DG-Competition confirms ‘dawn raids’ upon German car manufacturers

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Less then a week after so-called ‘dawn raids’ at BMW’s headquarters in Muenchen, the European Commission has today confirmed that its officials carried out additional unannounced inspections at the premises of several other German car manufacturers today, 23rd October 2017. Commission staff were accompanied by their counterparts from the German Federal national competition regulator, the Bundeskartellamt.

The Commission said, in an official statement, that the inspections were related to concerns held by DG-Competition that “several German car manufacturers may have violated EU anti-trust rules that prohibit cartels and restrictive business practices”, activities which are prohibited under EU competition law (Article 101 TFEU).

Media reports have identified that Daimler, Volkswagen and Audi (part of the VW Group) were visited earlier today, although this has not been confirmed by the Commission itself.  Following confirmation by BMW that its headquarters had been inspected last week, Daimler, owner of the Mercedes-Benz marque, confirmed that it was applying for ‘leniency’ from the Competition.

This measure, if granted, could see it benefit from substantially reduced fines from the Commission in the event that wrong doing is proved, in return for whistleblowing on other alleged cartel participants and fully co-operating with DG Competition’s investigation. European law allows for cartel participants to be fined up to 10% of their global turnover, a severe penalty for any industry but all the more so for German car manufacturers reeling from Volkswagen’s admission in 2015 of the use of so-called ‘cheat devices’ in its vehicles to falsify regulatory emissions tests.

The recent week’s focus on the powerhouse of the automotive sector in the EU’s largest and richest Member State will also, indirectly at least, demonstrate DG Competition’s even-handedness in pursuing anti-competitive behaviour by dominant firms after muted – and not so muted – criticism of the European Commission regulatory pursuit of US firms  (Apple, Google, Amazon et al) in recent years for abuse of market position and ‘sweetheart’ tax deals with individual European tax authorities.

The full text of the European Commission’s press release: https://goo.gl/8v82HP