WRITTEN QUESTION P-0499/00 by Christopher Huhne (ELDR) to the Commission. Car price differentials.
Date: 2000-02-17
Institutions: European Parliament, Provisional data
Subjects: United Kingdom, common commercial policy, discriminatory price, exclusive distribution agreement, motor car

C 303 E/200

Official Journal of the European Communities

EN

24.10.2000

Alzheimer(cid:146)s disease effects 5 % of persons over the age of 65 in Europe and there is still no treatment able
rapidly to halt the neurodegenerative process that occurs.

Will the Commission say what procedure it intends to introduce and what criteria it will adopt for the use
of funds under the new budget heading B3-4307N, which is designed to improve the quality of life of
those suffering from neurodegenerative diseases, such as Alzheimer(cid:146)s disease and related conditions, and of
those assisting them in a non-professional capacity?

Answer given by Mr Byrne on behalf of the Commission

(22 March 2000)

The Commission is aware of the implications that demographic factors, and in particular the ageing of the
Community population, will have for society as a whole, and for health systems in particular. It underlined
these consequences in its communication on the development of public health policy in the Commun-
ity (1), which it also recognises in its forthcoming communication and proposal for a programme of action
in the field of public health. Moreover, under the present Community action programme on health
promotion, information, education and training, strategies aiming at improving older people(cid:146)s health have
been developed as a priority issue.

As a result of the ageing of the population, the number of people afflicted by Alzheimer(cid:146)s disease is bound
to increase in the future, and the Commission is very much aware of the great suffering caused by this
disease not only for the patients, but also for their families. The fact that neither proven treatments nor
effective preventive measures are available for Alzheimer(cid:146)s disease further aggravates the situation, and at
the same time limits the scope for action both at national and Community level.

Budget line B3-4307 foresees activities aimed at improving the quality of life of patients suffering from
neuro-degenerative diseases such as Alzheimer(cid:146)s, and of people who care for Alzheimer patients in a non-
professional capacity. The Commission is presently in the process of examining the implications of
implementing this budget line, including the implications for spending on other Community public health
activities. Once this examination is completed, the Commission will transmit the result of its examination
direct to the Honourable Member.

(1) COM(98) 230 final.

(2000/C 303 E/228)

WRITTEN QUESTION P-0499/00

by Christopher Huhne (ELDR) to the Commission

(17 February 2000)

Subject: Car price differentials

Does the Commission consider that the substantially higher prices for cars in the UK are the result of
concerted behaviour on behalf of car producers and/or distributers and thus should result in an early
revision of the block exemption from competition rules under the existing regulation? If the Commission
does not consider this to be the case, how does it explain the substantial and persistent difference in the
price of new cars, well beyond the figure mentioned in the notice published by the Commission in
connection with the regulation EEC 123/85 (1)?

(1) OJ L 15, 18.1.1985, p. 16.

24.10.2000

EN

Official Journal of the European Communities

C 303 E/201

Answer given by Mr Monti on behalf of the Commission

(8 March 2000)

The block exemption regulation concerning car distribution Commission Regulation (EC) No 1475/95 of
28 June 1995 on the application of Article 85(3) of the EC Treaty to certain categories of motor vehicle
distribution and servicing agreements (1), which will expire on 30 September 2002, provides in its Article
11 that the Commission evaluates on a regular basis the application of the Regulation, with a particular
view on price differentials between the different Member States and on the quality of service to final users.
To this end, the Commission has since 1993 monitored car price differences in the Community in its bi-
annual report on car prices (2). Article 11 of the Regulation also requires the Commission to draw up a
report on the evaluation of the Regulation before 31 December 2000.

It is true that, since 1997, the Commission has found high price discrepancies between the United
Kingdom and other Member States. This situation has been partly caused by the strength of the British
Pound, while a part may be attributed to the right-hand drive (RHD) specification of the cars sold in the
United Kingdom. On the other hand, it has been observed that low prices before tax prevail in Member
States with high taxation of car purchase. This circumstance may be apt to contribute to artificially high
price differences between those countries and countries where no such taxes exist, such as for example the
United Kingdom.

The Commission considers that growing price transparency, as promoted by its car price reports and the
introduction of the euro, is increasingly inducing customers from the United Kingdom to acquire cars in
other Member States. These developments are important market-related factors contributing to a better
harmonisation of prices throughout the Community. The Commission has undertaken a number of
initiatives (opening of ex-officio proceedings against certain car manufacturers, request accepted by the
industry to establish telephone help-lines to assist consumers) to ensure this freedom for consumers. For
instance, the Commission imposed, on 28 January 1998, a fine of € 102 million to Volkswagen for
restrictive practices aiming at establishing a prohibition on its dealers to sell cars for export to citizens of
other Member States. Similar cases relating to other car manufacturers are being examined at present.

The Commission notice concerning Regulation (EEC) No 123/85 of 12 December 1984 on the application
of Article 85(3) of the EC Treaty to certain categories of motor vehicle distribution and servicing
agreements (3) mentioned by the Honourable Member specifies the circumstances under which the
Commission may withdraw the benefit of the block exemption. It refers inter alia to the existence of
substantial price differentials between Member States over a considerable period and requires in such cases
the Commission to demonstrate that such price differentials are chiefly due to the car distribution block
exemption. The simple existence of a high price differential superior to the figure quoted in the notice, is
therefore, in itself, not sufficient evidence for a possible withdrawal.

The report on the evaluation of the Regulation is expected to provide more evidence on the causes for
price differentials and on the impact of the exempted distribution system on car prices. The United
Kingdom Competition Commission is also in the process of finalising a report which should contain
detailed information on the particular issue of the price differentials for the British market. After having
taken note of the findings of the United Kingdom Competition Commission, and having completed its
own report, the Commission will then be able to determine which measures, if any, are to be taken. The
report on the application of Regulation (EC) No 1475/95 will provide an essential basis for the
forthcoming discussion about the future legal framework for car distribution, after expiry of the current
Regulation.

(1) OJ L 145, 29.6.1995.
(2) See for most recent one IP/00/121 of 7 February 2000.
(3) OJ C 17, 18.1.1985.