Maruti Suzuki Forcing Customers To Buy Its Own Insurance; Govt. Will Investigate Abuse Of Competition
India’s biggest carmaker: Maruti Suzuki is now under Govt’s investigation for abusing its authority and power.
As per the allegations levied against Maruti Suzuki, they are forcing buyers to purchase the insurance recommended by Maruti Suzuki, and this is an abuse of competition.
Will the Competition Commission Of India find any evidence against Maruti?
Keep reading to find out more..
Maruti Suzuki Imposing Their Own Insurance?
Last year, the Competition Commission Of India or CCI received an anonymous complaint, which claimed that Maruti Suzuki is imposing their own insurance providers and forcing the buyers to purchase them.
As per the complaint filed, the insurance suggested and imposed by Maruti Suzuki is expensive compared to other insurance providers, and this is unfair.
Based on this complaint, CCI has now started an investigation against Maruti Suzuki, and if found guilty, appropriate action will be taken.
Why Imposing One’s Own Insurance Is Abuse Of Competition?
Under the anti-competitive laws of India, if any auto-maker has tie-ups with brands related to insurance, complementary products such as polish, engine oil etc, then it’s not legal.
Promoting and/or forcing buyers to choose these products under their tie-ups is an unfair business practice, and there are provisions to impose a penalty as well.
This ends-up sucking up all options available to the consumers in a free-market model, and destroys the competition, which can lead to an environment unconducive to free and fair business practice.
In their response, Maruti Suzuki issued a statement: “We are not aware of any such alleged complaint that is being investigated by CCI and therefore cannot comment on the same.”
CCI too has refused to make any comment.
Maruti Is Already Under Investigation
Few months back, Maruti had restricted dealers from offering discounts beyond a set limit.
Few dealers had approached CCI and made complaints against them, which has led to an investigation against Maruti Suzuki, which is currently undergoing.
In case CCI finds any conclusive evidence against Maruti-Suzuki related to stifling competition by promoting their own insurance providers, then the investigation pertaining to both of these cases can be combined.
This may sound a piece of bad news for Maruti Suzuki, which is already reeling under slowdown, along with other carmakers.
We will keep you updated, as more details come in.