Tesla Prevails in Monopoly Class Action Suit From Customers

U.S. District Judge Trina Thompson in San Francisco has rejected a proposed class action against Tesla that accuses the electric carmaker of monopolizing the market for vehicle maintenance and replacement parts, according to a Reuters report.

The suit claimed Tesla violated antitrust laws by forcing owners of its electric vehicles pay high prices for replacement parts, and forcing them to wait up to six months for repairs at designated service centers.

The complaint explained that unlike other automobile brands, Teslas require drivers to have their vehicles serviced by the company or its approved service centers, and use only Tesla parts. Customers also claimed that Tesla misled them about the maintenance needs of its vehicles. 

Judge Thompson argued that customers failed to demonstrate that these problems were “not generally known” when they chose to purchase Teslas. She also wrote that customers could not prove that the company coerced them into using its services and parts.

“To be sure, plaintiffs allege that defendant misled them about…how much maintenance its EVs are designed to need and how long that maintenance ought to take,” the judge wrote. “But nowhere do plaintiffs allege that consumers are in fact unaware of the supposedly supracompetitive prices and exorbitant wait times.”

According to the ruling, the Tesla customers can amend their complaint, which was actually a combination of five lawsuits.

Tesla reported $6.15 billion of services and other automotive revenue from January to September, accounting for 9 percent of its $71.6 billion total revenue.

Tesla Chief Executive Elon Musk is no stranger to the courtroom or controversy as Today’s General Counsel has reported in previous articles here and here.