Jaguar Land Rover fined £4.6m after 'illegal agreement' with other manufacturers

The company, which has major manufacturing sites in Wolverhampton and Solihull, was one of ten car manufacturers fined over £77m by the Competition and Markets Authority(CMA) this week, who ruled that all ten had illegally agreed not to compete against one another on advertising claims relating to recycled cars.

Car manufacturers are legally required to include details on recyclability in their advertising, so customers can take this into account before making a purchase.

However the CMA found that ten companies had a "gentleman's agreement' in place, in some cases for more than ten years, which said that they would not compete against one another when advertising what percentage of their cars could be recycled.

The CMA launched the investigation in 2022 after Mercedes-Benz reported their involvement.

"Most manufacturers took part in this practice from May 2002 to September 2017, with Jaguar Land Rover joining in September 2008," said the ruling, which was published this week (April 1).

"The agreement was set out in a document called the ‘ELV Charta’ – sometimes referred to as a gentleman’s agreement – and sought to 'avoid a competitive race' amongst the manufacturers in relation to advertising claims of this kind. This agreement was referenced in emails, internal documents and meeting minutes, and certain manufacturers challenged others when they breached this agreement."

Jaguar Land Rover was fined a total of £4,626,404, which included a 20 per cent settlement reduction for admitting their involvement in the scheme. Ford was fined £18,541,929, Volkswagen hit with a penalty of £14,755,900, BMW with £11,060,925, while Nissan and Renault shared a fine of £9,979,826. Toyota, Peugeot Citroen, Mitsubishi and Vauxhall were all issued with smaller penalties.

Mercedez-Benz were immune from a financial penalty having reported the incident.

Trade bodies, the Society of Motor Manufacturers & Trader(SMMT) and the European Automobile Manufacturers' Association (ACEA) were fined a combined total of £160,800 after the CMA ruled they had "facilitated" the agreements.

Meanwhile, a separate ruling issued by the European Commission this week also issued fines totalling €458 million to 15 major car manufacturers and the ACEA, which included a €1,637,000 fine for JLR relating to activities within the European Union.

Lucilia Falsarella Pereira, Senior Director of Competition Enforcement at the CMA, said: "Agreeing with competitors the prices you’ll pay for a service or colluding to restrict competition is illegal and this can extend to how you advertise your products. This kind of collusion can limit consumers’ ability to make informed choices and lower the incentive for companies to invest in new initiatives.   

"Today’s fines show our commitment to taking action when competition law is broken. In accordance with our leniency policy, we’ve given discounts to those who came forward with information and co-operated at an early stage, which helps to get the swiftest outcomes.

"We recognise that competing businesses may want to work together to help the environment – in those cases our door is open to help them do so." 

A spokesperson from JLR said the company had taken steps to ensure it complies with competition law in future.

"JLR cooperated with both authorities during their investigations. We are committed to complying with competition law and have taken steps to further strengthen compliance," they said.

The manufacturers and industry bodies have until June 2 to pay their fines.