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Fair trade regulator CCI has rejected allegations against Volkswagen Group Sales India Pvt Ltd that it abused dominant market position with respect to its dealership agreements.
A complaint filed by Bhasin Motors, a car dealer in Delhi -NCR region, had alleged that Volkswagen by virtue of its dominant position in the market imposed unfair and one sided agreement on its authorised dealers.
In an order released on Thursday, the Competition Commission of India said that "no case is made out against opposite party (Volkswagen) for contravention of the provisions of...the (Competition) Act".
It observed that Volkswagen had "a very negligible share in the passenger car segment in India which is dominated by a number of players. In such a market construct, opposite party cannot be said to be a dominant player and as such the question of abuse of dominance will not arise".
The authorised dealer of Volkswagen said it was aggrieved by the termination of its dealership agreement by the automobile company and appointment of another dealer.
It alleged that Volkswagen had exploited its position in the market "by forcing it to sign a unilateral agreement".
Further, it was alleged that clauses in the agreement were unfair and one sided and have excluded Volkswagen from any obligation and liability.
It is also averred that the company had unilaterally "cancelled the dealership on false and fictitious facts".