The Federal Court today decided it would impose penalties totalling $6 million on Honda Australia Pty Ltd, accepting Honda engaged in misleading or deceptive conduct, and made false or misleading representations to customers of former authorised Honda Australia dealerships Brighton Automotive Holdings Pty Ltd (Astoria), Tynan Motors Pty Ltd (Tynan) and Buick Holdings Pty Ltd (Burswood).
The ACCC alleged that between about January 2021 and June 2021, Honda Australia represented to customers of Astoria, Tynan and Burswood that the dealerships would close or had closed and would no longer service Honda vehicles, when this was not the case. These representations were allegedly made in emails, text messages and phone conversations with customers.
The communications were made in the context of Honda Australia restructuring which resulted in some franchise agreements with authorised dealers being terminated, including agreements with Astoria, Tynan and Burswood. The Astoria, Tynan and Burswood dealerships continued to operate independent service centres to service and repair vehicles, including Hondas.
Honda Australia admitted that in certain statements to thousands of customers it had breached the Australian Consumer Law by making misleading representations that the dealerships had closed and would no longer service Honda vehicles.
The company contested that other statements about the dealerships alleged by the ACCC were also in breach and the Federal Court concluded that these additional statements did not contravene the Australian Consumer Law.
“We took this case because we believed Honda Australia’s conduct harmed the dealerships and their customers,” ACCC Commissioner Liza Carver said.
“Honda Australia deprived consumers of the opportunity to make an informed choice about their options for servicing their vehicle. It also caused likely financial loss to the dealerships by the false claim they were closing or had closed.”
“The substantial penalty sends a strong message to all businesses about the consequences for making misleading statements to consumers,” Ms Carver said.
Background
Honda Australia is a motor vehicle retailing company, owned by the Japanese company Honda Motor Co Limited.
Prior to 1 July 2021, Honda operated a franchise model. In February 2020 Honda resolved to restructure its operating model, including transitioning to an agency model for new vehicles. As a result Honda terminated a number of its authorised dealerships’ franchise agreements, including agreements with Astoria, Tynan and Burswood.
The Astoria dealership is located in Brighton and Bentleigh East, Melbourne, and had been a Honda-branded dealership for approximately 50 years. The Tynan dealership in Sutherland, NSW, had also been with Honda for around 50 years.
The ACCC commenced legal action against Honda Australia in April 2022.
Example of Honda Australia’s text message to Astoria, Tynan and Burswood customers:
