CCI imposes Rs 200-crore fine on Maruti Suzuki for restricting dealers’ discounts

NEW DELHI:  The Competition Commission of India (CCI) on Monday imposed a penalty of Rs 200 crore on India’s largest carmaker Maruti Suzuki India Limited (MSIL) for restricting discounts by dealers that could have benefited end-consumers. The watchdog has now asked the automaker to “cease and desist” from anti-competitive practices related to dealer discounts and deposit the fine within 60 days.

CCI, which had started looking into anti-competitive allegations against MSIL in 2019, found that the company had a ‘discount control policy’ in place whereby the dealers were discouraged from giving extra discounts and freebies to the consumers beyond what were permitted by the company. If a dealer wanted to offer additional discounts, prior approval of MSIL was mandatory.

Any dealers found violating the policy were threatened with penalty, including threat of stopping supplies, said ministry of corporate affairs in a statement quoting the CCI order. To enforce this policy, MSIL had even appointed Mystery Shopping Agencies (‘MSAs’) who used to pose as customers to MSIL dealerships to find out if any additional discounts were being offered to customers. 

MSIL spokesperson said, “We have seen the order dated 23 August 2021 published by the Competition Commission of India. We are examining the order and will take appropriate actions under law. MSIL has always worked in the best interests of consumers and will continue to do so in the future.”