Europe Addresses Access to Service/Repair information

POLICY IN THE MAKING
Europe Addresses Access to Service/Repair information

BRUSSELS, BELGIUM (Oct.2, 2007) - The European Council (EC) has adopted four decisions - pertaining to DaimlerChrysler, Toyota, General Motors and Fiat - that ensure technical service information about car repairs is available to all independent garages in the European Union (EU). 

Europe has a different service/repair structure Lacking in Europe is any cooperative broad industry organization similar in nature, structure and function to the National Automotive Service Task Force (NASTF), which has effectively closed service information, tool and training gaps made known to it by independent service/repair shops. "Consumers benefit from competition between repairers, through lower labor charges and cheaper spare parts"
- Neelie Kroes, EC Competition Commissioner 

Europe also has a distinctly different service information environment that what exists in America. Several automakers rely on a network of "authorized" independent service/repair shops rather than, or as a supplement to, a lack of franchised dealerships with service departments. 

Having no NASTF-like organization, a number of "unauthorized" shops filed complaints with the EC Competition Commission (ECCC) in regards to the difficulty accessing the same technical service information that the authorized shops have access to, prompting an investigation by the EC Competition Commission (an agency similar to the U.S. Federal Trade Commission). 

Leveling the field for all independents With cars becoming increasingly complex, even basic repairs require qualified technicians with brand-specific technical information. "In all  four cases, the carmakers seem to have withheld certain technical information from independent repairers, and have provided the rest in a way that does not meet their needs," says the ECCC in it's report of preliminary finding  Background ReadingECCC Invites CommentsRegulation EC No 1400/2002Regulation EC No 1/2003/Article 9(1)Regulation EC No. 715/2007ECCC Press Release The report also expressed concern that apparent inadequacies could force independent repairers from the markets, resulting in considerable consumer harm. Such behavior is prohibited by a EC Regulation 1400/2002, which provides that full and non-discriminatory access must be given in a manner proportionate to independent repairers' needs.  "The resulting reduction in competition between car repairers could lead to less choice and higher prices for consumers, as independent repairers are often cheaper than authorized outlets, sometimes by more than 50 percent," the ECCC notes. "In addition, if repairs were carried out without the right technical information, this could lead to vehicles being driven in an unsafe condition, and add to air pollution and wasted fuel."  The EC decisions regarding the four automakers closes the gap between those independent shops that are authorized by some automakers as service centers and those independent shops that are not.4 automakers ... 4 binding agreements Following the investigation, the EC Competition Commission found that the agreements between the carmakers and their authorized repairers infringed EC Treaty rules on restrictive business practices. The Competition Commission then entered into negotiations with each of the four automakers to reach an agreement that would resolve its concerns and close the technical service information gap between authorized and non-authorized service/repair outlets.  "These decisions provide a concrete and timely solution to the problems faced by independent repairers, who might lose their ability to compete without access to the relevant technical information." - Neelie Kroes, EC Competition Commissioner The binding agreements reached between the ECCC and Toyota, Fiat, DaimlerChrysler and General Motors places the following obligations upon these vehicle manufacturers: 1. Vehicle Security - The car manufacturers may withhold information relating to anti-theft or performance-limiting functions of on-board electronics, provided this does not prevent independent repairers from performing repairs not directly related to these functions. 2. Other Technical Service Information - All other technical service information provided to authorized repairers must also be made available to independent repairers on a non-discriminatory basis. 3. Pricing of Information Access - All independent repairers can obtain information that is both unbundled and priced in a way that takes into account the extent to which they use it. Web sites chosen by the automakers as their main means to provide technical information will be kept operational during the validity period of the commitments. Access will be based on time slots, with the price for one hour set at a level that ensures equality between independent and authorized repairers. 4. Dispute Mechanism - The four automakers have accepted a defined arbitration or mediation mechanism for disputes, wherein a breach of the commitments may lead to EC-imposed fines of up to 10 percent of a company's turnover. 5. Timeline - These commitments will be binding until the EC motor vehicle block exemption (Commission Regulation EC 1400/2002) expires in May 2010. By that time, the vehicle emissions regulation (Commission Regulation EC 715/2007) will have entered into force.  "Consumers benefit from competition between repairers, through lower labor charges and cheaper spare parts," notes EC Competition Commissioner Neelie Kroes. "These decisions provide a concrete and timely solution to the problems faced by independent repairers, who might lose their ability to compete without access to the relevant technical information." Kroes added that the decisions and agreement are important safeguards for competition in the automotive service/repair sector, and should spur manufacturers of other brands to look hard at their own practices regarding the provision of technical information. (Source: European Council)