Brussels, 15/03/2013 (Agence Europe) - The agreements concluded between car insurers and dealers on the price of vehicle repairs are anti-competitive in their goal and are consequently outlawed if - by their nature - they hinder free competition, the Court of Justice of the EU ruled on 14 March (C-32/11) in response to the supreme court of Hungary. The anti-competitive nature of these agreements must be assessed in relation to the two markets concerned - the automobile insurance market and the car repairs market, the Court of Justice adds.
Once a year, Hungarian insurers agree with car dealers the tariffs and conditions that car dealers will have to apply in their workshops when insured cars that have been involved in an accident have to be repaired. Car dealers and insurers are doubly linked - on the one hand, car dealers repair insured cars that have been in an accident on behalf of insurers, and, on the other hand, car dealers are intermediaries for insurers through supplying car insurance to their clients when the car dealers sell or repair vehicles. In addition, car dealers receive a higher tariff for repairing accident-damaged vehicles according to the number and size of insurance contracts sold for the relevant insurer. The Hungarian competition office (GVH) has banned these agreements, believing that they restrict competition on the insurance market and car repair market, and the GVH fined the companies involved. The Hungarian supreme court is hearing an appeal against this decision, and asks the Court of Justice of the EU if the agreements in question are intended to prevent, restrict or distort competition.
In its judgment, the Court of Justice of the EU first notes that agreements intending to restrict competition are forbidden and that it is not, therefore, necessary to examine their effects on competition. The Court notes that the Hungarian agreements link two activities which in theory are separate - the repair of vehicles and the brokering of automobile insurance. Such a link does not automatically mean that the agreements concerned intend to restrict competition, but can constitute an important element for examination with regard to this, and even if this case is about agreements between non-competing businesses, their intention can, nevertheless, be to restrict competition. In this case, the purpose of the agreements under investigation must be assessed with regard to the two markets affected. In order to assess the competitive nature, the Hungarian court will have to check: - if the role assigned by national law to the car dealers, acting as intermediaries or insurance brokers, requires their separateness in relation to insurance companies; - if it is likely that, following the conclusion of the agreements, the competition on the automobile insurance market will be eliminated or seriously weakened. On the other hand, as far as the vehicle repair market is concerned, the Hungarian court will have to take account of the fact that the agreements under investigation appear to have been concluded on the basis of “recommended prices”, established in the decisions taken by the national association of automobile dealers. If the Hungarian court should observe that these decisions were intended to restrict competition by standardising the hourly rates for repairing vehicles and that, through the vertical agreements under investigation, the insurance companies willingly ratified these decisions (which can be presumed if they concluded an agreement directly with this association) the illegality of these decisions would also mean the illegality of these agreements. (FG/transl.fl)