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Evaluation of the Motor Vehicle Block Exemption Regulation

Summary
Evaluation
Commission Proposal
Legal Act
Implementation

Overall state of play:

Evaluation finalised on28 May 2021. Evaluation report (COM(2021)264) and staff working document (SWD(2021)112)

State of play, main conclusions, outlook

The Motor Vehicle Block Exemption Regulation, which declares Article 101(1) of the Treaty inapplicable to categories of vertical agreements and concerted practices in the motor vehicle sector, will expire on 31 May 2023 (OJ L 129, 8.5.2010). Pursuant to Article 7 thereof, the Commission had to draw up an evaluation report on its operation by 31 May 2021. This evaluation provides evidence on the functioning of the regulation, in terms of its effectiveness, efficiency, relevance, coherence and EU added value.

Vertical agreements in the motor vehicle sector may give rise to competition concerns and thus require assessment pursuant to Article 101 of the Treaty.

According to this article, agreements that are caught by the prohibition of paragraph 1 thereof might benefit from the exemption provided for in paragraph 3 thereof, as long as they satisfy the cumulative conditions set out therein. Block exemption regulations create safe harbours for categories of agreements, thus relieving the parties from the need to analyse on an individual case-by-case basis whether they can benefit from Article 101(3) of the Treaty. Their general objective is thus to ensure effective supervision of the markets, while reducing administrative and compliance costs for competition law enforcers and for undertakings respectively.

The Motor Vehicle Block Exemption Regulation (Commission Regulation 461/2010 of 27 April 2010) applies Article 101(3) of the Treaty to categories of vertical agreements and concerted practices in the automotive sector and supplements in this regard the General Vertical Block Exemption Regulation (Commission Regulation 330/2010 of 20 April 2010). Further to its general objective, as laid down above, the applicable exemption regime also pursues an array of specific objectives, including:

• Preventing foreclosure of competing vehicle manufacturers and safeguarding their access to the market;
• Protecting competition between dealers of the same brand;
• Preventing restrictions on parallel trade in motor vehicles;
• Protecting competition between independent and authorised repairers;
• Protecting competition within the manufacturers’ networks of authorised repairers;
• Preventing foreclosure of spare parts suppliers;
• Preserving the deterrent effect of Article 101 of the Treaty – preventing suppliers from using indirect pressure and threats to achieve anticompetitive results.

Estimated savings and benefits

The evaluation of the Motor Vehicle Block Exemption Regulation (MVBER) has shown that the regime has been efficient, and that the costs resulting from assessing compliance of vertical agreements in the motor vehicle sector with Article 101 of the Treaty are proportionate to the benefits brought by the regime. Absent the latter, the costs would have been higher.

State of Play

Finalised on 28 May 2021, with the publication of the evaluation report and staff working document (SWD(2021)112).

Scope:

The evaluation concluded on 28 May 2021 covered the whole regime applicable to the automotive sector, including the Motor Vehicle Block Exemption Regulation and the Supplementary Guidelines as well as the Vertical Block Exemption Regulation and the Guidelines on vertical restraints, as far as they apply to the automotive sector.

Evaluation findings:

The evaluation found that, overall, the competitive environment in the motor vehicle markets has not significantly changed since the Commission last evaluated these markets in 2010, but that the sector is now under intense pressure to adapt in line with the green and digital transformation.

The evaluation concluded that the current regime had shown itself to be suitable and adapted to diverse situations. Nevertheless, it was found that some provisions may need updating to take account of technological progress, in particular to reflect the importance that access to data is likely to have as a factor of competition.

The Commission is currently reflecting on the various findings, while also taking account of the findings of the ongoing review of the Vertical Block Exemption Regulation. During this forward-looking phase, all interested stakeholders will have the opportunity to provide their views on to the proposals for the future regime.

Estimated savings and benefits

The evaluation showed that the Motor Vehicle Block Exemption Regulation (MVBER) has made it easier for businesses in the automotive sector to assess whether their agreements are in line with the EU rules on competition. At the same time, it showed that it is important to take into account the emergence of new technologies and the increasing role of data in competitive dynamics in this industry. The Commission is therefore reflecting on how to address these issues to ensure that the rules remain fit for a rapidly changing automotive industry.

More specifically, a large majority of respondents to the public consultation and National Competition Authorities considered that, without the Motor Vehicle Block Exemption Regulation regime, costs stemming from the assessment of the compliance of vertical agreements in the motor vehicle sector with Article 101 of the Treaty would have been higher and that the current level of costs seemed proportionate to the benefits brought by the regulation.

As to the type of costs incurred by businesses when assessing whether their vertical agreements in the motor vehicle sector can benefit from the exemption, most respondents to the public consultation referred to costs for external counsel and internal administrative costs, followed by costs for internal lawyers. Although respondents were asked to provide estimates on the yearly amount of such costs, only a few provided actual figures. The latter range from EUR 10 000 to EUR 140 000 per year and do not allow to draw general conclusions on the real level of costs. The National Competition Authorities also generally assessed the costs to be reasonable and proportionate to the benefits obtained but reported not being able to provide exact figures.