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If commissions and incentives are offered to dealers at a sliding scale, with the reward increasing with each given slab of turnover achieved, it is not a restrictive trade practice, held the Competition Appellate Tribunal in DIG MRTP Commission vs. DIC Coating Ltd.
No bias
The Tribunal did not agree with the appellant’s submission that sliding rates of commission have the effect of discriminating in favour of big dealers who are able to lift larger quantities and hence in a position to sell at a lesser price, thanks to larger commission earned, to the detriment of small dealers.
It pointed out that a business has the right to use all fair means to increase its sales, and one of the fair means in its armoury is giving dealers the incentive with sliding rates of commission.
The Tribunal went on to point out that it was not the case of the appellant that the company was discriminating between two dealers achieving the same turnover so as to amount to a restrictive trade practice.
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