U.S. Judge Dismisses Antitrust Lawsuit Against Tesla
A U.S. judge has dismissed an antitrust lawsuit accusing Tesla, the electric car company led by Elon Musk, of monopolizing the markets for vehicle maintenance and replacement parts. The lawsuit alleged that Tesla forced customers to pay high prices and endure long waits for repairs by limiting their options for maintenance and parts.
The decision was made by U.S. District Judge Trina Thompson in San Francisco. She ruled that the customers in the proposed class action failed to demonstrate that the alleged problems were not widely known at the time of their vehicle purchases, or that they were unable to predict the costs associated with maintaining their vehicles.
Judge Thompson also stated that the customers could not prove that Tesla coerced them into using the company’s services and parts solely because they had bought Tesla vehicles. She noted that while the plaintiffs claimed that Tesla misled them about the maintenance needs and duration, they did not allege that consumers were unaware of the supposedly higher prices and long wait times.
Furthermore, the judge dismissed the claims made under California consumer protection laws. However, she left open the possibility for the customers to amend their complaint. The lawsuit combined five separate lawsuits and covered drivers who had paid for Tesla repairs and parts since March 2019.
Lawyers representing the customers involved in the case have not yet responded to requests for comment.
According to the complaint, Tesla differs from traditional car manufacturers as it requires customers to have their vehicles serviced at Tesla-approved centers and use only Tesla parts. Unlike other car manufacturers, Tesla sells its vehicles directly to consumers rather than using a network of franchisees.
In terms of revenue, Tesla reported $6.15 billion from services and other automotive-related activities from January to September, accounting for approximately 9% of its total revenue. Meanwhile, vehicle sales accounted for $57.9 billion, or 81%, of the company’s total revenue for the same period.
The case, known as Lambrix v Tesla Inc, was heard in the U.S. District Court in the Northern District of California with the case number 23-01145.
Reporting by Jonathan Stempel in New York; editing by Diane Craft
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