CAR INSURANCE : COURT STRIKES DOWN AGREEMENTS BETWEEN INSURERS AND REPAIR SHOPS.

Agreements on the price of repairs of insured vehicles concluded between insurance companies and repair shops are by nature anti-competitive, ruled the EU Court of Justice, on 14 March. The judges also spelled out how the "injurious" nature of such agreements should be assessed (Case C-32/11).

Hungarian insurers - in particular Allianz Hungaria and Generali-Providencia - agree once a year with car dealers or with their national association the conditions and rates applicable to repair services that the insurer must provide in the case of accidents involving insured vehicles. The repair shops are thus able to carry out repairs immediately in the event of an accident according to those conditions and rates. Their remuneration for car repairs increases according to the number and percentage of insurance policies sold for the insurer concerned.

The Hungarian competition authorities found that the agreements in question have as their object to restrict competition in the car insurance contracts and car repair services market, and consequently prohibited the continuation of the anti-competitive behaviour and imposed fines of around 35 million on the companies concerned. The companies appealed this decision before the Hungarian courts and the Legfels bb Birosag (Supreme Court), hearing the case on appeal, asked the Court of Justice whether the agreements at issue have as their object the prevention, restriction or distortion of competition.

For the Luxembourg-based court...