Prevent Group Accuses Volkswagen of Anticompetitive Behavior in New Lawsuit
Automotive parts supplier Prevent Group has filed suit against Volkswagen AG and Volkswagen Group of America Inc alleging violations of federal antitrust laws, civil conspiracy, and tortious interference. Prevent, represented by litigation powerhouse Boies Schiller Flexner LLP, alleged that Volkswagen used anticompetitive tactics to stop larger suppliers like Prevent from acquiring smaller auto parts suppliers in the US, including at least seven based in Michigan. The complaint alleges “Small, fragmented, and pushed to the brink of insolvency, Volkswagen's lower-tier suppliers typically have no choice but to comply or die with Volkswagen's unfair terms and prices, the complaint states. If these smaller firms were acquired by a larger supplier like Prevent, Volkswagen feared that it would lose its ability to extract prices and terms that were below competitive levels.”
It said “When Prevent acquired a company called Car Trim that had been a supplier of parts for Volkswagen vehicles, this was the "last straw" for Volkswagen. In response, Volkswagen launched an anticompetitive campaign internally called Project 1, which is detailed in the complaint based on internal Volkswagen documents obtained from a senior source inside the Company. The purpose of this strategy was to stop any acquisitions of smaller, high dependency suppliers. Volkswagen tracked these suppliers on a secretive Problematic Suppliers List, monitored potential M&A activity, and then intervened to stop any sales that it deemed threatening to its market power.”
Prevent Group was a direct target of this anticompetitive campaign. For the past 15 years, Prevent Group has grown by acquiring smaller, Tier 2 and Tier 3 auto parts suppliers around the world, increasing their efficiency and output. Volkswagen deployed Project 1 to block at least seven other acquisitions by Prevent in the United States.
Source : Strategic Research Institute