The Secretary of State accepted the Competition and Markets Authority’s recommendation to replace the retained Motor Vehicle Block Exemption Regulation (retained MVBER) with a United Kingdom (UK) Motor Vehicle Block Exemption Order (MVBEO), updated to reflect market developments under section 6 of the Competition Act 1998. This will exempt certain agreements in the motor vehicle aftermarket from the prohibition in Chapter I of the Competition Act 1998, which prohibits agreements between firms that prevent, restrict, or distort competition.
The purpose of this order is to ensure that businesses are not prevented or disincentivised from entering into agreements that the Competition and Markets Authority considers to be beneficial and not anticompetitive. The order replaces a similar block exemption – the MVBER made under EU law and retained in UK law after the UK’s withdrawal from the EU. The retained block exemption expires on 31 May 2023.
The draft explanatory memorandum includes the explanation of the draft legislation.
NFDA’s Response to MVBEO Consultation:
On 1 March 2023, NFDA submitted its response to the Department for Business and Trade’s (DBT’s) consultation on the draft Motor Vehicle Agreements Block Exemption Order 2023 (MVBEO). A separate consultation on the more detailed and informative Guidelines that will accompany the MVBEO will follow in due course.
In light of the NFDA’s previous representations to the CMA (including on the VABEO), the NFDA is concerned that the decision to replace the retained MVBER with an aftermarket instrument broadly in line with the status quo may not go far enough to preserve current healthy levels of competition in relevant UK automotive markets.
This does not mean that the NFDA disagrees with the content of much of the MVBEO insofar as it applies to matters dealt with by the MVBEO; rather, the NFDA considers that the MVBEO may ‘leave too much unsaid.’ Without detracting from the MVBEO’s aftermarket focus, it is important that these issues are considered (in the MVBEO and/or its Guidelines) given their potential indirect effects.
NFDA has reminded the DBT (and the CMA) of the pre-2017 market landscape - against which much evidence was collected to inform the EU’s present MVBER policy position. In the NFDA’s view, there is a disconnect between current and imminent market realities and the historic evidence base upon which new regulation has been proposed.
Comment from Sue Robinson, NFDA Chief Executive:
“In our latest submission, the NFDA has commented on a range of issues regarding competition in the automotive sector. We have highlighted and made reference to market trends, outlined the possible implications of future sales models and made specific recommendations to be incorporated in the MVBEO and/or guidelines.
“Going forward, the NFDA will continue to actively engage with the CMA, DBT and other stakeholders over the MVBEO and the best ways of preserving healthy levels of competition in relevant UK automotive retail markets.
“If you are an NFDA member who is concerned or would like more information regarding this process, or the future of the automotive retail landscape more broadly, please contact us directly.”
