WE India Private Ltd, a well-known seller of Android-based car head units, found itself at the centre of a competition law dispute. A consumer rights group, XYZ (the Informant), filed a complaint against the company befo

The given situation is based on the recent decision in the matter of XYZ v. Woodman Electronics India Pvt Ltd decided by Competition Commission of India, where similar charges were made on Woodman Electronics. XYZ is an informant and Woodman Electronics is an opposite party. At the outset, the Commission noted that the Informant has alleged contravention of provisions of Section 4, Section 36A, Section 2(47) of the Competition Act, 2002 (the Act) and Section 21(2) of the Consumer Protection Act, 2019, through indulging in anticompetitive practice unfair trade practice by not disclosing the country of origin, claiming the product to be indigenous in advertisements, on its websites, YouTube channel etc. In this regard, the Competition Commission observed that Section 2(47) and Section 36A of the Competition Act, 2002 are incorrectly mentioned by the Informant and no such sections exist in the Competition Act. Moreover, enforcement against false and misleading advertisement under Section 21(2) of the Consumer Protection Act, 2019 is entrusted to the Central Authority constituted under the Consumer Protection Act, 2019. Accordingly, the Commission proceeded to examine the alleged abusive conduct within the contours of Section 4 of the Act. As per publicly available information, the car audio market is a growing market globally as well as in Asia Pacific region, including India. The growing automotive industry, technological advancements, ease of availability and affordability are stated to be major growth drivers. There has been a rise in demand for car audio system in the secondary market given the rise in small and mid-range cars as the consumers have wider choice in the after market to look for options according to their budget and requirements. The car audio market appears to be competitive with the presence of established global players such as Sony, Panasonic, Blaupunkt, JVC, Kenwood, Harman, Bose etc. as well as various unorganized players. As per agreed details available in public domain, the Opposite party started selling its products online in 2015 through e-commerce platforms. In 2019, it set up its own website and started selling directly to its customers through its own website. The Opposite party reportedly earned revenue of ₹7.5 Crores in the year 2022. In view of the foregoing, the Commission notes that the car stereo market is very competitive with presence of organized players as well as unorganized players. Sony, Panasonic, Pioneer, Blaupunkt, JBL, JVC, Kenwood etc. are reputed global players and the Opposite party appears to be a relatively new as well as small player. Moreover, the alleged conduct of suppressing the details of country of origin and misleading advertisement appears to be a consumer issue for which remedy lies elsewhere. In the facts and circumstances of the present case, the Commission finds that no prima facie case of contravention of the provisions of Section 4 of the Act is made out against the Opposite party. Accordingly, the information is ordered to be closed herewith. Applying the above reasons, we can conclude that: Concealment of the country of origin and the use of misleading branding by WE India does not constitute an unfair or anti-competitive practice under the Competition Act, 2002. These are a consumer issue for which remedy lies under the Consumer Protection Act. Such conduct does not warrant an investigation by the Competition Commission of India (CCI) under Section 4 for abuse of dominance.