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Digital control and market power in the automotive sector: OEMs, gatekeeping, and the future of aftermarket regulation

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Listed:
  • Hey, Florian
  • Zombek, Max

Abstract

The automotive industry is undergoing a fundamental transformation driven by digitization, enabling original equipment manufacturers (OEMs) to exert increasing control over vehicle functions, data, and - consequently - aftersales markets. Despite high relevance for consumers, regulatory scrutiny remains limited. This paper examines whether these developments constitute digital gatekeeping in a functional sense, and whether they justify increased regulatory attention. We show that OEMs' digital strategiesreinforce their dominance in secondary markets, particularly repair and maintenance. We assess the current European regulatory framework, focusing on the European Motor Vehicle Block Exemption Regulation (MVBER), and argue that it has not kept pace with the realities of software-defined vehicles. The planned MVBER review provides an opportunity to reassess legacy privileges and adapt competition rules to the digital age. We discuss potential reforms, including improved data access, stronger interoperability standards, and a broader definition of aftermarket components. We also examine supplementary measures such as a Right to Repair regime and self-regulation. Our analysis concludes that OEMs increasingly act as digital gatekeepers and that existing frameworks inadequately address the resulting risks. Regulatory recalibration is needed to safeguard innovation, consumer welfare, and long-term market openness.

Suggested Citation

  • Hey, Florian & Zombek, Max, 2025. "Digital control and market power in the automotive sector: OEMs, gatekeeping, and the future of aftermarket regulation," Ilmenau Economics Discussion Papers 201, Ilmenau University of Technology, Institute of Economics.
  • Handle: RePEc:zbw:tuiedp:335043
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    References listed on IDEAS

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    1. Jens-Uwe Franck & Martin Peitz, 2021. "Digital Platforms and the New 19a Tool in the German Competition Act," CRC TR 224 Discussion Paper Series crctr224_2021_297, University of Bonn and University of Mannheim, Germany.
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    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment

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