Motor dealers face fines of €50m for blocking car owners' use of independent garages

Irish Times

2 days ago

Motor
dealers could face fines up to €50 million for trying to stop drivers using independent garages for maintenance and repairs, competition regulators will warn on Monday.
The
Competition and Consumer Protection Commission
(CCPC) is writing to the Republic's motor industry threatening to clamp down on terms in guarantees discouraging drivers from choosing where they get their cars repaired or which spare parts they use.
Conditions that void guarantees on vehicles if owners do not go to authorised dealerships for servicing and repairs, or if they buy spare parts not made by their cars' manufacturers, could break competition law, a letter from Craig Whelan, the CCPC's director of antitrust will set out.
Serious breaches of competition law could result in prosecution and fines of up to €50 million, or 20 per cent of a firm's turnover, whichever is the higher, on conviction by a jury.
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On a 'non-criminal basis' the commission itself can impose penalties up to €10 million on companies or groups of associated businesses, the correspondence will explain.
'Restrictions on competition between independent repairers and authorised repairers leads to higher prices and lower quality of service for motorists,' Mr Whelan says.
The CCPC has the power to investigate suspected breaches of competition law, resulting in prosecution, or in imposing its own financial penalties which it must get the High Court to confirm.
Mr Whelan maintains that terms invalidating guarantees – where a vehicle owner goes to an independent garage instead of the manufacturer's authorised dealer – increase costs because a motorist must then pay for repairs that guarantees would otherwise cover.
The commission notes that these practices boost prices, limit choice, and harm consumers and independent garages.
'These restrictive practices hurt consumers, stifle competition, and unfairly advantage authorised dealerships,' Mr Whelan will say in a statement on Monday.
The commission will urge motor distributors to review and, if required, change their practices to ensure they comply with competition law.
It will assure independent garages that they can freely repair vehicles, use non-original spare parts where quality matches the manufacturer's, and access repair and diagnostic equipment.
The commission will ask independent garages to report instances where dealers deny them access to essential tools or diagnostic information.
Complaints from motorists and garages prompted Monday's warning to the industry.
Drivers have said authorised dealers and repairers have warned them their guarantees would be voided if routine services or repairs not covered under the vehicle warranty were carried out at an independent garage.
They have also reported that dealers told them their guarantees would be voided if non-manufacturer supplied spare parts were used in routine maintenance or repairs.
Independent garages complained they could not get access to tools or to some on-board data, which helps track and identify problems, preventing them from working on those vehicles.
While the commission has not taken proceedings against individual businesses, it warns that it will act where it identifies illegal practices.
'We will continue to monitor this issue closely and will take appropriate enforcement action where we believe competition law has been breached,' it will say.