Last week's decision by the European Commission to fine Volkswagen (VW) €30.96 million (£24.4 million) for price-fixing has wider implications for business generally.

The Commission objected to VW telling its dealers not to give discounts on sales of new VW Passats, which it regarded as unlawful price-fixing.

It objected because such "concerted practice" between suppliers and resellers prevents competition on price between resellers. Technically, it is described as resale price maintenance (RPM). The Commission and the Republic both outlaw it. The US practice is not so uniform. The thinking is that consumers lose out on price competition where there is RPM but may gain on improved service from resellers where there is sufficient competition.

The significance of the VW decision is manifold. Some business people may be surprised at the narrowness of the rules; the unlawful behaviour was not so much fixing the price but only an element of it (namely, the discounts) and was thus, narrower than "normal" pricefixing.

There was no "agreement" between the parties in a conventional sense. Some business people might have even seen it as pro-competitive by giving a level playing field to all dealers. However, the decision reiterates the Commission's belief that RPM is wrong even though there has been some rolling back on this view by US courts.

The decision brings the motor sector back into focus at a time when the Commission is considering how to regulate it and may even give rise to class actions or compensation claims by consumers.

This could have happened in any industry. Businesses need a competition compliance programme and culture. At European Union level, such practices expose businesses to fines of up to 10 per cent of worldwide turnover. At the Irish level, similar fines may be imposed but also executives may be made personally liable for anti-competitive behaviour and sentenced to up to two years in jail as well as being fined up to €3.8 million.

Businesses may recommend a resale price and a discount/ rebate policy but must, at all times, let resellers choose their own pricing practices. Suppliers must not react to discounting or rebates by their resellers. They must not take on board complaints from other resellers.

Clearly, some consumers have complained to the Competition Authority and the Commission. Many complaints are unfounded because there can be legitimate reasons why "the price is the same everywhere", such as genuine competition. However, some complaints are legitimate. According to the Commission, some consumers in the VW case were overcharged by as much as €2,000.

Legally, they could reclaim this from the dealers, who, in turn, might seek to reclaim it from VW. The claim against the dealers seems to be, on general principles, a sound one (subject to proof) but the claim between the dealer and VW is not so clear-cut because technically, they both did wrong, according to the Commission.

The Commission must be careful to only tackle genuine cases and not seek to favour one industry over another by choosing the "usual suspects" even when the evidence is flimsy. This populist competition policy can be a dangerous tactic where cases are merely stunts to attract media coverage and are not driven by pure competition concerns.

VW has already indicated its intention to appeal to the Court of First Instance in Luxembourg and will then probably appeal to the European Court of Justice.

Such appeals usually result in some reduction of the fine and could even result in the quashing of the Commission's decision where the court finds that the Commission breached a rule of procedure. Either way, if the VW decision falls away, there is little doubt that the principle that price-fixing is wrong will survive.

Vincent Power is partner and head of EU competition and regulatory law unit at A&L Goodbody Solicitors