In 2016, Carwow a new car portal, which introduces customers to dealers for the purchase of cars, complained to the Competition and Markets Authority (“CMA”) that BMW UK was prohibiting its dealers from listing their new BMW and MINI cars on the portal. It asked the CMA to launch an investigation into whether this restriction was anti-competitive and breached EU or UK competition law.
Online comparison tools can help promote competition in many markets and assist consumers to make informed choices. An increasing number of customers are looking to use online channels to make purchases. Internet commerce is therefore an increasingly important route to market.
The CMA policy, as shown in previous cases, is to attack restrictions imposed upon internet commerce as being in breach of the competition rules under both EU and UK competition law. Placing barriers on dealers to limit their use of internet platforms or online market places is regarded as a ban on passive sales. These are restrictions by object within the meaning of Article 101(1) TFEU and Chapter I of the Competition Act 1998. This means they are viewed as serious infringements of the competition rules without needing to demonstrate that the conduct in question has anti-competitive effects.
The CMA carried out a preliminary assessment of the complaint and met with both Carwow and BMW UK. However following this initial investigation, BMW UK offered commitments to the CMA to change its policy to enable its UK retailers to work with Carwow and similar internet based new car platforms. The CMA welcomed BMW UK’s change of policy.
These commitments were made without any admission by BMW that its actions breached competition law. In addition, although the CMA decided to not to initiate any formal investigation into BMW UK, it reserved its position to review its decision should facts change.