Motor dealers have been warned that they could be prosecuted and face fines up to €50 million for “serious breaches of competition law, including cartel behaviour” if they include terms in vehicle warranties seeking to stop drivers using independent garages for maintenance and repairs.
Ireland’s competition authority – The Competition and Consumer Protection Commission (CCPC) – says that it is writing to the Irish motor industry – motor vehicle importers and main distributors – to highlight competition concerns and to seek information.
The CCPC warned that it has “the power to take enforcement action against businesses suspected of engaging in these practices. On a non-criminal basis, the CCPC may impose administrative financial sanctions on businesses and associations of undertakings of up to €10 million, or 10% of its annual worldwide turnover (whatever is greater), for breaches of competition law.”
It also noted that: “These administrative financial sanctions are determined by independent CCPC adjudication officers and are subject to court confirmation. Alternatively, more serious breaches of competition law, including cartel behaviour, may be prosecuted as criminal offences and fines of up to €50 million, or 20% of a business’s annual worldwide turnover (whatever is greater) may be imposed by the court upon conviction on indictment.”
In an industry-wide letter, the CCPC reminded the motor industry across the country that, under competition law, consumers must not be prevented from freely choosing who services or repairs their vehicle, or what parts they use.
The warning follows reports from motorists who have been prevented or discouraged from getting their vehicles serviced or repaired by independent garages. In some cases, motorists claim to have been told that their warranty will be void if they have their vehicle serviced or repaired outside an authorised dealership network or use non-original or non-manufacturer supplied spare parts.
Others claim to have been blocked from using independent garages due to restricted access to essential diagnostic data or tools which were not made available by the manufacturer or distributor. Such practices can break competition law, the authority warned.
The CCPC has warned that these practices drive up prices, limit choice, and harm both consumers and independent garages. The CCPC is seeking information from distributors of motor vehicles in Ireland and has urged them to review and, if necessary, amend any arrangements they have in place.
While formal proceedings have not been instigated against any particular firm at the current time, the CCPC has emphasised that it will take action if illegal practices are identified.
Additionally, the CCPC has informed independent garages of their right to freely repair vehicles, to use non-original spare parts which are of a matching quality, and to access repair and diagnostic tools.
Craig Whelan, director of antitrust at the CCPC, said:
“Motorists must be free to choose where they service their vehicles and what parts they use without fear of losing their warranty. Independent garages must not be blocked from accessing essential diagnostic data or tools.
“These restrictive practices hurt consumers, stifle competition, and unfairly advantage authorised dealerships.
“We will continue to monitor this issue closely and will take appropriate enforcement action where we believe competition law has been breached.”
The CCPC is urging independent garages to report any experiences of unfair restrictions, including being prevented from accessing essential diagnostic data or tools, by emailing antitrust@ccpc.ie.