One recent, promising account of Autism Spectrum Disorders (ASD) situates the cause of the disorder in an atypicality in basic neural information processing, more specifically in how activity of one neuron is modulated by neighboring neurons. The canonical neural computation that implements such contextual influence is called divisive (or suppressive) normalization. The account proposes that this normalization is reduced in ASD. We tested one fundamental prediction of this model for low-level perception, namely that individuals with ASD would show reduced cross-orientation suppression (leading to an illusory tilt perception). 11 young adults with an ASD diagnosis and 12 age-, gender-, and IQ-matched control participants performed a psychophysical orientation perception task with compound grating stimuli. Illusory tilt perception did not differ significantly between groups, indicating typical divisive normalization in individuals with ASD. In fact, all individuals with ASD showed a considerable orientation bias. There was also no correlation between illusory tilt perception and autistic traits as measured by the Social Responsiveness Scale. These results provide clear evidence against the decreased divisive normalization model of ASD in low-level perception, where divisive normalization is best characterized. We evaluate the broader existing evidence for this model and propose ways to salvage and refine the model.