Market abuse in the area of new car sales and garage services
The Cartel Court has now imposed a fine of EUR 15 million on Peugeot owing to its abuse of a dominant position during the period from 2017 until 2021.
Peugeot breached the Cartel Act in relation to its new car sales activities by:
- Linking premium payments to the existing system of customer satisfaction surveys actually used in practice
- Reducing margins by deliberately setting excessive sales targets – Peugeot increased the target value beyond the generally estimated sales trends despite having lowered the sales targets for previous years in contractually agreed arbitration proceedings with experts
- Using the practice of abusively low sales prices for the end consumer market from dealerships in which Peugeot holds a majority share. Moreover, these dealerships’ losses were covered by Peugeot, while at the same time it was charging Büchl GmbH prices and granting discounts that made it impossible for Büchl GmbH to offer similarly low prices to end consumers.
Peugeot breached the Cartel Act in relation to its garage services by:
- Requiring statutory guarantee and warranty work to be carried out on Peugeot’s terms, particularly by requiring the use of an onerous control system that made such work economically unprofitable for Büchl GmbH
Requiring statutory guarantee and warranty work to be carried out at hourly rates below cost, as well as by providing refunds for spare parts below cost.
Furthermore, Peugeot had also breached the Cartel Act by passing on costs for mystery shopping, mystery leads and standard criteria audits to Büchl GmbH, particularly by including these costs in the calculation of the flat rate for training seminars.
Acknowledgement
Peugeot has acknowledged the infringement in the proceedings, accepting the submitted facts of the case and AFCA’s legal interpretation of them and not contesting the application for a fine in the requested amount. The company has also acknowledged the period of the breaches and the appropriateness of the fine, considering the legal criteria for the fine’s assessment.
“The abuse of a dominant position has a significant negative effect on competition. Prosecuting this type of case is a clear priority for the AFCA ,” explains Natalie Harsdorf, Director General for Competition.
AFCA continues to monitor automotive industry
“We continue to receive complaints from the automotive market, and we look into each of them in depth. However, so far they have not been sufficient to initiate investigations. We therefore encourage everyone to report, anonymously if they prefer, evidence of breaches via the AFCA’s whistleblowing system. We will be continuing to monitor this market,” confirms Natalie Harsdorf.
Overview of proceedings
- In October 2018, Büchl GmbH applied to the Cartel Court to have Peugeot end its abuse of its dominant market position (individual proceedings).
- The AFCA and the Federal Cartel Prosecutor were official parties to these proceedings.
- The AFCA provided a detailed statement in relation to Peugeot’s abusive conduct and relative market power.
- The AFCA took part in all hearings of the individual proceedings and was actively involved in the hearing of evidence as part of the oral proceedings.
- In 2020, the Cartel Court found that Peugeot had breached the ban on abuse of a dominant position in relation to several points, and instructed Peugeot to cease such infringements.
- Peugeot filed an appeal with the Supreme Cartel Court.
- The Supreme Cartel Court (OGH) upheld the appeal in part but confirmed the main points of the decision (press release of 9 April 2021), instructing Peugeot to end its abuse of a dominant position within three months (OGH decision in German).
- In June 2023, the AFCA filed an application to impose an appropriate fine based on the infringements that had been finally determined in the individual proceedings.