Over the years, Carfax has become the dominant used-vehicle history reports provider, and now owners of 120 auto dealerships are filing an antitrust federal lawsuit against the company.
The dealerships are alleging that Carfax engages in anti-competitive practices and violates antitrust laws. All together, they are seeking damages of more than $50 million.
Dealerships from all across America are getting involved, stating that Carfax provides “cash or noncash marketing support” to automakers and classified sites as part of an exclusive agreement to shut out its competitors. In addition, the suit accuses Carfax of charging dealers “a significantly higher price” for vehicle history reports compared to its competitors.
According to the lawsuit, Carfax forces dealers to purchase its vehicle history reports due to exclusive agreements with 37 of 40 manufacturer certified pre-owned programs. And despite not being a focal point of the lawsuit, the dealerships are also alleging that Carfax has inaccuracies in its reports as revealed in a recent ABC News 20/20 segment.
[Source: Automotive News]