Maruti Suzuki, India’s largest automaker, recently comes under CCI radar for forcing customers into buying the insurance policies from them if the sources are to be believed. Last year in the month of June, Competition Commission of India (CCI) received an anonymous complaint that the carmaker is recommending insurance policies to the customers which are costing more than the others.
The sources who have asked not to be named have stated that CCI is looking into the matter. Based on the complaint, the CCI is looking into if Maruti Suzuki has engaged in something called a “tie-in arrangements” which involved them recommending car accessories from some companies.
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Indian law states that such practices are anti-competitive as they limit customer choices.
The CCI is looking into the complaint and one source said that it will take a while. On the other hand in a reply to Reuters Maruti Suzuki spokesperson said: “We are not aware of any such alleged complaint that is being investigated by CCI and therefore cannot comment on the same.”
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At this point of time, the investigation can either be stopped dead in its track due to no merit or continued and a deeper probe be conducted. As the case is currently private no major details are shared.
This can be a pile up for Maruti Suzuki as they are already facing another antitrust investigation. In 2019 Maruti was being probed by CCI under allegations that they limited the amount of discount its certified dealers could offer which hurts customers and is considered malpractice.
“The most credible way for Maruti to show there is no tie-in would be by providing actual data on Maruti car buyers opting for insurers other than those recommended by it,” said Rahul Rai, a lawyer specializing in antitrust law.
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Maruti had a good year in 2019 with 5 of its models being in the top 5 selling models of 2019. Let’s see if this case tarnishes Maruti’s image or not.