VW rejects anti-competitive allegation by parts maker Prevent

FILE PHOTO: The revised logo of German carmaker Volkswagen AG is pictured during a preview of the world's biggest automaker at the international Frankfurt Motor Show IAA in Frankfurt, Germany September 9, 2019. REUTERS/Wolfgang Rattay

(Reuters) - Volkswagen VOWG_p.DE on Tuesday rejected claims it had engaged in anti-competitive behavior after parts supplier Prevent Group sued the German carmaker in the U.S. District Court in Detroit.

The lawsuit said that Volkswagen had extracted written agreements from suppliers not to sell to Prevent, which amounted to anti-competitive behavior.

“This suit is completely unfounded. We will vigorously contest it using all the judicial procedures available to us,” VW said in a statement, adding that Prevent had disrupted production by halting deliveries in Germany in 2016 and 2018.

Prevent said it a statement it was seeking damages in excess of $750 million, alleging Volkswagen used its market power to squeeze smaller suppliers who had to comply with “unfair terms and prices” or face bankruptcy.

In 2016, Volkswagen and two of its suppliers, one which was part of Prevent, resolved a contract dispute that had hit output at more than half of the automaker's German plants.

Reporting by Jan Schwartz in Hamburg, Sanjana Shivdas in Bengaluru; Editing by Arun Koyyur and Alexander Smith