Mergers & Antitrust Law News

Volkswagen Accused of Anticompetitive Behavior in New Suit (1)

Nov. 19, 2019, 12:37 AMUpdated: Nov. 19, 2019, 4:26 PM

Volkswagen AG and its American subsidiary were hit with a lawsuit in Michigan federal court Nov. 18 by automotive parts supplier Prevent Group, which accuses the auto giant of anti-competitive behavior aimed at stopping Prevent from acquiring smaller suppliers.

Prevent says the automaker kept the international parts supplier from acquiring smaller distressed competitors in order to “maintain its stranglehold over suppliers of automotive component parts.”

Volkswagen got written agreements from suppliers to refuse to sell themselves to Prevent and otherwise exerted its influence over weaker suppliers with a “high dependency” on the company, according to the complaint.

“This strategy was carried out with the purpose and effect of suppressing competition, maintaining Volkswagen’s market power over suppliers, and in the process causing massive losses to Prevent,” the complaint says.

Cause(s) of Action: Sections 1 and 2 of the Sherman Antitrust Act; Michigan antitrust law; tortious interference; conspiracy; unjust enrichment.

Relief: Treble damages; attorneys’ fees; permanent injunction; restitution.

Response: Volkswagen rejects the claims and will defend itself against them, the company said in an emailed statement. Volkswagen will also seek money from Prevent for the damage caused by the stopped parts supplies in 2016 and 2018, it said.

Attorneys: Prevent is represented by Boies Schiller Flexner LLP and the Miller Law Firm PC.

The case is Prevent USA Corporation et al v. Volkswagen, AG et al, E.D. Mich., No. 2:19-cv-13400, complaint filed 11/18/19.

--With assistance from Christoph Rauwald (Bloomberg).

(Updates Nov. 18 story with comment from Volkswagen)

To contact the reporter on this story: David McAfee in Los Angeles at dmcAfee@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Nicholas Datlowe at ndatlowe@bloomberglaw.com

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