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GM gets European rap
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September 20, 2000: 11:01 a.m. ET
EU fines General Motors unit $36M for blocking buyers who sought low prices
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LONDON (CNNfn) - The European Union slapped the world's No. 1 automaker General Motors Corp. with a  43 million ($36.4 million) fine on Wednesday for stopping EU citizens from shopping around for their new GM car by buying from a neighboring country where prices are cheaper.
GM's Dutch importer Opel Nederland BV prevented non Dutch-based consumers from buying Opels in the Netherlands between September 1996 and January 1998, said the European Commission, the executive arm of the 15-nation EU.
For new car buyers in EU nations where auto prices are high, it has become increasingly attractive to seek the cheapest new car prices by shopping beyond their home country. GM's action hindered the efforts of consumers to take advantage of price differentials for identical models of 25 percent or more between EU countries.
"The commission is determined to intervene in cases where measures taken by undertakings jeopardize the proper functioning of the single market," EU Competition Commissioner Mario Monti said. "Such measures constitute a very serious infringement of European competition rules and must be dealt with severely."
The commission raided the offices of Opel and two auto dealerships in 1996 because it said the staff were acting under instructions from GM (GM: Research, Estimates) to block sales of cars in the Netherlands to consumers from Germany and the U.K.
The commission last April sent Opel a legal warning over practices that it alleged were designed to discourage foreign consumers. Carmakers argue that selling cars to customers outside their own country reduces loyalty to local dealers.
Dealers were told through sales campaigns that they world lose bonus payments if they continued sales to consumers from other countries, the Commission found.
"Opel Nederland is very disappointed that the commission has chosen to impose a fine in this matter," said a spokesman for the GM unit, declining to comment further until it had assessed the decision.
Volkswagen AG (FVOW), Europe's biggest car maker, was fined a record 90 million by an EU court for illegally strong-arming its Italian dealers over a three-year period. The fine was less than the 102 million that European Commission officials had sought.
The commission said Opel's fine was less than Volkswagen because it broke the rules over a shorter period of time, 17 months compared to Volkswagen's 3 years.
The commission said the 43 million, the fifth-largest fine it has levied, represents 4.4 percent of Opel Nederland's revenue in 1999, or just 0.2 percent of GM Corp.'s revenue in western Europe.
Companies infringing European rules can be fined a maximum of 10 percent of their revenue.
DaimlerChrysler AG (FDCX), PSA Peugeot Citroen SA (PUG) and Renault SA (PRNO) are also under investigation by the Commission for allegedly blocking cross-border sales. 
--from staff and wire reports
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