The Competition Commission of India (CCI) on Monday imposed a penalty of ₹200 crore on Maruti Suzuki India Ltd. (MSIL) for indulging in ‘unfair business practices’ by restricting dealers from offering discounts to customers.
The antitrust regulator also passed a “cease and desist” order against the company.
The CCI found that MSIL had a ‘discount control policy’ in place for dealers, whereby they were discouraged from giving extra discounts, freebies, etc. to the consumers beyond what was permitted by the company.
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“We have seen the CCI order dated August 23. We are examining the order and will take appropriate action under law,” a company spokesperson said. “MSIL has always worked in the best interests of consumers and will continue to do so in the future,” the spokesperson added.
“If a dealer wanted to offer additional discounts, prior approval of MSIL was mandatory. Any dealer found violating such discount control policy was threatened with imposition of penalty, not only upon the dealership, but also upon its individual persons, including the direct sales executive, regional manager, showroom manager, team leader, etc,” the CCI said.
The regulator further pointed out that to enforce this MSIL had appointed ‘mystery shopping agencies’ who used to pose as customers to MSIL dealerships to find out if any additional discounts were being offered to customers.
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“Monitored and enforced the same [the discount policy] by monitoring dealers through MSAs, imposing penalties on them and threatening strict action like stoppage of supply, collecting and recovering penalty, and utilisation of the same,” the CCI said.