Published on August 24, 2021, at 11:24 IST
The Competition Commission of India (CCI) on Monday fined a sum of Rs. 200 crore to Maruti Suzuki India Ltd. (MSIL) for indulging in anti-competitive practices by pressuring dealers to discount cars.
The CCI stated, “MSIL not only entered into an agreement with its dealers across India for the imposition of a discount control policy amounting to RPM (Resale Price Maintenance) but also monitored the same by appointing Mystery Shopping Agencies (MSAs) and enforced the same through the imposition of penalties.”
The CCI ruling, however, contained extracts from several emails exchanged between dealers and Maruti officials, indicating that Maruti, not its dealers, was in control of the discount control policy.
Carmakers at times set a limit on discounts their dealers offer to prevent price wars among them, but Competition Act, 2002 declares the practice, known as “resale price maintenance”, as illegal if it hinders the prevailing competition in market.
The CCI passed a final order against MSIL for engaging in anti-competitive Resale Price Maintenance (RPM) in the passenger vehicle segment by way of implementing discount control policy vis-à-vis dealers, and accordingly, imposed a penalty of Rs. 200 crore upon MSIL, in furtherance to passing a cease-and-desist order.