CARFAX Hit with $50 Million Monopoly Lawsuit!

Jeremy Alicandri
First, I must disclose we are one of the plaintiffs in this case. Moving on... Many dealers want more options. They want the ability to choose how their inventory is marketed on sites like AutoTrader.com/Cars.com.I can't predict the outcome of this case, but I'm hoping it will yield a favorable result for all franchised and independent dealers.
Stephen Barrett
Auto Check?
Paul Schnell
I expect it will play out well for Law360 since they seem to be the only source (subscription site) with any information about this suit. How about some real research and reporting here?
Jeremy Alicandri
Paul, here you go: The dealers filed suit Monday, saying Carfax's exclusivity arrangements violate the Clayton Act, that they unreasonably restrict trade and that CARFAX has monopolized the market for VHRs under the Sherman Act. The plaintiffs seek injunctive relief from Carfax's allegedly anti-competitive practices and to recover at least $50 million in damages they have incurred by having to pay more to CARFAX for VHRs than they would have paid in a free and competitive market. Representatives for Carfax didn’t immediately respond to requests for comment Tuesday. The plaintiffs are represented by Leonard A. Bellavia and Mark W. Gaffney of Bellavia Blatt Andron & Crossett LLP. Counsel information for Carfax wasn’t immediately available. Counsel information for Carfax was not immediately available. The case is Maxon Hyundai Mazda NYLSI Inc. d/b/a/ Sunrise Toyota et al. v. Carfax Inc., case number 13-cv-2680, in the U.S. District Court for the Southern District of New York. --Editing by Lindsay Naylor.
Jeremy Alicandri
Grrr.... Second try: Source: http://www.law360.com/competition/articles/435410/dealers-hit-carfax-with-50m-suit-over-auto-report-monopoly Dealers Hit Carfax With $50M Suit Over Auto Report Monopoly By David McAfee Law360, Los Angeles (April 23, 2013, 7:57 PM ET) -- More than 120 auto dealers hit Carfax Inc. with a $50 million lawsuit in New York federal court Monday, claiming the company has created a monopoly in the vehicle history report market and has lowered the reliability of VHRs while increasing the price. The dealers raise allegations that Carfax has a 90 percent share of the VHR market for used automobiles and light trucks in the U.S. because of exclusivity agreements with “major players” in the auto industry. As a result of the agreements, the dealers say they have been compelled to purchase Carfax VHRs, despite the fact that other suppliers offer more reliable VHRs at substantially lower prices. The plaintiffs say Carfax requires them to purchase Carfax VHRs for every used car sold in 37 of 40 used auto sales programs, and every used car they list for sale on Autotrader.com and Cars.com. “By contractually committing these two websites to include hyperlinks to Carfax VHRs and to exclude VHRs of any other provider, Carfax has stigmatized any listing without such a link in the eyes of consumers who infer that the absence means that the car has a blemished history,” the complaint said. “Carfax's anti-competitive practices have thwarted competition in the publication and sale of VHRs in the United States, which has diminished the quality of VHRs, increased their prices, and caused harm to customers.” Leonard A. Bellavia, who represents the plaintiffs, said he wouldn’t be surprised if the case “mushrooms” from 120 plaintiffs to several thousand. “Dealers have reached their boiling point with Carfax's business practices — from defective vehicle history reports, to illegal tying arrangements with key industry players, to price gouging, to the way it disparages dealers in their advertising,” Bellavia told Law360 on Tuesday. Auto dealers spend anywhere from $10,000 to multiple tens of thousands of dollars per year for VHRs, the complaint says. The dealers filed suit Monday, saying Carfax's exclusivity arrangements violate the Clayton Act, that they unreasonably restrict trade and that CARFAX has monopolized the market for VHRs under the Sherman Act. The plaintiffs seek injunctive relief from Carfax's allegedly anti-competitive practices and to recover at least $50 million in damages they have incurred by having to pay more to CARFAX for VHRs than they would have paid in a free and competitive market. Representatives for Carfax didn’t immediately respond to requests for comment Tuesday. The plaintiffs are represented by Leonard A. Bellavia and Mark W. Gaffney of Bellavia Blatt Andron & Crossett LLP. Counsel information for Carfax wasn’t immediately available. Counsel information for Carfax was not immediately available. The case is Maxon Hyundai Mazda NYLSI Inc. d/b/a/ Sunrise Toyota et al. v. Carfax Inc., case number 13-cv-2680, in the U.S. District Court for the Southern District of New York. --Editing by Lindsay Naylor.
Brian Miller
Like Stephen said Auto Check? Experience tells me that Auto Dealer's to not fair well in court (in general). That being said, if they win, will they target the 3 major credit credit bureaus next for monopolistic practices? It will be interesting to see how this all plays out.

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