The Commission's allegations that Volkswagen had breached article 81 which is intended to catch anti-competitive agreements have been struck down by the Court of Justice which had held that the Commission failed to indicate actual acquiescence between the dealers and Volkswagen.
Volkswagen has a number of agreements with car dealerships throughout Europe. Generally, the dealers are granted an exclusive right to sell Volkswagen cars in return for undertaking to promote the interests of Volkswagen. In this respect, Volkswagen can recommend the prices of their products but the recommendations are stated to be non-binding.
This case arose from Volkswagen's action in sending out letters and circulars to its dealerships asking them to grant either limited discounts or no discount at all in relation to the Volkswagen Passat model. The Commission was of the opinion that this behaviour breached European competition law.
The Court of Justice held that the Commission failed to indicate actual acquiescence between the dealers and Volkswagen. On appeal, the case was dismissed.
Of importance in this case is the reinforcement by the court that it is possible to deduce from the actions of the parties involved that tacit acquiescence exists. This case should serve as a reminder to businesses that agreements need not be in writing to breach competition law.