BLOCK EXEMPTION FOR VERTICAL AGREEMENTS IN THE MOTOR VEHICLE SECTOR – The European Commission extends the Exemption Regulation applicable to the motor vehicle after-sale sector and updates the accompanying guidelines

On April 17, 2023, the European Commission (the “EC” hereinafter) published in the Official Journal of the European Union (the “OJEU” hereinafter) Regulation n°2023/822 extending Regulation n°461/2010 of May 27, 2010 (the “MVBER” hereinafter)[1] and a communication amending the accompanying guidelines[2] .

Reminder

The block exemption of vertical agreements in the motor vehicle sector is governed by:

• Regulation n°2022/720 of May 10, 2022 (formerly Regulation n°330/2010) on the application of Article 101§3 of the Treaty on the Functioning of the European Union (the “TFEU” hereinafter) to categories of vertical agreements and concerted practices (the “VBER” hereinafter), applicable to distribution agreements for new motor vehicles; and
• The MVBER, applicable to agreements for the distribution of spare parts for motor vehicles and agreements for the provision of repair and maintenance services for such vehicles.

Background

On December 2018, the EC launched the process of reviewing the MVBER and its guidelines since they were due to expire on May 31, 2023. On May 28, 2021, the EC published an evaluation report and a work document presenting the results of the evaluation of the MVBER and its guidelines.

The evaluation report shows that pressure from the growing importance of vehicle-generated data, the reduction of greenhouse gas emissions and the evolution of post-covid mobility patterns calls for the MVBER to be adapted to the motor vehicle sector. However, the EC points out that these factors will only lead to changes in the motor vehicle sector in several years so that to date, there have been no significant developments justifying a major revision of the MVBER and its guidelines.

In its evaluation report, the EC concludes that the MVBER is still useful and needs to be extended, and that the accompanying guidelines need to be updated to account for the potential importance of accessing vehicle-generated data as a competitive factor.

Following the publication of the draft regulation extending the MVBER for five years and the draft communication amending the accompanying guidelines of the MVBER, the EC opened a public consultation from July 6, 2022 to September 30, 2022.

Extension of the MVBER for a further five years and updating of the accompanying guidelines to factor in the importance of vehicle-generated data

On April 17, 2023, the EC published Regulation n°2023/822 in the OJEU, extending the MVBER by five years to expire on May 31, 2028. Apart from the period of application of the MVBER, its content remains unchanged.

On the same day, the EC also published in the OJEU a communication amending the guidelines accompanying the MVBER (“the Communication” hereinafter).

In its Communication, the EC now considers that vehicle-generated data may constitute an essential input, being a competitive factor and as such, essential to the repair and maintenance services of independent operators. 

As a reminder, the withholding of essential inputs may be considered to constitute an anticompetitive agreement falling within the scope of Article 101§1 TFEU when one of the parties acts in such a way as to evict certain independent operators by sharing certain essential inputs for the repair and maintenance services.

In addition, the EC states in its Communication that when a party is considering, for security grounds, the withholding of an essential input, it must consider whether the withholding of this information is a  means to address the security concerns at issue and must consider whether less restrictive measures would suffice.

Finally, the Communication specifies that the withholding of an essential input such as vehicle-generated data may constitute an abusive practice under Article 102 TFEU when the dominant supplier does not communicate it to independent operators.

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[1]       Regulation (EU) n°461/2010 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices in the motor vehicle sector.

[2]       Commission notice – Supplementary guidelines on vertical restraints in agreements for the sale and repair of motor vehicles and for the distribution of spare parts for motor vehicles (2010/C 138/05).