As reported in our November competition update (Update: Competition, Solicitors Journal, 18 Nov. 2008 (hereinafter, “November Update”)), the Commission is in the process of reviewing sector block exemption regulations dealing with liner shipping consortia, motor vehicle agreements, and the insurance sector, all of which are due to expire in 2010. At the beginning of 2009, the European Commission took its reviews of the motor vehicle and insurance block exemptions a stage further.

On February 9, 2009, the Commission held a public hearing to discuss the effectiveness of the motor vehicle block exemption. The public hearing considered the extent to which the block exemption regulation has helped to prevent foreclosure of competing manufacturers and to promote intra-brand competition between dealers. It also considered whether the block exemption regulation was necessary to allow independent repairers access to the relevant technical information to allow them to compete on a level playing field with manufacturers’ authorized repairers. The Commission indicated at the end of the hearing that it was still considering whether to renew the block exemption regulation and how best to design rules that would be appropriate for the sector, especially taking into account the current economic downturn.

On March 24, 2009, the Commission published its preliminary views on the functioning of the insurance sector block exemption regulation. The Commission first considered whether the activities that are currently covered by the block exemption are unique to the insurance sector, and then considered whether they still warranted a block exemption. The Commission acknowledged that joint calculations and joint studies of risk are unique to the insurance sector and are necessary to enable insurance companies to price insurance products. As such, the Commission indicated there are good reasons for these activities to be covered by a block exemption. Similarly, the Commission also concluded that it may be appropriate to keep an exemption for co(re)insurance pools, but in a redrafted format to ensure consistency with other general and sector specific block exemptions. However, the Commission indicated that standard policy conditions and agreements relating to standards for security devices are not unique to the insurance sector and therefore should not benefit from the block exemption. These preliminary views will be debated at a public hearing June 2, 2009.

While in the past, the Commission has indicated that it may consider removing sectoral block exemption regulations, its current views indicate that it will keep sectoral block exemption regulations where it considers that they are still needed. The Commission is keeping an open mind with regard to the future of the motor vehicle block exemption, and has indicated that certain insurance activities should still benefit from a block exemption. It is therefore possible that, together with the liner shipping consortia block exemption (which is currently in draft form—see November Update), the motor vehicle and insurance block exemption regulations may be renewed in 2010, albeit with amended provisions.