Motor Vehicles Block Exemption Regulation
There is a general prohibition of anti-competitive agreements established under the EU Treaty.
Certain sectors are specifically excluded from this blanket prohibition. A ‘block exemption’ creates what is termed a ‘safe harbour’ for agreements between businesses in a given sector: businesses are not required to assess if an agreement might fall foul of the general ban on anti-competitive agreements. Agreements not covered by a block exemption are not presumed to be illegal, but instead, have to be assessed individually. Block exemptions thus contribute to legal certainty and to the coherent application of EU competition rules across the EU.
For the motor trade, these arrangements have been in place since the mid-eighties, allowing car manufacturers to create networks of selective and exclusive dealerships.
This was partly on the grounds that the regular maintenance of vehicles, by trained staff at specially equipped facilities, was crucial in the light of their potential impact on health, property and the environment.
In October 2002 European Commission Regulation No. 1400/2002 – the ‘Motor Vehicle Block Exemption’ – came into force, replacing Regulation No 1475/95 : this allows vehicle manufacturers to create networks of selective and exclusive dealerships, provided that they do not contain any serious restrictions of competition and that they meet the other conditions laid down by the Regulation, such as giving authorised repairers (independent garages) access to technical information and spare parts. The regulation ensured that all service and repair work could be undertaken by any garage whether an authorised or independent dealership.
Looking at the rules as they applied to car repairers, the aims of this legislation were:
To allow manufacturers to set selection criteria for authorised repairers, so long as these do not prevent the exercise of any of the rights enshrined in the Regulation;
To ensure that if a supplier of new motor vehicles sets qualitative criteria for the authorised repairers belonging to its network, all operators who fulfil those criteria can join the network. This approach will enhance competition between authorised repairers by making sure that operators with the necessary technical expertise can establish themselves wherever there is a business opportunity;
To improve authorised repairers’ access to spare parts which compete with parts sold by the vehicle manufacturer;
To preserve and reinforce the competitive position of independent repairers; these currently carry out on average about 50% of all repairs on motor cars. The Regulation improves their position by reinforcing their ability to gain access to spare parts and technical information in line with technical advances, especially in the field of electronic devices and diagnostic equipment. The access right is also extended to training and to all types of tools since access to all four of these elements is necessary if an operator is to be able to provide after-sales services. A desirable and important side effect of this wider access is to encourage improvement in independent repairers’ technical skills, to the benefit of road safety and consumers in general.