Competition Commission fined Maruti Suzuki ₹200 crore for restricting dealer discounts
Company: Maruti Suzuki India Limited
Summary
On August 23, 2021, the Competition Commission of India imposed a ₹200 crore penalty on Maruti Suzuki India Limited and ordered the company to cease and desist from resale-price-maintenance conduct in the passenger-vehicle market. The Commission found that Maruti Suzuki operated a discount-control policy under which dealers were discouraged from offering discounts, freebies or other benefits beyond levels permitted by the company. Dealers wanting to offer additional discounts were required to obtain approval. The CCI said Maruti Suzuki monitored compliance through mystery-shopping agencies posing as customers. Reports of unauthorized discounts could lead to demands for explanations, penalties imposed on dealerships and employees, and, in some instances, threats that vehicle supplies would be stopped. The CCI concluded that Maruti Suzuki imposed, monitored and enforced this policy and that the conduct produced an appreciable adverse effect on competition in India. It found a contravention of section 3(4)(e), read with section 3(1), of the Competition Act 2002. This is therefore recorded as a regulator finding and penalty, rather than merely an allegation. The available CCI release gives the date of its final order but does not provide a sufficiently precise beginning date for all of the underlying dealer practices. To avoid inventing a conduct period, the timeline fields use the final-order date as the documented enforcement event. Primary source — Competition Commission of India: https://www.cci.gov.in/images/pressrelease/en/pr-322021-22pdf1652345739.pdf
Record details
- Category
- Corporate Misconduct
- When it happened
- August 23, 2021–August 23, 2021
- Status
- Resolved (August 23, 2021)
- Severity
- high
- Added to Rotten Company
Source
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