June/July 2001: The European Commission has fined Volkswagen, the biggest manufacturer of cars in Europe, more than 30 million Euros for preventing its German dealers from offering discounts on Passat models in 1996 and 1997.
Competition Commissioner Mario Monti said the fine was a clear signal that 'competition policy serves consumers' interests'.
He added: 'It is the first decision regarding resale price maintenance and confirms, in the area of vertical restraints, the commission's strict policy on price-fixing practices.'
The EC found Volkswagen guilty of instructing its German dealers to 'show discipline' and not sell Passats at considerably below the recommended retail price.
'Unfortunately, this case is also a further example of non-respect of the Block Exemption regulation,' Monti said. 'The measures adopted by Volkswagen represent a clear restriction of dealers' freedom to set their own prices, and were aimed at changing their commercial behaviour to the detriment not only of German consumers, but also of those from other Member States.'
Volkswagen said it would lodge an appeal against the decision with the European Court of First Instance. It added: 'Volkswagen worked together with the Commission on establishing the facts, at all times asserting that pricing has always been and will remain the sole responsibility of distributors.
'During the course of the proceedings, Volkswagen drew the particular attention of the Commission to the fact that no agreements infringing on EU law were concluded at any time. The size of the fine in particular appears excessive.'
The Commission said that the case against Volkswagen was 'based on documents that the Commission received together with a letter of compliant from a consumer'.
'These documents show that in 1996 and 1997, Volkswagen sent several circular letters to its German Volkswagen dealer network, urging the dealers not to sell the VW Passat at prices considerably below the recommended resale price and/or to limit or not grant discounts to customers'.