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Peugeot fined for obstructing new car exports

Competition: Commission imposes a €49.5 million fine on Peugeot for obstructing new car exports from the Netherlands

The European Commission has decided to impose a fine of €49.5million on Automobiles Peugeot SA and Peugeot Nederland N.V., for having obstructed between 1997 and 2003 exports of new cars from The Netherlands to consumers living in other Member States. By preventing these exports of new cars, the companies committed a very serious violation the EC Treaty’s ban on restrictive business practices (Article 81).

Competition Commissioner Neelie Kroes commented “This decision demonstrates the Commission’s determination to use the EC Treaty’s competition rules to prevent companies from depriving consumers of the benefits of the Single Market. In the motor vehicle sector, such practices are particularly harmful, since the car represents the second most expensive item in the household budget.”

From January 1997 until September 2003, Automobiles Peugeot SA, through its 100%-owned importer Peugeot Nederland N.V, implemented a strategy designed to prevent dealers from selling cars to consumers in other Member states so as to curb exports by Peugeot Dutch dealers.

The strategy consisted of two measures. Firstly, part of the remuneration of Peugeot’s Dutch dealers was made dependent on the final destination of the vehicle, and discriminated against sales to foreign consumers. In particular, performance bonuses were refused if dealers sold cars to non-Dutch citizens. Secondly, Automobiles Peugeot SA exercised, through Peugeot Nederland N.V, direct pressure on those dealers who were identified as having developed a significant export activity, for example by threatening to reduce the number of cars supplied to them.

In determining the level of the fine, the Commission took into account the very serious nature and the relatively long duration of the infringement committed by Automobiles Peugeot SA and its Dutch subsidiary.

In The Netherlands, prices before taxes were generally substantially lower than in other Member States, such as Germany and France. The case against Automobiles Peugeot SA and its importer Peugeot Nederland N.V. began with surprise inspections which the Commission carried out in September 1999 and April 2003 on the basis of complaints received from customers wanting to buy cars in the Netherlands at cheaper prices.

The Commission acts under the competition rules in order to ensure that consumers enjoy the freedom to buy anywhere in the EU, a freedom which is designed to enhance consumer welfare. In the car sector, recent car price reports published by the Commission every semester show that pre-tax retail prices of cars across the EU have been steadily converging and that such convergence took place in a context of relative price stability, including in low-price countries. In other words, car prices have not tended to converge upwards towards price levels in high price countries.

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