Decree No. 31 / 2003 Coll.
Ordinance on the authorisation of a general exemption from the prohibition of agreements distorting competition pursuant to § 3 (1) of Act No. 143 / 2001 Coll., on the Protection of Competition, for certain types of vertical agreements on the distribution and servicing of motor vehicles
Valid
Effective from 01.07.2003
31
DECLARATION
of 23 January 2003
authorising a general exemption from the prohibition of agreements distorting competition pursuant to Article 3 (1) of Act No. 143 / 2001 Coll., on the Protection of Competition, for certain types of vertical agreements on the distribution and servicing of motor vehicles
According to Article 26 (1) of Act No. 143 / 2001 Coll., on the Protection of Competition, hereinafter referred to as "the Act ', the Authority provides:
Preliminary provisions
(1) The prohibition laid down in Article 3 (1) of the Law does not apply, under the conditions laid down in this Decree, to vertical agreements concluded between two or more competitors operating for the purposes of an agreement at different levels of production or distribution chain, which concern the conditions under which their parties may withdraw, sell or resell new motor vehicles, spare parts for motor vehicles or provide repair and maintenance services for motor vehicles ("vertical agreements").
(2) The Vertical Agreement within the meaning of this Decree is not a decision of the association of competitors.
(3) However, vertical agreements concluded between a competitor's association and its members or between a competitor's association and its suppliers shall not be covered by the prohibition provided for in Article 3 (1) of the Act only if the members of the association are dealers of motor vehicles or spare parts for motor vehicles or repairers of motor vehicles and the total annual turnover of each member of the association does not exceed CZK 50 million. The possibility of applying Paragraph 3 (1) of the Act to horizontal agreements concluded between members of that association or to the decision of that association is not affected.
(4) However, vertical agreements involving, but not involving, the transfer or grant of an intellectual property right, for the purposes of the use, sale or resale of certain products or the provision of certain services, shall not be covered by the prohibition provided for in Paragraph 3 (1) of the Act only provided that those provisions do not contain, in respect of the goods forming the subject of the agreement, such restrictions on competition not covered by this Decree.
(5) However, the prohibition under Article 3 (1) of the Law always applies to vertical agreements concluded between competitors competing with each other, except in the case of non-reciprocal vertical agreements, where:
(a) the total annual turnover of the customer shall not exceed CZK 100 million;
(b) the supplier is also the manufacturer and seller of the goods forming the subject of the agreement, while the customer is only a seller who does not produce goods competing with the subject of the agreement; or
(c) the supplier is a service provider operating at several levels of production or the distribution chain, whereas the customer does not provide competing services at the level at which it receives those services.
Basic concepts
(1) For the purposes of this decree:
(a) an obligation not to compete shall mean the direct or indirect obligation of the customer not to produce, collect, sell or sell goods which compete with the goods forming the object of the agreement, as well as the direct or indirect obligation of the customer to withdraw on the relevant market from the supplier or from another competitor designated by the supplier more than 30% of his total purchases of goods constituting the object of the agreement, of the corresponding goods or goods which are interchangeable with those goods, calculated on the basis of the value of the purchases for the previous calendar year. The undertaking of the seller to sell motor vehicles of other suppliers in separate zones of the demonstration space, with the intention of avoiding confusion, is not an obligation not to compete within the meaning of this decree. The undertaking of the seller to employ specific sales staff separately for the motor vehicles of each supplier is an obligation not to compete within the meaning of this Decree, except where the supplier bears all the additional costs incurred,
(b) an exclusive supply obligation means any direct or indirect obligation to sell goods forming the subject of an agreement exclusively to a person;
(c) a selective distribution system means a distribution system in which the supplier undertakes to sell goods constituting the subject of the agreement only to customers selected on the basis of certain and pre-determined criteria and where those customers undertake not to sell such goods to unauthorised sellers or independent repairers; the possibility of selling spare parts to independent repairers and the obligation to provide independent market participants with all the technical information, diagnostic equipment, instruments and technical instructions necessary for the repair and maintenance of motor vehicles and for environmental measures is without prejudice to this;
(d) a quantitative selective distribution system means a selective distribution system to which the supplier classifies customers on the basis of criteria directly limiting their number;
(e) a qualitative selective distribution system means a selective distribution system in which the supplier places only qualitative criteria which are necessary and set in a uniform manner for all customers by virtue of the fulfilment of the quality criteria of the goods forming the subject of the agreement and which are applied to them in a non-discriminatory manner and do not directly restrict their number;
(f) intellectual property rights means industrial property rights, copyright and related rights;
(g) knowhow means a set of unpatented technical, commercial and other essential and identified experience and knowledge not known or generally available. Information necessary to ensure compliance with agreed procedures, in particular the manufacture, sale or distribution of contract goods, shall be regarded as material experience or knowledge. Such information shall be considered to be an identified experience or knowledge which is described in sufficient detail to enable it to be verified that it meets the criteria of secrecy and materiality. A description of how know-how may be part of a vertical agreement, a separate agreement or recorded in another appropriate form,
(h) the customer means the seller or repairer; the seller is a competitor who collects, sells or resells new motor vehicles and spare parts for motor vehicles; the repairer is a competitor providing repair and maintenance services for motor vehicles,
(i) an authorised repairer means a repairer which is part of a distribution system established by a supplier of such motor vehicles;
(j) an independent repairer means a repairer who is not part of a distribution system set up by a supplier of motor vehicles whose motor vehicles are being repaired or maintained;
(k) motor vehicle means a self-propelled vehicle equipped with three or more wheels intended for use on the road;
(l) a passenger motor vehicle means a motor vehicle intended only for the carriage of seated persons and their baggage, having not more than nine seating positions, including the driver's seat;
(m) light commercial vehicle means a motor vehicle intended for the transport of goods whose total weight is not more than 3,5 tonnes; Modified versions of such a motor vehicle shall also be considered light commercial vehicles, irrespective of their actual mass,
(n) the contract programme shall mean all models of motor vehicles that may be obtained from the supplier for resale;
(o) a motor vehicle conforming to the model of the contract programme means a motor vehicle which is the subject of a distribution agreement with another competitor within a distribution system established by or with the agreement of the manufacturer, is mass-produced or assembled by the manufacturer and has the same drive unit and chassis, bodywork of the same shape and engine of the same type as the motor vehicle of the contract programme;
(p) spare parts means parts which are fitted to or attached to a motor vehicle, replacing one of the parts of that motor vehicle; spare parts are also necessary for the operation of this motor vehicle, such as lubricants, excluding fuels,
(q) original spare parts shall mean spare parts of the same quality as those used or used for the assembly of a new motor vehicle and manufactured or produced in accordance with the specifications and production requirements laid down by the manufacturer of the motor vehicle for the manufacture of parts or spare parts of the motor vehicle, the original spare parts being those manufactured on the same production equipment as those parts; unless otherwise demonstrated, the original spare parts shall be considered as those spare parts for which their manufacturer certifies that they achieve the quality of the parts used in the manufacture of a new motor vehicle and have been manufactured according to the specifications and production requirements of the manufacturer of the motor vehicle,
(r) qualitatively equivalent spare parts shall mean spare parts produced by any competitor who is at any time able to certify that they achieve the quality of the parts used or used in the assembly of new motor vehicles;
(s) a competitor within a distribution system means the manufacturer or competitor to whom the manufacturer has entrusted or who has, with the agreement of the manufacturer, been entrusted with the distribution, repair or maintenance of the goods forming the object of the agreement or the goods corresponding thereto;
(t) the final consumer also means the competitor, where the contracts for the purchase of the hired item concluded by him do not allow the transfer of ownership of the motor vehicle or the option to purchase it before the end of the period for which the contract was concluded.
(2) For the purposes of this decree, competitors, suppliers, customers, sellers and repairers shall also be understood as connected persons.
(3) For the purposes of this Decree, the persons who:
(a) are controlled by or controlled by one of the Parties to the Agreement;
(b) are controlled by the same person who controls one of the Parties to the Agreement;
(c) are jointly controlled by one of the Parties to the Agreement and by one or more of the persons referred to in (a) and (b), or are jointly controlled by two or more of the persons referred to in (a) and (b); or
(d) are jointly controlled by the Parties to the Agreement or by associated persons within the meaning of the preceding points or by one or more Parties to the Agreement, or by one or more associated persons within the meaning of the preceding points and by a third party or persons.
(4) For the purposes of this decree, the audit shall mean the holding of a business or share in capital of more than 50%, or the right to appoint or revoke a majority of the members of the statutory body, supervisory board, directors of a legal person, or the possibility of otherwise exercising decisive influence over the management of a legal person.
General assumptions
(1) The prohibition provided for in Article 3 (1) of the Act does not apply to vertical agreements under the conditions laid down in paragraphs 2, 3, 4 and 5 if the supplier's market share in the relevant market for the sale of new motor vehicles, spare parts for motor vehicles or the provision of repair and maintenance services for motor vehicles does not exceed 30%. Vertical agreements on the sale of new motor vehicles within the quantitative selective distribution system shall not be subject to the prohibition provided for in paragraphs 2, 3, 4 and 5 of Section 3 (1) of the Act if the supplier's share of the relevant market for the sale of new motor vehicles, spare parts for motor vehicles or the provision of repair and maintenance services for motor vehicles does not exceed 40%. However, those limits do not apply to vertical agreements within quality selective distribution systems.
(2) Vertical agreements which contain an exclusive supply obligation shall not be subject to the prohibition in Article 3 (1) of the Act if the customer's share of the relevant market for the sale of new motor vehicles, spare parts for motor vehicles or the provision of repair and maintenance services for motor vehicles does not exceed 30%.
(3) The prohibition under Paragraph 3 (1) of the Act does not apply to vertical agreements provided that:
(a) the supplier agrees to the transfer of rights and obligations resulting from the vertical agreement to another seller or repairer operating in the distribution system selected by the original seller or repairer;
(b) the supplier may denounce the vertical agreement only in writing, together with detailed and factual justification; and
(c) is concluded between a supplier of new motor vehicles and a seller or authorised repairer
1. for a period of at least 5 years and provides for the obligation of the Parties to the Agreement to notify the other Party of their intention not to extend the Agreement for a further period of at least 6 months before the expiry of the period for which the Agreement is concluded; or
2. for an indefinite period and the period for unilateral termination shall be at least 2 years; that period may be reduced to a period of at least one year if the supplier is obliged to pay a reasonable compensation to the customer in this case or if the supplier does so because of the need to change the whole or a substantial part of the distribution system.
(4) The prohibition provided for in Article 3 (1) of the Act shall not apply to vertical agreements provided that they do not exclude the right of the parties to the agreement to appeal to an expert or arbitrator in the event of a dispute. The disputes arising may, inter alia, concern:
(a) the fulfilment of obligations relating to the supply of goods forming the subject of the Agreement;
(b) setting or achieving sales targets;
(c) the obligation to supply the goods forming the subject-matter of the Agreement;
(d) performance of obligations to provide or use a demonstration motor vehicle for test drives;
(e) compliance with the conditions for the distribution of motor vehicles of other suppliers;
(f) restrictions on the possibility of expanding the business of a retailer of motor vehicles other than passenger motor vehicles or light commercial vehicles resulting from a prohibition to sell from non-supplier approved sales premises; or
(g) whether the termination of the agreement is justified on the basis of the grounds given.
(5) For the purposes of this provision, the market share of the persons referred to in Paragraph 2 (3) (d) shall be added equally to any person who has control within the meaning of Article 2 (4).
Basic restrictions
(1) However, the prohibition provided for in Article 3 (1) of the Act always applies to vertical agreements which, directly or indirectly:
(a) restrict dealers or repairers to determine the price of goods for resale; the ability of the supplier to determine the highest selling prices or to determine the recommended selling prices is not affected,
(b) restrict the territory or the circle of persons to whom the seller or repairer may continue to sell the goods forming the subject of the agreement, with the exception of:
1. restrictions on active sales in a particular territory or group of persons reserved by the supplier to himself or another seller or repairer, unless the sales of customers by the seller or repairer are limited;
2. the restriction on the seller operating at wholesale market level to sell to final consumers,
3. restrictions on members of the selective distribution system to sell new motor vehicles and spare parts in markets with selective distribution system to unauthorised sellers, unless the sales of customers by the seller or repairer are limited;
4. the restriction on the customer to sell parts which are supplied for incorporation to the person who would use them to produce the same goods produced by the supplier;
(c) restrict dealers or repairers operating under a selective distribution system to supply each other with goods constituting the subject-matter of the agreement; This also applies to sellers or repairers operating at different market levels,
(d) restrict customers operating at the retail level of a market which is a member of a selective distribution system, actively or passively sell new passenger motor vehicles or light commercial vehicles, spare parts for motor vehicles or provide repair and maintenance services for motor vehicles on markets with a selective distribution system to final consumers; the possibility of imposing a prohibition on the sale of a member of a selective distribution system from non-suppliers of approved sales premises is not affected, subject to Article 5 (2) (b),
(e) limit customers operating at the retail level of a market which is a member of a selective distribution system to actively or passively sell new motor vehicles other than passenger motor vehicles or light commercial vehicles on markets with a selective distribution system to final consumers; the possibility of imposing a prohibition on the sale from non-suppliers of approved sales premises to members of a selective distribution system is not affected,
(f) restrict new motor vehicle dealers to sell new motor vehicles corresponding to a model of the contract programme;
(g) limit the supply of repair and maintenance services to authorised repairers by means of an additional agreement; This shall be without prejudice to the possibility for the supplier to require the seller to communicate to the final consumer, prior to the conclusion of the purchase contract, the name and surname or name, place of business or place of the authorised repairer or repairers, and to inform the final consumer of the distance between the particular repairers or repairers from the store. However, such obligations may be imposed only where similar obligations are imposed on vendors who provide repair and maintenance services for motor vehicles outside the premises where their shop is situated,
(h) limit the right of authorised repairers to provide repair and maintenance services only and to sell spare parts;
(i) restrict members of a selective distribution system to sell spare parts on motor vehicles to independent repairers who use those parts for the repair and maintenance of motor vehicles;
(j) restrict suppliers of original or qualitative spare parts, repair equipment, diagnostic or other equipment to sell these products to authorised or independent sellers, authorised or independent repairers or final consumers;
(k) restrict the seller or authorised repairer to obtain original or qualitative equivalent spare parts from third parties of his choice and use those parts for the repair or maintenance of motor vehicles; This shall be without prejudice to the right of the supplier of new motor vehicles to require the use of original spare parts supplied by the supplier for works under the guarantee, free customer service or call-up; or
(l) restrict the suppliers of parts which the motor vehicle manufacturer uses for the basic assembly of motor vehicles to place effectively and in a visible place on such parts and spare parts with his mark or logo.
(2) The prohibition provided for in Article 3 (1) of the Act also applies to vertical agreements whereby the supplier of new motor vehicles makes it impossible for independent market participants to access technical information, diagnostic and other equipment and tools necessary for the repair and maintenance of such motor vehicles or related environmental measures, as well as to the relevant software or technical instructions.
(3) Access within the meaning of paragraph 2 shall include, in particular, the possibility for independent market participants to make unrestricted use of electronic and diagnostic systems for motor vehicles, to programme such systems in accordance with the standard procedures of the supplier, to use repair and maintenance instructions or information necessary for the use of diagnostic and maintenance equipment, as well as other equipment. In addition, access must be provided to independent market participants in a non-discriminatory and proportionate form without delay and the data provided must be practically usable. The fact that some of the data provided is protected by intellectual property rights or constitutes know-how cannot be abused by the supplier of motor vehicles to the detriment of independent market participants.
(4) The independent market participants within the meaning of the preceding paragraphs shall be those involved, directly or indirectly, in the provision of repair and maintenance of motor vehicles, in particular independent repairers, manufacturers of repair equipment and equipment, independent parts vendors, publishers of technical information, car clubs, road assistance services, inspection and testing service providers, as well as training and further training institutions of repairers.
Specific restrictions
(1) The prohibition under Article 3 (1) of the Act also applies to the provisions of vertical agreements on the sale of new motor vehicles, spare parts for motor vehicles or the provision of repair and maintenance services for motor vehicles containing:
(a) a direct or indirect obligation not to compete;
(b) a direct or indirect commitment which limits the possibility for authorised repairers to provide repair and maintenance services for competing suppliers' motor vehicles;
(c) a direct or indirect commitment by members of the distribution system not to sell motor vehicles or spare parts of certain competing suppliers or to provide repair and maintenance services for motor vehicles of certain competing suppliers; or
(d) the direct or indirect obligation of the seller or authorised repairer upon termination of the agreement not to produce, collect, sell or sell motor vehicles or to provide repair or maintenance work for motor vehicles.
(2) The prohibition provided for in Article 3 (1) of the Act also applies to the provisions of vertical agreements on the sale of new motor vehicles containing:
(a) a direct or indirect undertaking by the customer operating at the retail level of the market not to conclude contracts for the purchase of a hired item on goods forming the subject of the agreement or corresponding goods; or
(3) Furthermore, the prohibition provided for in Article 3 (1) of the Act always applies to the provisions of vertical agreements on the provision of repair and maintenance services for motor vehicles and on the sale of spare parts for motor vehicles which contain a direct or indirect obligation of an authorised repairer within the framework of a selective distribution system concerning its location of operation.
Option to withdraw exemption
By its decision, the Competition Authority may withdraw the advantages of the general exemption provided for in this Decree if, as a result of market developments, the effects of an agreement subject to a general exemption do not comply with the conditions for authorising an individual exemption under Article 8 of the Law. In particular, this may be the case where:
(a) market access and competition on this market are substantially limited due to the cumulative effect of parallel networks of similar vertical restrictions on competition by competing suppliers or customers;
(b) competition is substantially limited in a market where the supplier is not exposed to effective competition from other suppliers;
(c) the prices or terms of delivery of the goods forming the subject-matter of the agreement or, where appropriate, the goods corresponding to it differ significantly in each area; or
(d) discriminatory prices or other commercial conditions shall be applied in each area without objectively justifiable reason.
Calculation of market shares
(1) Market shares shall be calculated for the purposes of this Order:
(a) for the distribution of new motor vehicles from the ratio of the volume of goods covered by the agreement sold by the supplier together with other goods considered to be interchangeable in terms of their characteristics, price and intended use, to the total volume of sales of those goods on the relevant market,
(b) for the distribution of spare parts from the value ratio of the goods forming the subject of the agreement sold by the supplier together with other goods sold by the supplier, which is considered to be interchangeable in terms of their characteristics, price and intended use, to the total value of those goods sold on the relevant market;
(c) for the provision of repair and maintenance services from the ratio of the value of the services forming the subject of the agreement which have been provided by the members of the supplier's distribution network together with other services considered to be interchangeable in terms of their characteristics, price and intended use, to the total value of those services provided on the relevant market.
(2) Where it is not possible to establish information on the volume of sales of goods, the value of the goods sold and vice versa shall be used to calculate the market share. Where this information is not available on the market, an estimate based on other reliable market information may be used to establish market shares. In the case of Article 3 (2), account may be taken of the volume or value of purchases made on the relevant market or their estimates to establish market shares.
(3) The market share for the purposes of this decree shall be established on the basis of data for the preceding calendar year and shall include goods which are supplied for resale to resellers who are members of the distribution system.
(4) Where the market share at the time of the conclusion of the agreement does not exceed the limits laid down in this Decree, the vertical agreement shall not be subject to the prohibition provided for in Article 3 (1) of the Act, even if those limits are exceeded by a maximum of 5% in the following year for a period of 2 calendar years immediately following the year in which the crossing of the border took place.
(5) If the market share at the time of the conclusion of the agreement does not exceed the limits laid down in this Decree, the vertical agreement shall not be subject to the prohibition provided for in Article 3 (1) of the Act, even if those limits are exceeded by more than 5% in the following year for a period of one calendar year immediately following the year in which the crossing of the border took place.
(6) The rules set out in paragraphs 4 and 5 shall not be combined in such a way that the duration of the general exemption exceeds two calendar years in such cases.
Calculation of turnover
(1) In order to calculate the total annual turnover within the meaning of Article 1 (3) and Article 5 (a), the net turnover achieved in the last financial year by the parties to the vertical agreement and their associated persons in the distribution of the goods forming the subject of the agreement shall be added together.
(2) The total annual turnover of the Parties to the Agreement shall not include that part of the turnover achieved in the distribution of goods forming the object of the Agreement between or between the Parties to the vertical agreement and their associated persons.
(3) The prohibition under Paragraph 3 (1) of the Act also does not apply to vertical agreements where the total annual turnover in two consecutive financial years does not exceed the turnover limits set out in paragraphs 3 and 5 (a) by more than 10%.
Transitional and final provisions
The prohibition provided for in Article 3 (1) of the Act does not apply until 31 October 2004 to vertical agreements which do not fulfil the conditions of this Decree, provided that they comply with the conditions of Decree 204 / 2001 Coll., to permit a general exemption from the prohibition of agreements distorting competition pursuant to Article 3 (1) of the Act 143 / 2001 Coll., on the protection of competition, for certain types of motor vehicle distribution and service agreements.
Decree No. 204 / 2001 Coll., authorising a general exemption from the prohibition of agreements distorting competition pursuant to Article 3 (1) of Act No. 143 / 2001 Coll., on the protection of competition, for certain types of motor vehicle distribution and service agreements, is hereby repealed.
This Decree shall take effect on 1 July 2003, except for Article 5 (2) (b), which shall take effect on 1 October 2005.
Chairman:
Ing. Bednář v. r.
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Regulation Information
| Citation | Decree No. 31 / 2003 Coll., authorising a general exemption from the prohibition of agreements distorting competition pursuant to Article 3 (1) of Act No. 143 / 2001 Coll., on the Protection of Competition, for certain types of vertical agreements on the distribution and service of motor vehicles |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 03.02.2003 |
|---|---|
| Effective from | 01.07.2003 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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