into infrastructure, plant, machinery, and inventory in good faith, relying on assurances of continuity from NMIPL. Allegations included coercive pricing policies, forced investments, delayed reimbursements, and systematic erosion of the dealer's viability. These actions were cited as constituting abuse under Section 4 of the Competition Act, 2002.

CCI Findings on Market Dominance and Industry Standards​

The Commission meticulously examined the Informant’s claims regarding market restrictions, resale price maintenance, and denial of market access. The CCI noted that while the allegations alleged vertical restraints, these were addressed in light of established commercial practices.

Regarding restrictive clauses (such as Clauses 3.2.1, 3.2.2, etc.) found in the Dealership Agreement, the Commission observed that these dealship stipulations do not inherently constitute an exclusive supply obligation or refusal to deal under Section 3(4). The Commission referenced previous case precedents where similar exclusivity clauses were found not to restrict dealers from acquiring other OEM dealerships if such restrictions could be demonstrated.

Furthermore, regarding resale price maintenance (MRRP), the CCI noted that while dealers must sell at a price not exceeding the MRRP communicated by NMIPL, there is no stipulation dictating a minimum price or discount, thus finding no merit in this specific allegation.

Nissan’s Market Share vs Anti-Competitive Practices​

The ultimate determination of the case hinged on establishing the market dominance of the Opposite Party (OP). The CCI delineated the relevant market as "distribution and sale of passenger cars in India." Statistical data regarding sales volumes between May 2025 and April 2026 was then scrutinized against established industry leaders.

Publicly available sales statistics placed NMIPL among a highly competitive field of manufacturers, including Maruti Suzuki India Ltd (39.71% market share) and Mahindra & Mahindra Ltd (13.42% market share). As per the Commission’s analysis, Nissan Motor India Pvt Ltd held less than 1% market share across the relevant period.

Conclusion: Information Closed Under Section 26(2)​

Given the extensive review and testing against Section 19(4) of the Act (which assesses dominance), the CCI found that the Informant had not furnished sufficient evidence to demonstrate that NMIPL restricted its dealers from acquiring competing dealerships or exercised market control.

The Commission concluded that, prima facie, there is no basis for a contravention of Sections 3(4) or 4 of the Act. Consequently, the Information is directed to be closed forthwith under Section 26(2), and the Interim Application seeking restraints against NMIPL was rejected.