Guilty verdict against Kia guarantee

The question of the restrictive market terms regarding approved service providers applied by Kia Motors on its 7-year new car guarantee in the Swedish market is decided. This is after the Supreme Court in Stockholm dismissed Kia Motor’s petition for leave to appeal, re-trial, to receive a new legal hearing of the Market Court’s guilty verdict.

The reason that Kia has petitioned for a re-trial is that they, according to a legal report, allege that the Market Court is guilty of miscarriage of justice, negligence, in its verdict. “It is our opinion that the Market Court’s verdict was explicit and clear at the same time as they both defined and explained how the rules of play in the car aftermarket shall be applied and also what they mean,”  said Christer Liljenberg, Chairman for the Swedish Industry Organisation for the independent car aftermarket, the Association of Swedish Car Parts Wholesalers SBF, which sued Kia Motors in 2011 for suspicion of breach of competition.

In Kia Motors’ guarantee for new car the terms require that the prescribed service be performed by a brand authorized workshop. A suspected competition restriction, according to SBF, which subsequently reported Kia Motors to the Swedish Competition Authority. The Swedish Competition Authority chose, however, not to act even though it agreed with SBF’s report that Kia Motor’s guarantee terms were likely in breach of the Commission’s (EU) ordinance 461/2010.

”Supported by, in part, the competition authority’s indication that it presumably was a matter of a breach of competition, and, in part, by our own conviction and with support from our members, SBF then chose to sue Kia Motors in the Market Court which rules in market and competition cases in Sweden,” recounts Christer Liljenberg.

The Swedish Market Court convicted Kia Motors for breach of competition and imposed a fine of SEK 5 million in December 2012. They should also pay SBF’s costs for trial. In addition to being denied a new trial in the Supreme Court they have to been ordered to pay damages for attorney fees that SBF incurred in the petition for leave to appeal.

“The verdict is fundamentally important and may be viewed as a precedent for the car aftermarket within the EU. Kia Motors’ guarantee terms not only affects the car aftermarket but also car owners, the consumers,” explains Christer Liljenberg.

The Swedish verdict is the first of its kind within the EU.