Volkswagen rejects anti-competitive allegation by Prevent

Volkswagen on Tuesday rejected allegations of being anti-competitive after parts supplier Prevent Group took legal action against the automaker in the U.S. District Court in Detroit.

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

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

Prevent stated it was seeking damages in excess of $750 million, accusing Volkswagen of using its market power to squeeze smaller suppliers who had to agree with their “unfair terms and prices” or face bankruptcy.

In 2016, Volkswagen and two of its providers, one which was part of Prevent, resolved a contract dispute that had impacted output at over half of the automaker’s German plants.