Competition Authority Notification No: CA/625/92E and CA/626/92E: Gowan Distributors Ltd

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COMPETITION AUTHORITY

Decision No. 531

Competition Authority Decision of 15 December 1998 relating to a proceeding under Section 4 of the Competition Act, 1991.

Notification No CA1625192E and CA/626/92E - Gowan Distributors Ltd/Motor Vehicle Loan Agreement and Mortgage.

Abstract:

Notification under section 4 of the Competition Act 1991 — Standard loan agreement and mortgage between Gowan and distributor — Gowan was importer of Peugeot motor vehicles, spare parts and after—sales service in State — Distributor was distributor of Peugeot motor vehicles in State under agreement with Gowan — Certificate under section 4(4) of Act requested by Gowan — In the event of a refusal by Authority a licence under section 4(2) requested — Market for the products notified was the market for the financing of motor vehicles and the business of motor vehicle distribution — Under agreement Gowan advanced loan to distributor and secured the loan by mortgage — Loan only advanced to distributors who had entered into a separate motor vehicle distribution agreement with Gowan — Finance improvements in premises from which vehicles were sold under terms of that agreement — Monies advanced become outstanding should distributor terminate distribution agreement with Gowan.

The agreement reached between the parties did not prevent, restrict or distort competition and therefore did not contravene section 4(1) of the Competition Act 1991. The Competition Authority so decided.

Introduction

1 Notification was made of a standard loan agreement (CAJ62S/92E) and mortgage (CA1626/92E) between Gowan Distributors Ltd. (“Gowan”) and a distributor on 30 September 1992. Gowan requests a certificate under Section 4(4) of the Competition Act, 1991 or, in the event of a refusal by the Competition Authority to issue a certificate, a licence under Section 4(2).

1. (a) The Subject of the Notification

   2. This notification concerns an agreement between Gowan and a distributor for a loan and mortgage for the purchase of Peugeot motor vehicles by the distributor. The mortgage is security for the loan.

2. (b) The Parties Involved

   3. Gowan is a company incorporated in, the State. It is the importer of Peugeot motor vehicles, spare parts and after-sales service in the State.

   4. The distributor is a distributor of Peugeot motor vehicles who operates in the State under a motor vehicle distribution agreement with Gowan.

3. (c)The Product and the Market

   5. The market for the products notified here is the market for the financing of motor vehicles and the business of motor vehicle...