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. Last Updated: 07/27/2016

EU Probes Daimler for Antitrust Breaches

STUTTGART, Germany -- DaimlerChrysler AG confirmed Wednesday that the European Commission had started proceedings against it over an alleged breach of antitrust rules, but disputed the charges.

A DaimlerChrysler spokesman said the EU had been investigating the group for the past two years but he did not give details of the allegations.

Volkswagen was fined 102 million euros ($110 million) over a similar case in January 1998, the largest penalty ever imposed by the European Union's competition watchdog on a single company.

Media reports have said that the group had been accused of forbidding its dealers in Belgium, the Netherlands and Spain from selling Mercedes vehicles to customers who were not residents of those respective countries.

"We have supported the investigation of the commission in a cooperative way from the start," a DaimlerChrysler spokesman said.

He said the group "never pursued a strategy of sealing off national markets within the European economic area."

"We never left our distribution networks in any doubt that sales to end-users in line with European competition rules were permissible."

DaimlerChrysler is accused in particular of ordering dealers in Germany, Belgium, the Netherlands and Spain not to sell cars to nonresidents in search of cheaper prices, the European Commission spokesman said.

DaimlerChrysler must now answer the commission's objections. The multinational may request a hearing to defend its case and could ultimately challenge any fine in the European courts.

Since the abolition in 1993 of national border controls in the 15-nation EU, the commission has fought attempts to fragment the market by preventing cross-border sales. Commission reports show prices varying by as much as 40 percent despite the European single market.

Under EU rules, companies can be fined a maximum of 10 percent of their annual turnover for breach of antitrust rules, but the Volkswagen penalty represented only 0.4 percent of its sales.