|
Volvo admits price fix
|
 |
July 9, 1999: 7:18 a.m. ET
Company confesses staff rigged prices of autos in the U.K.
|
LONDON (CNNfn) - Volvo admitted Friday to fixing car prices in Britain, following an investigation by the government's consumer affairs watchdog.
"This is a disgraceful case. A major and well respected car manufacturer colluded with dealers who were fixing prices by penalizing distributors who didn't toe the line," said John Bridgeman, Director-General of Fair Trading, the U.K.'s senior consumer protection officer.
He criticized "a blatant disregard for U.K. law and an indifference to the exploitation of customers."
Volvo said it was "horrified" by the finding. The company, now part of Ford, promised to upgrade staff training and introduce a new disciplinary code to prevent the abuses from occurring again in future.
The company blamed "a limited number of field force staff" that it admitted had been involved in "dealer pricing agreements".
"It has never been our policy to condone anti-competitive behavior," said Volvo Car U.K. managing director Gerry Keaney in a statement. "Now we have a tough new disciplinary code. Everybody is clear that any breach of the rules will not be tolerated."
Volvo promised to send all its dealerships a reminder not to engage in price-fixing.
Ford officials refused to comment on the issue, saying it was a matter for Volvo.
Under existing U.K. competition law, the Office of Fair Trading's powers are limited. However, Bridgeman noted that new legislation in effect next March will increase its powers. In particular, the office will be able to fine companies up to 10 percent of their U.K. revenue. Bridgeman warned of "substantial penalties in the future."
|
|
|
|
|
 |
|
.
