Competition Commission of India (CCI) Fines Maruti Suzuki Rs 200 Crore For Anti-Competitive Infringements

Maruti Suzuki India Limited (MSIL) has landed in a bit of hot water. The Competition Commission of India (CCI) has fined India’s largest carmaker a whopping Rs 200 crore for anti-competitive practices regarding the carmaker’s dealer discount policies and has asked them to "cease and desist" from these practices.

The situation all started in 2019, where the CCI started investigating Maruti Suzuki for allegedly forcing dealerships to limit discounts being offered to customers within the prescribed limits set by the carmaker. What’s more, the carmaker was allegedly warning its dealerships of strict action including stoppage of supply and other penalties for offering extra discounts. 

According to the CCI, these practices stifled competition among dealerships, and claimed it harmed consumers who could have benefitted from lower prices had the dealers been allowed to operate freely.

A spokesperson for Maruti Suzuki spoke on the incident: “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.”

The carmaker also responded, claiming they didn’t impose a discount control policy on their dealers and they were free to offer any discounts they wished to customers. But the CCI’s investigation had concrete evidence that included emails between the company and the dealers of these anti-competitive practices. 

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As such, the carmaker has been found guilty of these practices, and has to pay the fines within 60 days. It is no secret that carmakers do try to silently control their discounts being offered between dealers to keep costs standardised across their dealer networks via discount control policies or resale price maintenance to be more spedic. But it is prohibited by Indian law, as it affects fair competition. 

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