Maruti Suzuki Slapped Rs 200 Crore Penalty; Know Where They Faltered

New Delhi: The Competition Commission of India (CCI) imposed a penalty of Rs 200 crore on Maruti Suzuki India Limited (MSIL), besides passing a cease-and-desist order against the carmakers.

In its final order, CCI penalized Maruti Suzuki for indulging in anti-competitive conduct of Resale Price Maintenance (RPM) in the passenger vehicle segment by implementing Discount Control Policy vis-à-vis dealers.

In its inquiry, CCI found that MSIL had an agreement with dealers whereby the latter were restrained from offering discounts to customers beyond those prescribed by the company.

Dealers were thus discouraged from giving extra cash discounts and other likely offers which were not permitted by MSIL.

If a dealer wanted to offer additional discounts, approval of MSIL was mandatory. In the case of any dealer found to be violating such Discount Control Policy, he was threatened with imposition of penalty on the dealership and its Direct Sales Executive, Regional Manager, Showroom Manager, Team Leader, etc.

MSIL appointed Mystery Shopping Agencies (MSAs) to enforce the Discount Control Policy. The MSAs would pose as customers to MSIL dealerships in order to find out if any additional discounts were being offered to customers.