Seat and Skoda have to justify refusal to grant service contract

Frankfurt. Volkswagen group subsidiaries Seat and Skoda have to justify their refusal to grant a service contract in a cartel suit at the Frankfurt regional court.

The case: a former Seat and Skoda partner leased his business to someone else after his dealer contract was canceled. The leaseholder applied for a service contract for both brands but his application was turned down.

Juergen Ensthaler, an antitrust law expert from Kaiserslautern University, says that, under the new European Union rules for auto retailing, manufacturers are obliged to give a service contract to any applicant that meets the required standards.

The brands' management boards, however, do not share this opinion.

"Seat and Skoda believe that, even if an applicant meets all quality standards, he is not legally entitled to a contract," Ensthaler said. Seat and Skoda declined to comment on the issue.

Ensthaler says that, under both German and European competition laws, the applicant's claim is valid.

He said that the two brands believe that only the antitrust regulator can order sanctions against a manufacturer when refusing a candidate. The authorities would then need to examine if the manufacturer should lose the right to maintain a sales network.

Such administrative proceedings by the antitrust regulator are generally a lengthy process and the result is relatively unsure, said Ensthaler.