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CCI Imposes Rs 200 Crore Penalty On Carmaker Over Dealer Discount Policy


New Delhi: India’s antitrust regulator fined Maruti Suzuki Rs 200 crore for indulging in anti-competitive practices related to how the dealers were forced to discount cars, the watchdog informed in an order on Monday.

In 2019, the Competition Commission of India (CCI) started looking into the accusations wherein it was alleged that Maruti forces its dealers to limit the discounts they offer, which leads to stifling of competition, harming the consumers who could have benefited from lower prices if dealers operated freely, news agency Reuters reported.

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In the order, the CCI asked Maruti to “cease and desist” from indulging in such practices. It also directed the company to deposit the fine within 60 days.

Maruti is the biggest carmaker in India and sells one in every two cars in the country.

During the probe, the company told the regulator that there was no discount control policy that has been imposed on dealers, contending that they were free to offer any discounts they wished to their customers, the order informed.

However, as per the Reuters report, the CCI order contains extracts of several emails exchanged between dealers and Maruti officials where it was “evident that the Discount Control Policy was controlled” by Maruti and not its dealers.

Carmakers set restrictions on discounts that dealers can offer to discourage competitive pricing among them, but the practice described as “resale price maintenance” is prohibited in Indian law if it adversely impacts competition.

According to the CCI order, Maruti not only indulged in anti-competitive practices but also penalised those who didn’t abide by the directive.

The watchdog stated that it took a considerate view in imposing the penalty of Rs 200 crore, keeping in mind that the automobile sector is undergoing a post-pandemic phase of recovery.

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