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£2.6m fine for Mercedes and dealers over cartel probe

Mercedes-Benz and three commercial vehicle dealers have been fined a total of £2.6m for infringing competition law.

The OFT has today announced that Mercedes-Benz and three of its commercial vehicle dealers, Ciceley, Road Range and Enza, have admitted infringing competition law and agreed to pay fines totalling £2.6 million.

Provided it continues to cooperate with the OFT, a further dealer, Northside, which has also admitted infringing competition law, will avoid a fine, having been the first company to come forward after the investigation commenced to provide valuable evidence of collusion in return for immunity from penalty under the OFT's leniency policy.

Today's announcement concerns three separate admitted infringements of competition law involving the distribution of Mercedes-Benz commercial vehicles.

The dealers involved are mainly active in areas within the North of England and parts of Wales and Scotland. The nature of the infringements varies but all contain at least some element of market sharing, price coordination or exchange of commercially sensitive information.

Not every settlement party was involved in every infringement and the conduct, products and duration vary from infringement to infringement. The infringements being settled relate to: the distribution of vans between 15 January 2008 and 26 January 2010, involving Ciceley and Northside; the distribution of vans between 1 February 2008 and 26 January 2010, involving Ciceley and Road Range; the distribution of trucks between 8 December 2009 and 26 January 2010, involving Ciceley, Enza, Mercedes-Benz and Road Range.

Ali Nikpay, OFT senior director of cartels, said: "These cases send a clear signal that the OFT will take firm action against companies that collude to deny customers the benefit of fair competition regardless of the size of the firms involved or geographic scope of the investigation.

"These cases also underline that the OFT can uncover cartels even in cases where the businesses involved do not blow the whistle, as well as being a concrete illustration of the benefits of businesses acting quickly and cooperating at the earliest opportunity so as to qualify for immunity from fines."

The agreed fines include a 15% reduction from the total penalties of £3.07 million that the OFT would otherwise expect to impose, to reflect the companies' admissions and agreement to a streamlined administrative procedure.

Breakdown of the fines:
Mercedes-Benz UK Limited - £1,492,646

Road Range Limited - £115,774

Ciceley Commercials Limited - £659,675

Enza Motors Limited-  £347,198

Mercedes-Benz UK has issued the following statement in response to the OFT's announcement:

"Mercedes-Benz regrets the incident and has learned a lot from it.

"The company has strengthened its internal controls, and every member of staff participates in comprehensive and ongoing Integrity training programmes.

"The company and its staff have fully co-operated with the investigators over the past three years.

"This thorough OFT investigation took three years to complete, and the agreed settlement with Mercedes-Benz UK relates to one meeting held in late 2009. The settlement figure, based on company turnover, is £1.49 million.

"The settlement reached with the OFT draws the investigation into this matter to a close.

"Mercedes-Benz takes its responsibilities under competition law seriously and has taken all appropriate steps to ensure all its staff comply fully with the law."

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  • P. Lattimer - 21/02/2013 17:11

    about time mercedes were brought to book! they should be further fined for offering car warranties they refuse to honour, by trying to force you to have the car dealer serviced throughout its entire life, and also restricting the availability of diagnostic equipment to dealers and certain specialists only. i know of no other manufacturer that i cannot get diagnostic equipment for, for a reasonable price. for the record i have always worked in the motor trade and believe the warranty and diagnostics situation breaches peoples right to have their car serviced where they like, and this should also be investigated! as an owner myself of a mercedes which is 11 years old and extremely rusty in places i never thought a car COULD rust (and the car supposedly has a 30 year corrosion warranty for rust from the inside outwards, which ALL of mine is as ive watched it develop as the bubbles have started to flake off because MB wont honour the warranty as i service it myself) i am really fed up of big companies like this ripping off the british public and getting away with it!

    • Ludders - 23/02/2013 13:36

      @P. Lattimer - Big companies like this ripping off the British Public?? happens to be one of the UK's largest employer, it does more for local causes and charities than most, does your operation do that? You say you are in the trade, why doesn't your dealership invest in the equipment.....Mercedes-Benz dealers do!......have you gone through intensive training on these models? I doubt it! Do you know the history of your car, from day 1? Has it had poor repairs....I know of cars that are 18 years old that have benefitted form the corrosion warranty.......guess what.....because they've been maintained as per the schedule......if you don't like the rules, then don't quibble!

    • P. Lattimer - 25/02/2013 14:31

      @Ludders - as a matter of fact, yes i do know the cars history from day 1. it sat in a showroom prior to us buying it. if you do a search on the internet there are THOUSANDS of cars like mine that have been affected by premature rust, especially in places that cant POSSIBLY have had stonechips etc. mercedes dealers have also stated that they do NOT have time to carry out the necessary corrosion checks during a service! maintaining them as per schedule does NOT mean they have to return to the dealership to be correctly serviced. in fact a friend of mine recently had his car serviced ('B'service) at his local dealership, and the WHEELS were never removed, the BRAKES were never checked (for siezed pads etc) etc. strangely, i have the distinct feeling you actually WORK for mercedes, probably in the PR department or similar. as for buying the MB diagnostic equipment, as i am now operating on my own, i cannot possibly afford, as a new venture, to lay out the sort of money mercedes want for their diagnostic equipment. and as for the dealer technicians 'in depth training' on their cars, the previous car i had I was having to tell THEM what was wrong with the car!!!! in the end, i repaired it MYSELF!!!!!!! does mercedes really do much for local causes? i suspect not at the moment. NO dealership from ANY brand is willing to take on people who are currently unemployed through no fault of their own. that is the reason WHY i am starting out myself. and yes, mercedes dealers splash out on the latest diagnostic equipment. BUT if theres no diagnostic socket, (older cars) or its not a mercedes, theyre USELESS!!!!!! they are simply trying to get around block exemption laws by avoiding warranty claims, making equipment unaffordable etc!

  • toby holland - 22/02/2013 20:05

    Cheats NEVER prosper !!

    • P. Lattimer - 25/02/2013 14:40

      @toby holland - thats the problem though, they still seem to be doing ok from it! but it WILL bite them eventually!