Tesla Inc. is facing a pair of proposed antitrust class actions accusing the company of unlawfully curbing competition for maintenance and replacement parts for its Electric vehicles, forcing owners to pay more and wait longer for repair services. The lawsuits, filed in federal court in San Francisco on Tuesday and Wednesday, allege that Tesla designed its Electric vehicles, warranties and repair policies to discourage owners and lessees from using independent shops outside of Tesla’s control.
The proposed class in both cases would include anyone who has paid Tesla for repairs or parts since March 2019. According to the plaintiffs’ lawyers, the potential class includes hundreds of thousands of Tesla owners and lessees, so damages could total hundreds of millions of dollars.
The complaints argue that Tesla’s alleged restraints on service and repair have caused “exorbitant wait times” for drivers who otherwise would have gone to an independent repair shop. The lawsuits call for Tesla’s repair services and parts monopoly to be “dismantled” and for the company to make its repair manuals and diagnostic tools “available to individuals and independent repair shops at a reasonable cost.”
Tesla’s alleged anticompetitive practices come at a time when the U.S. Federal Trade Commission (FTC) has made “right to repair” a priority to address manufacturer restrictions on repairs and parts. As part of its efforts, the FTC recently issued a policy statement that said the agency would make it a priority to address manufacturer restrictions on repairs and parts.
The “right to repair” movement has gained traction in recent years as consumers and independent repair shops have come together to challenge the increasingly consolidated auto industry’s attempts to limit access to vehicle service information and parts. Tesla joins other major vehicle makers facing similar antitrust litigation, including Harley-Davidson Motor Co Group LLC and Deere & Co, the world’s largest farm equipment maker.
The proposed class actions against Tesla are a reminder that the company’s anticompetitive conduct will not be tolerated. With the FTC’s policy statement, the pressure is on for Tesla to open up its ecosystem and allow competition for the servicing of its vehicles and sales of parts. If the company fails to do so, it may end up paying hundreds of millions of dollars in damages.
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