Class actions

Two separate class action suits launched against German carmakers alleging collusion

Days after the German news magazine Der Spiegel reported that for two decades more than 200 managers and engineers of three large German automakers met in 60 different task forces to secretly coordinate the “development of cars, costs, suppliers, and markets,” back-to-back class action lawsuits were launched in Quebec and Ontario.

In a suit filed this week before Quebec Superior Court, class representative Nick Bountounis alleges that the carmaker’s alleged anticompetitive and illegal price-fixing led to artificially inflated prices for the vehicles. Bountounis, “your average pére de famille” who works as a digital technician, leased two Volkswagen Jetta’s over the past seven years. In 2015 he leased a Volkswagen Jetta TSI for 48 months and is paying $342 monthly, and in 2011, he had a 48-month lease at a cost of $375.00 a month.

“Due to the defendants’ anticompetitive illegal activities, (Bountounis) was deprived of the benefit of a competitive market and therefore paid a higher price for both his Volkswagen Jetta leases,” according to the suit.

The class action, piloted by Montreal lawyers Joey Zukran and Michael Vathilakis, allege that the car manufacturers breached of articles 6, 7, and 1457 of the Civil Code of Quebec and sections 45 and 46 of the federal Competition Act.

“The applicant wants to hold Defendants accountable for their misconduct and is taking this action so that he and the Class members can recover the sums overpaid as a result of their collusion and price-fixing,” according to the class action suit. The German automakers “generated aggregate amounts in the billions of dollars while intentionally violating price-fixing laws.”

In Ontario a $1.1 billion class action suit was filed this week on behalf of all Canadians, excluding Quebec residents, who purchased or leased vehicles from the German car manufacturers beginning in the mid-1990s until present.

The notice of action filed by Strosberg Sasso Sutts LLP alleges that the German car manufacturers conspired to set the price, output, innovation, and technical standards of components used in the motor vehicles they manufactured, and that were sold in Canada. It also alleges that they colluded for over two decades and that the conspiracy caused and is causing significant loss and damage to consumers in Canada who purchased or leased motor vehicles manufactured by the defendants.

“If the allegations in the claim prove to be true, then Canadian consumers have been harmed by a long-standing cartel of German car manufacturers to provide inferior components in their vehicles while charging premium prices for these vehicles,” said David Wingfield, partner at Strosberg Sasso Sutts LLP, in a communiqué.

European Union antitrust regulators are apparently investigating allegations of a cartel among a group of German carmakers, said the European Commission earlier this week.

Earlier this year Ontario Superior Court Justice Edward Belobaba approved a $2.1-billion Canadian diesel emissions class action settlement plan. More than 100,000 people who purchased or leased certain Volkswagen or Audi vehicles with two-litre diesel engines that were caught up in an emissions cheating scandal will each receive a payment between $5,100 and $8,000.

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