OCU launches Spain’s biggest ever class action for consumers ripped off by car price cartel

Euroconsumers’ member OCU has launched Spain’s largest ever class action on behalf of consumers overcharged by a cartel when they bought new cars.

Euroconsumers’ member OCU has launched Spain’s has launched a huge class class action to compensate consumers for the money they lost due to price fixing in the new car market.

OCU, the Organization of Consumers and Users, has already registered over 100,000 buyers affected by the illegal practice and will represent them in the class action against multiple car manufacturers and retail forecourts including BMW, Ford, Honda, Audi and Renault. Any of the estimated 5 million consumers who bought a new car from a brand complicit in the price fixing between 2006 and 2013 are eligible to join.

The collective claim relates to 2015-16 when Spain’s competition authority found that 21 car manufacturers, 172 dealers and two consultancies who together have a 91% market share had broken competition law. They had shared confidential information and colluded to fix prices and discounts in the consumer car market by setting limits on the amounts of discounts available to buyers.

This anti-competitive price pact between many major car brands meant buyers did not have access to discounts or offers and ended up paying hundreds of EUROS more than they would have without the cartel in place.

The claim estimates that affected buyers will be able to get between 10 – 15 % of the value in compensation. The exact figure will depend on when the car was bought and the make and model.

How consumer groups support class actions

This is a far reaching case, involving millions of consumers and multiple manufacturers and makes of car including OCU is coordinating multiple class actions against the brands to claim for damages on consumers’ behalf.

A first step in that coordination has been to interrupt the statute of limitations for consumers’ legal action against all brands participating in the car cartel.  Essentially, the ability to claim expires within one year of the Supreme Court ruling that confirmed the sanctions of the Competition Authority.  As the Supreme Court ruled against different companies at different times, there would have been a lot of complexity for consumers in establishing if they were able to claim.

OCU’s continued actions mean that claims can be brought against brands even if the ruling was handed down over 12 months ago. This greatly simplifies communication and engagement with those affected and enables more consumers to get the redress that is owed to them.

Secondly, they have widely publicized the case and the potential to join the claim which has resulted in over 100,000 car buyers joining the action.  They have also negotiated a good financial package for participating consumers. Individual claims can be held back by these constraints which force individuals to bear the risk of enforcement action. In this action, claimants won’t have to pay anything or assume any legal costs if the claim is rejected.

Collective action as effective and accessible enforcement

Class action rules differ across countries, but essentially enable a group or ‘consumer class’ to make the same claim against a company on a more cost-effective basis. The new EU Representative Action Directive adopted last year, seeks to level up collective claims across member states so that more consumers can benefit from simpler and cost-effective actions. Euroconsumers has been at the forefront of cross border co-ordinated actions against VW for dieselgate, Apple for deliberately slowing down iphones and HP for blocking printers that use third party ink cartridges and their wealth of experience will continue to be informed by the work of its national members.