Carfax Litigation

In September 2016, District Judge Alison J. Nathan granted a motion for partial summary judgment brought by Compass Lexecon’s client Carfax, the leading provider of vehicle history reports (VHRs) in the U.S. The Plaintiffs alleged that Carfax had exclusive dealing arrangements with car manufacturers and used car listing websites that foreclosed rival VHR suppliers. In granting Carfax’s motion for summary judgment, Judge Nathan relied on expert reports and deposition testimony from Dr. Robert Willig, finding that even if the alleged conduct occurred, Carfax did not foreclose a sufficient portion of the market to support a legal claim.

Plaintiffs in this matter were 469 dealers of used cars that challenged Carfax’s agreements with certified pre-owned (CPO) vehicle programs and certain websites advertising used vehicles for sale (e.g., Autotrader or Cars.com). Specifically, Plaintiffs alleged that: 1) agreements with CPO programs to use Carfax VHRs in promoting their CPO vehicles adversely affected competition in the market for VHRs and 2) Carfax’s agreements with Cars.com and Autotrader to be the exclusive VHR provider for these sites also adversely affected competition in the market for VHRs. Judge Nathan relied on evidence put forth by Dr. Willig that “CPO Agreements were sufficiently short-term and/or terminable that they could not have foreclosed competition” and that “Website Agreements did not foreclose competition because Autocheck [Carfax’s principal competitor] could reach consumers through other means.” Further, Judge Nathan relied on evidence presented by Dr. Willig in his Reply Report that the foreclosure estimates used by Plaintiffs’ expert were unreliable, finding that “[Plaintiffs’ expert’s] foreclosure estimate was based on an artificially small figure for Carfax’s VHR sales, and therefore an artificially small estimate of the overall size of the market.”

Dr. Willig was supported by a team out of our D.C. office that was led by Mary Coleman and Maria Stoyadinova that included Bo Bourke, Georgi Giozov and Sahdia Khan. James Cooper from Arnold & Porter LLP successfully represented Carfax in this matter.