Automotive Right to Repair is now law!

On June 17, the Competition and Consumer Amendment (Motor Vehicle Service and Repair Information Sharing Scheme) Bill 2021 was passed by the Australian Parliament with no proposed amendments.

The new legislation establishes a mandatory scheme designed to promote competition and increase consumer choice by mandating the provision of motor vehicle service and repair information to Australian repairers and registered training organisations ("RTOs") on fair and reasonable commercial terms.

The legislation will come into effect from 1 July 2022 and applies to passenger and light goods vehicles supplied in Australia and manufactured on or after 1 January 2002 ("scheme vehicles").

What you need to know about the scheme

Among other things, the scheme imposes obligations on data providers (including original equipment manufacturers, distributors, dealerships and data aggregators) to:

• ·offer to supply information prepared by or for manufacturers of scheme vehicles for use in diagnosing faults with, servicing or repairing those vehicles ('scheme information') to all Australian repairers and RTOs;
• charge no more than the “fair market value” for the provision of scheme information;
• publish the scheme offers on the internet (in a form that is accessible free of charge) and provide a copy of the scheme offer (in writing) to the scheme adviser;
• ensure that access to safety and security information is only provided to those who meet specified access criteria; and
• supply scheme information (immediately in most circumstances) once the repairer has paid the agreed price.

Importantly, a maximum penalty of $10 million for a body corporate and $500,000 for an individual will be imposed in circumstances where data providers fail to comply with the new law.

What is “fair market value”?

Scheme information needs to be available to all repairers and registered training organisations at a price that does not exceed "fair market value". In the Explanatory Memorandum, "fair market value" is considered to be "the price a willing buyer would pay a willing seller in a transaction in the open market". However, what constitutes a "fair" price is subjective and is not a straightforward concept.

 In his second reading speech, Assistant Treasurer Michael Sukkar provided some clarity as to the factors which need to be taken into account in setting fair market value. The Assistant Treasurer stated that “the price charged to other repairers, reasonable recovery of costs, and the prices for information in overseas markets” are all factors which should be taken into account to ascertain fair marketing value. 

Next steps

We encourage OEMs and distributors to carefully review the mandatory scheme and understand to what extent their existing practices will need to change in order to be compliant with the new legislation.

For more information on the mandatory scheme, the obligations it imposes on data providers and how to prepare, see our article Motor Vehicle Service and Repair Information Sharing Scheme legislation introduced into Parliament in our most recent Automotive Snapshot.