Fiat Chrysler claims a website developer bribed an FCA executive to inflate website development costs.
Fiat Chrysler Automobiles N.V. overpaid for new car dealer websites after the developer bribed Clyde Campbell, who was then the company’s managing director in the country, according a lawsuit now being tried in the United Kingdom.
The UK High Court heard evidence from Robert Olver, a web services expert appointed to come up with a fair price for the contract signed in 2010 between Chrysler and British car industry web developer Motortrak.
Olver told the court there was no commercial justification for some elements of the contract, and Motortrak charged well above a fair price, according to the Sydney Morning Herald.
Olver said he based his calculations on the cost, at the time, of building car dealer websites from scratch in the Australian market – other options would have been even cheaper, he said. “This was not the single greatest technical challenge of the century, it’s a fairly straightforward job,” he testified.
Motortrak said in court documents it won the contract on merit, through proper process, and provided a premium service that was priced in line with its usual charges and helped contribute to Chrysler’s strong market growth.
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Hugh Norbury QC for Motortrak said Olver, in putting together his estimate, acted as an “advocate” for his client Chrysler “and not in any way as a court-appointed expert.” Olver countered that his estimates were based on his extensive expertise in the industry – including 15 years consulting Toyota on its Australian websites.
Motortrak is suing Fiat Chrysler Automobiles Australia for $2 million in outstanding invoices plus $27 million in loss of profit damages after FCA reneged on the web services contract.
Motortrak was contracted in 2010 to build and support websites for Chrysler’s Australian dealerships – initially at a cost of $8,280 per dealer per year, then increased in 2012 to $1,695 per dealer per month, then again hiked up in 2012 to $4,100 per dealer per month with the addition of new services.
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In court documents FCA said Motortrak separately paid $2.4 million to Campbell in 13 installments beginning in December 2010 and ending in December 2013.
Campbell was managing director of FCA from late 2010 to early 2013, and before that worked for Motortrak. He was a personal friend of Gary Pask, a director and 80% shareholder of Motortrak, FCA said.
The payments were “made with the intention and effect of inducing Mr. Campbell” to make sure FCA entered into the contract and agreed to the variations, FCA said in documents submitted to the court.
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Procurement of material and services is a sensitive subject in the automobile business and one of the areas carefully watched for improper activity.