EU to revise competition rules for motor vehicle distribution and repair

On May 26, the European Commission is due to adopt new competition rules for agreements between vehicle manufacturers and their authorised dealers, repairers and spare parts distributors.

The existing Motor Vehicle Block Exemption dates from 2002, and expires at the end of May. Consumers are benefiting from competitive conditions on the car sales markets, and it is therefore proposed that agreements on these markets should no longer be subject to a sector-specific regime, and should be brought within the ambit of the general block exemption for vertical restraints, Regulation No. 330/2010. On the other hand, a tougher approach is proposed for car repair and for spare parts, because these markets are structurally less competitive. The Commission therefore proposes to adopt a sector-specific block exemption and Guidelines that will supplement Regulation n° 330/2010.

Speaking before the European Parliament on May 5th, Commissioner Almunia said: "I strongly believe the new framework will bring tangible benefits for consumers. Our main priority is to increase competition in the after-sales market, in repair and servicing, where it is most lacking, and where European consumers spend a substantial slice of their budget."

The current Block Exemption Regulation 1400/2002 exempts vertical agreements that comply with its provisions from the EU competition rules' ban on restrictive business practices (Article 101(1) of the EU-Treaty). The Commission published an evaluation report in 2008 that found that many of these sector-specific provisions had been ineffective, or even counter-productive.

Last July, the Commission adopted a Communication and an Impact Assessment setting out the basic lines of the new approach. In December 2009, it published a draft of the new Regulation and Guidelines for public consultation. The Economic and Social Committee issued a report that was in favour of the proposed framework, while this week the European Parliament adopted a resolution that called on the Commission to monitor the sector in order to ensure that consumers will continue to benefit from competitive conditions in these rapidly evolving markets.