The Competition Commission of India (CCI) considers Maruti Suzuki India's deals with its parts suppliers anti-competitive. The commission believes Maruti Suzuki was abusing its dominance in the market by restricting the supply of spare parts and charging a high premium on them.

The director general (investigations) has accused the automaker of violating Sections 3 (4) and 4 of the competition law, and if CCI upholds these findings Maruti could be faced with a fine of up to INR34bn (US$623.8m), reports the Economic Times. The fine can be a maximum of 10% of Maruti's annual turnover.

A Maruti spokesman declined to comment, saying, "We would not comment as the matter is subjudice".

According to the report by the director general (investigations), Maruti's exclusive contracts with original equipment suppliers prohibit them from supplying these spare parts to anyone else, which violates Section 3(4) of the Competition Act. The report suggests Maruti charged a steep markup and limited the access of certain diagnostic tools needed to check defects in its cars. The company allows supply of these tools only to authorised service stations, which deters customers from getting their vehicle repaired from any other service centre. This is a violation of Section 4 of the Act.

The final hearing of the matter is scheduled for 25 April.

Maruti supplies spare parts of its vehicles in the open market, but they are sold through its own channels. The company controls the prices of these parts by restricting component manufacturers from selling those parts directly in the open market.

Maruti claims that if spare parts are available through other channels it will be difficult to check the spread of spurious parts. However, the report pointed out that unlike the highly-competitive primary car market, where cars are bought and sold, the secondary (spare parts) market does not have any competition because carmakers completely control the availability of spares owing to their exclusive deals with manufacturers. Customers may be forced to spend a lot on vehicle maintenance as they have to approach authorised service centres for "genuine" replacements.

The investigation against Maruti is part of industry wide probes into possible anticompetitive practices. As many as 16 other automakers have been found guilty of anti-competitive practice in the way they control the spare parts market, suggesting that the industry may have to fundamentally change the way spare parts are sold.

Legal experts say Maruti may get away with a lighter fine than other automakers since it has abused its dominance to a lesser extent.