1st ICAI 2020

International Conference on Automotive Industry 2020

Mladá Boleslav, Czech Republic

main offender in the above-mentioned classical distribution cases, and usually also the only undertaking fined. Direct availability of new cars through channels other than just authorized dealerships, coupled with a fast and broad online comparison of offers and prices, exposes individual dealers to unprecedented competitive pressure. Online distribution simply leads to intensified intra-brand competition, which inevitably reduces the profitability of traditional car dealerships (Schmidt, Trenka and Franzén et al., 2019, p. 18). Another source of pressure on authorized dealers will be the gradual development of lending and sharing of cars instead of their personal ownership. This phenomenon brings about a new competitor in the form of online ad hoc car rental service - which is already becoming commonplace in all major EU cities. Increased competition, demands on IT and client service, will logically lead to concentrations among distributors, as only a large dealership with a very professional e-shop and delivery system will be able to compete with large online marketplaces or direct online sales of the manufacturer. Mere cooperation between dealers will not replace concentration, as their mutual cooperation would usually mean sharing information on prices and clients, so a horizontal cartel between independent undertakings – competitors. However, even a concentration at the distribution level may not always be a simple solution from the perspective of competition law. On the one hand, it would increase the market share of a large concentrated dealer in the relevant market, which, with a share of more than 30%, will push both the distributor and the car manufacturer out of “the safe harbour” laid down by the Commission Block Exemption Regulation on vertical restraints. In addition, concentrations of higher-turnover undertakings are subject to ex-ante control at national or EU-level and may not be permitted in all cases (or allowed only on restrictive conditions). Therefore, the gradual transition from independent dealerships to the position of dependent sales agents appears to be much less risky – precisely from the perspective of competition law. Such agents are, in accordance with the DaimlerChrysler case law cited above, incorporated into the undertaking of the supplier, and although they do not legally lose their identity, competition law will not affect their relationship with the carmaker. Agents will become, for manufacturers, the endpoints of real-world contact with customers who previously booked their preferred car model online. Of course, dealers will lose a large part of their existing independence. Carmakers will not be able to transfer part of the risks to an independent intermediate link. Otherwise, the transition to this distribution model provides an escape from most competition law risks caused by the rise of the digital economy. There would be no risk of competition rules’ infringement when sharing current customer data between dealers, or between them and the car manufacturer. While if one maintains a network of independent dealers, the same data sharing would most likely lead to the coordination of the network’s behaviour or could easily be abused by the carmaker exerting pressure on the dealers acting outside its unifying instructions. As the collection and utilization of customer data becomes ever more important, such obstruction by competition law on their sharing may put at a disadvantage those independent distributors’ networks that do not convert themselves in agents’ networks (Krauskopf and Babey, 2016). Car manufacturers would acquire through the network

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