WARRANTY MAINTENANCE MORE FAVOURABLE TO VEHICLE OWNERS

The Competition Council of the Republic of Lithuania resolved to discontinue the investigation concerning the compliance of the actions of vehicle traders in relation to the requirements to perform the technical maintenance of vehicles covered by warranty in authorised service stations only with the requirements of Article 5 of the Law on Competition and Article 101 of the Treaty on the Functioning of the European Union. The resolution was passed by the Competition Council having taken into consideration the circumstances of material importance – a number of undertakings suspected of the infringement, namely, Hyundai Motor Baltic Ltd, UAB Inchcape Motors, Renault Polska Sp. Z. o. o., JV UAB Lautra Motors, Toyota Baltic AS, UAB Autotoja, UAB Tokvila, Honda Motor Europe Ltd., UAB Veho, Saab Automobile AB, and UAB Piliakalnis autocentras – submitted to the Competition Council the information and evidence of the termination, by their own free will, of the actions allegedly infringing the requirements of the Law on Competition and the Treaty on the Functioning of the European Union. Furthermore, the entities submitted to the Competition Council their written obligations to refrain from such actions in the future, or perform the actions with a view to eliminating the alleged infringements or preventing any such violations in the future.

The investigation by the Competition Council concerning the compliance of the actions of vehicle traders whereby they required that technical maintenance of vehicles is performed in the authorised service network only with the requirements of Article 5 of the Law on Competition was initiated in response to the application of UAB Martonas. The investigation was performed in view of a suspicion that the vehicle manufacturers (or their regional dealers) and distributors (sellers) had concluded a number of prohibited agreements resulting in limiting the possibilities of independent repairers to provide technical maintenance services during the vehicle warranty period and following the suspicion that such provisions related to the vehicle warranty service could affect trade between Member States. Such agreements might eventually become harmful to consumers by limiting their selection possibilities.

The investigation concerned a number of agreements concluded between undertakings operating in various areas, namely: Honda Motor Europe Ltd. and UAB Veho (seller of “Honda“ vehicles), Hyundai Motor Baltic Ltd. and UAB Inchcape Motors ( seller of “Hyundai“ vehicles), Renault Polska Sp. z. o. o and JV UAB Lautra Motors (seller of “Renault“ vehicles), Saab Automobile AB and UAB Piliakalnis autocentras (seller of “Saab“ vehicles), Toyota Baltic AS and UAB Autotoja and UAB Tokvila (sellers of “Toyota“ vehicles). Following the agreements car owners were handed over vehicle warranty service brochures specifying vehicle warranty service terms, according to which car owners and users were obliged to perform technical maintenance of vehicles only in certain dedicated services stations that were authorised to service vehicles of a specific make. Under the established terms of the warranty servicing of vehicles car owners (users) within the warranty period were essentially induced to use the technical maintenance services offered exclusively by authorised repairers, as otherwise they would lose their warranty maintenance privileges (i.e., the free of charge repair of vehicles within the warranty period).

Any technical maintenance of vehicles is performed periodically depending on the intensity of the exploitation of a vehicle, its mileage or operation period, and normally includes works related to the natural operational wear of vehicles as well as other works required to ensure its normal operation, such as changing oils and oil filters, tyres, flashlights, plugs, wipers, etc. The works related to the technical maintenance of vehicles are charged to vehicle owners or users. The vehicle repair works include a number of works related to breakdowns of vehicles and are to be performed, within the warranty period, free of charge where a vehicle breakdown occurred through no fault of the vehicle user and provided other warranty service conditions are satisfied.

The agreements concluded between the vehicles manufacturers and sellers and encouraging vehicle users to perform the warranty maintenance of vehicles within the warranty period within the authorised network only (through authorised repairers) could potentially limit the possibilities of independent repairers to compete with the authorised repairers in the provision of technical maintenance services thus driving the independent repairers from the market or preventing any start-ups from entering the market concerned. The situation may eventually lead to an advantageous position for authorised repairers that not facing any competition from independent repairers are in a position to establish higher prices for maintenance works than in the situation where customers are not restricted in their freedom to choose or procure the relevant technical maintenance services from independent repairers.

Considering the conditions provided by all vehicle manufacturers to all repairers (including the independent repairers) to obtain complete technical information necessary to properly perform any vehicle technical maintenance works, there is no reason to doubt that provided the sufficient demand is present all independent repairers could appropriately and in a quality manner provide vehicle technical maintenance works.

Having assessed the obligations assumed by the undertakings suspected of the infringements the Competition Council established a number of specific requirements concerning the publication and distribution of the new version of the warranty service leaflets and issued the appropriate instructions on notifying the buyers of vehicles with the old version of the leaflets on their rights concerning technical maintenance during the warranty period. Vehicle owners are to be made aware that they are being entitled to take advantage of the warranty maintenance terms even if they perform the technical maintenance of their vehicles at independent repairers.