On 4 October 2022, the Competition and Markets Authority (CMA) published its final recommendation to the Secretary of State (SoS) on the retained EU Motor Vehicle Block Exemption Regulation (Regulation 461/2010) (retained MVBER)).

Sue Robinson, Chief Executive of the National Franchised Dealers Association (NFDA), which represents franchised car and commercial vehicle dealers in the UK comments on the latest EU Motor Vehicle Block Exemption Regulation (MVBER) update:

“The CMA has recommended that the retained MVBER is replaced when it expires on 31 May 2023, with a domestic Motor Vehicle Block Exemption Order (MVBEO). However, the CMA's recommendation envisages relatively little change in the scope of the rules at this stage, so the MVBEO is likely to be broadly similar to the retained MVBER. This is to ensure continuity of the current regime for businesses, while making some amendments to improve the block exemption and reflect market developments.”

It follows that MVBEO will remain in the short to medium term (until 31 May 2029, when it expires) aftersales focused. The definition of "spare parts" will be updated to reflect technological developments and to capture more clearly other relevant goods necessary for the use of motor vehicles. The CMA has also recommended the introduction of a new condition to address perceived restrictions on access to necessary technical information and vehicle data, which reflects the increasing importance of access to information given technological changes.

Sue Robinson added: “It is worth noting that the CMA has acknowledged in its recommendation (not only the increasing sophistication of automotive telematics and issues around access to, and use of, vehicle-generated data but also) the evolving distribution models within the UK such as OEMs shifting towards an agency model or introducing direct sales platforms. The CMA appears to recognise that these are likely to impact the competitive dynamics of the sector in the coming years, and that more guidance may be necessary to accompany any proposed MVBEO when it is published later this year/early next year; however, this would suggest it considers that it is still too early to intervene in terms of hard regulation (although the guidance may be very useful). Of course, the key question is whether competition law guidance (and the threat of intervention) will be enough to address some of the concerns already identified by the NFDA.

“The CMA’s recommendation is detailed and the NFDA is still absorbing it; however, the NFDA is not only framing further recommendations for the accompanying MVBEO guidance; it is also considering direct representations to the SoS.

“Further updates will be issued in due course once the NFDA has considered the changes further, with its specialist competition advisers, TLT LLP.”