On March 14, 2018, CCI directed an investigation into the complaint filed by Mr. Vishal Pande against Honda Motorcycle and Scooter India Private Limited (‘Honda’), alleging contravention of several provisions of Sections 3 and 4 of the Competition Act through tie-in arrangements, resale price maintenance and maintaining a discount control mechanism with a standard dealership agreement.[1] While defining the relevant market, CCI delineated two separate relevant product markets for motorcycles and scooters rather than defining the market to be that of two-wheelers. CCI reasoned that motorcycles and scooters are prima facie not substitutable in terms of characteristics and consumer preference. As regards the geographic market, CCI noted that the conditions of competition for sale of motorcycles and scooters are apparently homogenous across the Indian territory, and thereby defined the relevant markets as: (i) ‘market for manufacture and sale of motorcycles in India’; and (ii) ‘market for manufacture and sale of scooters in India’.Upon defining the relevant market, based on the market share of Honda which varied between 7.14% and 12.63% during 2010-11 to 2016-17, CCI concluded that it did not appear to be in a dominant position in the market for the manufacture and sale of motorcycles in India and held that this did not merit investigation into any abuse.However, since Honda’s market share ranged between 43.30% and 56.82% during 2010-11 to 2016-17, CCI held Honda to be dominant in the market for manufacture and sale of scooters in India. With respect to the issue of abuse of dominance, CCI noted inter alia the following factors: (i) the restriction imposed by Honda on dealers that they are required to source oil & lubricants, batteries, accessories, merchandise items and insurance and finance services only from designated sources are unfair and in contravention of Section 4(2)(a)(i) of the Competition Act; (ii) the condition for mandatory purchase of accessories, merchandise items, forceful billing of slow moving vehicles, compulsory deduction of advertising expenses, restrictions on insurance and finance options, making purchase of Annual Maintenance Contract (‘AMC’), Extended Warranty (‘EW’) and Road Side Assistance (‘RSA’) contingent upon purchase of booklets from Corporate India Warranties (I) Private Limited, termination of dealership without prior notice, and refusal for stock buyback, all appear to be unfair and prima facie in contravention of Section 4(2)(a)(i) of the Competition Act; and (iii) the dealership agreement were concluded with supplementary obligations which, by their nature or commercial usage, have no connection with the subject of the contract, and such conduct merits examination under Section 4(2)(d) of the Competition Act.CCI then examined the allegations made under Section 3 of the Competition Act and noted that: (i) the mandatory requirement imposed by Honda on its dealers for purchase of oil and consumables, genuine accessories, AMC, EW and RSA, advertising services, merchandise items, batteries, insurance and finance options, from designated sources; (ii) resale price maintenance and discount control mechanism; (iii) allocation of any area or market for the disposal or sale of the goods; and (iv) exclusive supply agreement/refusal to deal, also appear to be in the nature of anticompetitive restraints covered under Section 3(4) of the Competition Act. In light of the above prima facie findings, CCI directed the DG to investigate into the complaint.[1] Case No. 40 of 2017.