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On 21 December 2011, the Düsseldorf Higher Regional Court
(the Court), sitting as the court of last instance, decided an
important case concerning the right of a manufacturer of passenger
vehicles to refuse to appoint a repairer applying to be admitted to
its authorised repair network. The European Commission's
position is that, in general, all qualified repairers must be
admitted to an authorised network owing to the market power enjoyed
by an authorised network in the brand specific after-market where
services are provided to end customers. However, this judgment
rejects the relevance of any brand-specific downstream market in
assessing the limitations on membership of the repairer network
and, instead, considers that the assessment should be conducted on
the basis of the competitiveness of the relevant purchase market on
which repairers source the inputs necessary to provide repair and
maintenance services.
In an earlier case, the German Federal Court of Justice (BGH)
issued in March 2011 its MAN judgment concerning access to an
authorised repairer network for commercial vehicles (MAN, see VBB
on Competition Law, Volume 2011, No. 4, available at
www.vbb.com). In that case, the BGH defined an upstream market
on which repairers, on the demand side, sourced from vehicle
manufacturers, on the supply side, products, services and rights
which would facilitate entry into the downstream market(s) for the
provision of repair and maintenance services for commercial
vehicles to end customers. This upstream market was not defined as
being brand-specific. The question of whether or not the downstream
market(s) on which repairers offer vehicle repair and maintenance
services is/are brand-specific was considered to be irrelevant. As
a result of this market definition, the BGH concluded that the
manufacturer, MAN, did not hold a dominant position on the relevant
upstream product market.
The new judgment of the Court in question confirms the BGH's
reasoning regarding market definition and applies it to the markets
relating to the repair of passenger cars. The facts were very
similar to MAN. An independent repairer (the claimant) had
requested to be admitted to the authorised repairer network of a
certain passenger vehicle manufacturer (the defendant). The
defendant refused to appoint this repairer as an authorised
repairer. The claim made to the Court was based on Article 102 TFEU
(abuse of dominance) and on Section 20 of the German Act against
Restraints of Competition (GWB). Section 20 GWB prohibits, among
other things, the abuse of economic dependence.
The claim was dismissed as the Court did not consider either
that the manufacturer had a dominant position or that the repairer
was in a position of economic dependence vis-à-vis the
manufacturer.
These conclusions result from the market definition applied by
the Court which is identical to that applied by the BGH in
MAN. The claimant had argued that the reasoning in
MAN could not simply be transposed to a case involving the
passenger car sector as (1) there is a separate (downstream) market
for warranty services in the passenger car sector and (2) it was
necessary to be admitted to the authorised repairer network of the
manufacturer in order to compete on this market as a supplier of
warranty services to end customers. The Court rejected this
argument. It held, in particular, that the ability to provide
warranty services was not critical to the viability of a downstream
repair business concentrating on a particular brand. The relevant
market remained, as in MAN, the non-brand specific market
comprising all products, services and rights which facilitate entry
into the downstream market(s) for the provision of repair and
maintenance services in respect of passenger cars. In this market,
the repairer had a number of alternative suppliers to the
manufacturer in question.
It will be interesting to see how the Commission addresses these
German cases in the FAQs concerning motor vehicle distribution
which it is expected to issue soon as a supplement to the block
exemptions and Guidelines issued in 2010.
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