N.Y. Settles with Auto Dealers for Price-Fixing

August 11, 2005

New York Attorney General Eliot Spitzer announced a settlement that resolves allegations of price-fixing and customer allocation by Holtz House of Vehicles Inc., located in Rochester, and Towne BMW Inc., located in Buffalo.

An investigation by the Attorney General’s Antitrust Bureau reportedly found that, in an effort to suppress competition, two former employees at the competing BMW dealerships discussed with each other retail selling prices available to customers, and sought to divide customers by geographic area.

The communications between the dealership employees included verification of prices quoted by Towne employees to customers from the Rochester area who were seeking to, or had received, prices quoted from Towne. The communications also included verification of prices quoted to Buffalo area residents who sought quotes at the Holtz dealership in Rochester. In some cases the employees at the dealerships called each other to compare price quotes and also to discourage competition between the dealerships.

“Customers are entitled to shop and buy cars at prices that each dealer sets by itself,” Spitzer said. “This case should be a wake-up call to auto dealers in New York that they must compete independently, without colluding on prices or allocating customers.”

In settling the case, each dealership agreed to pay $5,000 to the State for the costs of the investigation, and each will implement an antitrust compliance program.

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