WRITTEN QUESTION E-3296/02

by Dominique Vlasto (PPE-DE) to the Commission

(21 November 2002)

Subject: Sale of spare parts to clock and watchmakers in the European Union

The Commission's attention has already been drawn to the fact that clock and watchmakers are finding it more and more difficult to obtain the spare parts required to repair watches of certain luxury brands. This applies particularly to watches sold by Swiss manufacturers, who impose restrictions on the sale of spare parts to independent clock and watchmakers in the European Union.

This distribution policy, modelled on that for luxury goods, has become widespread and is now followed by most of the clock and watchmaking industry. Watch manufacturers who no longer supply spare parts to watchmakers have developed their own repair centres, thus securing a repair monopoly and denying consumers the option of choosing who carries out the repair.

1. Where a producer has a less than 30 % share of the relevant market, the Commission considers that there is no restriction of competition. What is the position if a group of producers, none of which exceeds the 30 % threshold, imposes the same restriction on the distribution of spare parts? In such a case, what can be done to offset the negative effects on competition?

2. The Commission has proposed new rules for the car distribution sector. Why should it not propose new rules for the watch distribution sector to safeguard the livelihood of the thousands of independent clock and watchmakers?

3. In the specific case of watches from Swiss manufacturers, can the Commission indicate whether there is any prospect of an early solution to this difficulty?

Answer given by Mr Monti on behalf of the Commission

(9 January 2003)

The ban on restrictive agreements in Article 81(1) of the EC Treaty applies also to restrictive vertical agreements where the manufacturer has less than 30 % of the relevant market when such agreements appreciably affect trade between Member States. Because the Commission recognizes that vertical agreements caught by Article 81(1) of the EC Treaty may result in more positive than negative effects

it has issued Commission Regulation (EC) No 2790/1999 of 22 December 1999 on the application of Article 81(3) of the Treaty to categories of vertical agreements and concerted practices(1), hereafter Block Exemption Regulation, which exempts certain restrictive vertical agreements from the application of Article 81(1), provided the supplier or buyer has less than 30 % of the relevant market.

The Commission may withdraw the benefit of the said Block Exemption Regulation if, in a particular case, it finds that access to the relevant market or competition within the relevant market is restricted by the cumulative effect of parallel networks of similar vertical restraints implemented by competing suppliers. In addition, the Commission may, by means of regulation, declare that where parallel networks of similar vertical restraints cover more than 50 % of a relevant market, the Block Exemption Regulation shall not apply to all vertical agreements containing specific restraints in that market.

The Commission wishes to stress that also in the field of watches, it can and will address any restriction of competition using Articles 81 and 82 of the EC Treaty, provided such restriction has an appreciable effect on trade between Member States.

The Commission does not consider that the particularities of the watch manufacturing industry justify the adoption of a Block Exemption Regulation applying specifically to watches. In particular, the Commission considers that environmental and safety issues directly related to the repair and maintenance of motor vehicles cannot, as such, be transposed to watches.

The Commission is aware of the commercial practice being developed in the Swiss watch manufacturing industry and currently is examining whether a watch manufacturer's refusal to supply spare parts to independent watchmakers may violate Community competition law, including Article 82 of the EC Treaty, especially in cases where the watch manufacturer is not located in the Union.

(1) OJ L 336, 29.12.1999.