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Brief 34: The EU Commission’s Proposals for Regulating New Car Sales: Article 101 meets Economics 1.01 30.09.08

In December 2009, the EU Commission published its proposals for the new European regime to regulate vertical restraints in the motor vehicles sector under Article 101 (formerly Article 81).1 The plans involve the continuation of the old sector-specific Motor Vehicles Block Exemption Regulation (“MVBER”) for new car sales until 2013 after which time the general Block Exemption Regulation (“BER”) for vertical agreements will apply and the sector-specific rules will cease to exist.2

In an industry that contains tens of thousands of vertical agreements that benefit from the MVBER, there was widespread support for the continuation of the legal certainty that it has provided. However, the Commission’s review reveals some interesting conflicts between the BER approach and the wider move to apply a more economic effects-based approach to vertical restraints. This Brief assesses the proposals, and how they relate to the economic principles behind an effects-based approach to vertical restraints.

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