The Competition Commission of India (CCI) on Monday imposed a fine of Rs 200 crore on Maruti Suzuki India Limited (MSIL) for anti-competitive conduct of Resale Value Maintenance (RPM) in the passenger vehicle segment, the Corporate Affairs Ministry said. a statement. In 2019, the watchdog started looking into allegations that Maruti forces its dealers to limit the discounts they offer. This ultimately affected consumers who could have benefited from lower prices if the dealers operated independently.
The regulator found that Maruti Suzuki had entered into an agreement with its dealers under which the dealers were barred from giving discounts to customers in excess of the discounts prescribed by the automaker.
As part of its ‘Discount Control Policy’ for its dealers, India’s largest carmaker discouraged dealers from offering additional discounts, free gifts etc. over and above the limit allowed by the company. Dealers had to take prior approval from Maruti Suzuki for offering any discount.
“Any dealer violating such discount control policy is threatened with fine not only on the dealership but also on his individual persons including Direct Sales Executive, Regional Manager, Showroom Manager, Team Leader etc. Was.” a statement.
To enforce the discount control policy, Maruti Suzuki employed mystery shopping agencies, who posed as dealers, to ascertain whether any additional discounts were being offered to customers.
“If offered, MSA will report along with the evidence (audio/video recording) to MSIL Management, who will, in turn, send an e-mail to the wrong dealership with the ‘Mystery Shopping Audit Report’, asking them to claim an additional discount. If the explanation was not offered by the dealership to the satisfaction of MSIL, the dealership and its employees would be fined with the threat of stopping the supply in certain cases. Maruti Suzuki to that dealership Where the fine was to be deposited and also the fine amount was utilized as per the directions of the Company.
“CCI observed that MSIL not only enforced Discount Control Policy on its dealers but also monitored the dealers through MSAs by imposing fines and threatening strict action like stoppage of supply, levy and use of fines. and implemented it. Similar. Therefore, such conduct of MSIL which resulted in significant adverse effect on competition within India was found by CCI to be in contravention of the provisions of Section 3(4)(e) read with Section 3(1) of the Competition Act, 2002. ,” the ministry added.
However, Maruti told the regulator during investigation that there was no discount control policy, which was imposed on dealers who were free to offer any discount to their customers, the order said. Maruti Suzuki sells one out of every two cars in India.
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