MINEOLA, N.Y. — As of Feb. 25, the number of dealer plaintiffs listed in the federal antitrust lawsuit against Carfax has reached 530. The firm of Bellavia Blatt Andron & Crossettfiled the lawsuit last April on behalf of 124 dealerships. According to Senior Partner Leonard Bellavia, new plaintiffs are being added every day.
“The lawsuit is a result of my receiving numerous complaints from dealers that we represent about their relationship with Carfax,” Bellavia told F&I and Showroom. “And that stems from the fact that dealers seem to be frustrated over the lack of reliability of the CARFAX report and how it put them in very awkward position with their own customers.”
The lawsuit charges Carfax with impairing competition by entering into agreements with vehicle merchandizing sites like Autotrader.com and Cars.com, and with OEMs and their certified pre-owned programs, then asking them “not to recognize vehicle history reports from anyone other than CARFAX.”
“The net result is, every place the dealer turns, he finds himself handcuffed into using Carfax,” Bellavia said. “Because Carfax has no competition, its reports are substandard, its prices are excessive to dealers and it enables them to employ a market strategy that disparages its own customer base.”
In the past, dealers have attacked the company’s advertising tactics for vilifying them and painting them as untrustworthy. Bellevia added that the company’s prices are inflated to nearly five times the fair market value when compared to at least nine other providers of vehicle history reports.
“Competition does two things: It keeps prices in check and it requires that your product be state of the art,” he said.
The firm is still in the process of resolving preliminary motions in the case. Bellevia said the lawsuit should enter the discovery phase within the next three months.