Access of independent operators to cars' technical information: the B&J Engineering v BMW case

Introduction

Which technical information can a car manufacturer legitimately refuse to share with independent operators without running the risk of infringing competition law? Withholding such pieces of information may negatively affect competition, foreclosing independent operators that they may not be capable to carry out their economic services due to the lack of access to the information (Commission notice, Supplementary guidelines on vertical restraints in agreements for the sale and repair of motor vehicles and for the distribution of spare parts for motor vehicles, paras. 62-64). The Conseil de Concurrence de Luxembourg, the Luxembourg Competition Authority (LCA), has recently dealt with this question in the B&J Engineering v BMW case (Decision of 26 June 2015 n. 2015-RP-04, B&JEngineering v BMW). Eventually, the LCA found for BMW. It held that the car manufacturers had no duty to share with indenpedent operators technical information other than those necessary for the repair and maintenance of cars. Thus the LCA closed the investigation with a non-infringement decision.

The facts of the case

B&J Engineering (BJ) was a Luxembourg-based firm that developed and supplied green technologies whose purpose was to cut the polluting emissions of car engines. BJ asked BMW for access to a number of technical information. These pieces of information were essential to enable BJ to offer its services to clients. In this case the BJ services consisted in turning the engines of BMW cars compliant with the Euro 4 Regulation into the less polluting Euro 6 Regulation engines. This work required modifications to the mechanic and eletronic equipments of cars as well as to the software controlling the engines of cars.

BMW refused to share with BJ the requested data. To this refusal BJ reacted by reporting the fact to the LCA. The BJ strategy was to challenging the BMW conduct on two grounds. First, BJ contended that by withholding the requested information BMW abused its dominant position in the market for the manufacturing and selling of cars. Second, BJ alleged that BMW made available the data at hand only to the authorized repairers, which amounted to a vertical restraint blacklisted by Article 5 of EU Regulation 461/2010 (the Motor Vehicle Block Exemption Regulation). As a result, the agreements concluded by BMW with the members of the network of its authorized were in breach of Article 3 of the Luxembourg Competition Act and of the corresponding Article 101 TFEU. In addition, BJ argued that by reserving the access of the data at hand to its authorized repairers, BMW also carried out a discriminatory conduct banned by Article 102 TFEU.

The decision of the LCA

a) The abusive conducts

First, the LCA ruled out that the BMW withholding of information constituted an abuse of dominant position. In fact BMW did not enjoy any dominance in the relevant product market, which was identified in the market for the re-programming, re-initialising and re-setting of car engines with the view to cut gas emissions. BMW was not present in this market, neither it had a dominant position in the upstream market for the manufacturing and sale of cars.

Notwithstanding that, the LCA went on to assess whether the conducts of BMW were abusive in nature. BJ characterized the BMW withholding of the information as a tying practice, as it sold luxury cars with onboard computers together with the related software. In other words, BMW tied the sale of cars (the tying product) with the sale of onboard computers and the related software (the tied products) with the result that consumers were not allowed to buy a new car without the onboard computer and software. According to BJ, the BMW commercial policy was then similar to the Microsoft's tying practices that have been found to be incompatible with Article 102 TFEU in the Microsoft I case. Yet, the LCA did not agreed with BJ. It pointed out that the BMW conducts failed to meet the first and the second condition of the four-limbs test applied by the European Commission in Microsoft I. Indeed in B&J Engineering v BMW there did not exist one market for cars without onboard computer and another distinct market for onboard computers without cars. In addition, BMW did not have a dominant position in the market for the tying product.

Finally, it can be argued that the qualification of the BMW withholding of information as tying practice seems to be not much consistent with the facts of the case. In fact, with the contested conduct BMW did not supplied BJ with inputs apparently indispensable to carry out its activity in the relevant product market. More plausibly instead, the BMW conduct could have been characterized as refusal to supply and the complainant could have invoked the doctrine of essential facilities. Had all the conditions for the application of the doctrine been met - which as hinted above, however, was not the case in B&J Engineering v BMW, since BMW was not a dominant undertaking in the relavant markets- BMW might have been obliged to share the data with BJ.

Second, the LCA rejected the BJ claims regarding the BMW discriminatory conduct. Indeed the LCA found that BMW refused the access to the technical data and software to all operators, including the authorized repairers. Therefore, under no circumstances BMW put in practice a discriminatory conducct to the detriment of independent operators such as BJ.

b) the anti-competitive vertical restraints

Third and finally, the LCA considered whether the service agreements entered by BMW with the authorized repairers, according to which BMW apparently reserved the access to technical information only to the latter, were compatible with the competition rules on vertical restraints. In that regard, the LCA pointed to the circumstance reported above that BMW did not make available to the authorized repairers the technical information it refused to give to BJ. Therefore, the LCA reached the conclusion that such data were not covered by the agreements concluded by BMW with the authorized repairers. And as a consequence, BJ could not invoke the EU rules on vertical restraints to challenge the validity of such agreements.

Though not necessary to adjudicate on the allegations submitted by BJ, the LCA went on to consider which type of technical information a car manufacturer can legitimaly withhold under EU Regulation 461/2010. It referred to the Guidelines on the application of EU Regulation 461/2010, which draw a clear distinction between two categories of technical information: i) information ultimately used for the repair and maintenance of motor vehicles and ii) the information used for another purpose. Only the information falling within the first category are within the scope of application of EU Regulation 461/2010. Thus a car manufacturer withholding the information belonging to the second category does not incur in any competition liability for breach EU Regulation 461/2010 and more generally the competition rules on vertical restraints. In light of the above, the LCA concluded that the agreements entered into by BMW and the authorized repairers did not contain any vertical restraint blacklisted by Article 5 of EU Regulation 461/2010.

Conclusive thoughts

The LCA findings in B&J Engineering v BMW that a car manufacturer can legitimate withhold any pieces of technical information that is not necessary for repair and maintenance works are consistent with the decisional practice of the European Commission. In DaimlerChrysler (decision of 13 September 2007, Case COMP/E-2.39.140), the Commission dealt with the DaimlerChrysler practices as for the supply of technical information for the repair of vehicles of the Mercedes-Benz and Smart brands. It found that such practices may infringe the then Article 81 EC as they discriminated between authorised and independent repairers as for access to technical information. Eventually, the Commission closed the investigation with a commitment decision on the basis of Article 9 of Regulation 1/2003. With the set of commitments accepted by the Commission, the parties offered to give authorized and independent repairers access on the same conditions to technical information. Importantly, the Commission read the concept of technical information under the Motor Vehicle Block Exemption Regulation then in force (Regulation 1400/2002) as including all information provided for the repair and maintenance of motor vehicles. Accordingly, DaimlerChrysler was not obliged to provide independent repairers with technical information enabling a third party to bypass or disarm on-board anti-theft devices and/or recalibrate electronic devices or to tamper with devices which limit a vehicle's performance (see para.15 of the decision). This restrictive approach was also embraced by the French Competition Authority (FCA). The FCA published an opinion on competition in the vehicle repair and maintenance sector and the spare parts manufacturing and distribution sector (Opinion no. 12-A-21 of 8 October 2012) in which it stated that the technical information belonging to the second category, those used for other purpose than the repair and maintenance of motor vehicles, fell outside Regulation 461/2010. The competition impact of the withholding of such technical data must be assessed on the basis of the general rules on vertical restraints in Article 101 TFEU and Regulation 330/2010 and also on the basis of Article 102 TFEU.

In conclusion, B&J Engineering v BMW confirms that under EU Regulation 461/2010 car manufacturers are allowed to withhold pieces of technical information that are not necessary for repair and maintenance. Having that said, whether the withholding of such information restricts competition should be assessed on the basis of general rules on anti-competitive agreements and/or abusive behaviours.