Slovenian Competition Protection Agency (CPA) has closed proceedings based on Article 101 TFEU against Hyundai Avto Trade (HAT) – the authorized Slovenian importer and distributor for Hyundai motor vehicles – and its authorized repairers, for concluding agreements on selective qualitative distribution making warranty conditional upon maintenance work being carried out only by the authorized repairers and with spare parts and materials supplied only by HAT, by accepting their commitments with a decision adopted on the 5th of May 2016.
The commitments remedy the competition concerns raised by the CPA and enable it to closely monitor the behavior of HAT. They enhance competition between the authorized and independent repairers even when the vehicles are still under warranty, as is provided by the Motor Vehicle Block Exemption Regulation.
Apart from seizing with the alleged infringement HAT offered to remedy the situation where car owners were disincentivised to look elsewhere for maintenance works by explicitly informing them that the warranty is not conditional on where the vehicle has been repaired and maintained but only on the fact if it was maintained according to the manufacturer’s instructions. HAT will also send them the instructions on what needs to be done by an independent repairer in order to insure the traceability of the operations performed on the vehicle so that the potential causal link between the error of the mechanic and the malfunction of the vehicle can be established. There will be no automatic removal of warranty based on the location of maintenance works or purchase of spare parts and other materials (such as motor oil). HAT shall also inform its authorized network on the proper conduct and be responsible for monitoring the practice of the authorized repairers so that they do not orally mislead the costumers with regard to warranty conditions.
The authorized repairers have committed themselves not to mislead the clients or to discriminate against costumers that repair their vehicles elsewhere. Since it was established that silent recall and manufacturers service campaigns might be an issue putting the car owners, who maintain their car elsewhere, in a disadvantage, HAT introduced an interface on its webpage, allowing the car owners to check if there was a campaign applicable to their vehicle. Such campaigns are then to be performed free of charge by an authorized repairer regardless of where the regular maintenance has taken place. HAT shall ensure independent repairers’ access to all tools and spare parts.
These commitments are expected to have a positive impact on the prices of the aftermarket services.
HAT shall enable the CPA to monitor the compliance and the impact of the remedies. For that purpose, the CPA shall have access to all relevant databases without previous notice or special permission from HAT. Based on this experience the CPA may check compliance with the competition rules of authorized distributors of other brands of cars and their networks.
Accepting commitments means that the authority has not established the infringement, however infringement procedure may continue if the undertakings do not comply with the commitments, which in itself is an infringement for which the fine may be up to 10 % of annual worldwide turnover of the undertaking concerned.