The Autorité aimed to conduct a full appraisal of the sector, and to issue recommendations to boost competition and bring down prices. The report is available from 12a21_en.pdf. I have provided a link to the English version, and look forward to the day when our Competition Commission provides its reports in French! However, the following summary is based on what the Autorité says in its annual report.
Its main proposal is a gradual and controlled opening up of the market in visible spare parts, which it says are protected by industrial design rights in France. This gives vehicle manufacturers a monopoly over more than70 per cent of sales of visible spare parts, and a duopoly with the original equipment manufacturer over the remaining 30 per cent. This means, of course, that repairers must have recourse to the manufacturer's network more often than they might like.
The Autorité observes that there is a difference between protecting visible original equipment parts and such parts destined for repairs - aftermarket parts - and it proposes removing the restriction in the aftermarket, in the gradual and controlled manner referred to earlier. It says that eleven EU Member States have already adopted this approach, "which also prevails in the United States and Germany where much lower prices can be observed". I think that means that Germany already had such a law, not that it is not to be included among the EU Member States where this approach is taken.
Its suggestion is that the principle be enacted by law and the timescale set by decree, with a transition period so that the market can be opened up gradually, one type of part at a time. This would enable players in the market to adapt their business models and for French parts makers to prepare for the new open market. And what about parts makers from other EU countries? Is this the French doing exactly as we expect them to?
Whether removing protection from visible parts is a good or a bad thing (and the UK's experience appears to be that it has forced prices down, which cannot be an altogether bad thing, and has not brought about the end of civilisation as we know it, which the car makers suggested would be the case back in 1988 when the Copyright, Designs and Patents Act made the big changes), retaining it for original equipment parts seems like no sort of sop to the manufacturers. The aftermarket is highly competitive: I can buy spares from many different sources. The original equipment market, by definition, cannot be competitive, because the intellectual property rights in the visible parts invariably belong to the vehicle manufacturer (it is often different with internal parts) and the vehicle manufacturer is not only able to control supply using its intellectual property, but as a monopsonist, it controls the market completely. Even if the IP rights were removed, it would still be the only customer.
Among other proposals, the Autorité says it wants to see original equipment manufacturers, the companies best-placed to serve the aftermarket, able to put their parts on the market freely. It also addresses the matter of repair and maintenance information, threatening where necessary 'to sanction, in a dissuasive manner, any restrictions' on access to such information on the part of independent repairers.
It also proposes to draw up clauses for warranty (including extended warranty) contracts, making them as clear and explicit as possible regarding the consumer's right to use the services of an independent repairer without losing the benefit of the warranty. This follows the furrow ploughed years ago by the OFT.
Finally, it wants to ensure that the retail prices for parts recommended by vehicle and parts manufacturers do not lead to a restriction of competition between operators - presumably it means factors, wholesalers and retailers, as well perhaps as independent repairers. Well, retail price maintenance is pretty well covered in French law, as in ours, I imagine.
Its main proposal is a gradual and controlled opening up of the market in visible spare parts, which it says are protected by industrial design rights in France. This gives vehicle manufacturers a monopoly over more than70 per cent of sales of visible spare parts, and a duopoly with the original equipment manufacturer over the remaining 30 per cent. This means, of course, that repairers must have recourse to the manufacturer's network more often than they might like.
The Autorité observes that there is a difference between protecting visible original equipment parts and such parts destined for repairs - aftermarket parts - and it proposes removing the restriction in the aftermarket, in the gradual and controlled manner referred to earlier. It says that eleven EU Member States have already adopted this approach, "which also prevails in the United States and Germany where much lower prices can be observed". I think that means that Germany already had such a law, not that it is not to be included among the EU Member States where this approach is taken.
Its suggestion is that the principle be enacted by law and the timescale set by decree, with a transition period so that the market can be opened up gradually, one type of part at a time. This would enable players in the market to adapt their business models and for French parts makers to prepare for the new open market. And what about parts makers from other EU countries? Is this the French doing exactly as we expect them to?
Whether removing protection from visible parts is a good or a bad thing (and the UK's experience appears to be that it has forced prices down, which cannot be an altogether bad thing, and has not brought about the end of civilisation as we know it, which the car makers suggested would be the case back in 1988 when the Copyright, Designs and Patents Act made the big changes), retaining it for original equipment parts seems like no sort of sop to the manufacturers. The aftermarket is highly competitive: I can buy spares from many different sources. The original equipment market, by definition, cannot be competitive, because the intellectual property rights in the visible parts invariably belong to the vehicle manufacturer (it is often different with internal parts) and the vehicle manufacturer is not only able to control supply using its intellectual property, but as a monopsonist, it controls the market completely. Even if the IP rights were removed, it would still be the only customer.
Among other proposals, the Autorité says it wants to see original equipment manufacturers, the companies best-placed to serve the aftermarket, able to put their parts on the market freely. It also addresses the matter of repair and maintenance information, threatening where necessary 'to sanction, in a dissuasive manner, any restrictions' on access to such information on the part of independent repairers.
It also proposes to draw up clauses for warranty (including extended warranty) contracts, making them as clear and explicit as possible regarding the consumer's right to use the services of an independent repairer without losing the benefit of the warranty. This follows the furrow ploughed years ago by the OFT.
Finally, it wants to ensure that the retail prices for parts recommended by vehicle and parts manufacturers do not lead to a restriction of competition between operators - presumably it means factors, wholesalers and retailers, as well perhaps as independent repairers. Well, retail price maintenance is pretty well covered in French law, as in ours, I imagine.
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