Thinking | 15 June 2022
Data sharing laws to enhance competition in motor vehicle repair markets
By Ben Hamilton and James Pavlidis
In June 2021, the Federal Government passed the Competition and Consumer Amendment (Motor Vehicle Service and Repair Information Sharing Scheme) Act 2021 (the Act) to establish a mandatory scheme for the sharing of motor vehicle service and repair information, known as the Motor Vehicle Information Scheme (the Scheme). The Scheme will come into effect on 1 July 2022.
The Scheme establishes a mandatory scheme designed to promote competition and increase consumer choice by mandating the provision of motor vehicle service and repair information/data to Australian motor vehicle repairers and registered training organisations (RTO) on fair and reasonable commercial terms. This includes providing independent motor vehicle repairers with fair access to the information they need to do their job. The Act will apply to passenger and light goods vehicles supplied in Australia and manufactured on or after 1 January 2002.
What is the Scheme?
Under the Scheme, motor vehicle service and repair information will be made available to purchase at a fair market price for Australian repairers and RTOs, where these organisations provide courses on servicing and repairing cars. Access to information includes access to things such as software updates to connect a new spare part, and information and codes for computerised systems from a car manufacturer. The Scheme does not provide consumers with direct access to information. However, it does not prevent car manufacturers from sharing information directly with consumers.
The Scheme will apply to light goods vehicles and passenger vehicles that are manufactured on or after 1 January 2002. The Scheme does not apply to two or three wheeled vehicles, construction, heavy vehicles or farm vehicles, motor homes or buses.
Why was the Scheme introduced?
The ACCC’s 2017 new car retailing industry market study had found continued problems for repairers when trying to access information needed to service and repair cars. Despite a voluntary commitment in 2014 by car manufacturers to provide information, the ACCC recommended introducing a mandatory scheme as it found issues around access to information had persisted.
As a consequence, the Scheme is intended to increase competition between repairers of passenger and light goods motor vehicles by allowing for fair access for repairers, to the information needed to conduct servicing and repairs. The increased competition should improve outcomes for consumers as they will be better able to shop around between repairers, including independent repairers, knowing that all repairers will have the right to potentially access the information needed to complete the work.
What does this mean for businesses?
The Scheme will affect two classes of businesses:
- data providers; and
- motor vehicle repairers and RTOs.
Manufacturers, distributors, dealerships and importers are all classified as data providers under the Scheme, including franchises subject to the Franchising Code of Conduct.
Among other things, the Scheme requires data providers to:
- offer to supply information used for diagnostics, services or repairs prepared by or for manufacturers of motor vehicles covered under the Scheme (Scheme Information);
- charge no more than the ‘fair market value’ to supply Scheme Information (a ‘fair market value’ is considered to be ‘the price a willing buyer would pay a willing seller in a transaction in the open market’);
- only supply safety or security information to individuals with proper credentials;
- once a repairer or RTO has paid for the Scheme Information, supply it immediately without any unreasonable conditions, requirements or restrictions (in most circumstances);
- compensate any third parties that hold the copyright to Scheme Information they are obligated to disclose;
- have easily accessible agreements in place for sharing Scheme Information; and
- not increase the price for the Scheme Information after the agreement has been executed.
Safety or security information can only be accessed by repairers or RTOs if it will be used for the purposes of a repairer’s business or RTO course and the individual requesting access has passed a ‘fit and proper person’ check.
If data providers fail to comply with their obligations under the Scheme, they could be subject to penalties.
The Act will most likely increase competition in the automotive sector in Australia by providing a more competitive environment in which repairers will operate.
More broadly, the Act can be seen as part of a wider legislative trend of regulating the sharing of data.
If you need assistance, please contact Hall & Wilcox.
This article was written with the assistance of Katelyn Free and Hugh Pearce, Law Graduates.
You might be also interested in...
Financial Services | 7 Jun 2022
ASIC issues guidance on what ‘useful’ and ‘meaningful’ financial reporting should include for the 30 June 2022 reporting period
We provide a summary of ASIC’s recent advice on areas companies should give particular consideration to as part of their reporting process.
Cyber | 10 May 2022
Following ASIC v RI Advice, AFSL holders should be aware that cybersecurity protocols are now a core obligation in the provision of financial services.