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Volkswagen to appeal against new EC fine

Volkswagen is to appeal against a European Commission fine of euros 31m (£18.65m) for allegedly fixing new car retail prices in Germany.

Announced earlier today in Brussels, it comes three years after the car maker was fined a record euro 102m (£61.3m) for restricting cross-border sales - a figure later reduced to euro 90m (£57m) by the European Court of First Instance, but which upheld the EC decision that Volkswagen had seriously infringed competition rules by preventing German and Austrian customers from buying in Italy.

Today's fine for “serious infringement of competition rules” – dismissed by VW as “disproportional” - stems from the introduction in 1996 of a new Passat model. Volkswagen is said to have instructed its German dealers to stick rigidly to list prices and not offer discounts, but the manufacturer insists there were no agreements that violated EU laws.

Other manufacturers are understood to be under investigation by Brussels officials for similar claims of price maintenance and other restrictions outlawed under European Competition rules.

The European Commission issued a warning to manufacturers in February about restrictive selling techniques after finding new car prices in the UK were still higher than in the rest of Europe, despite reduced list prices and a fall in the value of the pound.

An EC statement at the time said: “Competition Commissioner Mario Monti has reaffirmed his commitment to investigate restrictive practices by car manufacturers that impede EU citizens.”

Meanwhile the car industry is attempting to convince the European Union to renew from September 2002 the Block Exemption, the rules which allow manufacturers to sell cars exclusively through dealerships. A consultancy group commissioned by Mr Monti will report on Block Exemption and the impact of various alternatives to current car sales and distribution arrangements.

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