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European Parliament supports block exemption resolutions

The European Parliament has voted to accept the resolutions put forward by MEP’s for Motor Vehicle Block Exemption Regulation (MVBER).

The resolution, which follows lobbying by the Retail Motor Industry Federation (RMI), set out a number of issues that the European Parliament was unhappy with in the European Commission’s (EC) proposals for block exemption (see bullet points and headings below).

The RMI said it was a positive step for dealers in the fight for a fair block exemption regime.

It said: “It means that MEP’s have taken very seriously the concerns we have raised on behalf of the franchised retail motor sector across Europe. We will keep members informed of further developments.”

The EC is due to adopt new competition rules for agreements between vehicle manufacturers and their authorised dealers, repairers and spare parts distributors.

The existing MVBER dates from 2002, and expires at the end of May.

The EC believes consumers are benefiting from competitive conditions on the car sales markets, and it has proposed that agreements on these markets should no longer be subject to a sector-specific regime, and should be brought under general block exemption.

However, the EC is proposing a tougher approach for car repair and for spare parts, because it believes these markets are structurally less competitive. The EC proposes to adopt a sector-specific block exemption.

Speaking before the European Parliament on May 5, Commissioner Joaquin Almunia said: "I strongly believe the new framework will bring tangible benefits for consumers.

“Our main priority is to increase competition in the aftersales market, in repair and servicing, where it is most lacking, and where European consumers spend a substantial slice of their budget."

The resolution supported by the European Parliament asks that the EC review the following issues:

Contractual clauses

  • Multi-branding
  • Notice of termination
  • Contract duration
  • Dispute arbitration
  • Business transfers within the network

Multi-branding

The Resolution draws particular attention to the risks of forcing single branding to the consumer and dealer independence.

Small business

The European Parliament is particularly concerned for small businesses and the impact of the changes to them.

Monitoring

The European Parliament wants the European Commission to undertake studies on the impact of the proposed changes on dealers and the market place on a regular basis.

In addition, they request a comprehensive study undertaken during the three year prolongation period of the MVBER. It particularly wants the study to focus on multi-branding, business transfer and spare parts thresholds plus the provision of the proposed code of conduct.

Finally, it wants the Commission to undertake that if significant issues are found, that the current three year prolongation period be extended further.

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