Competition Watchdog Probing Maruti For Insurance Tie-Ins: Report
A Reuters report says the anti-trust regulator is probing allegations that buyers have to pay more for insurance.
Have you ever bought a Maruti Suzuki vehicle and found the dealer bundling specific insurance plans with the car? Well, that’s exactly what the Competition Commission of India (CCI) is allegedly investigating.
The CCI is looking at allegations that Maruti is engaging in “tie-in arrangements” where a manufacturer promotes preferred insurance or lubricant brands, according to a Reuters report quoting sources.
Apparently the CCI had received complaints that buyers were sold only specific insurance products, which is anti-competitive as it prevents other insurance providers from selling their policies to a buyer.
Following up on the Reuters report, The Quint reached out to Maruti Suzuki for its response to this alleged case.
“We are not aware of any such alleged complaint that is being investigated by CCI and therefore cannot comment on the same.”Maruti Suzuki Spokesperson
What exactly is a tie-in arrangement? It is one where a dealer or dealers of a car brand bundle or sell insurance, lubricants or accessories of a particular brand only to the buyer. In such cases, the buyer is forced to be restricted to a few brands only.
Quite often, there would be competitive insurance policies that are available at a much lower premium, but the buyer isn’t made aware of these. Also, dealers sometimes say such policies won’t have “cashless claims” honoured. This is where anti-competitive laws come in.
The Reuters report says the competition commission did not respond to its queries.
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