Anticompetitive practices in Ireland's motor industry under scrutiny by the CCPC

Following reports from motorists alleging potential anticompetitive practices within the motor industry, the Competition and Consumer Protection Commission (CCPC) has issued a letter to importers and distributors, urging them to review their agreements and arrangements to ensure they do not give rise to anticompetitive conduct.

Origin of rising anticompetitive conduct

These practices have come to light as result of motorists’ complaints that they had been warned their vehicles warranties would be rendered void or invalid if repairs or routine services were carried out by independent garages, and not those forming part of a brand’s network of authorised repairers.

Motorists also claimed that independent garages, freely chosen by vehicle owners, were unable to access essential diagnostic data or tools due to restrictions imposed on these systems. 

Possible consequences for motor industry companies

Such practices could give rise to illegal conduct, as they may restrict competition and result in companies preventing motorists from freely choosing an independent garage for servicing or repairs without jeopardising their warranty.

The letter sent to importers and distributors reminds them that a vehicle’s warranty should not be affected if non-original spare parts, not covered by the warranty, are used in repairs, provided those parts are of “matching quality” to the original components. 

Reminder of fines

The CCPC has not yet commenced formal investigative proceedings against any specific business, according to the CCPC’s Director of Antitrust.

However, the CCPC reminded motor industry companies, should such practices persist, it has enforcement powers that could result in administrative sanctions up to €10m, or 10% of the company’s worldwide turnover (whichever is greater), for breaches of competition law.

Whistleblowing channels

The CCPC is also encouraging independent garages to keep reporting experiences of unfair restrictions whenever they are aware of it through email and telephone channels enabled for these purposes. 

Looking ahead

The CCPC are of the view that “motorists must be free to choose where they service their vehicles and what parts they use without fear of losing their warranty. Independent garages must not be blocked from accessing essential diagnostic data or tools.” 

Companies operating in the Irish automotive industry should review any arrangements that could result in potential anticompetitive conducts. If necessary, companies may need to have those arrangements amended or revised to ensure that access to spare parts, diagnostic and onboard diagnostic data tools are available to independent garages in the same conditions as authorised repairers, without the warranties of the vehicles to be at risk. 

Failure to comply, whether maintaining restrictive warranty terms, limiting access to data or ignoring the warning letter from CCPC, may constitute a breach of the Competition Act 2002 and expose businesses to significant administrative fines and reputational harm.

The CCPC's shift from recommendation to enforcement marks a turning point in Ireland’s Motor Industry and reinforces the European Commission’s Motor Vehicle Block Exemption Regulation (MVBER) signalling a stricter and more proactive approach to competition law in the motor industry.