EC announces plans to revise Block Exemption regulations
Author: Robin Brown
Published: 29 May 2008
The European Commission has announced proposals to simplify Block Exemption legislation from 2010, after finding that Block Exemption 1400/2002 have had mixed results in the new-car and workshop markets.
An evaluation report by the European Commission on the block exemption Regulation indicated that he market for the sale of new vehicles, competition between car manufacturers has become more intense since Block Exemption 1400/2002 was brought in five years ago.
The Block Exemption 1400/2002 rules are intended to increase competition in car sales and repair and drive down the associated costs to consumers, but may be dropped in 2010 as they are regarded as 'overly strict, complex or redundant'.
The rules also allowed dealerships to sell cars from several franchises and free up dealerships from manufacturer control, while making it easier for internet retailers to work with dealerships.
The report on the BER found that the more open market was due to other factors such as manufacturing over-capacity. But the number of authorised repairers has risen as a result of BER rules as garages have been able to gain access to manufacturers' technical information.
Other findings suggested that few dealerships have taken the opportunity provided by the Block Exemption 1400/2002 to run showrooms without a workshop, while Block Exemption has not prevented manufacturers imposing more stringent quality standard, making the cost to the customer higher.
Competition Commissioner Neelie Kroes said: "Buying and running a car are big expenses for consumers, so we need to make sure that the right rules are in place to help competition to work properly.
"That’s why I am eager to receive comments on this report that will help us understand how best to design the competition rules for the sector in the future".
The Report suggests that car owners might benefit from less complicated rules across the sector. The Competition Commissioner will now look at ways to improve the regulations.
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