A potential class action lawsuit could be launched against German vehicle manufacturers.
German luxury vehicle makers are under investigation for conspiring on numerous aspects of their cars sold in the US, including “clean diesel” technology, costs, suppliers, and pricing. Seeger Weiss is investigating possible antitrust and consumer protection violations against a number of German auto brands.
Seeger Weiss is investigating a potential class action to bring potential antitrust and consumer protection claims against Volkswagen and Daimler, manufacturers of luxury brands Bentley and Mercedes-Benz, along with three other luxury car manufacturers, Porsche, Audi and BMW. Their alleged actions led to an increase in the cost of the vehicles, as well as a variety of other outcomes.
Der Spiegel Magazine Reveals Conspiratorial Behavior
According to a report in Der Spiegel magazine, German automotive manufacturers engaged in years of conspiratorial behavior in an effort to increase the prices of German Luxury Vehicles.
The German manufacturers named in the lawsuit include:
Volkswagen and Daimler have also reportedly admitted they were involved in the conspiracy, but have agreed to work with the European Commission in exchange for leniency.
Der Spiegel launched its investigation following a 2016 raid that involved 50 employees of the authority, aided by local police and regional law-enforcement officers.
The automakers are accused of violating federal and state antitrust laws, unfair competition laws, consumer protection laws, and unjust enrichment laws. The investigation revealed the automakers have been working together since the 1990s, sharing commercially sensitive information and participating in illegal agreements. It is likely discussions also involved the size of tanks for AdBlue fluid for diesel autos.
AdBlue is added to diesel engines to neutralize the toxic and potentially fatal chemical they are known to emit. It’s only effective when used properly, which can increase production costs. To avoid this, car makers put AdBlue in gas tanks smaller than required, which resulted in increased pollution. Knowing they were averting regulators, they agreed to limit the size of their tanks and conspire to prevent their actions from being detected.
Investigation Reveals Collusion Over Technical and Design Details
According to the report, one of the goals of collusion was to “obstruct competition, with the carmakers agreeing on costs for components or technical details such as convertible roofs.”
The Der Spiegel report revealed that over the course of the last five years, the vehicle manufacturers met during at least 1000 meetings involving more than 200 employees to discuss the development of vehicles, emissions technology, suppliers and markets, and costs. The European Commission (EC) continues to investigate whether anti-competitive and illegal activities occurred.
The scandal is expected to affect carmakers throughout Asia and North America tech companies vying for a larger piece of auto industry’s revenue.
It’s not uncommon for carmakers to discuss how to implement new emissions standards and technologies, but in this case, there is a question of whether the talks among German manufacturers constituted anti-competitive behavior. According to those familiar with the details of the case, had the actions of the car makers been legal, there would’ve been no effort to hide what they were doing.
If the current investigations reveal there was indeed collusion and a breach of EU cartel rules, the German automakers involved face fines of as much as 10% of their global revenue, which would equate to billions of dollars.
Class Action Lawsuits Could Cost Manufacturers Even More
In addition to fines levied by the EU, car makers also face potentially costly legal action.
As a result of discovery of the conspiracy, competition authorities from multiple jurisdictions, including the United States, have launched investigations into the conduct of the automakers.
One class action lawsuit includes four claims for relief, including:
- Violation of Section 1 of the Sherman Act on behalf of Plaintiffs and the Nationwide Class
- Violation of State Antitrust Statutes on behalf of Plaintiffs and the Damage Class
- Violation of State Consumer Protection Statutes on behalf of Plaintiffs and the Damage Class
- Unjust Enrichment on behalf of Plaintiffs and the Damage Class
Though the collusion allegedly occurred over the course of multiple decades and many people were affected several years ago, the statute of limitations did not begin until the collusion was revealed in July 2017. Those who purchased or leased a new vehicle in the United States under one of these brands could be eligible to sue under federal and state antitrust and consumer protection laws for inflated pricing and other injuries.
The law allows plaintiffs to recover compensation for over-pricing and other harm when companies unlawfully collude instead of compete. If you have questions or you believe you could be a representative of the class, contact us for more information.