Antitrust: Commission prolongs validity of Motor Vehicle Block Exemption Regulation and updates the Supplementary Guidelines

The European Commission has prolonged the Motor Vehicle Block Exemption Regulation (‘MVBER’) for five years, meaning that it will now be applicable until 31 May 2028. It has also updated the Supplementary Guidelines for the sector. The revised Guidelines will help companies in the automotive sector assess the compatibility of their vertical agreements with EU competition rules, while ensuring that aftermarket operators, including garages, continue to have access to vehicle-generated data necessary for repair and maintenance.

Main changes

The MVBER was set to expire on 31 May 2023. The Regulation adopted today will prolong it until 31 May 2028. This limited prolongation will allow the Commission to react in a timely manner to possible market changes, such as those resulting from vehicle digitalisation, electrification and new mobility patterns.

The updated Supplementary Guidelines:

  •   Clarify that data generated by vehicle sensors may be an essential input for the provision of repair and maintenance services. Therefore, to comply with Article 101 of the Treaty on the Functioning of the European Union (‘TFEU’), authorised and independent repairers should have access to such data on an equal footing. The existing principles for the provision of technical information, tools and training necessary for the repair and maintenance services have been extended to explicitly cover vehicle-generated data.
  •   Specify that vehicle suppliers must apply the proportionality principle when considering whether to withhold inputs, such as vehicle-generated data, on the basis of potential cybersecurity concerns.
  •   Warn that Article 102 TFEU may be applicable where a supplier unilaterally withholds from independent operators an essential input, such as vehicle-generated data.

Background on the review process

On 28 May 2021, the Commission published an Evaluation Report and Staff Working Document setting out the results of the evaluation of the whole regime applicable to the automotive sector (the MVBER,  the Supplementary Guidelines, as well as the Vertical Block Exemption Regulation and the Guidelines on vertical restraints, as far as they apply to the automotive sector).

The evaluation revealed that the regime had been useful and remained relevant for stakeholders. In particular, it showed that, overall, the competitive environment in the motor vehicle markets had not significantly changed since the Commission last evaluated these markets in 2010, but that the sector was now under intense pressure to adapt in line with the green and digital transformation. However, the evaluation also revealed that an update was necessary to reflect the increased importance of access to vehicle-generated data. In July 2022, the Commission launched a stakeholder consultation and a call for evidence on the draft Regulation prolonging the MVBER and draft Communication amending the Supplementary Guidelines. In November 2022, it published a summary of the contributions received during these consultations. A synopsis report, which includes more details on the consultation activities, has also been published today.

Background on the MVBER

Vertical agreements are agreements between two or more undertakings operating at different levels of the production or distribution chain, and relating to the conditions under which the parties may purchase, sell or resell certain goods or services.

Article 101(1) TFEU prohibits agreements between undertakings that restrict competition. However, under Article 101(3) TFEU, such agreements can be declared compatible with the Single Market, provided they contribute to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefits without eliminating competition.

The MVBER states that the Commission’s general regime on vertical restraints (i.e. the Vertical Block Exemption Regulation or ‘VBER’) applies to agreements for the distribution of new vehicles. The VBER exempts vertical agreements that meet certain conditions from the prohibition in Article 101(1) TFEU, thus creating a safe harbour for those agreements. The Guidelines on Vertical Restraints provide guidance on how to interpret and apply the VBER and how to assess vertical agreements falling outside the safe harbour of the VBER.

As to agreements relating to the sale or resale of spare parts for motor vehicles or the provision of repair and maintenance services for motor vehicles, the MVBER provides that Article 101(1) TFEU does not apply to them, so long as these agreements fulfil the requirements for an exemption under the general regime and do not contain any of the clauses that are listed in the MVBER which remove the benefit of the exemption.