Italy fines car finance cartel 678 mn euros

Italy’s anti-trust authority said Wednesday it has fined a swathe of top car makers, including BMW, Fiat-Chrysler, Ford and Toyota, 678 million euros (USD 776 million) for operating a financing cartel.

The car manufacturers and their respective banks which offer financing to customers purchasing vehicles were found guilty of running a cartel from 2003 to 2017, the AGCM competition authority said in a statement.

Cartel members also included General Motors, PSA (Peugeot-Citroen) finance institutions, Renault, Volkswagen, Santander Consumer Bank, and the Assofin and Assilea trade associations.

They “put in place an anti-competition agreement, between 2003 and 2017, to alter the competitive dynamics in the market of car sales… through financing,” it said.

The AGCM noted “a single, complex and continuous agreement concerning the exchange of sensitive information on quantities and prices.”

Germany’s Daimler and its Mercedes Benz Financial Services Italia unit reported the cartel, of which it was a member, and therefore received “total immunity” in return, the authority said.

“Considering the gravity and duration of the infringement” the authority imposed a total fine of 678 million euros.


Because there are only a few large firms in oligopolistic markets, they often have a strong incentive to cooperate, rather than compete, with one another on output and pricing decisions. The firms in a particular industry may form an official organization through which price and output decisions are agreed upon. This is called a CARTEL. And in this case, BMW, Fiat-Chrysler, Ford, and Toyota have formed a financing cartel. The price consumers pay will be higher and with lower output(consumer surplus lower as well). Considering the fact that less quantity is being consumed, it does not reach the socially optimum level and allocative efficiency is not achieved.

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