3rd ICAI 2024

International Conference on Automotive Industry 2024

Mladá Boleslav, Czech Republic

Jun. 16, 2023). In some states, however, Tesla has been successful (e.g. in Delaware, where the Supreme Court reversed the lower court’s decision upholding the denial of Tesla’s application for a new dealer licence) (Tesla Inc. v. The Delaware Division of Motor Vehicles, No. 375, 2022, Del. May 15, 2023).

3. Potential Antitrust Concerns with Agency Distribution Model

3.1 Exclusion of Intra-Brand Competition One of the most significant effects of a transition to an agency model may be potential threat of a reduction or exclusion of intra-brand competition. Intra-brand competition refers to competition between undertakings selling the same product of a given manufacturer. Intra-brand competition is given attention in EU competition law. For example, resale price maintenance, i.e. the restriction by the supplier of the buyer’s ability to determine its selling price, is treated relatively strictly under under EU competition rules (VBER, Art. 4(a), however, see also Court of Justice, C-211/22, Super Bock Bebidas, which seems to loosen such a strict approach). Such a conduct is sanctioned by national competition authorities in the EU relatively frequently. For example, the Czech Office for the Protection of Competition issued 8 first-instance decisions prohibiting resale price-maintenance in 2023). Moreover, the Commission considers the protection of competition between dealers of the same brand among the objectives of the MVBER (Commission (2021), SWD(2021) 112 final, p. 63). In the VBER Guidelines, however, the Commission states that a reduction of intra brand competition is by itself unlikely to lead to negative effects for consumers if inter-brand competition between undertakings selling the goods or services of different suppliers is strong (VBER Guidelines, para 21). In other words, inter-brand competition is considered more important than intra-brand competition even under EU competition rules. At the EU level, there is a multitude of players in the passenger car market. In addition, many minor players have grown significantly over the last 15 years. Market shares may shift with new entrants or the launch of new models. That may indicate that there is no significant degree of market power (let alone dominant undertaking) in the industry. In addition, the transformation of the automotive industry makes it easier for new entrants to gain market shares from established players by offering innovative products (Commission, M.9730 FCA/PSA, paras 1117-1121). From this standpoint, the adoption of the agency model and the possible reduction or exclusion of intra-brand competition in the market for new passenger cars may not in itself violate competition rules. Although intra-brand competition is considered to be important, there is no legislation at the EU level preventing car manufacturers from selling their products directly to final consumers (or through agents), without using independent dealers. In principle, there is no mechanism under EU competition rules to prevent car manufacturers from implementing an agency distribution model. Moreover, as there is strong inter-brand competition in the market, potential harmful effects of excluding intra-brand competition appear to be limited. However, this does

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