Mercedes 2004 Annual Report Download - page 156

As previously reported, the Antitrust Division of the U.S. Depart-
ment of Justice, New York Regional Office, opened a criminal
investigation in connection with the allegations made in a lawsuit
filed in 2002 in the United States District Court for the District of
New Jersey against DaimlerChrysler’s subsidiary Mercedes-Benz
USA, LLC (“MBUSA”), and its wholly-owned subsidiary Mercedes-
Benz Manhattan, Inc. The Department of Justice advised those
companies in the third quarter of 2003 that it had closed the
investigation and will take no further action. The lawsuit, certified
as a class action in 2003, alleges that those companies partici-
pated in a price fixing conspiracy among Mercedes-Benz dealers.
MBUSA and Mercedes-Benz Manhattan will continue to defend
themselves vigorously.
As previously reported, DaimlerChrysler received a “statement
of objections” from the European Commission on April 1, 1999,
which alleged that the Group violated EU competition rules by
impeding cross-border sales of Mercedes-Benz passenger cars to
final customers in the European Economic Area. In October 2001,
the European Commission found that DaimlerChrysler infringed
EU competition rules and imposed a fine of approximately €72
million. DaimlerChrysler’s appeal against this decision is still
pending before the European Court of Justice.
As previously reported, in 2003 approximately 80 purported
class action lawsuits alleging violations of antitrust law were filed
against DaimlerChrysler and several of its U.S. subsidiaries, six
other motor vehicle manufacturers, operating subsidiaries of
those companies in both the United States and Canada, the
National Automobile Dealers Association and the Canadian Auto-
mobile Dealers Association. Some complaints were filed in feder-
al courts in various states and others were filed in state courts.
The complaints allege that the defendants conspired to prevent
the sale to U.S. consumers of vehicles sold by dealers in Canada
in order to maintain new car prices at artificially high levels in the
U.S. They seek treble damages on behalf of everyone who bought
or leased a new vehicle in the U.S. since January 1, 2001.
DaimlerChrysler believes the complaints against it are without
merit and plans to defend itself against them vigorously.
As previously reported, DaimlerChrysler’s subsidiary, Daimler-
Chrysler Services North America LLC (“DCSNA”) is subject
to various legal proceedings in federal and state courts, some of
which allege violations of state and federal laws in connection
with financing motor vehicles. Some of these proceedings seek
class action status, and may ask for compensatory, punitive
or treble damages and attorneys’ fees. In October 2003, the Civil
Rights Division of the Department of Justice and the United
States Attorney’s Office for the Northern District of Illinois
advised that they are initiating an investigation of DCSNA’s credit
practices that focuses on DCSNA’s Chicago Zone Office. The
investigation follows a lawsuit filed in February, 2003, against
DCSNA in Chicago with the United States District Court for the
Northern District of Illinois that alleges that the DCSNA Chicago
Zone Office engaged in racially discriminatory credit and collec-
tion practices in violation of federal and state laws. In that
lawsuit, initially six individuals filed a purported class action
complaint on behalf of African-Americans in the region alleging
that they were denied vehicle financing based on race. They seek
compensatory and punitive damages, and injunctive relief barring
discriminatory practices. The lawsuit was later amended to
include Hispanic-Americans. DCSNA believes that its practices
are fair and not discriminatory. DCSNA intends to defend itself
vigorously against these claims.
The Federal Republic of Germany has initiated arbitration pro-
ceedings against DaimlerChrysler Services AG, Deutsche
Telekom AG and the consortium an introductory writ (see also
Notes 3 and 32). The Federal Republic of Germany is seeking
damages, including contractual penalties and reimbursement of
lost revenues, which allegedly arose from delays in the operabili-
ty of the toll collection system. Specifically, the Federal Republic
of Germany is claiming lost revenues of €3.56 billion plus interest
for the period September 1, 2003 through December 31, 2004,
and contractual penalties of approximately €1.03 billion plus
interest through July 31, 2004. Since some of the contractual
penalties are depending on time, the amount claimed as contrac-
tual penalties may increase. DaimlerChrysler believes the claims
of the Federal Republic of Germany are without merit and intends
to defend itself vigorously against these claims.
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