VW, Fiat, Ford face probe in Brazil on auto-parts policies

[NINETY EIGHT REGENCY]

VW, Fiat, Ford face probe in Brazil on auto-parts policies

Automotive News Europe -- December 16, 2010 14:03 CET

BRASILIA (Bloomberg) -- Brazil's antitrust agency ordered an investigation into automakers Volkswagen AG, Fiat S.p.A. and Ford Motor Co. to find out whether their policies toward auto parts suppliers are abusive.

The agency, known as Cade, wants to determine if the automakers are “abusing their economic power and illegally exercising their property rights on the auto parts,” Cade said Thursday in Brasilia.

The investigation was requested by Brazil's federal association of partsmakers, known as Anfape, which claims the automakers, based on their intellectual property rights, are using lawsuits and other means to hinder competition from independent partsmakers.

The automakers' rights are supported by Brazil's law on patents and intellectual property, and confirmed by multiple judicial decisions, Fiat and Ford lawyers said during Cade's session today in Brasilia. Volkswagen's lawyer made no comments.

Anfape is asking Cade to “restrict in a generic way” the law on intellectual property and patents, said Fiat's lawyer Lauro Celidonio Gomes dos Reis Neto.

The judicial system “has already considered Ford's behavior legitimate,” said Ricardo Inglez de Souza, a lawyer for the the automaker.

Volkswagen gets the largest share of auto sales in Brazil, followed by Fiat, General Motors Co. and Ford, according to November data from the National Vehicle Manufacturer's Association.

Fiat announced yesterday it will invest 3 billion reais ($1.77 billion) in a new car factory in Brazil, as it seeks to boost sales in the Italian company's second-biggest market by revenue.

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