Unfair Commercial Practices Directive, Chapter 2, Article 5, 1. Unfair Commercial Practices Directive, Chapter 2, Section 1, Article 6, 1., (b)

The adaption of the number of kilometers a vehicle has traveled, by adapting the vehicle's odometer, constitutes an unfair commercial practice.

The present case deals with alternations to odometers in cars sold by the defendants.

On 9 September 2010 the Italian Competition Authority decided to start an investigation regarding the car dealers Autobrand S.r.l. and Autosab AR S.r.l. The investigation was launched following an accusation reported by the Italian Traffic Police.

The Italian Competition Authority performed inspections in collaboration with the Market Protection Corps of the Guardia di Finanza (Italian Tax Police).

According to the Italian Competition Authority, the defendants altered odometers, an instrument that indicates distance traveled by a vehicle, in cars to display a lower number of kilometres actually traveled by that car. Both defendants also inserted this false information in their guarantees towards the consumers.

Only defendant Autobrand presented a defense, arguing that with the exception of one vehicle only, no vehicles identified by the Tax Police were to be offered for sale but were destined for internal use solely. The defendant further argued that in some cases the odometer was altered to correspond with an engine, when the engine of that vehicle was replaced.

By analyzing the number of kilometres indicated on the invoices of purchase of the car by the defendant, the Authority established that several odometers were indeed altered.

Following the investigation carried out by the Criminal Police, the Authority found out that the defendants altered the odometers with help of a collaborating workshop. It was also established that the defendants inserted the false information in the respective guarantees of the altered vehicles.

According to the Authority, by their conduct, the defendants omitted to provide information concerning the main characteristics of the advertised products. The Authority concluded that consumers did not have necessary information to be able to take an informed transactional decision, causing them to take a transactional decision that they would not have taken otherwise.



In a short reasoning, the Authority further pointed out that the alteration of drawn kilometres cannot be justified even in cases where an engine of a vehicle was changed because the mileage indicated the overall life of the vehicle and not only the life of the engine. Neither was the defendant's defense withheld, that the cars were to be used internally only.



As a result, taking into account the gravity and duration of the commercial practice, the Authority concluded that the defendants have breached the prohibition on unfair commercial practices.

 

Does the adaption of the number of kilometers a vehicle has traveled, by adapting the vehicle's odometer, constitute an unfair commercial practice?

 

URL: http://www.agcm.it/ricerca-avanzata/open/C12560D000291394/A2B1DF47DFF2869AC125781C004F195D.html

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The Italian Competition Authority decided to fine both traders and it issued a cease-and-desist order regarding the criticized practices. The fines imposed:

- Autobrand S.r.l. - EUR 150.000;

- Autosab AR S.r.l. - EUR 100.000.

Consequently, the Italian Competition Authority ordered defendants to publish extract of the Authority's resolution (at their expenses) to ensure that the unfair commercial practices do not continue to constitute any effects.