ACCC welcomes new law on motor vehicle service and repair information

The ACCC welcomes legislative changes which will increase competition and choice for consumers about where they have their cars serviced and repaired. These changes adopt recommendations from the ACCC’s new car retailing industry market study.

The Competition and Consumer Amendment (Motor Vehicle Service and Repair Information Sharing Scheme) Bill 2021, which passed Parliament yesterday, amends the Competition and Consumer Act to establish a mandatory scheme to promote competition in the Australian automotive servicing sector. It requires motor vehicle service and repair information to be made available for purchase by Australian repairers at a fair market price.

“Under the scheme, independent Australian motor vehicle repairers will have fair access to the information needed to service and repair cars, such as software updates to connect a new spare part with a car, or information and codes for computerised systems from the car manufacturer,” ACCC Chair Rod Sims said.

“This enables motorists to shop around for the repairer that offers the best price, service and convenience, knowing they will all have access to the information needed to complete the servicing or repair.”

“Previously, only car manufacturers and their affiliated repairers could be confident of getting access to important service and repair information, preventing many independent repairers from competing fairly for car servicing and repair work. This created additional costs for consumers, as well as inconvenience and delays,” Mr Sims said.

“We believe the scheme provides a much fairer opportunity for independent Australian motor vehicle repairers to compete and will improve outcomes for consumers, and we welcome this important reform being passed by the Parliament.”

The ACCC’s 2017 new car retailing industry market study found that independent repairers experienced continued problems accessing information needed to repair and service new cars. This was despite a voluntary commitment made by car manufacturers in 2014 to provide independent repairers with the same information provided to authorised dealers.

The ACCC recommended introducing a mandatory scheme requiring car manufacturers to share the information needed to repair and service cars with independent repairers.

The study found problems with the breadth, depth and timeliness of the service and repair information offered by car manufacturers to independent repairers, including a lack of transparency and consistency across manufacturers about safety and security information.

“These reforms will ensure consumers benefit from competitive aftermarkets and by having a choice of providers to repair and service cars,” Mr Sims said.

The ACCC will have a broad oversight and enforcement role, while day-to-day operations will be the responsibility of a new industry-led body called the Scheme Adviser. The Scheme Adviser will be responsible for dispute resolution, sharing information about the scheme online, and providing reports about the operation of the scheme.

The ACCC has established a dedicated team to ensure the industry has a clear understanding of the ACCC’s role and functions and will closely monitor the implementation of and compliance with the scheme.

Penalties apply for failure to comply with the main obligations of the scheme, and the ACCC will have a number of enforcement tools available ranging from infringement notices to commencing legal proceedings in the Federal Court alleging that individuals or companies have breached the Act. Guidance to assist industry understand the ACCC’s compliance and enforcement approach will be released soon.

The Motor Vehicle Service and Repair Information Sharing Scheme is scheduled to come into effect on 1 July 2022.

Background

In 2017 the ACCC looked into competition and consumer issues in the new car retailing industry. In its new car retailing industry market study, the ACCC found a number of issues which affected independent repairers in repairing and servicing cars. As a result, the ACCC recommended that a mandatory scheme be introduced to give independent repairers access to the technical information they needed to repair and service cars.

Similar regulatory interventions in the European Union and the United States have made the technical information necessary for repairers to service and repair cars more widely available in those jurisdictions.

The ACCC’s study also considered other issues relating to consumer guarantees and new cars, and fuel consumption and emissions performance.

Case study – unexpected costs for independent repairers and consumers

Technicians at an independent garage in Melbourne had received a popular small car for repair. They understood it had a problem with the alternator.

The aftermarket diagnostic tool could report the actual output voltage of the alternator.

However, the technician needed to compare the actual voltage to the manufacturer’s specifications to determine if the alternator was not performing as it should be. This information could not be obtained from the car manufacturer.

The garage had three options: replace the alternator and compare before and after values, keep searching for the information from other sources, or take the car to a dealer.

Each of these options involved additional costs for the garage and would create unexpected costs, inconvenience or delays for the consumer including the cost for the repairer to take the car to a dealer.

Once the legislation comes into effect, car manufacturers will have to provide manuals, technical service bulletins, wiring diagrams, technical specifications for components and lubricants and testing procedures to independent repairers at a fair market price.

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