A suit filed in federal court in New Jersey accuses German luxury carmakers of colluding to sell their cars at inflated prices in the United States.
The suit accuses the makers of Mercedes-Benz, BMW, Audi, Porsche and Bentley vehicles of participating in a 20-year conspiracy to unlawfully increase their vehicles’ prices through collaboration on technology, suppliers and emissions controls, according to the suit. Filed on Tuesday on behalf of a nationwide class of car buyers, the suit comes amid media reports that the companies face price-fixing investigations in the U.S. and Europe. A similar suit was filed on behalf of Canadian car buyers Tuesday in Montreal.
According to the suit, the Department of Justice announced on Tuesday that it is investigating the antitrust allegations, the plaintiffs said. The European Commission announced on July 22 that it was investigating antitrust allegations against the defendants, and the Bundeskartellamt, Germany’s antitrust regulator, has confirmed that it received information from the defendants that may relate to operation of an antitrust cartel dating to the early 1990s. The statute of limitations was tolled by fraudulent concealment because no information about the alleged antitrust activities were available until July 21, when German news magazine Der Spiegel reported that Volkswagen had disclosed participation in antitrust violations resulting from coordination with other German automakers about development of vehicles, cost suppliers and strategies for controlling emissions in diesel engines from at least the 1990s to the present, the suit said. News about the allegations caused the defendants’ share prices to plummet in German stock markets.
The suit said demand for German luxury cars in the U.S. is inelastic, meaning that an increase in price will not bring about a dramatic reduction in sales. “Inelastic demand is a market characteristic that facilitates collusion, allowing producers to raise their prices without triggering customer substitution and lost sales revenue,” the suit said.
The suit, brought on behalf of a nationwide class of car buyers, brings claims for violation of the Sherman Act and for unjust enrichment and for violations of antitrust and consumer protection laws of the 50 states. The plaintiffs seek statutory damages, disgorgement of profits, interest and costs of suit.
The suit is filed by Robins Kaplan of New York and Carella Byrne Cecchi Olstein Brody & Agnello of Roseland. Attorneys for the plaintiffs did not respond to requests for comment about the suit.
Daimler North America Corp., the parent company of Mercedes-Benz, said in a statement, “We consider this class action suit to lack merit. We will defend ourselves by all legal means.”
Representatives of the other defendants did not respond to requests for comment.