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CCI slaps Rs 200-crore penalty on Maruti for anti-competitive discount policy

The Competition Commission of India (CCI) on Monday fined Maruti Suzuki India (MSIL) Rs 200 crore for anti-competitive practices related to how it forced dealers to discount cars. 


In 2019, the CCI had started looking into allegations that Maruti was forcing its dealers to limit the discounts that they would offer. This way, the country’s largest car-maker would effectively stifle competition among the dealers and also harm consumers who could have benefited from lower prices if the dealers had operated freely. 


In an order issued after an investigation, the CCI asked Maruti to “cease and desist” from indulging in such practices and asked the company to deposit the fine within 60 days. 


The fine has been slapped for “indulging in anti-competitive conduct of Resale Price Maintenance (RPM) in the passenger vehicle segment by way of implementing Discount Control Policy vis-a-visdealers,” the competition regulator said in a release on Monday. 


The CCI found that MSIL had an agreement with its dealers, whereby the dealers were restrained from offering discounts to the customers beyond those prescribed by MSIL. 


“In other words, MSIL had a ‘Discount Control Policy’ in place for its dealers, whereby the dealers were discouraged from giving extra discounts, freebies, etc to the consumers beyond what were permitted by MSIL. If a dealer wanted to offer additional discounts, prior approval of MSIL was mandatory. Any dealer found violating such Discount Control Policy was threatened with imposition of penalty, not only upon the dealership, but also upon its individual persons, including direct sales executive, regional manager, showroom manager, team leader, etc,” said the CCI in a statement. 


Maruti, majority-owned by Japan’s Suzuki Motor Corp, did not immediately respond to a request for comment. 

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