The European Commission on Wednesday fined Peugeot SA €49.5 million for blocking its Dutch dealers from selling cheap cars to consumers outside the Netherlands and warned other carmakers to stop stalling on deregulating their dealer networks, Dow Jones reported.
The Commission reportedly said Peugeot carried out this illegal strategy to block cross-border trade from January 1997 to September 2003.
The Commission told Dow Jones Peugeot pressured Dutch dealers by holding back sales performance bonuses if they sold cars to non-Dutch residents, and threatened to reduce the supply of new vehicles to dealers who sold cars outside of the Netherlands.
“Consumers have the right to buy a car anywhere in the single market,” EU antitrust commissioner Neelie Kroes told the news agency. “In the motor vehicle sector, such practices are particularly harmful since the car represents the second most expensive item in the household budget.”
Dow Jones noted that, over the past few years, the commission has fined many European car companies for similar offences, including Volkswagen, DaimlerChrysler and General Motors’ Opel subsidiary.
Peugeot was the last outstanding case for blocking exports, but Kroes reportedly said she “continued to receive frequent complaints” about car dealers from consumers.
In particular, according to Dow Jones, she accused the manufacturers of “putting obstacles” in the way of reforms. On Saturday, regulators reached a milestone in a years-long battle to inject more consumer choice into the car industry, banning car makers from telling the dealerships that sell their vehicles where they can open showrooms.
Dow Jones noted that the rule on dealership location was the last in a package of EU car-industry changes to be phased in since 2002 and added that Kroes said she was considering opening investigations against carmakers for stalling.
The European Automobile Manufacturers Association told Dow Jones it was studying Kroes’ declarations while PSA Peugeot-Citroen said the lack of tax harmonisation within the EU is responsible for distortions in the sticker prices of new cars from one country to another.
“We dispute the notion that there has been systematic discrimination,” Peugeot-Citroen spokesman Hughes Dufour told Dow Jones, adding that the company is waiting to be notified of the EU ruling before it decides whether to appeal, and will have two months to do so.
An appeal could be worth it. Dow Jones noted that a top European court last month slashed a fine that DaimlerChrysler was ordered to pay by Brussels for blocking competition while, separately, the commission is appealing a competition case it lost against Volkswagen.
Commissioner Kroes told the news agency she hadn’t decided whether to appeal the Daimler decision.