Diagnostic information and special tools and training have been bones of contention in debates on the block exemption for years. The independent sector had secured a set of rules in the last block exemption regulation, which for the aftermarket has just expired: what does the new one do?
Actually, that’s almost the wrong question now: the new block exemption (Regulation 461/2010) is deliberately much less draconian than its predecessor. Instead of setting down strict conditions and prohibitions, it leaves most restrictions in (and outside) agreements to be scrutinised under basic competition rules.
Changes brought in a few years ago make the competition rules a matter for something like self-assessment. Block exemptions are safe harbours that can be used by those whose arrangements will fit within them, or who want certainly above all. The European Commission has trimmed off those parts of the old block exemption that seemed to serve no competition-law purpose – minimum notice periods, requirements for arbitration or mediation, and rules about diagnostic information, training and tools. The basic competition rules will apply if the treatment of these matters have a detrimental effect in the aftermarket: action can be taken, but it no longer says on the face of the Regulation that these practices are prohibited.
Suppliers to vehicle manufacturers of spare parts, tools, and diagnostic and other equipment do still have an express right under the new Regulation to sell direct to the independent aftermarket. But while vehicle manufacturers can decide that they don’t actually need to be in the safe harbour, it’s just possible that they could justify such restrictions anyway.
Nor does the regulation oblige those suppliers to sell to the independents. If they unilaterally choose not to, that could be an abuse of a dominant position which the competition rules prohibit, but that’s an extremely blunt instrument and one that independents would find prohibitively costly to use.
The block exemption regulation is supplemented by Guidelines, which explain among other things how restraints are to be assessed outside the cut and dried situations set out in the block exemption. While it’s permissible for vehicle makers to select their authorised, repairers, anything they do to prevent independents competing could be prohibited – the buzz-word is “foreclosure”. Independents who don’t have access to technical information suffer this fate.
Vehicle repair and maintenance information is now dealt with in type approval legislation. Regulation 715/2007 obliges manufacturers to make the information available for passenger cars marketed after 1 September 2009. (Another regulation does the same for CVs, from the end of 2012.) As for earlier vehicles – which is probably what the independent sector is worried about – the Guidelines say that the Commission will take these regulations into account when assessing cases of withholding of information. The Commission will consider whether the item in question is available to authorised repairers, whether the information will be used for repair or maintenance or another purpose (such as writing a DIY manual), and whether withholding it will have “an appreciable impact on the ability of independent operators to carry out their tasks and exercise a competitive constraint on the market”. The nature of the information will also be relevant: if it is commercial rather than technical it can probably legitimately be withheld.
Technical information will include software, fault codes and other parameters needed to work on CPUs. Regulation 715 defines vehicle repair and technical information to include all information required for diagnosis, servicing, inspection, periodic monitoring, repair, re-programming or re-initialising of the vehicle which the manufacturers provide for their authorised dealers and repairers, including all subsequent amendments and supplements. It also includes all information required for fitting parts or equipment on vehicles. According to the Guidelines, vehicle identification methods are also included, along with parts catalogues (that’ll be contentious) and recall notices. Independents must be able to get access without delay and on demand: anything less wouldn’t truly amount to “access”. They can be charged, but not so much that they are discouraged: the charge must take account of the use they will make of the information. Independents must have access at the same time as authorised repairers get it, and cannot be obliged to buy more than they need for the job they are trying to do.
The Guidelines treat tools and training in the same way. Tools include diagnostic and other repair tools, plus software for those tools, updates for the software, and aftersales service for the tools. So the Guidelines seem to cover the problem fairly comprehensively – the only problem being how to make these rules stick.
Previously, you could at least point to the block exemption and say its requirements were being broken. Morally, the party in breach of the rules would be in the wrong, even though legally no-one did anything about it. Now you’d have to be sure of your ground, whether the other party is acting anti-competitively, and that inevitably requires a lot of expensive economic and legal analysis. The documents say all the right things, but who will make them stick, and how?
Actually, that’s almost the wrong question now: the new block exemption (Regulation 461/2010) is deliberately much less draconian than its predecessor. Instead of setting down strict conditions and prohibitions, it leaves most restrictions in (and outside) agreements to be scrutinised under basic competition rules.
Changes brought in a few years ago make the competition rules a matter for something like self-assessment. Block exemptions are safe harbours that can be used by those whose arrangements will fit within them, or who want certainly above all. The European Commission has trimmed off those parts of the old block exemption that seemed to serve no competition-law purpose – minimum notice periods, requirements for arbitration or mediation, and rules about diagnostic information, training and tools. The basic competition rules will apply if the treatment of these matters have a detrimental effect in the aftermarket: action can be taken, but it no longer says on the face of the Regulation that these practices are prohibited.
Suppliers to vehicle manufacturers of spare parts, tools, and diagnostic and other equipment do still have an express right under the new Regulation to sell direct to the independent aftermarket. But while vehicle manufacturers can decide that they don’t actually need to be in the safe harbour, it’s just possible that they could justify such restrictions anyway.
Nor does the regulation oblige those suppliers to sell to the independents. If they unilaterally choose not to, that could be an abuse of a dominant position which the competition rules prohibit, but that’s an extremely blunt instrument and one that independents would find prohibitively costly to use.
The block exemption regulation is supplemented by Guidelines, which explain among other things how restraints are to be assessed outside the cut and dried situations set out in the block exemption. While it’s permissible for vehicle makers to select their authorised, repairers, anything they do to prevent independents competing could be prohibited – the buzz-word is “foreclosure”. Independents who don’t have access to technical information suffer this fate.
Vehicle repair and maintenance information is now dealt with in type approval legislation. Regulation 715/2007 obliges manufacturers to make the information available for passenger cars marketed after 1 September 2009. (Another regulation does the same for CVs, from the end of 2012.) As for earlier vehicles – which is probably what the independent sector is worried about – the Guidelines say that the Commission will take these regulations into account when assessing cases of withholding of information. The Commission will consider whether the item in question is available to authorised repairers, whether the information will be used for repair or maintenance or another purpose (such as writing a DIY manual), and whether withholding it will have “an appreciable impact on the ability of independent operators to carry out their tasks and exercise a competitive constraint on the market”. The nature of the information will also be relevant: if it is commercial rather than technical it can probably legitimately be withheld.
Technical information will include software, fault codes and other parameters needed to work on CPUs. Regulation 715 defines vehicle repair and technical information to include all information required for diagnosis, servicing, inspection, periodic monitoring, repair, re-programming or re-initialising of the vehicle which the manufacturers provide for their authorised dealers and repairers, including all subsequent amendments and supplements. It also includes all information required for fitting parts or equipment on vehicles. According to the Guidelines, vehicle identification methods are also included, along with parts catalogues (that’ll be contentious) and recall notices. Independents must be able to get access without delay and on demand: anything less wouldn’t truly amount to “access”. They can be charged, but not so much that they are discouraged: the charge must take account of the use they will make of the information. Independents must have access at the same time as authorised repairers get it, and cannot be obliged to buy more than they need for the job they are trying to do.
The Guidelines treat tools and training in the same way. Tools include diagnostic and other repair tools, plus software for those tools, updates for the software, and aftersales service for the tools. So the Guidelines seem to cover the problem fairly comprehensively – the only problem being how to make these rules stick.
Previously, you could at least point to the block exemption and say its requirements were being broken. Morally, the party in breach of the rules would be in the wrong, even though legally no-one did anything about it. Now you’d have to be sure of your ground, whether the other party is acting anti-competitively, and that inevitably requires a lot of expensive economic and legal analysis. The documents say all the right things, but who will make them stick, and how?
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