The Competition Act 1998 (Motor Vehicle Agreements Block Exemption) (No. 2) Order 2023
| Jurisdiction | UK Non-devolved |
| Citation | SI 2023/586 |
2023 No. 586
COMPETITION
The Competition Act 1998 (Motor Vehicle Agreements Block Exemption) (No. 2) Order 2023
Made 26th May 2023
Laid before Parliament 30th May 2023
Coming into force in accordance with article 1(2) and (3)
The Competition and Markets Authority has recommended that the Secretary of State make an order specifying certain categories of agreements relating to the motor vehicle aftermarket for the purposes of section 6 of the Competition Act 19981(“the Act”).
In accordance with section 8(1) of the Act2, before making the recommendation, the Competition and Markets Authority published details of the proposed recommendation and considered the representations about it which were made to it3.
The Secretary of State has decided to give effect to the recommendation without modifications and makes this Order in exercise of the powers conferred by sections 6(2)(a), (5), (6) and (7) and 71(3) of the Act.
The Secretary of State has complied with section 8(5) of the Act4in relation to the revocation of the Competition Act 1998 (Motor Vehicle Agreements Block Exemption) Order 20235by this Order.
Citation, commencement and extent
1.—(1) This Order may be cited as the Competition Act 1998 (Motor Vehicle Agreements Block Exemption) (No. 2) Order 2023.
(2) This article and article 14 (revocation of S.I. 2023/501) come into force on 31st May 2023.
(3) The remainder of this Order comes into force on 1st June 2023.
(4) This Order extends to England and Wales, Scotland and Northern Ireland.
Interpretation
2.—(1) In this Order—
“aftermarket goods” means—
(a) spare parts,
(b) any software required to repair or replace a part or system of a motor vehicle, but which is not a spare part,
(c) any code or other information necessary for the use of software falling within paragraph (a) or (b), and
(d) fluids used in the braking system, steering system, engine or elsewhere in a motor vehicle as a coolant, lubricant, cleaner or otherwise, in so far as the fluids are necessary for the effective operation of the motor vehicle, but not fuel;
“agreement” includes a concerted practice but not a decision by an association of undertakings6;
“authorised distributor”, in relation to motor vehicles of a particular make, means a person who—
(a) distributes aftermarket goods for such vehicles, and
(b) operates within the distribution system set up by a supplier of such vehicles;
“authorised repairer”, in relation to motor vehicles of a particular make, means a person who has entered into contractual arrangements with a supplier of such vehicles for the purposes of providing repair and maintenance services for such vehicles;
“the block exemption”, in relation to the category of agreements specified in this Order, means the exemption from the Chapter 1 prohibition7arising by virtue of this Order;
“connected undertaking”, in relation to a party to an agreement, means—
(a) an undertaking in relation to which the party to the agreement, directly or indirectly—
(i) has the power to exercise more than half the voting rights,
(ii) has the power to appoint more than half the members of the supervisory board, board of management or bodies legally representing the undertaking, or
(iii) has the right to manage the undertaking’s affairs,
(b) an undertaking which directly or indirectly has, in relation to the party to the agreement, any of the rights or powers listed in paragraph (a),
(c) an undertaking in relation to which an undertaking referred to in paragraph (b) has, directly or indirectly, any of the rights or powers listed in paragraph (a),
(d) an undertaking in relation to which the party to the agreement, together with one or more undertakings referred to in paragraph (a), (b) or (c), or in relation to which two or more undertakings referred to in paragraph (b) or (c), jointly have any of the rights or powers listed in paragraph (a), and
(e) an undertaking in relation to which any of the rights or the powers listed in paragraph (a) are jointly held by—
(i) two or more parties to the agreement or their respective connected undertakings referred to in paragraphs (a) to (d), or
(ii) one or more of the parties to the agreement or one or more of their respective connected undertakings referred to in paragraphs (a) to (d) and one or more third parties;
“distribution system” means a system for distributing motor vehicles of a particular make;
“goods” includes software and information;
“independent distributor”, in relation to motor vehicles of a particular make, means a person who—
(a) distributes aftermarket goods for such vehicles, and
(b) is not an authorised distributor;
“independent repairer”, in relation to motor vehicles of a particular make, means a person who—
(a) provides repair and maintenance services for such vehicles, and
(b) is not an authorised repairer;
“motor vehicle” means a self-propelled vehicle intended for use on public roads and having three or more road wheels;
“MVA agreement” has the meaning given in article 3(2);
“original part” means a component of a motor vehicle which is, or is intended to be, installed in or on a motor vehicle for the purpose of the initial assembly of a motor vehicle, and includes software;
“part”, in relation to a motor vehicle, means an original part or spare part;
“repair and maintenance services” means repair and maintenance services in respect of motor vehicles, and includes diagnostic services (whether on site or remote), replacing a part or system of a motor vehicle, servicing or inspecting a motor vehicle, software updates, and testing a vehicle for road worthiness;
“repair and maintenance tool” means a tool used for repair and maintenance services;
“spare part” means a component of a motor vehicle which is, or is intended to be, installed in or on a motor vehicle to replace an original part, and includes software;
“supplier” means—
(a) in relation to goods not falling within paragraph (b) or (c)—
(i) the manufacturer of the goods, or
(ii) an importer of the goods into the United Kingdom;
(b) in relation to software which is a part of a motor vehicle or is, or is intended to be, installed in a repair and maintenance tool, and any information required to use that software—
(i) the developer of the software,
(ii) a person who transfers the software by electronic means into the United Kingdom,
(iii) the manufacturer of the goods into which the software is, or is to be, installed, or
(iv) an importer into the United Kingdom of the goods into which the software is, or is to be, installed;
(c) in relation to any other software used for repair and maintenance purposes, and any information required to use that software—
(i) the developer of the software, or
(ii) a person who transfers the software by electronic means into the United Kingdom;
“system”, in relation to a motor vehicle, means an assembly of parts combined to perform one or more functions in a motor vehicle;
“the VABEO” means the Competition Act 1998 (Vertical Agreements Block Exemption) Order 20228.
(2) For the purposes of this Order, the terms “party” and “undertaking” include their respective connected undertakings.
Block exemption
3.—(1) The category of agreements identified in paragraph (2) as motor vehicle aftermarket agreements (“MVA agreements”) is specified for the purposes of section 6 of the Competition Act 19989(and accordingly a block exemption10applies in respect of MVA agreements).
(2) MVA agreements are agreements which—
(a)
(a) would fall within the category of agreements specified in article 3 of the VABEO but for article 3(6)(a) of that Order (subject matter falling within another block exemption order), and
(b)
(b) relate to the conditions under which the parties may—
(i) purchase, sell or resell aftermarket goods, or
(ii) provide repair and maintenance services.
Block exemption subject to conditions and obligation
4.—(1) The block exemption has effect in relation to a particular MVA agreement subject to—
(a)
(a) the conditions in articles 6 (market share thresholds), 8 (hardcore restrictions) and 10 (excluded restrictions) of the VABEO,
(b)
(b) the conditions in articles 5 (hardcore restrictions: MVA) and 6 (excluded restriction: MVA), and
(c)
(c) the obligation in article 9 (obligation to provide information).
(2) For the purposes of paragraph (1)(a), the MVA agreement is to be treated as an agreement to which the VABEO applies.
Hardcore restrictions: MVA
5.—(1) The condition in this article is that the MVA agreement must not contain a hardcore restriction within the meaning of paragraph 2.
(2) A hardcore restriction is one or more provisions which, directly or indirectly, in isolation or in combination with other factors under the control of the parties, have as their object—
(a)
(a) the restriction of sales of aftermarket goods by members of a selective distribution system to independent repairers who use or want to use those aftermarket goods for the purposes of providing repair and maintenance services,
(b)
(b) the restriction, agreed between—
(i) a supplier of aftermarket goods or repair and maintenance tools, and
(ii) a supplier of motor vehicles,
of the ability of the supplier in paragraph (i) to sell any of the goods referred to in that paragraph to distributors, repairers or end-users, or
(c)
(c) the restriction, agreed between—
(i) a supplier of motor vehicles who uses original parts supplied by another supplier, and
(ii) a supplier of such parts,
of the ability of the supplier in paragraph (ii) to place its trade mark or logo effectively and in an easily visible manner on the original parts or on any spare parts intended to replace those parts.
(3) In this article—
“distributor” means an authorised distributor or an independent distributor;
“repairer” means an...
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