Source: www.weko.admin.ch
The Competition Commission (hereinafter referred to as the Weko) issued the notification on the competition law treatment of vertical agreements in the motor vehicle trade on October 21, 2002. This has been in effect since November 1, 2002. As part of its implementation, the Weko Secretariat has been instructed to provide explanations on a number of specific questions raised by the addressees of the notification. In this document, the Weko summarizes the answers to the most frequently asked questions and publishes them in the form of these explanations. The Weko takes into account developments at the European level in the application of Regulation (EU) No 1400/2002 and aims for maximum alignment with the practice developed by the European Commission.
In the sales sector, motor vehicle suppliers have the choice between two distribution systems, namely exclusive and selective distribution. It is therefore no longer possible to combine these two distribution systems, as was the case under the old regulation.
If a motor vehicle supplier grants purchase bonuses, these must be calculated based on the number of new motor vehicles purchased from the latter, regardless of their final destination (sale to end consumers or to approved network dealers). Taking into account the final destination of motor vehicles would represent an indirect restriction on cross-supplies. Furthermore, the motor vehicle supplier may not link the achievement of sales targets for approved dealers to the number of new motor vehicles purchased from the official importer. In contrast, motor vehicle suppliers may grant approved dealers so-called quantity discounts, i.e., discounts based on the absolute quantity of purchases made from the motor vehicle supplier.
Regardless of the place of purchase of a motor vehicle in the European Economic Area or in Switzerland, approved workshops have the obligation to repair all motor vehicles of the respective brand, to grant warranties, to provide free maintenance, and to carry out all work within the scope of recall campaigns. It does not matter whether the motor vehicle was purchased from an approved dealer, an authorized intermediary, or an independent reseller. The warranties granted by motor vehicle suppliers at the place where the new motor vehicle is sold must be valid under the same conditions throughout the European Economic Area and in Switzerland. The warranty does not expire if an end consumer has their motor vehicle repaired or maintained by an independent workshop during the warranty period (including repairs due to an accident), unless the work has been performed incorrectly. An end consumer is therefore not obliged to have their motor vehicle maintained or repaired exclusively within the network of approved workshops during the warranty period.
1. Motor vehicle suppliers must organize their network of approved workshops based on a selective distribution system that is exclusively based on qualitative criteria. This means that all workshops capable of meeting the specified criteria must be included in the workshop network (compulsory acceptance). This includes in particular approved dealers whose contract has been terminated but who still wish to operate as an approved workshop. Motor vehicle suppliers are authorized to verify whether applicants meet the specified criteria before concluding a corresponding workshop contract. 2. Motor vehicle suppliers are generally free to choose and define the qualitative criteria to be met by the applicants. Among other things, they may require that approved workshops be able to carry out repair or maintenance work of a certain quality and within defined deadlines. The criteria of motor vehicle suppliers will focus on the suitability of approved workshops to grant warranties, provide free maintenance, and participate in recall campaigns for motor vehicles of the respective brand sold in the European Economic Area or in Switzerland. Certain qualitative requirements indirectly contribute to limiting the number of applicants. However, motor vehicle suppliers may not limit the number of approved workshops to the extent permitted in the sales sector. Thus, the corresponding qualitative criteria must not exceed what is required for proper execution of repair and maintenance work. Motor vehicle suppliers have the obligation to establish identical qualitative criteria and to apply them in the same manner to all workshops (applicants or already approved workshops) in similar situations (principle of non-discrimination). For economic reasons (activity zone, type of clientele), differentiated criteria may be set. However, within each of these categories, the principle of non-discrimination also applies. On the other hand, the same criteria must be applied to approved workshops that are also approved dealers of new motor vehicles of the respective brand and those that are not approved dealers of the respective brand. A workshop may become an approved workshop of several brands if it is able to meet all the corresponding qualitative criteria. The principles mentioned under this clause also apply if the motor vehicle supplier has established a network of approved bodywork workshops.
If motor vehicle suppliers wish to establish a network of approved original spare parts dealers, they must organize this network of approved original spare parts dealers based on a selective distribution system that is exclusively based on qualitative criteria. This means that all original spare parts dealers capable of meeting the specified criteria must be included in the original spare parts dealer network (compulsory acceptance).
Motor vehicle suppliers are prohibited from restricting the ability of their approved dealers to set retail prices for end consumers themselves. Motor vehicle suppliers are also not allowed to prescribe fixed or minimum prices in any other way. As long as approved dealers are free to grant end consumers any form of discount, motor vehicle suppliers may issue price recommendations.
In an exclusive distribution system, a specific sales area or customer group is assigned to the approved dealer. The approved dealer is prohibited from actively approaching customers outside the assigned sales area or customer group in an individual or general manner, for example, through personalized letters or emails, customer visits, or other sales promotion measures (Clause 4: so-called active sales). This restriction does not apply to general sales promotion measures through advertising in mass media or on a website targeting customers in the assigned sales area or also reaching customers who are not in the assigned sales area. Furthermore, the approved dealer must be able to fulfill unsolicited orders coming from customers outside the assigned sales area or customer group (so-called passive sales). In an exclusive distribution system, the approved dealer may sell to non-approved dealers, especially independent resellers, supermarkets, or online retailers.
In a selective distribution system, the motor vehicle supplier selects its authorized dealers based on predetermined qualitative and/or quantitative criteria. Examples of such criteria may include:
Training requirement for sales personnel Requirements for product presentation Separate display of vehicles of a brand in the showroom
Annual minimum purchase quantities Limitation of the number of dealers in the sales area Minimum sales volume Quantitative requirements for storage Number of approved dealers In a selective distribution system, the motor vehicle supplier may prohibit approved dealers from selling new motor vehicles to non-approved dealers acting on their own behalf, especially independent resellers, supermarkets, or online retailers. The motor vehicle supplier may therefore require approved dealers to sell only to other approved dealers of the respective brand (cross-supplies), to end consumers, and to authorized intermediaries acting on behalf of an end consumer. In a selective distribution system, so-called active and passive sales by the motor vehicle supplier must not be restricted.
The notification allows approved dealers of a brand within a selective distribution system to sell new motor vehicles to an intermediary authorized by an end consumer. Motor vehicle suppliers may require their approved dealers to ensure that the authorized intermediary holds a signed and valid order from an end consumer. This may involve, for example, a purchase order and/or an order to deliver a motor vehicle of a specific category or model. It is permissible to require the authorized intermediary to also provide proof of the identity of the end customer, such as a copy of the passport or identity card. The execution of multiple orders, known as chain orders, allowing an end customer to purchase a new motor vehicle through several authorized intermediaries, is permissible.
According to the notification, sales activities must be separated from customer service activities. Sales activities must also not be combined with the distribution of spare parts. The notification abolishes the obligation for an approved dealer to simultaneously handle both sales and customer service. Consequently, an approved dealer may limit its activities exclusively to one of these areas. The notification provides that the approved dealer (not the workshop) should indicate to the end consumer an approved workshop capable of performing maintenance and repair work, warranty work, and work related to a recall campaign (Clause 15 lit. b). An approved dealer may request that the end consumer sign a declaration of consent allowing the motor vehicle supplier to inform the approved workshop of the end consumer's name and address, motor vehicle brand, and motor vehicle identification number (for warranty, maintenance, or recall work).
Motor vehicle suppliers are prohibited from restricting the options for supplying spare parts. An approved or independent workshop may directly obtain original spare parts or spare parts of equivalent quality from third parties (spare part manufacturers) within the European Economic Area and Switzerland and use them for the repair or maintenance of motor vehicles.
Independent workshops must be granted access to the same technical information, training, tools, and equipment as approved workshops, particularly the information necessary for the execution of repair and maintenance work. Access must be non-discriminatory and provided without delay. The costs invoiced to independent workshops must be reasonable.
The new regulation allows the approved dealer of one brand (for example, a concessionaire) to become an approved dealer of one or more additional brands, without any limit on the number of brands. There is no requirement for a minimum percentage of total purchases of new motor vehicles of the same brand (such as the 30% requirement in the European Union) in Switzerland. Therefore, dealers are free to choose to sell one or more brands. Some qualitative selection criteria must be relaxed or completely abandoned if they hinder multi-brand distribution in practice. For example, the requirement for a brand-specific reception desk is generally impermissible if the lack of space or other practical considerations unreasonably inhibit the provision of additional reception desks. Excessive requirements regarding the exhibition space reserved for a brand or the number of vehicles to be displayed must also be similarly relaxed. Generally usable equipment and other facilities must not be reserved for a specific brand. An approved dealer or workshop of one or more brands may sell vehicles of other competing brands as an independent dealer. In doing so, they must act as authorized intermediaries to source within the network of approved dealers of the respective brand. They may equally source outside the official distribution network of a brand on the so-called grey market. If they do so, their status as an approved dealer or workshop must not be revoked solely for this reason, nor may they be otherwise disadvantaged.
An approved dealer who is simultaneously engaged in sales and customer service may terminate one of these activities without having to negotiate a new contract with the motor vehicle supplier for the remaining activity. An approved dealer who has entered into a contract covering both sales and customer service and wishes to withdraw from the sale of new motor vehicles to continue its operations as an approved workshop, or vice versa, may do so based on the existing agreement between them and their motor vehicle supplier.