OCTOBER 13, 2001

DaimlerChrysler stung for $66 million EU fine

THE European Commission came down hard on Mercedes-Benz parent company DaimlerChrysler after it found the German giant guilty of price fixing or discriminatory retail practices and levied a $66.05m fine for abusing competition rules.

The fine is the fourth against a leading carmaker, although it is the heaviest yet imposed, and comes at the conclusion of a review into European block exemption on car retailing which allows carmakers to avoid normal competition rules.

Mario Monti, the EU competition commissioner who has taken great interest in Formula 1's business practices in recent times, is expected to recommend a much more liberal retailing regime when the current agreements end next autumn and is seen to have used Mercedes Benz as a high profile example to the rest of the motor manufacturing community after it found breaches of EU trading rules in Germany, Spain and Belgium.

The EU Commission had found that Mercedes had infringed competition rules by obliging non-German customers to pay a 15% deposit to source vehicles from German dealers; limiting sales to independent leasing companies in Spain and Germany and that the Mercedes-Benz dealers in Belgium were fixing prices on their vehicles.

Mr. Monti said: "Our investigation has also shown once more that the car manufacturers can largely control their distributors and punish those whose commercial behavior they dislike. Practices like the ones that DaimlerChrysler indulged in are therefore unacceptable and must be reprimanded severely."