COMPETITION • EUROPEAN LAW • RESTRICTIVE AGREEMENTS
Motor vehicle distribution law is heavily marked by the sector-specific block exemption regulations that were successively adopted to define the conditions of exemption of distribution agreements in this sector. Since 1 June 2013, the general law on vertical restraints set by Regulation No 330/2010 of 20 April 2010 has governed the sale of new vehicles, with after-sales being subject to Regulation No 461/2010.
Regulation No 1400/2002 had established selective distribution as the reference model in the automotive sector and marginalized the use of other distribution systems. Many manufacturers have, for various reasons, chosen to maintain quantitative selective distribution despite the new possibilities offered by the Vertical Restraints Regulation. Firstly, the economic context encourages manufacturers to focus on the stability of their networks. Second, suppliers have adapted to the constraints of quantitative selection, which offers considerable flexibility in the organization of networks, by allowing them to define catchment areas. Finally, the EU court has made this mode of distribution more secure, by making the eligibility for block exemption subject to the condition that the criteria for approval be “criteria the precise content of which may be verified” without it being “necessary for such a system to be based on criteria that are objectively justified and applied in a uniform and non-differentiated manner in respect of all applicants for authorization”.
The content of contracts has also not undergone the radical changes one might have expected. Admittedly, new distribution contracts have generally eliminated the requirement of justification in the event of termination of an open-ended contract, which made it necessary to set out the objective and transparent reasons for the termination. Similarly, most manufacturers have taken advantage of the abolition of the freedom to transfer a dealership intra network and now require them to be subject to the manufacturer’s approval. Nevertheless, new contracts still provide for two years’ prior notice of termination, whereas the general regulation does not require it. This is due to the inclusion of this term in certain best practice codes, its common use in the automotive sector and its compliance with national legislation, which imposes long notice periods for terminations. The ability to call upon an independent expert or arbitrator in the event of a dispute has generally been maintained, but in a simplified form. Moreover, only the largest manufacturers make use of the freedom to use single-branding, opened up by Regulation No 330/2010. Indeed, for smaller manufacturers, the economic equilibrium of the dealership often implies multi-branding. Finally, the spin-off option imposed by the former regulation, which most manufacturers have not retained, is sensible in certain cases, in particular to encourage better adaptation to market developments and thus make the territorial coverage more flexible.
