Is my vehicle warranty invalidated if an aftermarket security device is fitted?
The simple answer is no, but there are rules governed by the Motor Vehicle Block Exemption Order (MVBEO, which came into force on 01st June 2023) that if not followed would invalidate a warranty, for example:
If the device is fitted by a qualified independent installer, then the manufacturer would have to prove that due to a poor installation a vehicle fault had developed which would not then be covered under the vehicle’s warranty.
Under the MV-BEO vehicle manufacturers cannot insist that your vehicle must have any work carried out on it by an authorised network whilst under warranty, as this would deprive consumers of their right to choose to have their vehicle maintained or repaired by an independent repairer and it would, especially in the case of “extended warranties”, prevent such repairers from competing effectively with the authorised network.
THE FOLLOWING TAKEN FROM THE UK’s CMA GUIDANCE ON MOTOR VEHICLE AGREEMENTS
DISTRIBUTION AND SERVICING OF MOTOR VEHICLES IN THE EUROPEAN UNION
COMMISSION REGULATION (EC) NO. 461/2010 of 27 May 2010 (Guidelines updated 01st June 2023)
ON THE APPLICATION OF ARTICLE 81(3) OF THE TREATY TO CATEGORIES OF VERTICAL AGREEMENTS AND CONCERTED PRACTICES IN THE MOTOR VEHICLE SECTOR
Question 37: If a consumer has his vehicle repaired or maintained by an independent repairer during the warranty period, can the manufacturer refuse to honour the warranty? If the consumer has his vehicle repaired or maintained by an independent repairer during the manufacturer's warranty period the warranty may be lost if the work carried out is faulty. However, a general obligation to have the car maintained or repaired only within the authorised network during such a period would deprive consumers of their right to choose to have their vehicle maintained or repaired by an independent repairer and it would, especially in the case of “extended warranties”, prevent such repairers from competing effectively with the authorised network.
THE FOLLOWING TAKEN FROM THE UK’s CMA GUIDANCE ON MOTOR VEHICLE AGREEMENTS:
4.2 One of the objectives of the CMA’s competition policy for the motor vehicle sector is to protect access by suppliers of aftermarket goods to the motor vehicle aftermarkets, thereby ensuring that competing brands of aftermarket goods continue to be available to both independent
17 and authorised repairers, 18 as well as to both independent 19 and authorised distributors.20
17 In accordance with Article 2(1) MVBEO “independent repairer”, in relation to motor vehicles of a particular make, means a person who— (a) provides repair and maintenance services for such vehicles, and (b) is not an authorised repairer. 18 In accordance with Article 2(1) MVBEO “authorised repairer”, in relation to motor vehicles of a particular make, means a person who has entered into contractual arrangements with a supplier of such vehicles for the purposes of providing repair and maintenance services for such vehicles. 19 In accordance with Article 2(1) MVBEO, “independent distributor”, in relation to motor vehicles of a particular make, means a person who— (a) distributes aftermarket goods for such vehicles, and (b) is not an authorised distributor. 20 In accordance with Article 2(1) MVBEO “authorised distributor”, in relation to motor vehicles of a particular make, means a person who— (a) distributes aftermarket goods for such vehicles, and (b) operates within the distribution system set up by a supplier of such vehicles.
4.3 Aftermarket goods means any of the following:
12 (a) spare parts; (for definition see 21 below)
(b) any software required to repair or replace a part or system of a motor vehicle, but which is not a spare part;
(c) any code or other information necessary for the use of software falling within (a) or (b); and
(d) fluids used in the braking system, steering system, engine or elsewhere in a motor vehicle as a coolant, lubricant, cleaner or otherwise, in so far as the fluids are necessary for the effective operation of the motor vehicle, but not fuel.
Restriction of the ability to sell components as spare parts
4.4 Article 8(2)(e) of the VABEO describes it as a hardcore restriction for an agreement between a supplier of components and a buyer who incorporates those components to restrict the supplier's ability to sell its components as spare parts to end-users, repairers, wholesalers or other service providers not entrusted by the buyer with the repair or servicing of its goods. Article 5(2)(a), (b) and (c) of the MVBEO lay down three additional hardcore restrictions relating to agreements for the supply of spare parts. We address these hardcore restrictions in turn below.
Restriction of sales of aftermarket goods by members of a selective distribution system to independent repairers
4.5 Article 5(2)(a) of the MVBEO concerns one or more provisions which, directly or indirectly, in isolation or in combination with other factors under the control of the parties, have as their object the restriction of sales of aftermarket goods by members of a selective distribution system to independent repairers who use or want to use those aftermarket goods for the purposes of providing repair and maintenance services.
4.6 This provision is most relevant for a particular category of parts, sometimes referred to as ‘captive parts’, which may only be obtained from the supplier of motor vehicles or from its authorised distributors. If a supplier of motor vehicles and an authorised distributor (i.e. a member of the selective
21 Pursuant to Article 2(1) MVBEO “spare part” means a component of a motor vehicle which is, or is intended to be, installed in or on a motor vehicle to replace an original part, and includes software. See also the definition of ‘part’ which, in relation to a motor vehicle, means an original part or spare part. An “original part” means a component of a motor vehicle which is, or is intended to be, installed in or on a motor vehicle for the purpose of the initial assembly of a motor vehicle, and includes software.
5. The assessment of specific restraints
5.1 Parties to vertical agreements in the motor vehicle sector should use this Guidance as a supplement to, and in conjunction with, the VABEO Guidance in order to assess the compatibility of specific restraints with the Chapter I prohibition. Some of the aspects covered in this Part are not directly related to application of the relevant block exemptions to MVA agreements but are nonetheless relevant in the wider context of the motor vehicle aftermarket sector.
5.2 This Part gives particular guidance on the following issues:
(a) access to essential inputs by independent operators (paragraphs 5.3 – 5.29;
(b) restrictions on the use of matching-quality parts (paragraphs 5.30 – 5.34);
(c) warranty restrictions (paragraphs 5.35 – 5.41);
(d) access to authorised repairer networks (paragraphs 5.42 – 5.46);
(e) codes of conduct (paragraphs 5.47 – 5.48);
(f) other restrictions covered by the VABEO Guidance:
(i) single branding (paragraphs 5.50 – 5.63);
(ii) selective distribution (paragraphs 5.64 – 5.82).
5.35 The imposition of certain warranty restrictions may result in the foreclosure of independent repairers.50 It may also result in the closing of alternative channels for the production and distribution of aftermarket goods, which ultimately may have a bearing on the price that consumers pay for repair and maintenance services. We set out below two examples of such restrictions
(servicing and parts restrictions) which are likely to be caught by the Chapter I prohibition.51
5.36 Qualitative selective distribution agreements may be caught by the Chapter I
prohibition if the supplier and the members of its Authorised Network explicitly or implicitly reserve repairs of certain categories of motor vehicles to the members of the Authorised Network. This might happen, for instance, if the motor vehicle supplier’s warranty vis-à-vis the buyer, whether standard or extended, is made conditional on the end user having repair and maintenance work that is not covered by warranty carried out only by members of the Authorised Network.
49 Article 2(1) MVBEO.
50 The assessment of these restrictions is in principle the same irrespective of the document in which they appear (e.g. contract or service booklet).
51 These warranty restrictions are likely to cause or strengthen the anti-competitive effects of the agreements between the supplier of motor vehicles and its authorised repairers and distributors.
5.37 Warranty conditions which require the use of spare parts bearing the motor vehicle supplier’s brand (OEM parts) in respect of replacements not covered by the warranty terms may similarly be caught by the Chapter I prohibition. It also seems doubtful that selective distribution agreements containing such practices could bring benefits to consumers in such a way as to allow the agreements in question to benefit from the Section 9 exemption.53 However, the Chapter I prohibition does not prevent a supplier of motor vehicles (or any other warranty provider) from legitimately refusing to honour a warranty claim on the grounds that the situation leading to the claim in question is causally
linked i) to a failure on the part of a repairer to carry out a particular repair or maintenance operation in the correct manner, or ii) to the failure of a spare part supplied by a third party.
5.38 The fact that the extended warranty containing the servicing or parts restriction is arranged through a third party does not change the assessment.
The decisive element is whether the servicing or parts restriction is a factor within the control of one or more of the parties to the network of selective distribution agreements and therefore whether its implementation is likely to foreclose independent repairers or foreclose alternative channels for
distribution of aftermarket goods.
5.39 Another relevant consideration is whether an extended warranty is being sold years after the purchase of the vehicle. This is because years after the vehicle purchase, authorised dealers do not enjoy the same degree of privileged access to customers as they do in the period shortly after the purchase. As a consequence, alternative providers of extended warranties, such as chains of
independent repairers and insurance firms are less likely to face significant barriers preventing them from offering their products to vehicle owners. In such circumstances, it seems less likely that independent repairers could face a significant foreclosure effect even if car warranties issued by suppliers of motor vehicles or their Authorised Networks contained servicing or parts restrictions.
52 The fact that the servicing or parts restrictions are not set out in the vehicle supplier's standard warranty but are instead found in an extended warranty issued by the Authorised Network at the moment of the sale of the motor vehicle (or shortly thereafter) will not generally alter the assessment of the said restrictions.
53 Paragraphs 5.30 to 5.34 deal with the issue of restrictions on the use of matching-quality parts.
5.40 Further to the restrictions set out above, any other warranty restrictions which indirectly limit the consumer’s right to source repair and maintenance services from independent repairers are likely to be within scope of the Chapter I prohibition.
5.41 Terms and conditions proposed to consumers by suppliers of motor vehicles or their Authorised Networks that clearly state the consumer's right to use the services of an independent repairer without losing the benefit of the warranty are unlikely to give rise to competition concerns.