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FTC fines Benz for colluding on repair prices

Sept 27,2017
The Fair Trade Commission on Tuesday fined Mercedes-Benz Korea 1.32 billion won ($1.16 million) for colluding with local dealerships on rates for repair and maintenance.

The antitrust regulator also imposed a 468 million won fine on eight dealerships, including Hansung Motor and the Class Hyosung.

According to the Fair Trade Commission, Mercedes-Benz Korea convened a meeting with dealerships in 2009 to discuss raising the hourly rate for car repair and maintenance services. Dealerships then collectively raised rates by 15 percent in June that year.

The commission added that Mercedes-Benz Korea and its dealers applied the higher rates to only certain car owners, specifically those who went to the repair shop without going through their insurance companies to avoid raising their premiums.

Vehicles that went through insurance companies were not charged the higher rates.

The Fair Trade Commission speculated the rate increases were done to improve the balance sheets of dealers.

Following the commission’s decision, Mercedes-Benz Korea issued a statement denying the allegations and said it would appeal in court.

“Mercedes-Benz Korea does not agree with the Fair Trade Commission’s decision that it colluded with eight dealerships to increase service rates in 2009,” the statement said. “The commission’s conclusion is based upon an obvious misconception about the relationship between Mercedes-Benz Korea and its dealers in connection with service rates.”

The company said that “there exists neither motivation to push for service rate increases nor facts indicating incitement for collusion” and that it actually opposed the rate hikes.

The automaker further explained that it only made a recommendation on service rates, but it was up for each dealer to “decide the actual rates freely and independently.” The sole purpose of the meeting in 2009 was to discuss measures “to improve service quality and management efficiency,” the company said.

Mercedes-Benz is one of the most popular import car brands in Korea alongside German rival BMW. In August, 5,267 new Benz vehicles were registered in Korea, beating out BMW’s 4,105, according to data from the Korea Automobile Importers and Distributors Association.


BY CHOI HYUNG-JO [choi.hyungjo@joongang.co.kr]