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Automotive Newsflash - AUTOLIEK 1: Is the termination of an authorized dealership agreement confidential information?

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26/03/2018

AUTOLIEK 1:  Is the termination of an authorized dealership agreement confidential information?

No.

The termination of an authorized dealership agreement is not considered confidential information nor a trade secret.

Provided that the applicable privacy regulations are complied with, the importer can inform its clientele about it and / or answer any spontaneous questions related to this situation.

However, the importer should ensure that its communication on the termination remains objective, accurate, relevant and does not affect, in terms of both its form and content, the terminated dealer’s credibility and reputation.

In this context, one could think of informing clients of the termination date and the fact that the terminated dealer will no longer be authorized to honour warranties, provide free servicing and/or complete any recall work as from the specific date. Other relevant information, such as, a list of the network’s authorized dealers in the relevant territory, may be attached to the communication. However, if the importer takes this opportunity to suggest that turning to the authorized network for “security reasons” is best, such a communication may be denounced by the terminated dealer as damaging its professional interests.

Although, the importer’s freedom of expression remains the baseline principle, its good faith obligation towards its terminated dealer requires it exercise its rights with reservation and moderation.