Local MEP Announces Great News for Independent Garages and Consumers

11.00.00am BST (GMT +0100) Tue 7th Jul 2009

Following an intervention by the South West's Liberal Democrat MEP Graham Watson, the European Commission has reassured small independent garages across Britain that they will continue to be protected from anti-competitive practices by major car manufacturers, such as Fiat, Toyota and Daimler-Chrysler who will have to continue providing technical information.

Existing legislation known as the Motor Vehicle Block Exemption Regulation (MVBER) ensures that all garages can access the information and parts needed to make repairs. A review of the regulation is currently taking place, and some feared that these measures would be removed, putting independent garages out of business and pushing prices up for car owners.

However, in an answer to a Parliamentary Question asked by Mr Watson, Commissioner Kroes stated that;

"Any future competition framework for the motor vehicle sector must clearly ensure that the Commission can act when barriers are put in the way of independent repairers."

Mr Watson commented on the good news;

"Having met with many concerned garage owners over the past months, I am delighted that the Commission have re-affirmed their support for these businesses.

Although some have sought to distort the issue and present the EU as a threat to garages and consumers, the Commission has once again shown that they are willing to stand up to big business.

At a time of economic hardship it is essential that the European Union works to protect small businesses and consumers. MVBER did this, and we now have confirmation that this will continue to be the case."

Ends.

Editors notes;

The independent repair market provides an important local service to motorists, often charging half the hourly rate of franchised dealer. The UK has a particularly high number of independent garages and repairers.

The Motor Vehicle Block Exemption Regulation (MVBER) concerns competition in the motor industry and contains measures enabling independent garages and repairers to access the technical information and parts they need to conduct repairs. It also ensures that these garages are allowed into networks of authorised repairers providing they meet common standards.

The Commission are undertaking a planned review of the legislation, and following an "effects-based approach", they hope to keep the parts that are working well and remove unnecessary or ineffective regulations. Tragically, Eurosceptics have seized upon this and claimed that the Commission plans to scrap the legislation, leaving many fearing massive price rises for car owners and the closure of small businesses. It was also feared that the environment would suffer as a result of motorists travelling further to maintain their cars.

However this is not the case. In an Evaluation report (http://ec.europa.eu/competition/sectors/motor_vehicles/legislation/legislation.html) the Commission criticises many aspects of the Regulation but singles out measures on access to parts and information as highly successful and worth keeping.

In 2007, the Commission demonstrated their commitment to the spirit of the legislation by adopting four decisions that legally bound Daimler, Chrysler, Toyota, General Motors and Fiat to commitments to provide technical information about car repairs to all independent garages in the EU.

However, many are still concerned, and the Right to Repair group (www.r2rc.co.uk) launched a campaign to ensure protection continued. Graham has also been contacted by many concerned constituents and was asked to address a forum of small garage owners in Dorchester.

Graham communicated his and his constituents concerns to the Commission through the following Parliamentary Question;

"The European Commission is currently in the process of reformulating Regulation (EC) No 1400/2002 concerning Motor Vehicle Distribution and Servicing (MVBER).The Commission's evaluation report concludes that although competition in the automotive industry has been stimulated to a degree, many provisions in the Block Exemption Regulations have proven ineffective, irrelevant or sometimes even counterproductive.

There lies an implicit message in Commission communications that many of the measures in MVBER will be scrapped, but that the overall goal of improving competition in the sector will be served by a patchwork of other legislation. Can the Commission therefore confirm that this will continue to provide the immediate and effective protection independent after-market operators require?

In the UK, there are more independent repairers than franchised dealers and they often charge half the hourly rate of franchised dealers, offering a local and affordable service. This not only provides a valuable service to consumers and the environment, but also accounts for thousands of jobs. Can the Commission confirm that whatever changes are made to MVBER, there will be clear legal protection for independent garages and repairers to access the tools, parts and information that they need to conduct repairs?"

Commissioner Kroes, the Competition Commissioner, provided the following response;

"The Commission would agree with the Honourable Member that independent garages provide motorists with a valuable, and often cheaper, alternative to the authorised networks, and that they also provide employment to large numbers of European citizens. As regards the ongoing review of Regulation 1400/2002, any future competition framework for the motor vehicle sector must clearly ensure that the Commission can act when barriers are put in the way of independent repairers accessing tools, parts, and technical information.

One of the questions being analysed as part of the review of Regulation 1400/2002, in the light of the positive and negative impacts of the regulation identified in the Commission's Evaluation Report of May 2008, is what is the most effective means of ensuring a level playing field between authorised and independent repairers, to the benefit of the European consumer.

The Commission's determination to ensure that competition is not impeded to the detriment of independent repairers and consumers can be gauged by the formal decisions that it adopted in four cases in 2007 (Daimler Benz, Fiat, GM and Toyota), with a view to ensuring that independent repairers have access to technical information. The Commission would like to assure the Honourable Member that any future competition framework replacing Regulation 1400/2002 will not affect the Commission's ability or indeed willingness to take similarly robust action in the future."

Ends.