CCI Closes Complaint Against Mercedes-Benz Over Alleged Forced Financing, Insurance Tie-In
The Competition Commission of India (CCI) on 28 August closed a complaint against Mercedes-Benz entities alleging that a customer was required to procure financing and insurance services through them as a condition for delivery of a vehicle, finding that the allegations were not supported by credible evidence.
Chairperson Ravneet Kaur with Members Sweta Kakkad and Deepak Anurag held that no prima facie case of contravention of Sections 3 and 4 of the Competition Act was made out against Mercedes-Benz Financial Services India Private Limited, Mercedes-Benz India Private Limited and Global Star Auto LLP. They observed:
“…the Commission is of the view that no prima facie case of contravention of Section 3 and Section 4 of the Act is made out against the OPs”
The Information was filed by Rushab Aggarwal, alleging violations of Sections 3 and 4 of the Competition Act, which respectively deal with anti-competitive agreements and abuse of dominant position.
Aggarwal booked a Mercedes-Benz vehicle worth Rs. 1.40 crore from Global Star Auto on 3 March 2026 after paying Rs. 5 lakh as a booking amount. Delivery was allegedly assured by the last week of March. He alleged that he was subsequently told that delivery would be indefinitely delayed unless he procured financing and insurance through the Opposite Parties.
He claimed that he was consequently compelled to avail financing from Mercedes-Benz Financial Services and insurance services recommended by Global Star Auto, despite receiving better offers from service providers in the open market. Further, he alleged that the manufacturer, captive financer/broker and authorised dealer operated a three-layer vertical arrangement in which financing and insurance were bundled with the vehicle purchase while competing service providers were excluded.
During the proceedings, the Opposite Parties filed applications informing the Commission that the matter had been resolved.
The Commission observed that Aggarwal was aggrieved by the conduct of the Opposite Parties, including the alleged delay in delivery and the requirement to avail financing and insurance services from them. It held:
“Ihe Commission notes that the commitment allegedly made by the seller, followed by a delay in delivery, by itself, does not raise a competition concern and is essentially an operational matter governed by the terms and mutual understanding between the seller and the buyer.”
It also held that the fact that a customer had paid a booking amount and was interested in completing the purchase could not, by itself, establish market dominance.
On the alleged tie-in arrangement, the Commission noted that merely offering, facilitating or recommending financing and insurance as part of the sales process does not automatically constitute a tie-in arrangement under Section 3(4)(a) of the Competition Act, which deals with tie-in arrangements as a form of vertical agreement.
It found that Aggarwal had not produced cogent evidence showing that he was required to procure financing or insurance exclusively from the Opposite Parties.
Therefore, the Commission concluded that the Information concerned an individual commercial transaction rather than a vertical arrangement or abuse of market power. It further noted that the Information was not supported by credible evidence of an agreement causing or likely to cause an appreciable adverse effect on competition.
Accordingly, the CCI closed the Information.