EU Commission prolongs Motor Vehicle Block Exemption Regulation

On April 17, the European Commission adopted Regulation (EU) 2023/822 prolonging Regulation (EU) 461/2010 (Motor Vehicle Block Exemption Regulation or “MVBER”) until May 31, 2028. It also updated the MVBER Supplementary Guidelines (“Supplementary Guidelines”).

MVBER Extension

The prolongation of the MVBER brings to a close the review initiated by the Commission in December 2018 to assess the need to maintain or amend the existing regulation in light of the situation in the automotive sector. As the competitive environment in the motor vehicle markets has not significantly changed since its last review in 2010, the Commission concluded that the MVBER remains necessary, and that its configuration and content are appropriate. Accordingly, apart from extending its validity, the Commission has not altered the substantive content of the MVBER.

The decision not to amend the content of the MVBER despite the lengthy review process responds to the Commission’s own stated desire to have the necessary time to react to market transformations and developments. For instance, those resulting from vehicle digitization, electrification, new mobility patterns and other relevant trends in the automotive sector.

Thus, MVBER’s scope remains limited to vertical agreements relating to the purchase, sale or resale of spare parts and to the provision of repair and maintenance services. In particular, to the conditions under which certain restrictions may be considered compatible with article 101(3) of the Treaty on the Functioning of the European Union (TFEU)—and therefore exempted from the prohibition of anticompetitive agreements in article 101(1) TFEU. As regards the purchase, sale or resale of vehicles, the Vertical Block Exemption Regulation (2022/720) discussed in previous posts such as this Post| La nueva era de los acuerdos verticales este or this one El nuevo Reglamento de Verticales: principios básicos), continues to apply.

Updated Supplementary Guidelines. Highlights

Although the Commission has not modified the MVBER, it has updated its Supplementary Guidelines. While not binding, they specify the Commission’s approach to the aspects that determine the (in)compatibility of certain practices in the sector with competition rules on vertical agreements.

In line with the above, the updating of the Supplementary Guidelines seeks to address the sector’s technological and digital transformation—as well as the current and expected effects on the automotive sector. In this regard, the most prominent changes are the following:

• Classification of essential information for maintenance and repair services. The most prominent change in the Supplementary Guidelines is the inclusion and use of the term “essential inputs” to refer to any item that is essential or indispensable to perform vehicle repair and maintenance services. This category covers items already included in the previous version of the Supplementary Guidelines such as technical information on vehicles, tools and training required for their handling. Others have been added as a result of the update, notably vehicle-generated data.

In this regard, the Supplementary Guidelines refer to the criteria to determine whether or not the withholding of or failure to supply an essential input is compatible with competition law. In particular whether:

-    the withholding 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 essential input is made available to members of the relevant authorized repair network, in which case it should also be made available to independent operators on a non-discriminatory basis; and

-    the essential input is ultimately used for the repair and maintenance of motor vehicles, or rather for another purpose such as the manufacturing of spare parts or tools.

The updated Supplementary Guidelines place particular emphasis on the obligation to share vehicle-generated data on a non-discriminatory basis with independent operators with respect to official repairers. In addition, if cybersecurity reasons are invoked for not providing these data to independent third parties, the refusal must be justified in accordance with the principle of proportionality—i.e., that there are no less restrictive means to achieve that goal.

• Position on hardcore restrictions. In the updated Supplementary Guidelines, the Commission details its position regarding the inclusion of hardcore restrictions in vertical agreements (set out in article 4 VBER and article 5 MVBER). The Supplementary Guidelines specify that in such case vertical agreements will most likely fall within the scope of article 101(1) TFEU. However, the restriction could still be justified or severed from the rest of the vertical agreement without affecting the application of the exemption to other permissible restrictions.

• Abuse of dominance. Finally, the updated Supplementary Guidelines warn that unilateral withholding of essential inputs from independent operators may amount to abuse of a dominant position under article 102 TFEU.