CMA has published details and timeline for review of Motor Vehicle Block Exemption Regulations

Date: Thursday 17 March 2022

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The CMA has now published the timeline and details for its review of the retained Motor Vehicle Block Exemption Regulation to inform its recommendation to government on whether to replace or vary it when it expires on 31 May 2023.

Timetable of work

Date	Action
31 May 2023	Retained Motor Vehicle Block Exemption Regulation expires, is varied, or is replaced.
Late summer 2022 (estimated)	CMA's final recommendation to Secretary of State
Late spring/early summer 2022 (estimated)	Consultation on CMA's proposed recommendation to Secretary of State

The Competition Act 1998 prohibits agreements between businesses that restrict competition in the UK (unless they meet the conditions for exemption in section 9(1) of the Competition Act or are otherwise excluded). This is known as the Chapter I prohibition.

An agreement is exempt from the Chapter I prohibition if it creates sufficient efficiencies and benefits to outweigh any anti-competitive effects. A ‘block exemption’ regulation automatically exempts agreements of a certain category from the Chapter I prohibition if the agreement satisfies the conditions set out in the block exemption regulation. In this way, a ‘block exemption’ regulation provides legal certainty for businesses.

Following the UK’s exit from the EU, the EU ‘block exemption’ regulations that were in force under EU law at the end of the Transition Period on 31 December 2020 were retained in UK law. For details on what the retained block exemptions cover, see Guidance on the functions of the CMA after the end of the Transition Period (paragraphs 4.31 to 4.36).

The retained Motor Vehicle Block Exemption Regulation (MVBER), which expires on 31 May 2023, sets out automatic exemptions for certain categories of agreements related to the purchase, sale, and resale of spare parts for motor vehicles, and the provision of repair and maintenance services for motor vehicles.

The CMA’s review will assess whether the retained MVBER meets its intended purpose and takes account of specific features of the UK economy serving the interests of UK businesses and consumers, as well as considering the impact of recent developments in technology and industry business models. The CMA’s review will also include assessing the European Commission guidelines that accompany the existing MVBER, namely the supplementary guidelines on vertical restraints in agreements for the sale and repair of motor vehicles and for the distribution of spare parts for motor vehicles (Supplementary Guidelines).

The European Commission launched its own review of the MVBER in December 2018. In May 2021, the European Commission finalised its evaluation phase and concluded that the MVBER remained useful and relevant for stakeholders, but that its effectiveness and coherence could be improved. The CMA will draw on evidence from the European Commission’s evaluation, to the extent that it is relevant to the UK.

The CMA will provide further information on its webpage in due course regarding the review process for the retained MVBER. It is expected that the review process will be similar to that of previously reviewed retained block exemptions.

The CMA plans to consult on its proposed recommendation in late spring/early summer of 2022.

If you have any queries regarding the review, please contact mvberreview@cma.gov.uk.

 

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