BMW wins 'illicit purchasing' case

Judges say resellers cannot disguise themselves as end-consumers

Munich. BMW has won its case against two independent dealers at the district court here. The dealers are no longer allowed to buy BMW vehicles from authorized dealers with the intention of reselling them.

In both cases the dealers pretended to be end customers. Shortly after purchasing the vehicles, they sold the cars -- primarily BMW station wagons and SUVs -- in Italy.

BMW accused the purchasers of anticompetitive "illicit purchasing." BMW dealers had been deceived and were not informed of the purchasers' real intent.

European Union rules on retailing prohibit the selling of vehicles to unauthorized resellers within the selective distribution system, which applies to BMW.

BMW applied for an injunction under penalty of 250,000 euros.

According to the verdict, the defendants must no longer pass themselves off as ultimate consumers if they plan to resell a vehicle shortly after purchasing it.

However, the judges decided that BMW was not entitled to compensation or information about the scale of the transactions concerned.

According to specialist lawyers, illicit purchasing is not anticompetitive. They referred to a verdict by the German Federal High Court in 1999.

BMW already took two resellers to court in August. Then, the manufacturer referred to a clause within its sales terms and conditions that obligated customers to hold on to their cars for at least four months. The clause, however, was declared null and void by the EU competition authority after an enquiry by EU delegate Christoph Konrad. The authority said: "A car manufacturer cannot obligate its dealers to keep their customers from reselling their vehicles within a certain period of time."

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