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Auto parts supplier Prevent sues Volkswagen for suppressing competition

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Via Reuters Finance

FILE PHOTO: The revised logo of German carmaker Volkswagen AG is pictured during a preview of the world’s biggest automaker at the international Frankfurt Motor Show IAA in Frankfurt, Germany September 9, 2019. REUTERS/Wolfgang Rattay

(Reuters) – Volkswagen parts supplier Prevent Group on Monday filed a lawsuit alleging the German automaker (VOWG_p.DE) used anticompetitive tactics to stop larger suppliers like the company from acquiring smaller rivals in the United States.

In the lawsuit filed in the U.S. District Court in Detroit, the auto parts supplier said Volkswagen extracted written agreements from suppliers not to sell themselves to Prevent Group.

Volkswagen did not immediately respond to a Reuters request for comment.

The company, which is seeking damages in excess of $750 million, said that after the diesel emissions scandal, Volkswagen used its market power to squeeze smaller suppliers and stop any acquisitions to cut costs.

Volkswagen’s lower-tier suppliers had no choice but to suffer bankruptcy or comply with Volkswagen’s “unfair terms and prices”, Prevent said in a statement.

In 2016 reut.rs/2OnW5fN, Volkswagen and two of its suppliers, a part of Prevent, resolved a contract dispute that had hit output at more than half of the automaker’s German plants and threatened to undermine its recovery from the diesel emissions scandal.

Reporting by Sanjana Shivdas in Bengaluru; Editing by Arun Koyyur


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