EU interprets Block Exemption

Brussels. The European Commission has answered 20 frequently asked questions about the enforcement of the new block exemption regulation.

When it comes to multibrand sales, the Brussels authority stresses that manufacturers must let their retail partners participate in multibrand sales in a "practical" way. A manufacturer's requirement that a showroom must feature a so-called corporate identity should not act as a "limitation for a dealer who also wants to sell competitors' brands," the commission said.

But Juergen Ensthaler, professor of antitrust law at the University of Kaiserslautern, said this interpretation might impact margin systems such as the one used by VW, which provides higher margins to dealerships that fulfill all corporate identity requirements.

The commission has backed the VW Group's requirement that dealers should be prohibited from showing different brands of one group at the same time. For example, a dealer can display VWs, Fiats and BMWs in the same showroom, but not VWs, Audis and Seats.

"This is technically wrong," said Ensthaler, "because that way the commission makes a difference between the brands of one group and other brands."

Meanwhile, Ensthaler argues that the EC's standards on repair shops are "completely faithful to the spirit of the block exemption rules."

The commission investigated the necessity of certain service quality standards and gave a clear thumbs-down to manufacturers that force garages to buy expensive, rarely used tools. It is enough for repairers to rent the tools.

According to the EU commission, the practice of forcing garages to by "brand-specific diagnostic units" is "no real matter of quality" and therefore not covered by the block exemption rules.

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