Copart Appeals UK’s £2.5 Million Fine Over Hills Motors Takeover

Vehicle salvage and recycling company Copart is set to appeal a £2.5 million fine imposed by the Competition and Markets Authority (CMA) regarding its acquisition of Hills Motors. The CMA alleges that Copart failed to comply with an initial enforcement order, which mandated the maintenance of Hills as a separate operating entity during the investigation to assess potential restrictions on competition in the vehicle salvage market.

The CMA initially issued the enforcement order in August 2022, requiring Copart and Hills Motors to operate independently while the regulatory body conducted its investigation. The investigation concluded in July 2023 with a ruling that found no concerns of anti-competition practices. However, in December of the same year, the CMA revealed that Copart had engaged in negotiations with three insurers during the investigation period, presenting itself as a unified business with Hills Motors.

Copart’s UK Chief Executive, Jane Pocock, expressed the company’s intention to appeal the penalty notice issued by the CMA. Pocock emphasized the full cooperation of Copart and its customers during the 12-month investigation, highlighting the company’s success in three major tenders during that period. She argued that the CMA’s decision was based on the claim that the regulatory body was not explicitly informed of the contract awards.

Read more: UK Regulator Probes Anti-Competitive Practices In Car Recycling

“In this case, during the period of the 12-month investigation Copart and our customers fully cooperated. Copart were the successful party on three large tenders and the CMA believes they were not explicitly informed of the contract awards,” stated Pocock.

Pocock further noted that a ‘monitoring trustee’ was appointed by the CMA, and regular communication occurred between the regulatory body and Copart’s lawyers. All tenders were reportedly submitted, and communication with customers was maintained throughout the investigation.

“The CMA even had a ‘monitoring trustee’ appointed and were in regular contact with our lawyers who had submitted copies of all tenders and communicated with all customers who were also in direct dialogue. So, the basis for the fine remains an ongoing situation,” added Pocock.

The appeal process is expected to shed light on the intricacies of the case and provide further clarity on whether Copart will be held accountable for the alleged violation of the initial enforcement order imposed by the CMA.

Source: AM Online