Draft MVBEO Guidance

1 June 2023: The Competition Act 1998 (Motor Vehicle Agreements Block Exemption) (No. 2) Order 2023 (the MVBEO) has came into force. Following consultation with interested parties, the CMA has published Motor Vehicle Agreements guidance to accompany the MVBEO.

The Competition and Markets Authority (CMA) is launching its consultation on draft guidance to accompany the Motor Vehicles Block Exemption Order (MVBEO). This follows on from the CMA’s final recommendation to the Secretary of State at the Department for Business, Energy and Industrial Strategy regarding the retained MVBER. The CMA is seeking responses by 16 May 2023, 5:00pm.

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.

The primary purpose of this guidance is to explain how the CMA applies the Chapter I prohibition in CA98 to motor vehicle aftermarket agreements, ie vertical agreements relating to the purchase, sale or resale of aftermarket goods for motor vehicles, and to the provision of repair and maintenance services for motor vehicles. In particular, it describes the application of the proposed MVBEO to motor vehicle aftermarket agreements while also covering some aspects relating to the sale and purchase of vehicles and is intended to help businesses assess these agreements to establish whether they fall within the scope of the MVBEO and how to assess certain vertical restraints under the Chapter I prohibition in CA98.

The MVBEO exempts motor vehicle aftermarket agreements if they meet the general conditions relating to vertical agreements set out in the Competition Act 1998 (Vertical Agreements Block Exemption) Order 2022 (“the VABEO”). This draft Guidance should therefore be read in conjunction with the VABEO and the VABEO Guidance.

In accordance with our policy of openness and transparency, we will publish non-confidential versions of responses on our webpages. If your response contains any information that you regard as sensitive and that you would not wish to be published, please provide at the same time a non-confidential version for publication on our webpages which omits that material and which explains why you regard it as sensitive. When submitting your response please also let us know if you wish to remain anonymous.

The responses to the present consultation may be shared with Department for Business and Trade in order to facilitate the preparation of the final version of the MVBEO.

Please email your response to mvberreview@cma.gov.uk. You can also contact us with any queries using this email address.

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For more information about the CMA’s statutory functions, how the CMA processes personal data and your rights relating to that personal data (including your right to complain), please see the CMA’s Personal Information Charter.