The European Commission has adopted new competition rules for agreements between vehicle manufacturers and their authorised dealers, repairers and spare parts distributors. The new rules will increase competition in the market for repair and maintenance by improving access to technical information needed for the repairs and by making it easier to use alternative spare parts.

The Commission has adopted a new block exemption Regulation and Guidelines on the application of competition rules to the car sector.

The new rules introduce a 30% market share threshold above which agreements between car manufacturers and authorised repairers will no longer be block exempted, aligning the rules with the competition general framework, which was adopted in April 2010.

This will make it easier for the Commission to tackle possible abuses to the detriment of consumers, such as the refusal to grant independent repairers access to technical information. It will increase competition between authorised and independent repairers. The new rules will strengthen repairers' access to alternative spare parts which can represent a big share of the repair bills.

Car manufacturers will no longer be able to make the warranty conditional on having the oil changed or other car services only in authorised garages. Of course, manufacturers may request repairs covered by the warranty - and paid for by the manufacturer - be carried out within the authorised network.

All this is important for consumers because repair bills account for an estimated 40% of the total cost of owning a car and costs have been rising in recent years.

The Commission, furthermore, has proposed to simplify these rules and treat the distribution of cars like any other market. The current distribution model will continue to be exempted in most cases, but certain sector-specific clauses which have proven ineffective or counter-productive will not be carried forward. In this context, the existing rules are clearly overly complicated and restrictive and have had the indirect effect of driving up distribution costs, which make up on average 30% of the price of a new car.

The new regime will give carmakers more flexibility to organise diverse networks in which multi-brand dealers co-exist alongside dealers fully committed to promoting the brands of a single manufacturer.

The new rules will come into force on 1 June 2010 as concerns the repair and maintenance markets, and on 1 June 2013 with regard to the vehicle sales markets and will be valid until 31 May 2023.