[puneetakhouri]

Originally Posted by N.A.GTC

People on this thread seem to have forgotten that Dealers are separate from Manufacturers, and are actually free to sell at whatever price they feel fit.

Pardon my ignorance but just to understand, if you remember till a few years back the "Big Billion Day Sales" of Amazon/Flipkart were crazy. I mean they were selling ACs, fridges at such heavy discounts that the selling price was lesser than even the manufacturing cost. The competing stores and the manufacturers were extremely pissed off and manufacturers had even decided not to sell their product through e-comm and then some regulatory body stepped in and brought in rules around the pricing

So isn't this case something like that only? Instead of govt deciding it, in this case the manufacturer is laying down the ground rules.

[red_nemesis]

Originally Posted by puneetakhouri

Pardon my ignorance but just to understand, if you remember till a few years back the "Big Billion Day Sales" of Amazon/Flipkart were crazy. I mean they were selling ACs, fridges at such heavy discounts that the selling price was lesser than even the manufacturing cost. The competing stores and the manufacturers were extremely pissed off and manufacturers had even decided not to sell their product through e-comm and then some regulatory body stepped in and brought in rules around the pricing

So isn't this case something like that only? Instead of govt deciding it, in this case the manufacturer is laying down the ground rules.

Not exactly. The motive behind the actions differs significantly in both cases. While in the e-commerce case the consumers were ultimately benefitting, it was anti-competitive because of the deep pockets of the e-com giants. Hence, the intervention.

Whereas, what Maruti was doing was not to prevent predatory pricing but to prevent competition between its dealers (who operate independent of Maruti) in turn leading to loss of consumers.

Although, like many other members have pointed out, this judgement disregards the interest of smaller dealerships who might not have deep pockets to sustain this brutal competition. But we live in a capitalist world.!!

Works fine with me as long as the big fish is not getting into predatory pricing just to run out the competition. (Being too optimistic though!!! )

[N.A.GTC]

Originally Posted by puneetakhouri

Pardon my ignorance but just to understand, if you remember till a few years back the "Big Billion Day Sales" of Amazon/Flipkart were crazy.
...
So isn't this case something like that only? Instead of govt deciding it, in this case the manufacturer is laying down the ground rules.

red_nemesis has answered it well, but I'd just like to add this:

The pricing of Amazon & Flipkart was predatory, such that smaller players go out of the business. That eliminates competition, which is bad for the consumer.
Here, if the claim is that Maruti was trying to protect all its dealers, that still eliminates the competition among the dealers. Elimination of competition = bad = intervention by CCI.

The point of competition law/anti trust law is to provide a fair market, not protect all the players.

Secondly, government stepping in to make the market free is different than a private entity "trying" to do the same. It's for the same reason that you and I don't get to impose traffic challans on people jumping red lights, government does.

Originally Posted by red_nemesis

Although, like many other members have pointed out, this judgement disregards the interest of smaller dealerships who might not have deep pockets to sustain this brutal competition. But we live in a capitalist world.!!

Yes, but:

if those smaller dealers can show that the bigger ones have formed some sort of a cartel, or are deliberately undercutting them on price while having a significant influence on the market (not likely), the smaller dealers can approach the Competition Commission against those dealers.

if the bigger players are not engaging in any such shady practice, then it's just fair competition. All businesses compete to give me the best thing. Businesses can't be given protection at the expense of consumers. ¯\_(ツ)_/¯

[volkman10]

National Company Law Appellate Tribunal stayed the order of the Competition Commission of India that imposed a penalty of Rs 200 crore rupees on automaker Maruti Suzuki earlier this year.

The carmaker, has challenged this order and claimed that the commission has erred in imposing the penalty. Among other things, the auto-giant claimed that the commission, while imposing the penalty, failed to show how the alleged resale price management agreement between the company and its dealers was causing appreciable adverse effect on competition in the relevant market – a requisite feature under the competition law while dealing with anti-competitive agreements.

The tribunal has concluded that the legal issues raised in the case need detailed consideration and has fixed the date for hearing the case on Dec 15.

Link