Resale Price Maintenance In Auto Industry Under Challenge Before The CCI

Over the years, the Competition Commission of India (CCI) has dealt with several cases involving resale price mechanism. Last year in August 2021, CCI dealt with one such case involving country's leading and largest automaker, Maruti Suzuki India Limited (MSIL) and imposed hefty penalty of INR 2 billion on MSIL upon finding it guilty of indulging in market practices in contravention of the Competition Act, 2002 (the Competition Act). The case of MSIL lays down the principles on which the CCI concluded that the practice of fixing and enforcing a minimum retail price has the effect of not only resulting in decrease in intra-brand price competition, but also decrease in inter-brand price competition.