New Delhi, August 23
The Competition Commission of India (CCI) on Monday imposed a penalty of Rs 200 crore on Maruti Suzuki for restricting discounts offered by its dealers and directed the country’s largest car maker to cease and desist from indulging in unfair business practices.
Unfair business practices
- The fair trade regulator also flagged practices like appointing ‘Mystery Shopping Agencies’ and preparing ‘Mystery Audit Reports’ as part of enforcing the company’s discount control policy
- The watchdog slapped the fine as it found that Maruti Suzuki India indulged in anti-competitive conduct of Resale Price Maintenance in the passenger vehicle segment by way of discount control policy vis-a-vis dealers
Passing an order, the fair trade regulator also flagged practices like appointing ‘Mystery Shopping Agencies’ and preparing ‘Mystery Audit Reports’ as part of enforcing the company’s discount control policy.
The watchdog slapped the fine of Rs 200 crore as it found that Maruti Suzuki India Ltd (MSIL) indulged in anti-competitive conduct of Resale Price Maintenance (RPM) in the passenger vehicle segment by way of implementing discount control policy vis-a-vis dealers, an official statement said on Monday.
MSIL had an agreement with its dealers whereby the dealers were restrained from offering discounts to the customers beyond those prescribed by it. In other words, the company had a discount control policy and dealers who wanted to offer additional discounts were required to compulsorily seek the company’s prior approval, as per the regulator.
According to the CCI, any dealer found violating the policy was threatened with imposition of penalty, not only upon the dealership but also upon its individual persons, including direct sales executive, regional manager and showroom manager. — PTI
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