WRITTEN QUESTION E-3989/03 by Theresa Villiers (PPE-DE) to the Commission. EU rules on sales and servicing.
Date: 2004-01-07
Institutions: European Parliament, Provisional data
Subjects: application of EU law, concessionaire, consumer protection, control of restrictive practices, distributive trades, motor car, motor vehicle industry, producer's liability, restriction on competition, used goods, vertical agreement

8.4.2004

EN

Official Journal of the European Union

C 88 E/163

Answer given by Mr Patten on behalf of the Commission

(13 February 2004)

The salaries of local staff in Delegations of the Commission are revised annually in accordance with the
Framework Rules (FR) laying down the conditions of employment of local staff of the Commission serving
in third countries. The objective of the annual salary revisions is to maintain a level of salaries, which is
competitive with those of reference employers on the local labour market.

Due to the dramatic economic conditions in Brazil in the nineties, it was decided to establish a salary grid
in ECU, with monthly payment of the salaries in local currency. In 1999, it became obvious that the
reference grid in ECU had artificially put the local staff salaries far above the salaries of the reference
employers. Therefore, it was justified to return to salaries fixed in local currency. Those local agents, who
were already employed in the Delegation, signed an addendum to their contract accepting the conversion
of their salaries from ECU to the local currency at an agreed exchange rate.

Subsequently, the salaries of those local agents, who were employed already in 1999, were ‘frozen’ until
their salaries would be in line with the local market. The alignment is materialised by a salary grid fixed
and revised annually according to the agreement with the trade unions staff representatives on the basis of
the FR. Thus, the Commission cannot confirm that the salaries of the local agents who signed the
addendum have been dropped since their nominal value remains fixed since 1999. At present, those
salaries are still considerably higher than those of the local reference employers.

The Commission is treating all local staff employed at its Delegations world-wide in compliance with the
principles of the European Charter of Fundamental Rights.

(2004/C 88 E/0172)

WRITTEN QUESTION E-3989/03

by Theresa Villiers (PPE-DE) to the Commission

(7 January 2004)

Subject: EU rules on sales and servicing

Can the Commission confirm that one of the aims of Commission Regulation (EC) No 1400/2002 (1)
1.
on the application of Article 81(3) of the Treaty to categories of vertical agreements and concerted
practices in the motor vehicle sector is to enable car owners to use independent garages without infringing
the terms of the manufacturer’s warranty?

Does the Commission have any evidence to suggest that car distributors are reducing the warranty

2.
period on new cars?

After the initial warranty period has come to an end, can the Commission confirm that subsequent

3.
warranty periods are at the discretion of the distributor?

Under the new Regulation, would it be possible for subsequent warranty periods to include a clause
4.
which requires servicing to be carried out only by those agents endorsed by the distributor, with the
warranty becoming invalid if this is not done?

5.
Has the Commission any evidence to suggest that a similar practice has occurred in relation to
second hand cars? Does the Commission believe that current practice, whereby the buyer of a second hand
car has to purchase further warranty which usually includes an obligation to use only certain servicing
agents, is in keeping with the spirit of the above Regulation?

6.

Does the Commission have any plans to investigate whether these practices are occurring?

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Official Journal of the European Union

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8.4.2004

7. What action would the Commission take against distributors and/or Member States if these practices
were found to exist?

8.

How does the Commission propose to evaluate the impact of the Regulation?

(1) OJ L 203, 1.8.2002, p. 30.

Answer given by Mr Monti on behalf of the Commission

(11 February 2004)

The Commission believes that

repairers provide the consumer with a valuable
1.
alternative to authorised garages. One of the aims of Commission Regulation (EC) No 1400/2002 of
31 July 2002 on the application of Article 81(3) of the Treaty to categories of vertical agreements and
concerted practices in the motor vehicle sector is to ensure that independent repairers continue to be able
to provide such an alternative, and that they are not foreclosed from the market.

independent

In accordance with the new rules, during the period of a ‘basic’ manufacturer’s warranty or an extended
warranty bought from the manufacturer, it is usual and acceptable for the manufacturer to stipulate that
work covered by that warranty may only be carried out at repair shops that it has endorsed or authorised.

However, such ‘warranty work’ normally relates to defects in the new vehicle, and does not include routine
servicing or breakdowns not covered by the warranty. If manufacturers were to systematically exclude
independent repairers from carrying out such ‘non-warranty work’ on vehicles during the manufacturer’s
warranty period, this might result in foreclosure effects (1).

2. to 4.
that a car owner may encounter.

It may be useful to distinguish between the different types of warranty and servicing packages

Manufacturers’ warranties, as referred to in paragraph 1 above, form part of the distribution agreement
between dealers and manufacturers, and are therefore likely to be covered by Article 81 of the EC Treaty,
and to fall within the scope of Regulation (EC) No 1400/2002. The Commission does not have any
evidence to suggest that car manufacturers are generally reducing the length of the warranty periods that
they offer on new cars. Indeed, the Commission has observed a trend towards longer manufacturers’
warranties over the past few years.

Dealer warranties, on the other hand, are financed and issued by the dealer, and result from a contract
between the dealer and the consumer, and thus do not form part of the vertical distribution agreement
between the manufacturer and the dealer. Such warranties are in general not covered by Article 81 or
Regulation (EC) No 1400/2002. However, as the Office of Fair Trading report mentioned below makes
plain, warranties described as ‘dealer-based’ are often financed in the main by the manufacturer rather than
the dealer. These warranties should therefore be considered to be manufacturers’ warranties for the
purposes of Community competition law.

The consumer can choose to extend the protection beyond the end of the manufacturer’s warranty by
buying an extended warranty from the manufacturer or from a third party, and may also choose to buy a
servicing package. If the consumer buys an extended warranty from the manufacturer, the reasoning in
paragraph 1 applies.

5.
The Honourable Member should note that the sale of used cars does not fall within the scope of
Regulation (EC) No 1400/2002 (2), and that such products are dealt with under the Commission’s general
block exemption for vertical restraints, Regulation (EC) No 2790/1999 (3) instead.

6. and 7.
It goes without saying that the Commission takes this matter extremely seriously and will duly
investigate all complaints that appear to show that manufacturers’ warranty schemes do not comply with
the letter and spirit of Regulation (EC) No 1400/2002. However, at the present stage the Commission takes
the view that it would be inappropriate to speculate as to what specific action it would take in a
hypothetical instance, since this would depend on the exact facts of the case.

The Commission would also like to take this opportunity to acknowledge the recent important work in
this area carried out by the United Kingdom (UK) Office of Fair Trading (OFT) (4).

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Official Journal of the European Union

C 88 E/165

The Commission would draw the Honourable Member’s attention to the efforts made during the
8.
transitional period to clarify the way that the Regulation applies to warranty schemes, and in particular to
the guidance given to all interested parties through an explanatory brochure (5) and a set of Frequently
Asked Questions (6).

Now that the transitional period is over, and the Regulation is bedding-in, the Commission will shift its
efforts towards more focused monitoring and enforcement. The Commission will also carry out an
assessment of the operation of the block exemption in accordance with Article 11 of Regulation (EC)
No 1400/2002.

(1) See the reply to question 38 in the Commission’s Explanatory Brochure for more explanation on this point.
(2) See Article 2(1) of Regulation (EC) No 1400/2002.
(3) 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, OJ L 336, 29.12.1999.
(4) OFT report entitled ‘New car warranties (cid:1) Report of the market study’ (December 2003).
(5) See in particular Section 5.1.2.
(6) See the replies to questions 1 and 2. Both the Brochure and the FAQs are available on the Commission’s website at:

http://europa.eu.int/comm/competition/car_sector/distribution/

(2004/C 88 E/0173)

WRITTEN QUESTION E-4004/03

by Claude Moraes (PSE) to the Commission

(7 January 2004)

Subject: Disabled children in Russia

A number of my constituents have expressed much concern over the treatment of disabled children in
Russia.

Is the Commission aware of the lack of provisions for both physically and mentally disabled children in
Russia?

Could the Commission please indicate what measures, if any, it has taken so as to encourage Russia to
address this issue and improve this situation?

Answer given by Mr Patten on behalf of the Commission

(9 February 2004)

The Commission has been working for several years via TACIS to improve the treatment of disabled
children in Russia. Examples of projects include ‘Partnership in health, education and social assistance’,
implemented as part of the 1999 TACIS Action Programme for Russia in cooperation with the Ministry of
Education, which has promoted the early detection of disabilities and the better treatment of Russian
children in several regions of Russia.

Further projects (cid:1) to be implemented with Russian institutions including the Russian Ministry of Labour
and Social Development (cid:1) are currently being prepared.

These projects aim, ‘inter alia’ , to:

(cid:1) improve existing legislation;

(cid:1) develop mechanisms of cooperation between different departments/agencies and organisations dealing

with disabled children;

(cid:1) develop programmes for the social inclusion of children with disabilities and provide support to their

families;