Originally Posted by
Daily Telegraph
Car makers confess: we've colluded on sales for 20 years
By Daniel Foggo
(Filed: 23/01/2005)
The British motor industry has admitted that all car manufacturers may have been illegally sharing sales information for more than 20 years.
Lawyers employed by the Society of Motor Manufacturers and Traders (SMMT), the industry's trade association, last week ordered the practice, in which all the car makers exchanged information, to be stopped immediately.
They believe that if it is found that the exchange of such sensitive information, introduced in the 1980s, is in contravention of British and European competition laws set up to combat cartels, both the society and the manufacturers could be liable for heavy fines.
The society fears that if the sharing of predicted sales figures is illegal, it could be linked to the historical price inequality between prices for cars in Britain and the rest of Europe.
This could leave the industry open to compensation claims from every person who bought a car during the past two decades.
A previous investigation by the British Competition Commission concluded that the restrictive way in which the car firms provided vehicles to their dealers had led to inequality in prices compared with the same models on the Continent. Paul Everitt, the head of policy for the society, said the decision last week to stop providing car manufacturers with information about each other's predictions had been taken due to "scrupulousness" by the body's legal department.
He said: "We are adopting a cautious approach until we have done the assessment as to whether we are complying with the law."
The concerns stem from a recent decision by the European Commission to pass the responsibility for ensuring that companies comply with competition laws to individual nation states. In turn, the onus has now been placed on British industries to regulate themselves.
The SMMT has belatedly realised that its practice of convening quarterly meetings attended by all the car makers to discuss their sales projections may have been breaching competition laws all along.
Until now, each manufacturer would supply the society with its predictions for total industry car sales for the coming year and the trade body would put these into charts which would be shown to all the supposed competitors.
Although average figures obtained by collating all the traders' figures would be later released to the media, the manufacturer-by-manufacturer breakdown was never made public by the society.
At its most recent quarterly meeting, which was held at the Vauxhall headquarters in Luton last Monday, the car makers' representatives were no longer allowed to see each other's figures.
Elaine Kellman, an independent lawyer who specialises in competition law at London solicitors Fox Williams, said: "If they were sharing information that was broken down into different markets and if it wasn't in the public domain, that could be indicative of anti-competitive practices."
"If the manufacturerswere seeing information on different markets, then they may well have a problem. Even the discussion and comment on information could be significant and if that's not in the public domain that could be a problem, too," she said.
Jean Francois Varet, a market analyst for Citroen, who attended the meeting last week, told The Telegraph: "Before this week we were sharing our forecasts but the society's legal department has said we are not sure of the legality of this information. So for the moment we don't share any more.
"I don't know the Renault or Peugeot forecasts for the year. We just have the average and that's it. That's what happened on Monday for the first time and that's what should happen in the future."
Mr Varet said he was reasonably confident that he and his competitors had not been breaking the law: "There might be a risk, but as it's a known tradition, I don't think there will be a problem."
A spokesman for the Office of Fair Trading, which has the power to fine companies up to 10 per cent of their annual turnover, said: "The crucial issue is whether or not the parties could use the information they receive in a way that affects competition between themselves."
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