Spanish Land Rover Dealers Fined for Price Fixing

MADRID – A government watchdog agency fines 10 Land Rover dealers €3.2 million ($3.4 million) in a second investigation into suspected price-fixing activities.

The Commission for Market and Competition probed allegations that seven Madrid-area and three Barcelona-area dealers collaborated not only to fix prices but also secretly exchange strategic information within an organizational framework similar to that of a cartel. The dealers, for example, were suspected of setting maximum discounts on new Land Rover models.

Fines range from €939,313 to €40,697 ($1 million to $43,500). The commission also levied a €14,514 ($15,500) fine against ANT Servicalidad, a business-appraisal service which was penalized the same amount three times in an earlier investigation of 45 Toyota, Hyundai and Opel dealers.

In both probes ANT was found to have used secret shoppers to monitor dealer compliance with the price-fixing agreements. The company was fined only once in the latest case because it involved only Land Rover dealers.

The commission also imposed a €45,594 ($48,800) fine against Horwath Auditors Spain, a Madrid-area company accused of conducting activities similar to those of ANT. Investigators obtained much of their evidence from these two companies.

The Land Rover dealers have not indicated whether they will appeal the fines, nor have the Toyota, Hyundai and Opel dealers sanctioned a total of €9 million ($9.5 million) in the earlier investigation.

The maximum fine against an offending company is 10% of its previous fiscal year’s profits. Average fines in the latest case are higher because several dealers sell other high-end brands including Jaguar, Ferrari and Aston Martin in addition to Land Rover.

Regulators now are investigating suspected price-fixing by 90 SEAT, Volkswagen and Audi dealers and 12 Audi distribution subsidiaries. VW’s Spanish subsidiary SEAT denounced the dealers targeted in the earlier investigation in a possible bid to win significant reductions in penalties for whistleblowers.

The Spanish auto dealers group, FACONAUTO, said after the initial investigation that the fines were imposed without evidence. It claims the country’s car market is competitive, citing an 8.5% drop in prices in the past three years.