Immediate Release: August 18, 2005
Illinois Supreme Court Gives Auto Owners Big Win
By reversing the billion dollar trial verdict in Avery v. State Farm, the Illinois Supreme Court today saved consumers billions of dollars in future auto crash repair costs by restoring competition to the replacement crash parts market. After the 1999 verdict in Avery, many major auto insurers stopped specifying use of non-OEM aftermarket crash parts in collision repairs, giving the auto companies a windfall monopoly profit for their OEM (original equipment manufacturer) crash parts which often cost twice as much as a non-OEM aftermarket crash part which is certified to be at least as good as an OEM part.
Center for Auto Safety Executive Director Clarence Ditlow said:
The Federal Trade Commission and consumer groups worked for years to break the auto industry monopoly in the annual $10 billion crash parts market. With the demise of the annual style change in the 1970’s and the introduction of certified auto parts in the 1980’s, consumers benefited from high quality aftermarket crash parts that were half the price of OEM crash parts. Consumers further benefited because the competition from certified non-OEM parts forced auto companies to reduce the price on their own OEM parts.
The 1999 trial court decision in Avery v. State Farm virtually wiped out the consumer gains from competitive crash by forcing auto insurance companies like State Farm which specified certified non-OEM parts to stop using them for fear of being hit with another billion dollar judgment from a wrongfully certified class action. By reversing the decision in Avery, the Illinois Supreme Court has struck a major blow for consumers against the auto industry monopoly in crash parts.
The Center for Auto Safety has worked to break up the auto industry monopoly in crash parts since its founding in 1970 by supporting the early FTC investigations, opposing the annual style change in which every fender was changed on every car every year making it cost prohibitive to manufacture aftermarket parts, testifying before Congress and helping found the Certified Automotive Parts Association in 1988.