THE Government has fired a warning shot across the bows of the motor industry with the announcement of stiffer penalties for companies found guilty of anti-competitive practices. The Department of Trade and Industry's tougher line on anti-competitive practices applies to all industries, although the motor trade is very much under the spotlight. Volvo, for example, recently admitted that some of its dealers had acted like a cartel, while the entire industry is bracing itself for the Competition Commission's inquiry report in December.

The new penalties will allow the Government to fine companies convicted of anti-competitive practices up to 10% of their turn-over for each year of the infringement to a maximum of three years. The penalties feature in the new Competition Act, scheduled to come into force in March 2000, which will also give the Office of Fair Trading new powers to investigate alleged abuses of competition.