Tata Motors, the parent of Jaguar Land Rover has successfully defended a challenge by a dealership in France to its procurement of authorised dealers following a preliminary ruling by the ECJ. The ruling could have ramifications across the board for the distribution procurement practices of owners of luxury brands.
The dealership had sought to argue both that JLR’s selection criteria should have been disclosed in full and that those ‘specified criteria’ ought to have been applied to all bids in a ‘uniform and non-differentiated’ way.
The dealership’s application was for a preliminary ruling on the meaning of Article 1(1)(f) of Commission Regulation (EC) No 1400/2002 of 31 July 2002 and on the application of Article 81(3) TFEU to certain types of vertical agreements and concerted practices in the motor vehicle sector (“the Regulation”).
For appointment to both quantitative selective distribution systems and qualitative selective distribution systems (as defined in the Regulation) dealerships must be selected on the basis of ‘specified criteria’, as provided for in Article 1(1)(f) of the Regulation.
In that context, the term ‘specified criteria’ means criteria whose precise content may be verified.
The court noted specifically that it is not necessary for the purposes of verification of the content of the criteria that they should be published in full at the risk of compromising business secrets or even enabling possible collusive behaviour.
The court also ruled that the definition of the concept of ‘quantitative selective distribution system’, in Article 1(1)(g) of the Regulation was not susceptible to the rather broad interpretation which the Dealership wanted to place in it. ‘Specifying’ the criteria does not include a requirement that those criteria must be objectively justified and applied in a uniform and non-differentiated way with regard to all dealerships seeking authorisation.