FIA Eurocouncil Defends Member Interests

Publication date: 03 September 2009

Following recent publication of the review of the general vertical restraints Block Exemption Regulation (VRBER), the FIA Eurocouncil Cahairman called on Commissioner Neelie Kroes to maintain a specific regulation for the automotive sector. The review aims to introduce new rules when the current VRBER expires in May 2010. Rules will regulate sales and distribution competition in markets ranging from cosmetics to Internet sales to consumer durables.

The FIA Eurocouncil’s concern is that the specific competition policy framework created to govern the automotive sector set out in the motor vehicle BER could ultimately be replaced with the new VRBER’s general rules.

The Eurocouncil’s support for the sector specific Motor Vehicle Block Exemption Regulation stems from consumer rights it upholds in the primary (sales and distribution) and after sales (servicing repair and maintenance) markets not regulated elsewhere. Benefits for consumers include the right to buy a vehicle abroad and have it serviced in another country, the right to use independent garages without losing warranty claims and the right to use usually lowerpriced non-original replacement parts for non warranty repairs.

“A car is not a refrigerator or a laptop neither in terms of financial outlay, technological complexity or maintenance. Competition in the automotive sector should be safeguarded to keep motoring affordable. Reliance on the application of a general competition framework to the automotive sector would be unsatisfactory for motoring consumers,” says FIA European Bureau Director General Wil Botman.

In an impact assessment and policy orientation for the future of the BER, the European Commission has acknowledged that “stakeholders are virtually unanimous that the sector should continue to benefit from a block exemption …”

“We welcome the consumer angle adopted by the European Commission. We would like to reiterate that, in the context of the economic crisis,
restoring consumer rights to affordable mobility and their confidence is the starting point to sustaining the fragile automotive market,” says Region I President Werner Kraus.

Kraus also met with European Competition Commissioner Kroes and pointed to the need for specific rules. "Neelie Kroes, once again, heard the
message that there is a need for specific rules for a BER regulating the automotive sector," Kraus said following a June meeting with Kroes attended by executives from car manufacturers, automobile repairers and dealerships. The FIA Eurocouncil was the only organization representing consumers.

"Car makers were quick to argue against any specific regulation, claiming that the success of the BER made new rules unnecessary. In my view, a regulation is still needed for those who do not respect the rules," Kraus says. Without the so-called “BER” rules, FIA  Eurocpean clubs fear drivers will have less choice in the sales market and could be forced into using more expensive official dealerships for vehicle repairs.

The "BER" is a complicated piece of EU legislation and thanks to lobbying by the FIA  Eurocouncil and others, the Commission appears to have moved away from its initial evaluation in 2008 that the BER was no longer needed.

Under a sunset clause, the rules on sales, distribution and after-market repair and maintenance would disappear after May 2010 if no specific action is taken by the Commission.

"The FIA stands ready to defend the interests of its members," Kraus says. "One point clear to all participants was the principle of access to technical information has been accepted. This is very important not only for spare parts companies, but also for FIA  European clubs. We need the technical information to help our members if they break down."