Büchl vs. PSA: Groundbreaking verdict

Büchl vs. PSA: Groundbreaking verdict

In a long-standing legal dispute between the Upper Austrian Peugeot dealer Büchl and Peugeot Austria (PSA), the cartel court ruled on May 12, 2020 in the first instance that the general importer for Peugeot vehicles in Austria had violated the ban on abuse of market power. The Büchl company had turned to the cartel court because it - like numerous other Peugeot dealers in Austria and Europe - was suffering from oppressive requirements from PSA, which caused it serious economic disadvantages and called into question its independence as a Peugeot authorized dealer. In its decision, the cartel court applies not only Austrian but also European antitrust law and makes extensive findings on the problematic business policies of the Peugeot brand. The Büchl case therefore also has a signal effect for the dealer networks of other brands in Austria and throughout Europe.

Specifically, the court prohibited the Peugeot brand from commercially forcing the dealer to participate in promotions in new car sales and thus restricting the dealer's freedom in setting prices for the end customer; link bonus payments to the retailer with customer satisfaction surveys; to reduce the dealers' trading margin if they do not achieve sales targets that are deliberately inflated by PSA and to compete with the dealers on the end customer market through PSA's own operations with subsidized vehicle prices. In workshop operations, a complex control system as well as hourly rates that do not cover costs were banned, which make guarantee and warranty work economically unprofitable for dealers. Ultimately, PSA must not continue to pass on the costs of its mystery shopping and audit system for new car and repair business to dealers.

The Federal Vehicle Trade Committee and the Federal Guild of Vehicle Technology, the Association of Austrian Motor Vehicle Companies (VÖK) and the Austrian Peugeot Dealer Association welcome the decision and the groundbreaking statements of the cartel court that can be generalized beyond the individual case as an important step towards more fairness in the manufacturer-dealer relationship in Austria and Europe. An appeal from PSA is expected.

The opinions: Klaus Edelsbrunner, federal lobby representative of the vehicle trade, emphasizes, "It is important that the cartel court has now answered a legal question that has been unclear for a long time, at least in the first instance. This at least represents guidelines for correct market behavior based on both Austrian and European law and is therefore groundbreaking for the entire industry and all brands across Europe."

Joseph Shirak, spokesman for the motor vehicle retail trade, says: "For many years, the balance of power between the manufacturer/importer and the vehicle company has been deteriorating more and more to the detriment of the dealers. The cartel court has now made it clear that in many cases there is an abuse of market power." He therefore expects that the manufacturers/importers will react and adhere to the requirements of the cartel court in accordance with the judgment and, for example, adapt the dealer contracts. “This has clarified years of development in the contractual relationship between manufacturer/importer and authorized dealer,” concludes Schirak.

Joseph Harb, Federal Guild Master of Vehicle Technology, is pleased that this decision has not only placed a special focus on vehicle trading, but also on maintenance and workshop operations.

Stefan Hutschinski, Chairman of the Association of Austrian Motor Vehicle Manufacturers (VÖK) makes it clear: "Right now an extremely important judgment from the cartel court in favor of the motor vehicle companies. The pressure from the manufacturers on the companies has become greater and greater every year - many demands have been made that are extremely questionable economically and in terms of antitrust law. This judgment is a liberation and the first step in the right direction. All manufacturers across Europe are now required to align their cooperation in a commercially sensible and clean manner in accordance with antitrust law."

The details: The Büchl company was represented in the proceedings before the antitrust court by the Viennese law firm of Dr. Peter Thyri. Specifically, the decision established PSA's “dominant market position” and ordered the “abuse of this dominant market position” to be remedied in the following points.

In theNew car salesthrough

• die einseitige Beschränkung der Preissetzungsfreiheit der Antragstellerin durch den wirtschaftlichen Zwang zur Teilnahme an den von der Antragsgegnerin vorgegebenen Aktionen;

• die Koppelung von Prämienzahlungen mit dem bestehenden und tatsächlich praktizierten System der Kundenzufriedenheitsumfragen;

• Spannenreduktionen durch bewusst überhöhte Verkaufsziele;

• die Praktizierung missbräuchlich niedriger Abgabepreise am Endkundenmarkt durch im wirtschaftlichen Mehrheitseigentum der Antragsgegnerin stehende Händlerbetriebe, insbesondere wenn deren Verluste von der Antragsgegnerin abgedeckt werden, während die Antragsgegnerin gleichzeitig gegenüber der Antragstellerin Preise verrechnet und Rabattkonditionen gewährt, die es der Antragstellerin unmöglich machen, diese niedrigen Endkundenpreise einzustellen.

In theWorkshop operationthrough:

• die Verpflichtung zur Durchführung von Garantie- und Gewährleistungsarbeiten mit von der Antragsgegnerin gestellten Bedingungen, insbesondere einem auch für die Antragstellerin aufwändigen Kontrollsystem, die diese Arbeiten für die Antragstellerin wirtschaftlich unrentabel machen,

• die Abwicklung von Garantie- und Gewährleistungsaufträgen mit nicht kostendeckenden Stundensätzen sowie nicht kostendeckende Refundierungen bei Ersatzteilen.

In theNew car sales and in the workshop areathrough:

• die Überwälzung der Kosten für Mystery Shopping, Mystery Leads und Standardkriterien-Audits auf die Antragstellerin, insbesondere durch die kalkulatorische Einbeziehung dieser Kosten in die  Schulungspauschale.

The rejected points concern, for example, CI investments in which PPE is involved - at least in the present caseBuchl- would have had an appropriate share, prices for diagnostic equipment, the training fee, etc. "The cartel court has made generalizable, groundbreaking statements about the nature of the manufacturer-dealer relationship and the economic imbalance that exists there, so that in my opinion the judgment achieves the intended purpose of a 'guideline' for the entire industry in Austria and Europe," explains lawyer Peter Thyri. “In the next step, I think it will be important to communicate this success in a structured manner and disseminate it through the media, in which the federal committee has played a key role over the years of the process and even in the phase before it,” said Thyri.