No C 17/4 Official Journal of the European Communities 18.1.85 
Commission notice concerning Regulation (EEC) No 123/85 of 12 December 1984 on 
the application of Article 85 (3) of the Treaty to certain categories of motor vehicle 
distribution and servicing agreements 
(85/C 17/03) 
In Regulation (EEC) No 123/85 on the block 
exemption of motor vehicle distribution agreements 
the Commission recognizes that exclusive and 
selective distribution in this industry is in principle 
compatible with Article 85 (3) of the Treaty. This 
assessment is subject to a number of conditions. At 
the request of some of the commercial sectors 
involved, this notice sets out some of those conditions 
and lays down certain administrative principles for 
the procedures which the Commission might initiate 
under Article 7 of Council Regulation No 19/65/ 
EEC (') in combination with Article 10, points 3 and 
4 of Regulation (EEC) No 123/85 (2), taking account 
of the present stage of integration of the European 
Community. 
I 
1. Freedom of movement of European consumers and 
limited availability of vehicle models 
The Commission starts from the position that the 
common market affords advantages to European 
consumers, and that this is especially so where there 
is effective competition. Accordingly, Regulation 
(EEC) No 123/85 presupposes that in the motor 
vehicles sector effective competition exists between 
manufacturers and between their distribution 
networks. The European consumer must derive a fair 
share of the benefits which flow from the distribution 
and servicing agreements. Admittedly, the consumer 
may benefit from the fact that servicing is carried out 
by specialists (Article 3, points 3 and 5) and that such 
service can be obtained throughout the network from 
dealers and repairers who are obliged to observe 
minimum requirements (Article 4 (1)). 
However, the European consumer's basic rights 
include above all the right to buy a motor vehicle and 
to have it maintained or repaired wherever prices and 
quality are most advantageous to him. 
(a) This right to-buy relates to new vehicles from a 
manufacturer each of whose dealers offers them 
in a form and specification mainly required by 
final consumers in the dealer's contract territory 
(contract goods). 
O OJ No 36, 6. 3. 1965, p. 533/65. 
O OJNoL 15, 18. 1. 1985, p. 16. (b) In the interests of competition at the various 
stages of distribution in the common market and 
in those of European consumers, a certain limited 
availability of other vehicles within the distri­
bution system is also considered indispensable. 
Any dealer within the distribution system must be 
able to order from a supplier within the distri­
bution system any volume-produced passenger 
car which a final consumer has ordered from him 
and intends to register in another Member State, 
in the form and specification marketed by the 
manufacturer or with his consent in that Member 
State (passenger cars corresponding to those in 
the contract programme, Article 5(1), point 2 (d) 
and Article 13, point 10 of Regulation (EEC) No 
123/85). 
This provision does not oblige the manufacturer to 
produce vehicles which he would not otherwise offer 
within the common market. Nor does it oblige the 
manufacturer to sell particular vehicle models in any 
particular part of the common market where he does 
not, or does not yet, wish to market them. He is only 
obliged to supply to a dealer within his distribution 
system a new passenger car required by that dealer to 
fulfil a contract with a final consumer and intended 
for another Member State where that dealer's 
contract programme includes cars of a corresponding 
kind. 
2. Abusive hindrance 
The European consumer must not be subject to 
abusive hindrance either in the exporting country, 
where he wishes to buy a vehicle, or in the country of 
destination, where he seeks to register it. The 
restrictions inherent in an exempted exclusive and 
selective distribution system do not represent abuses. 
However, further agreements or concerted practices 
between undertakings in the distribution system that 
limit the European consumer's final freedom to 
purchase do jeopardize the exemption given by the 
Regulation, as do unilateral measures on the part of a 
manufacturer or his importers or dealers which have a 
widespread effect against consumers' interests (Article 
10, point 2). Examples are: dealers refuse to perform 
guarantee work on vehicles which they have not sold 
and which have been imported from other Member 
States; manufacturers or their importers withhold 
18. 1.85 Official Journal of the European Communities No C 17/5 
their cooperation in the registration of vehicles which 
European consumers have imported from other 
Member States; abnormally long delivery periods. 
3. Intermediaries 
The European consumer must be able to make use of 
the services of individuals or undertakings to assist in 
purchasing a new vehicle in another Member State 
(Article 3, points 10 and 11). However, except as 
regards contracts between dealers within the distri­
bution system for the sale of contract goods, under­
takings within the distribution system can be obliged 
not to supply new motor vehicles within the contract 
programme or corresponding vehicles to or through a 
third party who represents himself as an authorized 
reseller of new vehicles within the contract 
programme or corresponding vehicles or carries on an 
activity equivalent to that of a reseller. It is for the 
intermediary or the consumer to give the dealer 
within the distribution system documentary evidence 
that the intermediary, in buying and accepting 
delivery of a vehicle, is acting on behalf and for 
account of the consumer. 
II 
The Commission may withdraw the benefit of the 
application of Regulation (EEC) No 123/85, 
pursuant to Article 7 of Regulation No 19/65/EEC, 
where it finds that in an individual case an agreement 
which falls within the scope of Regulation (EEC) No 
123/85 nevertheless has effects which are 
incompatible with the provisions of Article 85 (3) of 
the Treaty, and in particular 
— where, over a considerable period, prices or 
conditions of supply for contract goods or for 
corresponding goods are applied which differ 
substantially as between Member States, and such 
substantial differences are chiefly due to 
obligations exempted by Regulation (EEC) No 
123/85 (Article 10, point 3); 
— where, in agreements concerning the supply to the 
dealer of passenger cars which correspond to a 
model within the contract programme, prices or 
conditions which are not objectively justifiable are 
applied, with the object or effect of partitioning 
the common market (Article 10, point 4). 
The Commission may pursue such proceedings in 
individual cases, upon application (particularly on the 
basis of complaints from consumers) or on its own 
initiative, in accordance with the procedural rules laid 
down in Council Regulation No 17 (l) and 
Commission Regulation No 99/63/EEC (2), under 
which the parties concerned must be informed of the 
0) OJ No 13, 21. 2. 1962, p. 204/62, as last amended by 
Regulation (EEC) No 2821/71, OJ No L 285, 29. 12. 
1971, p. 49. 
(2) OJ No 127, 20. 8. 1963, p. 2268/63. objections raised and given an opportunity to respond 
to them before the Commission adopts a decision. 
Whether the Commission initiates such proceedings 
depends chiefly on the results of preliminary 
inquiries, the circumstances of the case and the 
degree of prejudice to the public interest. 
Price differentials for motor vehicles as between 
Member States are to a certain extent a reflection of 
the particular play of supply and demand in the areas 
concerned. Substantial price differences generally give 
reason to suspect that national measures or private 
restrictive practices are behind them. 
In view of the present stage of integration of the 
common market, for the time being certain circum­
stances will not of themselves justify an investigation 
of whether an agreement exempted by Regulation 
(EEC) No 123/85 is incompatible with the conditions 
of Article 85 (3) of the Treaty. For the time being, 
the Commission does not propose to carry out 
investigations into private practices under Article 10, 
point 3 or 4 of Regulation (EEC) No 123/85 where 
the following circumstances obtain (this does not 
exclude intervention by the Commission in particular 
cases): 
1. Price differentials between Member States (Article 
10, point 3 in association with Article 13, point 11) 
Recommended net prices for resale to final consumers 
(list prices) of a motor vehicle within the contract 
programme in one Member State and of the same or 
a corresponding motor vehicle in another Member 
State differ, and 
(a) the difference expressed in ECU does not exceed 
12 % of the lower price, or, over a period of less 
than one year, exceeds that percentage either 
— by not more than a further 6 % of the list 
price, or 
— only in respect of an insignificant portion of 
the motor vehicles within the contract 
programme, or 
(b) the difference is to be attributed, following 
analysis of the objective datas, to the fact that 
— the purchaser of the vehicle in one of those 
Member States must pay taxes, charges or fees 
amounting in total to more than 100 % of the 
net price, or 
— the freedom to set the price or margin for the 
resale of the vehicle is directly or indirectly 
subject in one of those Member States to 
restriction by national measures lasting longer 
than one year; 
and that such measures do not represent 
infringements of the Treaty. 
No C 17/6 Official Journal of the European Communities 18.1.85 
Insofar as they are public knowledge, prices net of 
discounts shall replace recommended net prices. 
Particular account will be taken, for an appropriate 
period, of alterations of the parities within the 
European Monetary System or fluctuations in 
exchange rates in a Member State. 
2. Price differentials between passenger cars within 
the contract programme and corresponding cars 
(Article 10, point 4 in association with Article 5 
(1), point 2 (d) and Article 13, point 10) 
When selling to a dealer a passenger car 
corresponding to a model within the contract 
programme, the supplier charges an objectively jus­
tifiable supplement on account of special distribution 
costs and any differences in equipment and 
specification. 
In a Member State where pricing is affected in the 
manner described at II 1 (b) above, the supplier 
charges a further supplement; however, he does not 
exceed the price which would be charged in similar 
cases in that Member State not subject to such effects 
in which the lowest price net of tax is recommended 
for the sale to a final consumer of that vehicle within 
the contract programme (or, as the case may be, of a 
corresponding vehicle). 
3. Where the limits indicated above are exceeded, the 
Commission may open a procedure on its own initiative under Article 10, points 3 and 4 of Regu­
lation (EEC) No 123/85; whether it does so or not 
will depend mainly on the results of investigations 
that may be made as to whether the exempted 
agreement is in fact the principal cause of actual price 
differences in the meaning of Article 10, point 3 or 4 
or, as the case may be, has led to a partitioning of the 
common market or is, in the light of experience, 
liable to do so. Price comparisons made in this 
connection will take account of differences in 
equipment and specification and in ancillary items 
such as the extent of the guarantee, delivery services 
or registration formalities. 
Ill 
1. The rights of Member States, persons and 
associations of persons to make applications to the 
Commission under Article 3 of Council Regulation 
No 17 (i.e. complaints) are unaffected. The 
Commission will examine such complaints with all 
due diligence. 
2. This notice is without prejudice to any finding of 
the Court of Justice of the European Communities 
or of courts of the Member States. 
3. Any withdrawal of or amendment to this notice 
will be effected by publication in the Official 
Journal of the European Communities.