Competition law compliance: OFT fines Mercedes-Benz and three of its dealers

Competition law compliance: OFT fines Mercedes-Benz and three of its dealers

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Author: Simon Barnes

The Office of Fair Trading (OFT) today announced fines of £2.6m for Mercedes-Benz and three of its commercial vehicle dealers.

The fines relate to infringements of the competition law rules.

Full details are not yet available, but the OFT has indicated that Mercedes-Benz and its dealers engaged in market sharing, price coordination and exchange of commercially sensitive information.

As a matter of competition law, dealers must operate independently of each other. Any coordination between dealers, whether directly or indirectly through the supplier, risks being condemned as a serious breach of the competition law rules.

In this case, the infringements were relatively short (lasting for varying periods between January 2008 and January 2010) and not every party was involved in every aspect of them.

Also, the impact of the infringements appears to have been relatively limited, relating only to parts of the North of England, Wales and Scotland. This may explain why, in competition law terms, the OFT's fines are relatively low.

Mercedes-Benz and the three dealers - Cicely, Road Range and Enza - received 15% reductions in their fines for admitting to the infringement.

A fourth dealer was also involved in the infringements, but is set to avoid a fine because its level of cooperation was sufficient to secure immunity under the OFT's leniency regime.

This case underlines the importance of businesses ensuring competition law compliance in the context of supplier/dealer relationships.

In many industries, suppliers work closely with their dealers to help promote sales of their products. However, suppliers need to be aware that there is a limit to the extent to which they can coordinate the activities of their dealers. They must also be wary of becoming implicated in potentially anti-competitive conduct by their suppliers.

Knowing whether the boundaries lie will usually form a key part of suppliers' competition law compliance programmes.