The Competition Commission of India (CCI) imposed a hefty penalty of Rs. 200 crores on Maruti Suzuki India Ltd. for its involvement in “unfair business practices.” The CCI held that Maruti Suzuki had restricted its dealers from offering discounts to the customers.
According to the findings of antitrust regulator, MSIL had a “discount control policy” wherein it discouraged its dealers to give discounts more than the prescribed limit, along with freebies. Due to the actions and restrictions of MSIL, the CCI passed a “cease and desist” order.
As per MSIL’s policy, in case the dealers which to offer additional discounts, they had to take prior approval from the former. If any dealer had been found violating the fixed discount control policy, they were threatened with an imposition of penalty on dealership and on the individual persons; regional manager, showroom manager, sales executive, team leader, etc.
Moreover, in order to keep enforce its policy, MSIL had appointed “mystery shopping agencies” who upon direction, posed as customers before MSIL dealerships and figured out whether any additional discounts were being offered to the customers or not.
The CCI, in its order, mentioned that constant monitoring and enforcement of its policy through the mystery shopping agencies, hefty penalties, threats of strict actions like stoppage of supply, collection of penalty and its utilization, were the factors based on which MSIL had been held guilty.
With respect to this order, the MSIL’s spokesperson stated that it had examined the order and would take steps for appropriate action under the law. It clarified that it had been consistent in meeting the best interests of its consumers and its actions have always been in furtherance to it.
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