Block Exemption and beyond

The BER exempts new vehicle and spare parts distribution and servicing from mainstream competition rules in the EU, and is reviewed and updated by the Commission at regular intervals to make sure it is still able to provide the right combination of business freedom and consumer protection. The present BER expires in 2010. Currently, the Commission is considering whether or not to renew it and, if so, in what form. The Commission, which reported its proposals last week, has been taking views from major stakeholders on the issue. These include car manufacturers, consumer groups, as well as Europe’s vehicle dealers, and national trade bodies including the RMIF’s Independent Garage Association. The BER was always intended to be transitional and the objective was to return the “block” to a free trade market but whatever the Commission finally decides to do about regulation of the sector, the IGA believes it is vital certain safeguards and freedoms are retained. Access to technical information was one of the key freedoms given in 2002. Advances in vehicle technology have only increased its primacy for the sector since then, because without access to technical information, independent repairers are unable to enact repairs on newer vehicles. We believe that this vital right should be the keystone of any replacement regulation. For vehicles built after 2009, these freedoms will be protected by the Euro 5 emissions regulations coming into force next year. However, unless access to technical information on vehicles built under Euro 3 and 4 is also assured by any new legislation, there could be an information gap where repairers lose access to information on vehicles built during the early part of the decade. This kind of information vacuum could be very damaging and needs to be avoided. The Commission might seek to adopt a compromise position, such as a new general regulation with accompanying provisions specifically designed to protect competition in the automotive sector. Such a possibility should never be disregarded entirely out of hand provided the relevant safeguards are sufficiently clear, workable and robust. However, a sector specific regulation for the automotive industry, which incorporates appropriate rights for repairers, is still the safest and most straightforward way of preserving choice, quality and competition in the sector.