NMa: no violations on auto repair market

No violations of the Competition Act have been established on the auto repair market, concludes the Netherlands Competition Authority (NMa) after carrying out an extensive market analysis, launched partly because it had received a substantial number of reports on the anti-competitive role that insurance companies allegedly played on the auto repair market. The NMa currently does not see any leads for further competition-law investigations.

A survey commissioned by the NMa reveals that insurance companies steer 40 percent of car repair cases and 16 percent of window shield damage cases. Insurance companies steer auto repairs when they influence the insured party's choice for an auto repair shop by, for example, paying the repair costs directly to the auto repair shop, by offering a discount on the insured party's deductible, or by offering replacement transportation. The survey's results have led the NMa to conclude that individual Dutch insurance companies presently do not have a dominant position on the auto repair market. Neither do the current collaborations of several Dutch insurance companies (Stichting Schadegarant, Stichting Glasgarant and Topherstel) have any buyer power. Each of the alliances' market shares does not exceed 15 percent. Insurance companies, including collaborations thereof, initially have freedom of contract. They are permitted to steer auto repairs, partly because it might benefit insured parties as they benefit from the bulk discounts that insurance companies achieve through their collaborations.

The NMa can only take enforcement actions when undertakings act in violation of the Competition Act, which is by forming a cartel or by abusing a dominant position. There have been no indications of any of these, according to the market analysis. Yet having a dominant position in itself does not automatically mean the undertaking in question is also abusing that position. Like any other party on the market, a party with a dominant position is allowed to buy and negotiate sharply as well.

The market analysis further shows that the share of steered auto repairs has been on the rise in recent years compared to that of unsteered repairs. Several auto repair shops have indicated that this has made it harder for auto repair shops not selected by insurance companies to get any orders. The NMa is aware of this effect, but is not in any position to act as the Competition Act is not violated.