Swedish Market Court Judgment MD 2013:8
2013-05-02
BIL Sweden vs. MECA Sweden AB
RULING
1.
The Market Court prohibits MECA Sweden AB under penalty of fine (SEK
one million, 1,000,000) to use the following assertions in marketing repair
shops and automobile spare parts:
a) MECA is a brand repair shop;
b) MECA is a brand repair shop for all brands;
c) MECA’s affiliated repair shops can service all cars;
d) MECA’s affiliated repair shops use only original parts;
e) Regardless what brand you drive, there is a MECA mechanic with
the right skills and training to take care of it;
f) MECA’s affiliated repair shops can provide the same service and
repair services as authorised repair shops;
g) MECA’s spare parts may maintain higher quality than authorised
repair shops’ spare parts;
h) MECA can provide at least the same level of service, but generally
at a much more favourable price than authorised repair shops;
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i) or other assertions having essentially the same meaning, if not
correct.
2.
BIL Sweden’s other actions (claim i and j) are dismissed without approval.
3.
MECA Sweden AB is obliged to compensate BIL Sweden for its litigation
costs of SEK 4,025,000, of which 4,000,000 relates to attorneys fees, plus
interest according to § 6 in the Swedish Interest Act (1975:635), as from the
day of the Market Court’s judgment until payment is made.
BACKGROUND
1
The motor vehicle aftermarket includes services and products like tune-ups,
repairs, spare parts, and supplies for motor vehicles. These markets include
repair shops that are authorised by manufacturers or importers, and socalled independent car repair shops.
2
EU law ensures, for competitive purposes, that every car owner has the right
to freely choose any repair shop to provide services and repairs for their
vehicle (see the Block Exemption for motor vehicles and the Market Court
(2012:13)). Manufacturers are obligated to provide the information
necessary for any independent repair shop to be able to perform these
repairs and services.
3
BIL Sweden is an association of companies that manufacture and import
trucks, buses, and cars for sale on the Swedish market. The Association is a
member of the Confederation of Swedish Enterprise. Member companies
(currently about 24) are, together, responsible for nearly 99% of new car
sales in Sweden. BIL Sweden works to promote the interests of their
members and to improve the conditions for producing, selling, buying,
owning and driving cars.
4
MECA is a leading independent operator on the Scandinavian motor vehicle
aftermarket, and is currently owned by Mekonomen. About 340 repair shops
in Sweden are affiliated with the MECA Car Service repair shop network
concept. These repair shops are independent traders, where some are
authorised by one or more car brands.
5
The BIL Sweden complaint in this lawsuit regards marketing practices of
MECA, raises several assertions as to the quality of the spare parts,
competence and training of their mechanics, the quality of service, and price
provided by MECA affiliated repair shops, as well as the validity of
guarantees and service agreements subsequent to service provided by
MECA affiliated repair shops.
6
The marketing subject to BIL Sweden’s lawsuit was conducted on MECA’s
website, in commercials, and on repair shop buildings.
7
The case involves disputes regarding how the term “original parts” should
be understood, and such. This term is specifically defined under EU
competition law.
EU-LAW REGARDING THE TERM “ORIGINAL PART”
8
In the EU Commission’s supplementary guidelines on vertical restraints in
agreements for the sale and repair of motor vehicles and for the distribution
of spare parts for motor vehicles (herein “the Supplementary guidelines”)
articles 18, 19 and 20, the following is stated:
18: One of the Commission's objectives as regards competition policy for the motor vehicle
sector is to protect access by spare parts manufacturers to the motor vehicle aftermarkets,
thereby ensuring that competing brands of spare parts continue to be available to both
independent and authorised repairers, as well as to parts wholesalers. The availability of
such parts brings considerable benefits to consumers, especially since there are often large
differences in price between parts sold or resold by a car manufacturer and alternative parts.
Alternatives for parts bearing the trademark of the motor vehicle manufacturer (OEM parts)
include original parts manufactured and distributed by original equipment suppliers (OES
parts), while other parts matching the quality of the original components are supplied by
‘matching quality’ parts manufacturers.1
1
"original parts or equipment" means parts or equipment which are manufactured according to the
specifications and production standards provided by the vehicle manufacturer for the production of
parts or equipment for the assembly of the vehicle in question. This includes parts or equipment
which are manufactured on the same production line as these parts or equipment. It is presumed
unless the contrary is proven, that parts constitute original parts if the part manufacturer certifies
that the parts match the quality of the components used for the assembly of the vehicle in question
and have been manufactured according to the specifications and production standards of the vehicle
manufacturer;
19: ‘Original parts or equipment’ means parts or equipment which are manufactured
according to the specifications and production standards provided by the motor vehicle
manufacturer for the production of parts or equipment for the assembly of the motor vehicle
in question. This includes parts or equipment which are manufactured on the same
production line as those parts or equipment. It is presumed unless the contrary is proven,
that parts constitute original parts if the part manufacturer certifies that the parts match
the quality of the components used for the assembly of the motor vehicle in question and have
been manufactured according to the specifications and production standards of the motor
vehicle (see Article 3 (26) of Directive 2007/46/EC of the European Parliament and of the
Council of 5 September 2007 establishing a framework for the approval of motor vehicles and
their trailers, and of systems, components and separate technical units intended for such
motor vehicles (Framework Directive)
20: In order to be considered as ‘matching quality’, parts must be of a sufficiently high quality
that their use does not endanger the reputation of the authorised network in question. As
with any other selection standard, the motor vehicle manufacturer may bring evidence that
a given spare part does not meet this requirement.
9
In directive 2007/46/EC of the European Parliament and of the Council of 5
September 2007 establishing a framework for the approval of motor vehicles
and their trailers, and of systems, components and separate technical units
intended for such vehicles (Framework Directive), the following is stated
under article 3.26.
CLAIMS, etc.
10
BIL Sweden has asked that MECA in its marketing of car repair shop
products, under penalty of fine totalling SEK one million, or other
appropriate fine as found effective by the Market Court, be prohibited,
separately or jointly, from asserting or implying any of the following:
a) That MECA is a brand repair shop;
b) That MECA is a brand repair shop for all brands;
c) That MECA affiliated repair shops can service all cars;
d) That MECA uses only original parts;
e) That MECA, regardless of the car brand you drive MECA has a
mechanic with the right skills and training to take care of it;
f) That MECA affiliated repair shops can provide the same service
and repairs as authorised repair shops;
g) That MECA can provide service for all types of brands in
Scandinavia with appropriate spare parts of similar or higher quality
than brand repair shops;
h) That MECA can offer at least the same level of service, but
generally at a much more favourable price;
i) That all guarantees remain in force regardless of brand and model
year subsequent to service and/or repair performed at a MECA repair
shop;
j) That all guarantees and service agreements remain valid
regardless of the brand driven and/or repairs provided by a MECA
repair shop or,
k) Using any other assertion or expression having essentially the
same meaning that gives the essentially same impression when these
are not correct.
11
Meca has contested all claims.
12
The Parties have claimed reimbursement for their legal expenses.
BIL SWEDEN’S PRESENTATION OF THE CASE
Introduction
13
The reasons for the marketing assertions that MECA has made are
presumably due to EU competition rules for the motor vehicle aftermarket.
The background to these rules is that the EU identified obstacles to
independent repair shops entering this market and competing with repair
shops authorised by motor vehicle manufacturers, since the latter have
had access to unique information regarding how a specific car shall be
serviced and repaired. Under applicable EU instruments, motor vehicle
manufacturers are now obliged to permit these independent repair shops
access to this technical information, training, and special tools in order to
ensure that competition is on equal terms. However, the motor vehicle
manufacturers are entitled to reimbursement for this information and
similar.
14
Independent repair shops can perform services equal in quality to the
authorised repair shops. However, this presumes that these repair shops
actually obtain brand specific technical information and use adequate
tools, primarily brand specific diagnostics instruments. Modern cars are
quite complicated, comprising thousands of different parts, with large
numbers of digital processors and control units. This places significant
demands on the repair shop and the individual mechanic assigned to
repair that specific car.
Claims a) – c) and first clause in g) – assertions regarding brand repair
shop and service to all brands/cars
15
The term “brand repair shop” is generally understood by consumers to
refer to such car repair shops that are authorised or otherwise approved by
a specific car brand.
16
The expression “brand repair shop for all brands” can surely not be
understood in any other way than that MECA is authorised or approved in
some other way, by all car brands. This is not the case. Even if consumers
were to understand the expression to mean that MECA is not authorised
for a specific brand, they would, in any case, surely understand this phrase
as though MECA offers qualitatively equivalent service as the authorised
repair shops.
17
Some of the MECA affiliated repair shops are authorised to serve and
repair a limited number of car brands. It is not correct that all the MECA
affiliated repair shops offer equivalent service as authorised car repair
shops. The assertions in question are therefore misleading. Moreover, they
affect or likely affect consumers’ ability to make informed business
decisions.
18
The expression that MECA “can service all cars” and is a brand repair
shop for “all brands,” and “all types of brands in Scandinavia” must be
deemed to mean that all MECA repair shops can service and repair all car
brands and models sold on the Swedish market – possibly excepting
unusual models or custom built cars.
19
All MECA repair shops cannot service and repair all car brands and
models on the Swedish market. The assertions to this effect are therefore
misleading. Moreover, they affect or likely affect consumers’ ability to
make informed business decisions.
Claims d) and second clause of g) – assertions regarding spare part quality
and origin
20
According to BIL Sweden, the term “original part” shall be understood as a
spare part that bears the manufacturer’s trademark, or which they
recommend and/or bears the original equipment manufacturer’s
trademark.
21
The legal definition of “original part”, as specified in EU competition law,
is not applicable to marketing cases. The average consumer cannot be
expected to be aware of the new competition law definition identifying an
original part as a part that is “manufactured according to the car
manufacturer’s specifications and production standards”.
22
If the new competition law definition would be guiding in marking cases, it
is argued that not all of the MECA repair shops use only original parts, as
the complained of marketing substantially gives the impression of.
23
The parts that MECA does sell do not maintain the same or equivalent
quality as the parts provided by authorised repair shops.
24
From this reasoning, it follows that MECA’s assertions related to “original
parts” and “spare parts of equivalent or higher quality” are incorrect and
thereby misleading. These assertions affect or likely affect consumers’
ability to make informed business decisions.
Claims e) – assertions about the skills and training of mechanics
25
The formulation complained of cannot be interpreted in any way other
than that there are mechanics at MECA repair shops with the specialist
skills and necessary training to service and repair all car brands that exist
on the Swedish market.
26
This assertion is incorrect since almost none of the mechanics at MECA
have undergone the training or use the special tools required according to
the motor vehicle manufacturers. MECA therefore does not meet the
specifications or recommendations of these motor vehicle manufacturers
nor, therefore professional standards. Furthermore, these assertions affect
or likely affect consumers’ ability to make informed business decisions.
Claims f), h), i) and h j) – assertions regarding service and repairs and the
validity of guarantees
27
The clauses including the expressions “regardless of brand or model year”
and “no matter what brand you drive” – claims i) and j) – are, for the
reasons discussed above, already considered misleading and unfair.
28
The assertions that MECA’s repair shops can perform the same service
and repairs as an authorised brand repair shop are not correct. It does
occur that the quality of the service and repairs are worse at MECA than
at each brand repair shop and that the service and repairs therefore do not
meet the motor vehicle manufacturers’ specifications and
recommendations. MECA cannot always offer the same service level as the
authorised repair shops can at a generally much more favourable price.
29
In order for the guarantees and service agreements to remain valid,
repairs and service must be performed to professional standards in
accordance with the motor vehicle manufacturer’s specifications and
recommendations. Among the members of BIL Sweden, it is customary
practice that when a brand repair shop does make an error, the consumer
is held harmless. If the consumer leaves their car at a MECA affiliated
repair shop that commits an error, and the service does not maintain
professional standards, the consumers’ guarantee therefore becomes
invalid, and they are placed in a worse position than if the consumer had
left their car at an authorised brand repair shop, that commits an error
that does not meet professional standards. It is impossible for MECA’s
assertion that “all guarantees apply regardless of brand or model year,”
and “so that all guarantees and service agreements remain valid no matter
what brand you drive” to be correct. This is therefore specious and thereby
misleading. Furthermore, these assertions affect or likely affect consumers’
ability to make informed business decisions.
Pleaded sections of the law
30
Marketing is misleading and unfair according to 10 § second paragraph 1,
4, 5 and 8 § of the Swedish Marketing Act (SMA). In all circumstances
misleading marketing assertions contravene good marketing practice and
is unfair according to 5 § and 6 § of the SMA.
MECA’S PRESENTATION OF THE CASE
Introduction
31
As this case is adjudicated, a comprehensive campaign against MECA and
other independent-brand repair shop chains is underway for the purpose of
linking these independent chains to the term “pirate parts”. The campaign
has been accelerated subsequent to the ruling of the Market Court in the
case of Sveriges Bildelsgrossistersförening vs. KIA, issued on December 5,
2012 (see MD 2012:13). This is the context in which the marketing
assertions which BIL Sweden herein complained of shall be adjudicated.
32
There are three primary reasons for the current success of MECA as a
participant in the car brand repair shop sector. Motor vehicle
manufacturers have a legal obligation to provide information regarding the
parts of their cars and how service and repairs to these should be
performed. The suppliers who manufacture these parts for the motor
vehicle industry also supply MECA and others businesses in the auto
aftermarket sector. A clear dissatisfaction has been found among car
owners regarding the quality and price delivered by authorised repair
shops.
Claim a) – c) and first clause in g) – assertions regarding brand repair
shops and service of all brands and cars
33
MECA finds it important to emphasise their independence in relation to
the motor vehicle manufacturers. MECA has therefore endeavoured to not
suggest any assertion that could be understood or give the appearance of
their repair shops being authorised by any motor vehicle manufacturer.
MECA has not, in any instance, used the reference “authorised repairer” in
regard to their associated repair shops. MECA has also, in using the term
“brand repair shop”, not communicated the message that MECA is in fact
an authorised brand repair shop.
34
It is well understood among car owners that MECA repair shops are not
associated with any specific motor vehicle manufacturer(s), but rather they
are a ”repair shop for all brands”.
35
The assertion that MECA is a “brand repair shop for all brands” is, against
this background, therefore not understood by the average consumer as
meaning that MECA repair shops are just any brand repair shops, but
rather they are repair shops for all car brands.
36
MECA has no desire to be associated with the authorised repair shops for
motor vehicle manufacturers or car importers, but rather wants to
communicate the message that they operate as competitors to these
authorised repair shops, as these are often seen as more expensive without
generally being better than independent repair shops.
37
MECA’s assertions stating that their repair shop can service all brands
shall not be understood as a claim that this includes all cars now on the
roads regardless of how old and how “customized” they are.
It can be stated that the MECA repair shops together, as a collective, can
service and repair 58 car brands and that these brands represent 99.8% of
all the registered cars in Sweden, which is sufficient for the assertions here
in question to be reasonable. Certainly, there is no single MECA repair
shop that can service 99.8% of all car brands, but the complained of
marketing relates to the repair shop chain MECA and not any single
repair shop associated with that chain.
38
In all circumstances, the assertions in claims a) – c) shall be understood as
“typical advertising exaggeration”, that is, such dramatic or figurative
expressions that cannot be taken literally.
39
Even if MECA is considered to have communicated that the MECA repair
shop are authorised, then all assertions to this effect are, in all
circumstances not misleading, since a significant number – 45 – of all
repair shops in the MECA repair shop network are actually authorised by
a total of 36 car brands.
40
Against this background the assertions considered here are not
misleading.
Claims d) and second clause in g) – assertions regarding the origin and
quality of spare parts
41
MECA repair shops purchase spare parts only from suppliers who produce
spare parts that meet the legal requirements to be identified as “original
parts”. The suppliers are the same who supply the motor vehicle
manufacturers. The agreements that MECA enters with each repair shop
in their network specify that they may only install or sell parts
manufactured according to the specifications and production standards of
the motor vehicle manufacturers for producing of parts to fit in the vehicle
in question, that is, parts that agree with the legal EU definition of
“original part”.
42
The statutory marketing legislation cannot be used to counteract the
legislative intent of the separate competition statutory framework. Parts
that cannot be designated as “original parts” our normally called “pirate
parts” which is not used by MECA.
43
The spare parts used by MECA repair shops are equivalent or higher
quality compared to the parts originally assembled by the motor vehicle
manufacturers. It is therefore contested that the spare parts sold at MECA
repair shops are of lesser quality.
Claim e) – assertions regarding the skills and training of mechanics
44
It is incorrect to claim that motor vehicle manufacturers or their general
agents can decide on their own what are the “correct” skills and training.
Nor is there any “mandatory” training required for any individual
mechanic or brand repair shop to be able to perform work holding
professional standard.
45
The skills and competency levels, and training levels are generally at least
equivalent or higher at MECA repair shops compared with authorised
repair shops. MECA has a nation-wide organisation with full-time skilled
and experienced trainers who conduct training for the mechanics working
in the MECA repair shops following a specified training programme.
Claims f), h), i) and j) – assertions regarding service and repairs and the
validity of guarantees
46
The MECA repair shops have access to the same information, including
software, as the authorised repair shops that may be necessary to repair
cars. Motor vehicle manufacturers do not have any “right of approval” or
prerogatives in regard to determining the equipment or tools that are
“correct”. MECA’s repair shops have undertaken to have the relevant
brand repair shop equipment that, to a certain extent, is exactly the same
equipment as used by the authorised repair shops.
47
Assertions regarding prices being generally more favourable at MECA
than at authorised repair shops are correct.
48
According to current law, a car owner can leave their car for repair at an
independent brand repair shop and not risk losing their rights under
guarantees issued by motor vehicle manufacturers. In their arguments in
this regard, BIL Sweden attempts to prevent MECA from suggesting that
their MECA repair shops perform at least equivalent work as the
authorised repair shops, and that these car owners can therefore demand
the full validity of the manufacturer’s guarantees from members in BIL
Sweden. In doing so, BIL Sweden confuses two entirely different
circumstances: First, that a car owner can assert demands against the
motor vehicle manufacturers based on the guarantees these have issued;
and second that car owners can assert demands for professional standard
performance by the brand repair shop that has performed the work. When
authorised repair shops meet their obligations under statutory consumer
regulations to hold the car owner harmless for failing to maintain
professional standards in performance it has nothing to do with these
guarantees. The MECA associated repair shops naturally must also take
responsibility to hold the car owner harmless when it is found that their
work fails to maintain professional standards. The complained of
marketing assertions are designed to inform that under the presumption
that the repair shop meets professional standards in performing their
work, which is the case if the individual mechanic follows the instructions
MECA has issued for their associated repair shops, then the motor vehicle
manufacturers are obligated to meet the commitments made in their
guarantees. At times, however, certain confusion as to terminology does
arise, since the term “guarantee” is often used in regard to offers that are
more similar to insurance, such as “mobility guarantee”.
EVIDENCE
49
BIL Sweden has called for examination of witnesses T. H., M. B., C. V., G.
P., S. D., S. E., N. A., O. J., N. J. and R. N.
50
MECA has called for under questioning under other T. O. And
examination of witnesses P. O., J. B., K. V., A. M., T. M., H-J. W., H. P., T.
J., S. N. and L. F.
51
Documentary evidence and review of physical evidence have been
referenced in the case.
FINDINGS
52
The marketing subject to the BIL Sweden lawsuit consists of assertions
regarding MECA affiliated repair shops, the quality of spare parts provided
by MECA, their mechanics’ skills and training, service quality, and price
and regarding the validity of guarantees and service agreements after
service is provided at a MECA affiliated repair shop. The marketing claims
have been made on MECA’s website, in commercials, and on repair shop
buildings.
53
According to the Market Court, the target group for these marketing
activities are Swedish car owners generally.
54
According to § 10 first paragraph of the SMA, a trader may not make any
incorrect statement or other representation that is misleading with respect
to the trader’s own or another person's business activity. According to § 10
second paragraph subsections 4 and 5, the first paragraph applies in
particular to representations which concern the product’s price, basis for
calculating the price, special price advantages and payment terms, and the
qualifications of the trader or of another trader.
55
According to § 5, marketing shall be consistent with good marketing
practice.
56
According to §§ 6 and 8, marketing that contravenes §§ 5 and 10 shall be
regarded unfair if it affects or likely affects consumers’ ability to make
informed business decisions.
57
According to the reverse burden of proof principle as applied in marketing
cases, the trader who has used a claim in his economic activity must be able
to prove that the claim is correct. If a trader cannot prove this, the claim
shall be regarded as misleading.
Claims a) and b) – assertions that MECA is a brand repair shop (for all
brands)
58
MECA has asserted that MECA is a “brand repair shop for all brands” and
that MECA is a “brand repair shop” (see the assertion “Find your closest
brand repair shop”).
59
BIL Sweden claims that the term “brand repair shop” shall be interpreted
as though the repair shop is authorised or otherwise approved by a certain
motor vehicle manufacturer. MECA has stated that the average consumer
does not perceive their use of the term as though MECA is a brand repair
shop, and that it is well known by car owners that MECA is an independent
repair shop chain.
60
According to the Market Court, the term “brand repair shop” must be
interpreted as synonymous with “authorised repair shop”, which is
supported further by articles BIL Sweden has referenced. It is undisputed
that MECA affiliated repair shops are not authorised repair shops for all
brands and that only certain MECA affiliated repair shops are authorised
for one or a few car manufacturers. The assertions subject to BIL Sweden’s
lawsuit are therefore incorrect as such. This is not a play on words or
acceptable marketing exaggeration – as MECA has stated – which could
mean that the assertions are not misleading at all or that the requirements
in the ‘informed business decision test’ in § 8 SMA are not met. The
assertions considered here are unfair and shall therefore be prohibited.
Claims c), e), f) and first clause of g) – Assertions that all cars can be
serviced at MECA etc.
61
The relevant assertions referring to these motions are as follows:
-
“Whoever provides the service has to have knowledge of your specific
car. We know this at our 315 repair shops. – MECA brand repair shops
for all brands.”
-
“Our repair shops – for all cars.”
-
“Whatever car brand you drive, there is always a MECA mechanic
with the right skills and training to take care of it.”
-
“When you leave your car at a MECA affiliated repair shop, you can
feel secure it is in safe hands. Our affiliated repair shops can provide
the same service and repairs as your authorised repair shop.”
-
“MECA’s repair shop chain features repair shops which can service all
types of brands in Scandinavia […].”
62
The assertions above are formulated in different ways. However, the Market
Court finds that these are partly overlapping in terms of meaning and that
in their context gives the impression that MECA affiliated repair shops can
service all cars, among other things.
63
MECA has, in this case, stated that assertions that MECA or MECA
affiliated repair shops can service all cars should not be interpreted as if all
MECA affiliated repair shops can service all cars. Instead, they suggest a
meaning that all MECA affiliated repair shops collectively are able to
service a high proportion of all cars. BIL Sweden however states that the
relevant assertions must be interpreted as if each MECA affiliated repair
shop can service more or less all cars.
64
Looking at case law, it is obvious that the party responsible for a marketing
activity has the burden of proving its correctness for all possible
interpretations of the claim or assertion that arise.
65
In the Market Court’s assessment, some of the relevant assertions cannot
be interpreted in any way other than as BIL Sweden has claimed, namely
that each MECA affiliated repair shop alone is able to service all cars. One
assertion can be regarded as more linguistically ambiguous (“MECA’s repair
shop chain features repair shops which can […]”). However, even in this
case, the interpretation that each MECA affiliated repair shop alone is able
to service all cars arises, especially in light of all the other assertions on the
website.
66
It is undisputed that every MECA affiliated repair shop cannot service all
car brands. This simple fact in itself means that the relevant assertions are
misleading. The marketing is also unfair since it likely affects consumers’
ability to make an informed business decision. BIL Sweden’s action for
prohibition is therefore approved and shall have the formulation as stated
in the Court’s ruling (see section 1 c).
Claim d) – assertions that only “original parts” are used
67
The claim here concerns how the term “original parts” is understood. The
Court has examined evidence showing that modern cars are assembled from
parts from many subcontracting supply manufacturers.
68
Many interpretations of the term “original parts” have been the subject of
discussion during these court proceedings. The term can be defined either
as spare parts bearing the trademark of a car manufacturer, or spare parts
that are produced by the same manufacturer as manufactured the original
part originally featured in the car, or spare parts that have been
manufactured by a different manufacturer but that still meet the
requirements for the legal definition of “original parts” according to article
19 in the Supplementary Guidelines.
69
MECA has stated that MECA and MECA affiliated repair shops only
provide spare parts from suppliers who meet the requirements for the legal
definition of “original parts” according to article 19 in the Supplementary
Guidelines.
70
BIL Sweden has argued, primarily, that the legal definition in competition
law is not critical in a case under the SMA, and secondarily, that the spare
parts provided by MECA do not always meet the requirements for the legal
definition of “original parts” under article 19 in the Supplementary
Guidelines.
71
According to article 19 in the Supplementary Guidelines, “original parts or
equipment” means parts or equipment manufactured according to the
specifications and production standards provided by the motor vehicle
manufacturer for the production of parts or equipment used in the assembly
of the motor vehicle in question. Furthermore, it is presumed, unless proven
otherwise, that parts constitute original parts if the manufacturer certifies
that the parts match the quality of the components used in the assembly of
the motor vehicle in question, and have been manufactured according to the
specifications and production standards of the motor vehicle.
72
The last sentence in article 18 in the Supplementary Guidelines – for which
the Swedish translation is not entirely clear (see note 4 above) – states that
such parts not defined as original parts can be deemed to be “parts of
matching quality”. Article 20 in the Supplementary Guidelines states that
spare parts must maintain a sufficiently high quality in order to be
considered “matching quality”.
73
In this regard, MECA has referenced testimony of several foreign employees
of companies that manufacture and supply certain kinds of car parts to
them. MECA also referenced certificates from these companies and a large
number of companies that supply car parts to them. MECA has referenced
the witness testimony and certificates as evidence that the car parts in
question have been manufactured according to each car manufacturer’s
specifications and production standards, and that the parts shall be
regarded as original.
74
However, the evidence presented – including witness examinations of K.V.,
A.M., and H-J. W. – shows that manufacturers of aftermarket car parts
often do not have access to car manufacturers’ specifications. Instead,
according to these witnesses, these manufacturers often use “reverse
engineering”. In short, this means that certain parts, as an oil filter
originally assembled with the car, is disassembled and analysed, and then
copied for production (conditional to the part not being protected as
intellectual property, as with a patent).
75
Also, the referenced certificates do not prove the manufacturers produce
original parts according to the definition stated in the Supplementary
Guidelines. To the contrary, some of the certificates state that the
manufacturers produce spare parts of “matching quality” (see article 20 in
the Supplementary Guidelines).
76
The Court therefore finds that MECA does not only sell parts that can be
regarded as original parts as defined in the Supplementary Guidelines. The
spare parts also cannot generally be considered original parts in any other
way. (See below for parts’ matching or higher quality.) MECA’s marketing
is therefore incorrect and misleading. Furthermore, the marketing is unfair
since it likely affects consumers’ ability to make an informed business
decision. BIL Sweden’s claim of prohibition here is therefore approved.
Claim g) second clause – that spare parts have matching or higher quality
77
MECA asserts that “MECA can service all sorts of brands in Scandinavia,
with fitting spare parts of equivalent or higher quality than your brand
repair shop”.
78
As the Market Court states above, the first clause of this assertion shall be
prohibited since it is misleading and unfair (see claim c).
79
Concerning the second clause of the assertion, the Market Court finds that
the in itself it can be interpreted as if MECA spare parts are generally
“matching” or higher quality than the parts available in brand repair shops.
In this context, it is notable that MECA has, on its website, asserted that
MECA’s car spare parts are of at least “original quality”, which strongly
indicates the parts sometimes can have even higher quality.
80
BIL Sweden has presented as evidence several spare parts (various filters)
bought separately at MECA and authorised repair shops, to prove that
MECA’s spare parts are of lower quality than corresponding parts from
authorised repair shops.
81.
The evidence has shown that there are differences between the parts bought
at MECA and parts bought at authorised repair shops. For example, a filter
bought at MECA was missing a coating of active charcoal and another filter
was missing a certain protection against a defect common in colder climates.
82
Witness examinations, including of H-J. W., have shown that manufacturers
of car parts such as Bosch, from whom MECA purchases spare parts,
sometimes produce two versions of the same part, as with filters: One
cheaper version and one more expensive version. Witness testimony has also
shown that Bosch, in this particular case, has manufactured a filter
identical to the one purchased by an authorised repair shop. Considering
this and the uncertainty whether BIL Sweden had bought the cheaper or
the more expensive spare part at MECA, the value of this evidence is
limited.
83
MECA’s witness examinations with employees of manufacturers producing
products for aftermarket spare parts, and, especially the certificates from
these and other manufacturers, have shown with sufficient certainty that
the relevant parts are, generally, of matching quality to those provided by
brand repair shops (see rule of presumption in article 19 in the
Supplementary Guidelines).
84
MECA has also asserted that the quality of the parts that MECA offers could
be higher than the parts offered by authorised repair shops. This is a farreaching claim only supported by certain rather general testimony from HJ. W. and others. The Market Court finds that the evidence regarding this
claim is not sufficient to prove MECA’s claim correct. The claim is therefore
misleading. The claim is also unfair since it likely affects consumers’ ability
to make an informed business decision. BIL Sweden’s claim here is partly
approved and MECA is prohibited to use assertions as specified in the ruling
(see section 1 g).
Claim h) – The assertion regarding offering “at least the same level of
service”, at “generally much more favourable prices”.
85
In the context of these assertions, this obviously involves a comparison with
authorised repair shops (and not with other repair shops in general).
According to the Market Court, the meaning of the claim is, namely, that
MECA’s service levels are as high or higher (note “minimum”) as compared
to authorised repair shops, and that prices at MECA, in most cases, are
lower than those of the authorised repair shops. Regarding the term “Service
level”, the context in which it appears indicates it must be understood as a
general statement of the quality of the service provided.
86
Regarding the level of service, MECA has referenced several witness
examinations. BIL Sweden has referenced witness examinations of several
others to refute these assertions, and it has referenced inspection protocols
from the vehicle inspection agency (Bilbesiktningen), in order to support
their claim that the service provided by MECA affiliated respire shops in
three specific cases have shown defective quality.
87
Regarding these specified services provided by MECA in three concrete
cases, and inspected by the vehicle inspections agency, the Market Court
states that the service provided certainly seems to have had certain
deficiencies. However, according to the Market Court, these three random
tests do not justify any general conclusions about the quality of the service
provided by MECA affiliated repair shops (cf. MD 2012:13).
88
Moreover, in regard to the evidence presented here, this essentially
represents one word against another. The witnesses referenced by MECA
have stated it is entirely possible for MECA affiliated repair shops to provide
service in a satisfactory manner, and for many different car models. To the
contrary, witnesses referenced by BIL Sweden have emphasized the
importance of possessing certain brand-specific skills and equipment,
basically available only at authorised repair shops.
89
The information provided by these witnesses is largely from people
associated to each party, whereby the Market Court holds that this
information must considered with caution. Consequently, the Market Court
finds that MECA has not proved the claim that MECA can offer “at least the
same level of service” as authorised repair shops.
90
Regarding the claim here that prices are normally lower at MECA than at
authorised repair shops, MECA has referenced evidence including witness
testimony of several individuals, price surveys, and several newspaper
articles.
91
The Market Court finds that the referenced newspaper articles have very
limited value since they mainly consist of general discussion of independent
repair shops that generally can be cheaper than authorised repair shops. In
regard to the testimony and price surveys of T.J. and S.N., the Market Court
finds that the evidence provided must be considered with caution since these
individuals are employed at MECA. Regarding the price survey from
independent firm K2 Analysis AB (K2), the Market Court makes the
following assessment.
92
The report submitted shows that K2 has conducted three surveys. The first
two surveys consisted of consumer interviews, and so-called “mystery calls”
made to repair shops in order to compare prices on services reported by
consumers, to prices at comparable repair shops (MECA affiliated repair
shop and “other repair shop”). This covered 316 respondents with a response
rate of 25%. The conclusion of these two surveys was that MECA is cheapest
72% of the time. However, the report identifies a major flaw with these two
surveys; namely only 19% (59 out of 316) of the respondents were sufficiently
specific regarding the type of service/or measure they bought at the repair
shop. The Market Court finds this flaw so significant that the results of this
section of the report is considered having limited value as evidence.
93
The third survey conducted by K2 compared the service measures identified
as most common in the consumer interviews (from the first survey). in
paired comparisons, between MECA affiliated repair shops and other repair
shops. The report concludes that MECA has the lowest prices in 54% of the
cases. However, the Market Court finds that this can be questioned for
several reasons. First, considering the response rate in the first survey, it is
uncertain whether the service measures involved are the most common.
Second, the common measure (according to the consumer survey) “annual
or [mileage] service” was not considered since – as stated in the report – “the
content of the service is not identified and therefore may vary”. Third, it is
unclear which repair shops the MECA affiliates were compared with. For
these comparisons to be relevant in respect to the marketing claims under
consideration here, the non-MECA repair shops surveyed in the report must
be authorised repair shops. Fourthly, the report references only ten cars,
though these are identified as common brands representing 70% of the
Swedish car fleet. However, it cannot be precluded – as stated in the report
– that the “results would be different if other brands and model years were
studied”. Considering the entirety of this evidence, the Market Court finds
the third survey also does not provide confident conclusions relating to
prices.
94
In conclusion, the Market Court can determine that MECA failed to prove
the claim considered here that prices are generally lower at MECA affiliated
repair shops than at authorised repair shops.
95
The assertion is therefore misleading in its entirety. The marketing claim is
also unfair since it likely affects consumers’ ability to make an informed
business decision. BIL Sweden’s claim of prohibition in this part shall
therefore be approved.
Claim i) and j) – assertions that all guarantees and service agreements
remain valid
96
In relation to the prohibition claims considered here, MECA has asserted:
- “All guarantees apply – Regardless brand and model year”
- “[A]ll your guarantees and service agreements are valid, whatever brand
you drive.”
97
As determined above (see finding for Claim c, among others), not all MECA
affiliated repair shops can service and repair all cars. The assertions
considered here, seen separately, are primarily designed to inform
consumers of EU regulations whose purpose is to increase competition on
the car aftermarkets, and which entitles independent repair shops to access
certain information from the motor vehicle manufacturers. Considering the
above, these assertions’ must be considered as limited to meaning that all
guarantees and service agreements are valid after a service at a MECA
affiliated repair shop regardless of brand.
98
It is undisputed in this case that all guarantees and service agreements
apply regardless of the repair shop performing the work, provided this work
meets professional standards.
99
BIL Sweden has claimed that MECA’s assertions are incorrect, since the
MECA affiliated repair shops do not always meet requirements of
professional standards. MECA contests this claim that MECA affiliated
repair shops generally do not meet these requirements.
100 BIL Sweden has, as evidence supporting their claims here, also referenced
inspection protocols from the vehicle inspection provider to show that the
service provided by MECA affiliated repair shops was substandard quality
in three specific cases. The Market Court has determined (as foun above for
claim h), that these cases do not permit general conclusions as to the quality
of services provided by MECA affiliated repair shops. BIL Sweden and
MECA have also referenced several witnesses as to how complicated it is to
perform certain services, and similar. on modern cars. For the reasons
stated above (claim h), this evidence from witnesses in favour of each party
must be considered cautiously.
101 It is undisputed that MECA has quality requirements for affiliated repair
shops regarding training and equipment. With no further evidence
submitted to contradict this, such as statistics of complaints, it is found
proven sufficiently that repairs and other measures that individual MECAaffiliated repair shops perform, generally meet professional standards.
102 The assertions considered here can therefore not be found misleading and
BIL Sweden’s assertions in this claim shall be dismissed.
Fine
103 According to § 26 of the SMA, prohibition shall be subject to conditional
financial penalty, unless special grounds render this unnecessary. Such
grounds do not exist in this case. There is also no reason to deviate from
current case law in relation to the size of the fine.
Litigation costs
104 Since BIL Sweden’s claim was dismissed to only a limited extent, BIL
Sweden is the winning party, and is therefore entitled to compensation for
litigation expenses under chapter 18 §§ 1 & 4 of the Swedish Code of Judicial
Procedure.
106 BIL Sweden, according to unchallenged information, is not taxed under the
Swedish Value Added Tax Act (1994:200), claims compensation for
4,762,500 SEK (including VAT), of which 4,737,500 is for attorney fees and
25,000 refers to witness expenses. MECA has in regard to the attorney fees,
attested SEK 1,284,600 (excluding VAT). Compensation for the witness was
verified fully by MECA.
107 The Market Court’s assesses BIL Sweden to be reasonably compensated for
attorney fees of SEK 4,000,000. MECA shall therefore reimburse BIL
Sweden for litigation costs totalling SEK 4,025,000.