India’s antitrust body on Thursday said it had ordered an investigation into how Maruti Suzuki, the country’s biggest carmaker, controlled discounts its dealers could offer.
Reuters reported in May that the Competition Commission of India (CCI) was looking into allegations that Maruti forced its dealers to limit the discounts they offer, effectively stifling competition among them and harming consumers.
Carmakers, at times, set a limit on discounts to ensure there is no price war among dealers but Indian law says the practice, described as “resale price maintenance,” is prohibited if it causes “appreciable adverse effect on competition in India.”
Need for detailed probe
The CCI on Thursday said a detailed probe was needed to assess the methods used by Maruti as the “allegations, prima facie, reveal a fit case for investigation in respect of the alleged resale price maintenance arrangement”.
Maruti, majority-owned by Suzuki Motor Corp., did not immediately respond to a request for comment.
