Brussels Court of Appeal allows obligation to combine repair services and spare parts distribution in selective distribution systems

The Netherlands/Belgium

In a ruling earlier this year the Brussels Court of Appeal has provided elaborate guidance on the do's and don'ts when setting up a selective distribution system for repair services and spare parts distribution from a competition law perspective.
 
The appeal was brought before the court by a producer of commercial vehicles that operated a distribution network for authorized dealers who provide on the after market both services regarding repair and the distribution of spare parts. A wholesaler in spare parts for commercial vehicles demanded – and was granted in first instance – access to this network for the sole purpose of reselling the producer's spare parts, thereby refusing to fulfill the criteria regarding the provision of repair services.
 
The court firmly dismissed this demand and concluded that the selective distribution requiring distributors of spare parts to provide repair services as well (the 'combination requirement') fell within the ambit of the relevant group exemption regulations (GERs).

  • In principle, a motor vehicle producer is considered to hold a high market share on the after market. The court however qualified the after market for commercial vehicles as a 'system' market, where market shares of the producer on the after market are calculated based on the primary market (sale of vehicles), and therefore the market share thresholds of the GERs (30%) were not exceeded.
  • The distribution system did not contain any 'hardcore' restrictions.

Even if the GERs had not been applicable, the court considered the nature of the product (spare parts for commercial vehicles) to justify the combination requirement.

  • Previous statements of the European Commission that such combination requirement may not be considered necessary are no longer valid due to the growing importance of rapid and specialized assistance in installing spare parts for operators of commercial vehicles.

Even if the nature of the product did not justify the combination requirement, the court concluded that the distribution system selected by the producer –including the combination requirement – could be individually exempted because:

  • the distribution of spare parts through authorized repairers only efficiently guarantees sufficient stock and rapid service;
  • sufficient stock and specialized services are important to operators of commercial vehicles, for whom an unresolved breakdown can result in considerable losses;
  • allowing wholesalers to distribute spare parts on a supplementary level in the distribution system increases costs and harms authorized repairers;
  • there is still sufficient competition from independent repairers or spare part suppliers.

Brussel, 11 maart 2015, 2014/AR/101, MAN Truck & Bus N.V. tegen Sanders Parts B.V.B.A.