1st ICAI 2020

International Conference on Automotive Industry 2020

Mladá Boleslav, Czech Republic

However, the Commission repeatedly encountered a rejection by the General Court and, after it, by the Court of Justice (although the latter did not rule out that even a perfectly legal general dealership agreement may later lead to a cartel) and had to recognize that proof of at least tacit cooperation by dealers would be a more certain way to prove a cartel (Sousa Ferro, 2007, p. 205-209). The lessons learned from these cases, which are applicable to vertical distribution relationships in general, have been summarized by the Commission in its 2010 Notice – Guidelines on vertical restraints as two possible ways of proving vertical agreement in the absence of an evident concurrence of wills between the carmaker and its dealers. Either the clauses of their general dealership agreement provide for a unilateral policy of the carmaker that has to then be followed by their distributors, or it has to be shown that distributors at least tacitly acquiesced to the carmakers’ appeals or instructions – for instance by implementing them in practice (European Commission, 2010c, para 25). All in all, in the new generation of Block Exemption Regulations adopted in 2010, the Commission was able to exclude the distribution of new cars from the specific legislation and to include it under the general regulation also because of the importance and scope of the aforementioned case law. Thus, the first decade of the 21st century was undoubtedly crucial for the completion of competition rules governing the distribution of new cars. 3. A decade (almost) free of vertical car distribution cartels Indeed, in the second decade of the 21st century there have been noticeably fewer vertical cartel cases, which would be handled directly by EU institutions. On several occasions, the Court of Justice of the EU has answered preliminary references from national courts. As a rule, however, the issue was not the distribution of new cars, but for instance, the right of independent repairers to access information from a given manufacturer in order to repair its brand of cars (C-527/18), or the joint and several liability of members of the cartel of car suppliers for damage caused to clients (C- 451/18). Thus, only the Auto 24 SARL case, heard by the Court of Justice in 2012, represented a ruling still relevant to vertical distribution relationships (C-158/11). The subject matter of the dispute concerned the criteria for selecting dealers in a system of quantitative selective distribution. Selective distribution, i.e. supplies only to authorized distributors, are harmless to competition, only if the criteria of the dealers’ selection are qualitative . Such criteria must correspond to the complexity of the product being distributed and its brand’s reputation and must be applied in an objective, non-discriminatory manner. Conversely, quantitative distribution systems based on the selection of a fixed number of dealers per territorial unit may, in the worst-case scenario, create local distribution monopolies to the detriment of consumer welfare. EU competition law therefore exempts the quantitative selective distribution system (or a mixed system) from prohibition when both the supplier and his distributor keep their relevant market share below 30%. The dispute before the Court of Justice of the EU was whether the car manufacturer, if meeting the requirement for a limited market share, can determine the number of authorized dealers in its quantitative distribution network according to its own criteria or whether it must proceed on the basis of objectively substantiated ones. The court

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