Instruments of interest
Competition Act 1998 (Motor Vehicle Agreements Block Exemption) Order 2023 (SI 2023/501)
17.This block exemption Order has been made under section 6 of the Competition Act 1998 (“the Act”), following a recommendation by the Competition and Markets Authority (CMA). The instrument ensures that certain ‘vertical agreements’ in the motor vehicle aftermarket sector continue to be exempt from the prohibition in Chapter I of Part 1 of the Act which bans agreements between businesses that prevent, restrict, or distort competition, if certain conditions are met. The exemption will expire on 31 May 2029. According to the Department for Business and Trade (DBT), ‘vertical agreements’ are agreements between businesses which operate at different levels of the production or distribution chain, and which set the conditions under which the parties may purchase or sell spare parts for motor vehicles or provide repair and maintenance services.
18.The Order replaces a similar block exemption under retained EU law which will expire on 31 May 2023. While the Order provides continuity and legal certainty for businesses, the exemption diverges in some areas from the current rules under retained EU law. The differences include updated definitions and a new obligation on the parties to provide the CMA with information. The Order also introduces a new exclusion under which agreements which restrict access to repair and maintenance information, tools and training will not benefit automatically from the block exemption. Such agreements will instead be assessed against the Chapter 1 prohibition. DBT says that this exclusion is necessary to ensure a level playing field for independent operators and authorised repairers and distributors, adding that without the exclusion, the market position of independent operators could decline, leading to reduced choice of spare parts and repair and maintenance services and, ultimately, higher prices.