Corp-Ethics.com - Report: Peugeot Citroen hit with EU fine

Company	Peugeot Citroen [Company Info]
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Date	Issue	Title
5th Oct 2005	Other Issue	Peugeot Citroen hit with EU fine

Report

The European Commission has ordered French car group PSA Peugeot Citroen to pay a 49.5m euros ($59m; £34m) fine for breaking competition rules.

Brussels found that the firm's Peugeot and Citroen marques blocked the cross-border sale of new cars from the Netherlands, where prices are cheapest.

The Commission said this prevented people elsewhere in the European Union from benefiting from the single market.

PSA Peugeot Citroen said it took notice of the decision.

It added that it regretted its arguments to the Commission had "not been convincing".

The Commission said PSA Peugeot had made "a very serious violation" between 1997 and 2003 of a European Union ban on restrictive business practices.

"This decision demonstrates the Commission's determination to use the EC Treaty's competition rules to prevent companies from depriving consumers of the benefits of the single market," EU Competition Commissioner Neelie Kroes said.

"In the motor vehicle sector, such practices are particularly harmful, since the car represents the second most expensive item in the household budget."

A typical Peugeot 206 model can be as much as 16% cheaper in the Netherlands than in France.

Other carmakers have previously been fined by the Commission for similar anti-competition practices, such as DaimlerChrysler.

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