Motor industry warned against limiting choice for services and repairs
The Competition and Consumer Protection Commission (CCPC) has issued a warning to the Irish motor industry against preventing consumers from freely choosing who services or repairs their vehicle, or what parts they use.
In an industry-wide letter, the CCPC stated that it has received reports of “anticompetitive practices in the sale, maintenance and repair of motor vehicles”, with claims of motorists being “prevented or discouraged” from getting their vehicles serviced or repaired by independent garages.
It further claims that some motorists 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.
The CCPC said such practices can break competition law and “drive up prices, limit choice, and harm both consumers and independent garages”.
The CCPC said it 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.
On a non-criminal basis, the CCPC said it may impose administrative financial sanctions on businesses and associations of undertakings of up to €10 million, or 10 per cent of its annual worldwide turnover (whatever is greater), for breaches of competition law.
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 per cent of a business’s annual worldwide turnover (whatever is greater).
While formal proceedings have not been instigated against any particular firm at the current time, the CCPC said it has “emphasised that it will take action if illegal practices are identified”.
Additionally, the CCPC said it 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.”
FactorFocus.ie has contacted the Society of the Irish Motor Industry (SIMI) for a response to the CCPC warning.
SIMI represents all vehicle importers, the vast majority of main dealerships and also many independent service workshops businesses, as well as many wholesale and retail parts suppliers.