Recent Changes in the Regulation of Motor Vehicle Distribution in Europe – Questioning the Logic of Sector-Specific Rules for the Car Industry

Abstract

A new block exemption regulation for motor vehicle distribution agreements was adopted in May 2010. Regulation 461/2010 extends the application of Regulation 1400/2002 – the first ‘new style’ block exemption for the car sector – for three years regarding the distribution of new motor vehicles. After that period, the sector will finally fall within the scope of the general block exemption for vertical agreements - Regulation 330/2010. At the same time, Regulation 461/2010 contains a list of hardcore restrictions applicable to the car aftermarket. It is accompanied by a set of sector-specific supplementary guidelines. As Regulation 1400/2002 is progressively replaced, the momentum calls for an assessment of its achievements and the merits of the changes envisaged. The Commission appears to finally acknowledge that the maintenance of specific rules for the car sector is of questionable necessity, and opts to gradually include the sector in the general block exemption regulation for vertical agreements. Such a welcome change should doubtlessly bring coherence to an exemption system divided by the existence of a specific car industry regime for the past fifteen years. Unfortunately, a closer look at the modifications rapidly mitigates the initial enthusiasm, particularly since the Commission has opted to maintain specific rules for the aftermarket, and has delayed the inclusion of the sector in the general regime for vertical agreements. Whilst it is too early to assess the merits of the forthcoming amendments, this paper questions the practical effectiveness of the Commission’s most recent reform, and argues that a precious opportunity to unify the curious divide between distribution agreements in the car sector and all other industries may have – yet again – been squandered.

Keywords: Competition Law, Block Exemptions, Sectoral Rules, Motor Vehicles

JEL Classification: K21, L42