The French administration supervising competition to help car bodyshops

L'assureur, ce carrossier (source :
On March 25, 2019, Agnès Pannier-Runacher, Secretary of State to the Minister of the Economy and Finance and Virginie Beaumeunier, Director of the ministry's higher authority for competition (DGCCRF: direction générale de la concurrence et de la répression des fraudes - not to be mistaken with the independent Autorité de la Concurrence, the highest autority which is independent from the government), presented the 2018 results of the DGCCRF.
As the Director points out, the activity of her services is primarily conceived as an "action of economic protection of the consumer" and, as driving schools know, this can lead to initiatives that are not very relevant from the point of view of the automotive professions. But, as V. Beaumeunier also insists, the DGCCRF also has as one of its missions "action to combat restrictive practices of competition, in particular through civil proceedings against large digital or mass distribution companies or checks on the respect of payment deadlines".
It was within this framework and through a body called the CEPC (Commission d’examen des pratiques commerciales  : Commission for the Review of Commercial Practices) that it examined the fate of car bodyshops and their problematic relationship with insurers.
Indeed, as its website indicates, the CEPC "was created by the law of 15 May 2001 on new economic regulations" and "has the task of giving opinions or making recommendations on questions, commercial or advertising documents and practices concerning commercial relations between producers, suppliers, resellers, which are submitted to it. It may also decide to adopt recommendations on issues such as the development of good commercial practices. It shall act as a regular observatory of these practices."
In addition to the administrations (DGCCRF, DGE - Direction Générale des Entreprises [the department in charge of following industries], DGPE [Direction Générale de la Performance Economique et Environnementale des Entreprises - its counterpart at the ministry of agriculture]), judges, academics and professionals involved in these commercial relations sit at the commission for the review of commercial practices. Faced with complaints based on perception, and/or denunciations of problematic practices based on scattered cases, it is intended to investigate and compare these findings with the texts of laws and/or commitments made by each other in the past within the framework of charters of good practices.
It is in this respect that, again in 2018, CEPC and DGCCRF looked at the insurer-bodybuilder relationship and again noted that "the imbalance in the commercial relationship is increasing, even though the bodybuilder has several different accreditations."
After having examined numerous accreditation agreements, the DGCCRF notes certain shortcomings committed by car insurers, such as the fact that they "charge services without compensation or for which there is insufficient remuneration". To this end, the CEPC surveyed 71 bodywork companies and the DGCCRF points out that the survey revealed three indications of anti-competitive practices, "currently being dealt with".
It therefore seems that all professionals working in the bodywork sector can rely on this administration to at least partially correct the very strong asymmetries in commercial relations that the very high concentration of the car insurance sector has created.
A work carried out last year for the FFC(French federation of car bodyshops) by one of our fellow economists, Benjamin Montmartin, lecturer at the University of Nice, described the situation as "a market with an organisation that has become extraordinarily pyramid-shaped in recent years:
- with insurers at the top, few in number but extremely organized;
- the experts just below, few in number and moderately organized but whose word as technical guarantor is golden (at least, supposed to be), backed by a state accreditation;
- the repairers still below, numerous and poorly organized;
- "car owners, extremely numerous but without any semblance of organization."
B. Montmartin's study thus analyses the organisation of the bodywork market as being subject to "a strategy of monopoly in chain with the various other market players" which he describes as follows: "With experts, first, by retaining them through a "volume strategy" and thus offering insurers the opportunity to "reduce costs and impose[their] rules by eliminating independence."
With the repairers, then, loyalizing them in the same way and thus allowing insurers, again, to reduce costs and impose[their] rules by eliminating bargaining power.
With motorists, finally, by encouraging them to go to partner body shops.
As a result, accreditations have become more and more demanding and their revisions more and more difficult.  They are accompanied by legitimate qualitative requirements but also by discounts necessarily granted against would be additional business that remain hypothetical and additional service requirements that are multiplying (courtesy vehicles, towing, delivery of the vehicle to the insured's home...) without it being possible to invoice them as often as possible.
In a context where claims rates are tending to fall but claims costs are rising due to the technical nature of parts, equipment and repair operations, insurers can use their dominant position to demand more for less and do not deprive themselves of it. Disciplining their practices to enable professionals to invest and train their staff so that they remain able to cope with changes in their activity therefore seems legitimate and it is fortunate that the DGCCRF is concerned about this.
This intervention now seems all the more crucial as, beyond collision repair, the insurance industry is becoming an interlocutor-prescriber for a growing part of the after-sales activity through assistance and warranty, which are two "worlds" closely linked to the same actors.
In the same way that the European exemption regulation for distribution contracts has long been designed as a tool for correcting asymmetries between the two parties - weak and strong - to the contract, it is now necessary to strengthen both the legislative arsenal and the means of the police administrations in the automotive services to enforce it in the dual interest of small businesses and consumers.
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Translated with, corrections by Géry Deffontaines

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