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Volkswagen accused of anticompetitive conduct by parts supplier

Jef Feeley
Bloomberg

Volkswagen AG allegedly waged a campaign to “demolish” a Bosnian parts supplier by conspiring to freeze it out of the market and denigrate it in the press, according to a U.S. lawsuit.

In a suit filed Monday in federal court in Michigan, Prevent Group claimed it was targeted by VW after a 2016 price dispute tied to canceled orders for seat covers and transmission cases that forced the carmaker to temporarily shut down plants making its lines of Golf and Passat cars.

According to the suit, VW officials, including Ralf Brandstatter, head of its main car group, retaliated by illegally launching a conspiracy, code-named “Project 1,” to drive Prevent out of business.

The aim was to send a “warning to other suppliers about what will happen if they stand up to Volkswagen’s anticompetitive terms and prices,” Prevent said in the 56-page complaint.

VW officials Monday dismissed the suit as part of a failing legal effort to coerce the carmaker, based in Wolfsburg, Germany, into acknowledging Prevent’s complaints.

“We believe this new lawsuit is just the latest in a series of pressure tactics in a years-old dispute that follows extensive litigation in Germany, where Prevent Group has repeatedly lost in court and has been found to engage in behavior that amounts to extortion,” VW said in an emailed statement.