Member Article

On 12 March 2015, the Slovenian Competition Protection Agency ("Agency") initiated proceedings against Hyundai Avto Trade d.o.o. ("HAT"), the national distributor of Hyundai vehicles, together with a network of authorised repair shops for Hyundai motor vehicles.

The proceedings were initiated on the suspicion that the investigated companies were entering into anticompetitive qualitative selective distribution agreements, which were aimed at foreclosing the market for independent repair shops and spare parts distributors. The Agency alleged that the agreements contained clauses which obliged the customers to repair vehicles only at authorised shops and to use original Hyundai spare parts for all cases not covered by the guarantee in order to benefit from the 5 year warranty, in turn closing the market for independent car repair shops and part distributors.

These kinds of agreements can distort competition on the motor vehicle aftermarkets and fall into hard-core restriction, which cannot be exempt under the EU Motor Vehicle Block Exemption Regulation.

After the completion of the official investigation into HAT's activities, the parties involved proposed to the Agency a set of commitments, aimed at remedying the perceived breach of competition rules. Furthermore, the Agency was afforded the chance to monitor the parties' business operations, in order to secure compliance with the stipulated commitments, including:

• appropriate customer information on the conditions under which the guarantee can be used when vehicle repairs are performed by independent repair shops and when non-original spare parts are installed;
• prohibition of any discrimination against customers who use non-original spare parts or have their vehicles repaired by non-authorised repair shops, including informing the authorised shops, who undertook to enforce the new warranty policy, on the use of guarantees by such customers;
• appropriate customer information concerning free factory campaigns and safety repairs applicable for their vehicles; and
• providing access to original spare parts, technical information and trainings for all authorised and independent repair shops.

On 5 May 2016, the Agency accepted a decision that the final commitments allow for competition between authorised and independent repair shops during the term of the customer warranty. HAT and the authorised repair shops have to respect the terms of the commitments for the following 3 years.

The case may lead to further investigations by the Agency in the motor vehicle sector, where the Agency will look into any similar practices by other motor vehicle companies. In the aftermath, the Agency has also invited all customers and other stakeholders to report any similar industry practices they may have information about.