Hammer verdict against Peugeot confirmed

Hammer verdict against Peugeot confirmed

The background is the legal dispute between the Upper Austrian Peugeot dealer Büchl and Peugeot Austria (PSA), the general importer for Peugeot vehicles in Austria, which led to a groundbreaking judgment in May 2020 that received much attention across Europe. The Büchl company had already turned to the antitrust court at the end of 2018 because it - like numerous other Peugeot dealers in Austria and Europe - was suffering from seemingly oppressive requirements from PSA.

The recent ruling by the Supreme Court, which also acts as the Higher Cartel Court, which is before the motor vehicle industry, affects new car sales as well as workshop operations. “In detail, PSA now has to stop selling new cars, link bonus payments to dealers with customer satisfaction surveys; reduce dealers’ trading margins if they do not achieve sales targets that are deliberately inflated by PSA and compete with dealers through PSA’s own businesses with subsidized vehicle prices on the end customer market,” says Viennese lawyer Dr. Peter Thyri. The specialist in antitrust and competition law represented the Büchl company in proceedings before the antitrust courts.

In workshop operations, the “overly complex control system of PSA as well as hourly rates that do not cover costs, which make guarantee and warranty work unprofitable for dealers” must be eliminated. Ultimately, PSA must not continue to pass on the costs of its mystery shopping and audit system for new car and workshop business to dealers, Thyri explains. 

Far-reaching effects

The unilateral restriction of the retailer's freedom to set prices due to the economic compulsion to participate in promotions is also fundamentally confirmed. However, the first court must supplement the procedure and decide again in accordance with the precise instructions of the Supreme Court. “In all other points, the decision is legally binding and must be implemented by PSA within three months,” said Thyri. He also emphasizes that the OGH expressly points out in its decision that the dismissal order applies not only to the Büchl case, but also to all contractual relationships in which similar dependency relationships exist and sees a not insignificant need for changes to PSA's remuneration system.

The Supreme Court also clearly points out the parallel applicability of European antitrust law and deals in detail with the justification of the importer's dominant market position as well as the case group of abuse of conditions according to Art 102 TFEU. For the future, PSA's remuneration system must now be adjusted and re-agreed within the deadline set by the Supreme Court.

Thyri: “It is advisable to take the Supreme Court decision into account for other brand networks – in particular those of the new Stellantis group, which is directly affected by the proceedings – for reasons of legal certainty.” For many of the Peugeot dealers affected, the question immediately arises as to how to replace the remuneration that has been improperly withheld from them for years.

The Federal Vehicle Trade Committee and the Federal Guild of Vehicle Technology within WKÖ, the Association of Austrian Motor Vehicle Companies (VÖK) and the Club of Austrian Peugeot Dealers welcome the decision as a breakthrough in their decades-long efforts to achieve more fairness in the manufacturer-dealer relationship in Austria and Europe. Especially against the background of the current upheavals and challenges, the way is now clear for a new partnership in the automotive industry.

Peugeot has “taken note” of the court’s decision and now wants to analyze it in detail. As a result, appropriate solutions will be developed and implemented for the requested points within the three-month deadline set by the Supreme Court until June 22nd, as stated in response to a request from the motor vehicle industry.