Carfax suffers antitrust lawsuit from auto dealerships across the nation

Apr 26, 2013
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Carfax is a service that allows users to essentially perform a background check on cars, getting a look into their history and whether they've been in any reported wrecks, been salvaged, or any other details that could drastically reduce the asking price. While some consumers swear by the service, some dealerships aren't happy with it, saying that the company is "monopolist" and in violation of antitrust laws.

A total of 120 car dealerships have joined forces to file an antitrust lawsuit in the U.S. District Court for the Southern District of New York against Carfax, rallying against what they say is its anti-competitive practices and other related issues. The dealerships are located across the nation, spanning from California to the East Coast and back again.

Such a high number of dealerships exceed what the plaintiffs, represented by Bellavia Blatt Andron & Crosset, expected, with their attorney saying they anticipated between 25 and 50. Such wasn't the case, with many more proving eager to take part in the push against Carfax and its alleged devious actions, which include charging higher-than-industry-norm rates for dealers to pull up vehicle history reports and exclusive agreements that leave its competitors without a leg to stand on.

For example, the lawsuit says that Carfax has exclusive agreements that requires dealers to purchase its history reports. With dealers in this vice, the company then jacks the price up, charging more than is considered within the normal range. Another problem is the exclusive agreements it is said to have with AutoTrader.com and Cars.com that require dealers who list used cars on the sites to only provide history reports from Carfax.

Carfax said it can't comment on the issue.

[via Automotive News]


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