Law rules

Sector-specific competition law rules for automotive distribution are here to stay – Commentary

Automotive distribution is perhaps the only area of ​​competition law that is more regulated in Switzerland than in the European Union. In the European Union, the general vertical framework applies to vertical motor vehicle distribution agreements. Only vertical agreements for the distribution of spare parts and for the provision of repair and maintenance services are covered by a sector-specific block exemption regulation. On the other hand, Switzerland continues to apply the sectoral rules of competition law for the distribution of new motor vehicles, in particular the notice on motor vehicles and its related explanatory notes published by the Competition Commission. The sectoral regulations and the different approach of the European Union could continue now that Parliament has decided to incorporate the Motor Vehicle Communication into law.

The Motor Vehicle Notice and its explanatory notes reflect the current opinion of the Competition Commission and serve as a guide for courts and businesses. They apply to vertical agreements for the distribution of new motor vehicles and spare parts and for the provision of repair and maintenance services. The Motor Vehicle Notice contains a list of agreements which are considered to be qualitatively severe restrictions of competition in the motor vehicle sector. For example, the access of independent workshops to technical information and original spare parts for repair and maintenance work cannot in principle be restricted by agreements between manufacturers and authorized dealers. Also, unlike in the European Union, multi-brand sales may not be restricted (i.e. dealers and authorized repairers of one brand must have the ability to offer multiple brands). Given the differences between EU and Swiss regulations, authorized distribution systems in the European Union may be problematic under Swiss law.

In order to incorporate the guidelines of the Competition Commission into law, Parliament instructed the Federal Council to draft an ordinance on competition law. The content of the ordinance is not yet clear, although it is likely to be based on the existing motor vehicle notice and its explanatory notes.

Parliament’s aim is to better protect consumers against practices that distort competition or lock in territories, such as when manufacturers and their importers can hinder parallel trade. Proponents of the petition argued that the current Motor Vehicle Notice had been effectively enforced and claimed that the Competition Commission had failed to pursue cases brought to its attention and that the civil courts had refused to rule. ‘apply notice

Unlike the motor vehicle opinion and its explanatory notes, an order is binding on civil authorities and courts, which could increase legal certainty. However, it should be noted that the Competition Commission will retain discretion to decide, based on its own priorities, whether or not to open an investigation. In addition, an order is less flexible, as the Competition Commission cannot modify it – for example, in the event of changes in the markets or in EU competition law. Considering that the automotive industry is in turmoil, this rigidity could prove to be a significant drawback.

for more information please contact Marcel Meinhardt or Virginia Ondelli at Lenz & Staehelin by phone (+41 58 450 80 00) or email ([email protected] or [email protected]). The Lenz & Staehelin website can be accessed at www.lenzstaehelin.com.