European Union: The European Commission Publishes The Results Of The Public Consultation On The Review Of The Motor Vehicle Block Exemption Regulation

On 17 March 2021, the European Commission ("EC") published a summary of the contributions on the review of the Motor Vehicle Block Exemption Regulation ("MVBER") ("Consultation"). The MVBER is due to expire on 31 May 2023. The contributions will be used by the EC to determine whether it should let the MVBER expire, prolong its duration, or modify the regulation. The Consultation closely follows the review process of the Vertical Block Exemption Regulation ("VBER") that ended last year.

While certain topics (such as the intensity of competition) have shown to be controversial, there is a certain consensus that the rules (i) have, at least partially, met their objectives; (ii) are efficient; and (iii) have created legal certainty¹.

The aftermarket/repair market appears to be the area where the participants identified multiple threats to competition. Access to data and key technological information is proven to be more relevant than ever.

The Consultation: participation and issues addressed

In total, 84 participants submitted their answers via the online questionnaire while 17 stakeholders submitted position papers.

• Intensity of competition:  The results in this area were mixed. For example, in the market for new motor vehicle distribution 36% agreed that competition has intensified, while 21% believe it has weakened, and the remainder were unsure. Nevertheless, in the market for the distribution of spare parts for motor vehicles, the majority (54.2%) agree that competition has intensified since 2010.
• Scope of safe harbour: The majority of respondents to the consultation agreed that the 30% threshold was still suitable.² It is worth noting that the same threshold is contained in the VBER, hence change to one will likely have an impact on the other.
• Particular restrictions in distribution agreements: Although the EC feared that particular restrictions in agreements were being used as an indirect means of achieving anticompetitive results, the consultation suggests that these restrictions are not widespread. Such 'concerning' restrictions include resale price maintenance (encountered by 12 respondents), restrictions on authorised dealers' ability to sell motor vehicles (encountered by 7 respondents), post-term non-compete obligations (encountered by one respondent) and restrictions on authorised dealers to not sell motor vehicles or spare parts from certain competing suppliers (encountered by 6 respondents).

The aftermarket/repair market under an increasing threat?

Some of the most prevalent restrictions reported in the Consultation related to aftermarkets and repair markets. These included: (i) restrictions on independent operators' access to technical information (encountered by 46 respondents); (ii) restrictions of original equipment sellers' ability to sell spare parts to end customers or repairers (encountered by 34 respondents); (iii) restrictions on authorised dealers' ability to sell spare parts to independent repairers (encountered by 26 respondents); (iv) restriction on access to the official network of repairers (encountered by 25 respondents) and (v) restriction of components / parts suppliers' ability to place their trademark / logo on the components supplied (encountered by 19 respondents).

Access to data and key technical information are more important than ever 

The shift to a data driven economy has turned data and information into key assets for efficient competition. This is all the more applicable to aftermarkets and repair markets. 

In the Consultation, many stakeholders referred to the need to address access to in-vehicle-data and to the fact that access to technical information should continue or be reinforced. 

Some respondents suggested that some data/information related restrictions should be listed as hardcore restrictions in the MVBER. These included inter alia: (i) restrictions on access to technical information and in-vehicle data for aftermarket operators (including limitations on independent publishers' access to full/up-to-date technical information) and (ii) impediments to accessing vehicle software. Restrictive practices preventing independent repairers from competing effectively with authorised repairers were also flagged to the EC. These included: OEMs restrictions on access to aftermarket diagnostic technologies (leading to independent repairers being mainly focused on basic repairs/common maintenance, while more sophisticated interventions are conducted by authorised repairers) and restrictions on access to security-related functions.

As data flows grow, access restrictions become more detrimental. Already in April 2019, the EC published a report calling for a revitalisation of access to data rights as a tool of competition law enforcement. Other jurisdictions such as Australia are adopting specific rules for a mandatory data sharing scheme in the motor vehicle sector. The review of the MVBER may be a good opportunity for the EC to tackle the specific competition law concerns arising from the use of data and key technological information in this particular sector. 

Next Steps: The EC must draw up its evaluation report on the operation of the MVBER by 31 May 2021. A decision on whether to let the MVBER lapse, prolong its duration, or revise its content will be based on this report. 

Footnotes

1 59 out of 84 respondents believe that the MVBER rules have made it easier for NCAs and national courts to apply EU Competition rules consistently.

2 In terms of the 'safe harbour' provided for under the MVBER, vertical agreements where neither party has a market share above 30% are presumed not to be anti-competitive.

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