The consumer watchdog has launched Federal Court action against Honda Australia, accusing the car company of misleading customers and causing harm to two former authorised dealerships.
The Australian Competition and Consumer Commission (ACCC) is accusing Honda Australia — which is owned by Japanese car manufacturer Honda Motor Co. — of making false or misleading representations to customers.
It alleges that, from January to June last year, Honda Australia misled customers by telling them that two authorised dealerships had closed or would close and that those dealers could not service Hondas.
However, Honda had actually broken its contracts with Astoria Brighton in Victoria and Tynan Motors in New South Wales just two years into their franchise agreements.
The customers were contacted by Honda in texts, emails and phone calls between January and June last year.
However, in fact, both car dealerships continue to trade independently and to service vehicles.
Some customers were told their car warranties would not be valid unless they serviced their vehicles at an authorised dealership.
“We allege Honda deprived customers of the opportunity to make an informed choice about options for servicing their car, in favour of a Honda-linked dealership, which may have been less convenient or more costly for them,” ACCC Commissioner Liza Carver said.
“We also allege Honda caused harm to the Astoria and Tynan businesses, by falsely claiming they had closed or would close, which may have led customers to have their Honda vehicles serviced elsewhere.”
Last year, the ABC reported on Astoria's "David-and-Goliath" legal battle against Honda to get compensation after the car marker broke its contract.
Astoria co-owner Mark Avis also told the ABC that Honda used Astoria's database to send SMS and email messages to 34,000 customers, instructing them to move their business to the remaining dealers.
After several other, related court matters have been resolved, Astoria and Tynan have now filed proceedings in the Supreme Court of Victoria.
Those proceedings used internal Honda Australia documents to argue that the company did not disclose its plans to terminate a number of authorised dealers before renewing their five-year franchise agreements in 2018.
The claim states that Astoria and Tynan have suffered losses and damages through not being able to earn money by being an authorised Honda Dealer nor an authorised Honda Parts and Service dealer, nor the ability to sell the business as a Honda franchise.
Astoria and Tynan argue that Honda has broken Australian Consumer Law and breached the Franchising Code.
In a statement, Honda Australia said it "has cooperated with the ACCC's investigation into this matter".
"We are reviewing the recent filing by the ACCC and at this stage are unable to comment further on specific circumstances or details regarding the claims made or individual dealers," the company said.
On Wednesday, Mr Avis welcomed ACCC's court proceedings against Honda.
"We have maintained for some time now that how Honda Australia has treated us and other Honda dealers is unlawful," Mr Avis said.
"We were the most-successful Honda dealership in the country before being terminated by Honda Australia for no lawful reason. And, after being terminated, Honda Australia has sought to mislead our customers about our ability to continue servicing their Honda vehicles.
"We need a strong regulator like the ACCC to protect Australian businesses from the bullying behaviours of large, multi national companies."
The ACCC is seeking declarations, pecuniary penalties and costs.
