New Motor Vehicle Block Exemption

In a 27 May 2010 press release, the European Commission confirmed the rules which will apply to restrictions of competition in agreements for the supply of motor vehicles, having launched a consultation draft of the new rules in December 2009. The outgoing motor vehicle block exemption, introduced in 2002, was due to expire on 31 May 2010.

Today a revised block exemption regime has been introduced for supply or "vertical" agreements generally (see our LawNow ). There has long been a separate, more detailed and stricter block exemption regime for motor vehicle agreements, meaning agreements relating to the distribution of new motor vehicles and also applying to the distribution of spare parts and to the repair and maintenance of motor vehicles. For instance, whereas in certain circumstances non-compete restrictions are permissible in all other vertical agreements, they have not been allowed in motor vehicle agreements.

The Commission has concluded that, on balance, the strict rules for motor vehicles have not worked for this sector. For instance, solus dealerships have continued to exist despite the rules. Additionally, in the Commission's view, the old block exemption has proved overly complicated and restrictive at a time of financial crisis and in a fundamentally competitive market.

The Commission's decision (in relation to new cars) is to retain the automotive block exemption in its old form until 31 May 2013 and to make agreements for the distribution of new cars subject to the general verticals regime thereafter. For agreements relating to spare parts and servicing, the old block exemption is phased out with immediate effect and the general rules apply. In relation to...