German automakers under siege in U.S. courts, Part 2

The “Circle of Five” is a catchy sounding string of words, something that might aptly go with an intrigue-driven movie thriller or spy novel.

The “Circle of Doom” seems just as appropriate a title for similar purposes, though, and in fact would command utility for a group of actors outside the entertainment industry who are presently dealing with a quite dramatic reality themselves.

The first appellation noted above is an actual term often used to describe a major grouping of German car makers, which we referenced in our previous blog post. We noted in our August 8 entry the group’s current legal troubles in the United States, which a recent Bloomberg article pointed out “widen the scope of the latest scandal to hit the nation’s [Germany’s] auto industry.”

And the second reference, we submit, is immediately relevant, for it is unquestionably doom that is currently staring the CEOs and other top-tier principals of auto giants like Volkswagen, BMW and Mercedes-Benz in the face.

Here’s why: Those companies were slapped by two class action lawsuits filed in the U.S. last month that allege a host of wrongdoing being investigated by criminal and civil authorities.

Bloomberg states that the string of consumer fraud-related behaviors centrally includes the allegation that the consortium of automakers has colluded for years “to limit the pace of technological advances in their vehicles and stifle competition.”

One suit alleges that, among other things, the group has been “secretly stunting incentives to innovate” in order to keep costs down. And both legal filings charge the German companies as acting as a cartel in violation of American antitrust laws.

The allegations are unquestionably explosive, and are also being looked at closely by European authorities. We will keep our readers in Connecticut and elsewhere timely updated on any material developments that occur.

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