Why the ACCC stopped its investigation into Holden

Holden dealers are upset at the establishment of the GMSV with some continuing legal action

The Australian Competition and Consumer Commission (ACCC) has announced it has “completed its investigation” into the way General Motors and Holden treated its dealers in the wake of the brand’s shutdown.

The ACCC – the country’s consumer watchdog – began probing the closure of Holden and whether it had broken any laws or misrepresented itself to dealers. The dealers were unhappy with General Motors’ decision to close Holden and claimed they were being forced to make a decision on accepting compensation too quickly.

And that wasn’t the only complaint from the Holden dealers. While General Motors announced it would close Holden, it shortly after confirmed it would retain a presence in the Australian market with the introduction of General Motors Specialty Vehicles (GMSV); which will sell the Chevrolet Corvette and Silverado 1500. Holden dealers were angered by this decision, implying that General Motors was abandoning their arrangements whilst finding a way to remain in the market, albeit with a smaller presence.

But while the decision to stop the investigation may seem like good news for GM and Holden, ACCC chair, Rod Sims, made it clear that the decision was far from an exoneration of its behaviour. Instead, the decision to stop has largely been driven by a desire to not interfere with a lawsuit filed by a number of aggrieved former Holden dealers.

The fallout from Holden’s closure continues despite the ACCC closing its investigation

“While our investigation into Holden’s conduct left us with concerns about Holden’s treatment of some of its dealers, the ACCC has decided not to pursue these concerns, in large part because any ACCC action may prejudice the private actions taken by dealers. This was a difficult decision based on a range of considerations,” Sims explained.

“The behaviour by Holden has done much to damage the General Motors brand in Australia, and perhaps beyond.”

Sims added: “The way Holden withdrew from Australia and managed the process and its relationships with long-standing loyal dealerships should serve as a lesson to all franchisors of what not to do in managing their relationships with franchisees and treating them fairly and with respect,” Mr Sims said.

It’s also worth noting that the ACCC is still investigating whether Holden’s decision to end its ‘lifetime’ capped price servicing program has breached any Australian Consumer Laws.

General Motors Specialty Vehicles only released a brief statement: “We note the findings of the report.”