CCI slaps Rs 200 cr penalty on Maruti Suzuki;says discount control policy violates competition norms
New Delhi, Aug 23: Competition Commission of India (CCI) on Monday imposed a penalty of Rs 200 crore on Maruti Suzuki for restricting discounts offered by its dealers and directed the country's largest car maker to cease and desist from indulging in unfair business practices.
In a 39-page order, the fair trade regulator also flagged practices like appointing 'Mystery Shopping Agencies' and preparing 'Mystery Audit Reports' as part of enforcing the company's discount control policy.
An MSIL spokesperson said, "We are examining the order and will take appropriate actions under law."
The watchdog slapped the fine of Rs 200 crore as it found that Maruti Suzuki India Ltd (MSIL) indulged in anti-competitive conduct of Resale Price Maintenance (RPM) in the passenger vehicle segment by way of implementing discount control policy vis-a-vis dealers, an official release said on Monday.
MSIL had an agreement with its dealers whereby the dealers were restrained from offering discounts to the customers beyond those prescribed by it. In other words, the company had a discount control policy and dealers who wanted to offer additional discounts were required to compulsorily seek the company's prior approval, as per the regulator.
The case was taken up suo motu by the regulator based on an anonymous e-mail, dated November 2017, received from a purported MSIL dealer. It was alleged that MSIL's sales policy is against the interest of customers as well as the provisions of the Competition Act.
On July 2019, after finding prima-facie evidence of competition law violations, the CCI ordered a detailed probe into the matter by its Director General (DG).
While deciding on the Rs 200 crore penalty, the regulator also took into consideration the post-pandemic phase of recovery of the auto sector.
According to the CCI, any dealer found violating the policy was threatened with imposition of penalty, not only upon the dealership but also upon its individual persons, including direct sales executive, regional manager and showroom manager.
To enforce the discount control policy, the watchdog said the company appointed 'Mystery Shopping Agencies' (MSAs) who used to pose as customers to MSIL dealerships to find out if any additional discounts were being offered to customers.
"If found offered, the MSA would report to MSIL management with proof (audio/ video recording) who, in turn, would send an e-mail to the errant dealership with a 'Mystery Shopping Audit Report', confronting them with the additional discount offered and asking for clarification," the release said.
Further, the CCI noted that if the clarification offered by the dealer concerned was not satisfactory, then penalty would be imposed on the dealership and its employees, accompanied in some cases, by the threat of stopping supplies.
"MSIL would even dictate to the dealership where the penalty had to be deposited and utilisation of the penalty amount was also done as per the diktats of MSIL," the release said.
The CCI found that the car maker not only imposed the discount control policy on its dealers but also monitored and enforced the same 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.
Such activities have resulted in appreciable adverse effect on competition within India, it noted.
"Having considered the nature of the infringing conduct and the post pandemic phase of recovery of automobile sector, the Commission takes a considerate view and deems it appropriate to impose a penalty of Rs 200 crore... only upon MSIL, as against a maximum penalty permissible under the provisions of the Act, which may extend up to ten percent of the average of the turnover of the entity for the last three preceding financial years," the order said.
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Modi govt by changing name of MGNREGA exposed its 'hatred' towards Gandhi: Siddaramaiah
Bengaluru (PTI): Karnataka Chief Minister Siddaramaiah on Tuesday said that the union government led by Prime Minister Narendra Modi, attempting to change the name and structure of the MGNREGA, has itself exposed its "hatred" towards the poor and towards Mahatma Gandhi.
He also accused the Centre of "altering" the very structure of the scheme, by shifting nearly 40 per cent of the cost onto the state governments, and called Modi "anti federal".
Suggesting that the NDA government at the Centre start a "Ministry of Name Change", with the Prime Minister himself holding that portfolio, the CM warned of a statewide agitation against this name change move.
The Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G) Bill, 2025, that seeks to replace the existing rural employment law MGNREGA, was introduced in the Lok Sabha on Tuesday amid strong objections by the opposition to the "removal" of Mahatma Gandhi's name from it.
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"The Union government led by Prime Minister Narendra Modi, which is attempting to change the name and structure of the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA), has itself exposed its hatred towards the poor and towards Mahatma Gandhi," Siddaramaiah said in a statement.
Implemented by the UPA government 20 years ago, the MGNREGA scheme has played a crucial role in eradicating unemployment and poverty in rural areas, he said, adding that "this scheme, which guarantees the right to employment to every individual, has received praise from economists both in India and abroad."
Noting that MGNREGA was a genuine form of employment guarantee, the CM said the proposed new structure under the Modi government strips away that guarantee and places the assurance of work at the whims of political leaders.
"This will further deepen caste discrimination and social inequality," he claimed.
Highlighting that the NDA government has altered the very structure of MGNREGA, a scheme whose entire expenditure was earlier borne by the Central government, by shifting nearly 40 per cent of the cost onto the state governments, Siddaramaiah said this stands as clear evidence of the "anti-federal attitude" that Prime Minister Modi has followed ever since coming to power.
"This move will also increase the migration of poor people in search of work as the proposed form does not guarantee employment in their own location -- forcing families to travel long distances to survive," he said.
Naming this scheme after Mahatma Gandhi, who sowed the dream of Gram Swaraj, was a meaningful decision, the CM said, "While Prime Minister Narendra Modi indulges in praising Gandhi during his foreign tours, within the country he has consistently engaged in attempts to erase Gandhi's legacy from key national programmes. From a parivar that seeks to glorify Gandhi's assassin Godse, what different conduct can one really expect?"
"Narendra Modi is widely known for simply changing the names of landmark schemes launched by the UPA government rather than preserving or strengthening them. It would be more appropriate for this government to start a 'Ministry of Name Change,' with the Prime Minister himself holding that portfolio," he said.
More than 25 flagship programmes launched during earlier governments were merely renamed or repackaged by the present regime, the CM further said, listing out that the Nirmal Bharat Abhiyan was rechristened as the Swachh Bharat Mission, while the Basic Savings Bank Deposit Account scheme was rebranded as the Pradhan Mantri Jan Dhan Yojana, among others.
"These changes reflect a consistent pattern of altering names rather than fundamentally strengthening or expanding the original intent of these welfare initiatives," he added.
Stating that the Congress party and state government strongly condemn this "anti-people" decision of the Narendra Modi government, which has snatched food from the plates of the poor, insulted Bapu, and attempted to strangle state governments financially, Siddaramaiah warned about launching a statewide agitation against this move.
"The responsibility of preserving the MGNREGA scheme in its original form must also be taken up by the lakhs of beneficiaries of the scheme. They must hold the BJP leaders of the state accountable and exert pressure on them to raise their voices against this injustice, rising above party lines," he said.
