Maruti Suzuki To Pay A Fine Worth Rs. 200

The Japanese automaker Maruti Suzuki is fined by the competition commission of India (CCI) for it's discount control policy. In this policy, Maruti Suzuki used to stop dealers from giving extra discount to the customers.

CCI said that the carmaker had a contract with dealers in which Maruti used to apply a certain limit to the dealers for giving discount to the customers. If any dealer used to give a dicount beyond the provided limit then the dealer need to pay a certain amount to carmaker as penalty.

Further, it was found that a dealer had to get prior approval from Maruti in order to offer additional discounts and any dealer found in violation of the Discount Control Policy was threatened with imposition of penalty which could also apply to the dealership staff.

The CCI also found that Maruti had appointed Mystery Shopping Agencies (MSAs) to find out if any dealers offered additional discounts to customers. These MSAs would report directly to the car brand’s management. Maruti will send a ‘Mystery Shopping Audit Report’ to the dealer and seek clarification if a dealer found offering more discount to customers.

If the reply is found unsatisfactory, it would result in the firm threatening the dealership with a penalty and stoppage of supplies.

Passing a cease-and-desist order, the CCI said Maruti’s discount control policy resulted in adverse effect in competition in India. Thus, Maruti Suzuki was fined Rs. 200 crore Suzuki Rs. 200 crores for being in contravention of the provisions of Section 3(4)(e) of the Competition Act, 2002.

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