At a glance: automotive industry disputes in France – Lexology
What competition and antitrust issues are specific to, or particularly relevant for, the automotive industry? Is follow-on litigation significant in competition cases?
The European Commission has fined 14 price-fixing cartels in the automotive industry for a total amount exceeding €5 billion over the past 10 years. All these cases were initiated by leniency applications filed by suppliers, which revealed the existence of the cartel and provided the supporting evidence (and which, in return, were not fined).
In 2016 and 2017, the European Commission imposed record fines of €3.7 billion on six European truck manufacturers, including a €1 billion fine, which is the highest fine ever imposed on a single company in a cartel case. Over a period of 14 years, truck manufacturers colluded on prices and on passing on the costs of compliance with stricter emission rules imposed by an EU regulation.
The European Commission punished 13 other cartels that involved car parts manufacturers for coordinating price increases to be passed on to car manufacturers, bid rigging, allocating customers and exchanging sensitive commercial information. These practices concerned 13 categories of products: wire harnesses; alternators and starters; parking heaters; automotive bearings; thermal systems; refrigerants; braking systems; spark plugs; lighting system; occupant safety systems; flexible foam used in vehicle seats; door modules and window regulators; latches and strikers.
In July 2021, the European Commission imposed a total of €875 million fines on three car manufacturers after one of them revealed that all three companies had been colluding to limit their ambitions in reducing pollution from diesel cars.
The European Commission’s decisions gave rise to numerous follow-on damage actions, in particular, in the truck manufacturers’ case. The implementation in March 2017 of EU Directive 2014/104 on actions for damages under antitrust issues into French law can only encourage the development of such actions in France. In the Trucks cartel case, the Court of Justice of the European Union ruled in October 2021 that victims of an antitrust violation may seek compensation from the subsidiary of the infringing parent company.
The French Competition Authority also showed interest in automotive spare parts. It issued a detailed opinion in 2012, pointing out that spare part prices were higher in France than in Germany or in the UK and making recommendations to stimulate price competition between car manufacturers and spare parts suppliers for the supply of car parts. In this respect, France adopted in August 2021 bill No. 2021-1104 opening competition for the manufacture and distribution of visible spare parts (bumpers, lights, mirrors, etc) in the automotive sector.
The French Competition Authority also (May 2019) dismissed a claim by three repair companies against a car manufacturer after the latter refused to approve them. The repair companies claimed that this denial was discriminatory and would favour the manufacturer’s authorised resellers. The French Competition Authority held that the manufacturer’s decisions to refuse approval have been made on objective criteria and that the repair companies had not proven that the refusal was part of a general anticompetitive scheme implemented by the manufacturer.
Dispute resolution mechanisms
What kind of disputes have been experienced in the automotive industry, and how are they usually resolved? Are there any quick solutions along the supply chain available?
Apart from competition or antitrust and intellectual property issues, most disputes in the automotive industry relate to consumer matters, supply chain issues and criminal liability allegations.
There are several grounds in French consumer law enabling a consumer to sue an automotive manufacturer, such as defective product rules (…….
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