No competition law concerns regarding automotive industry cooperation in the area of wire harnesses

The Bundeskartellamt has no competition law concerns regarding a cooperation project in the automotive industry to standardise the production of cable sets commonly referred to as wire harnesses. The authority has informed the participants in the “Innovation Initiative Wire Harness” (IIWH), which is a project under the umbrella of the “Arena2036 research campus”, that in exercising its discretionary powers it does not object under competition law to their “standardisation initiative for cable sets” or to the new DIN standard that is to be developed in this context. In exercising its discretionary powers the Bundeskartellamt will not, for the time being, object to the other parts of this project, either.

The initiative is a cooperation project between different companies from all levels of the value chain in the automotive industry which aims to explore opportunities for more automation in the production of wire harnesses.

Andreas Mundt, President of the Bundeskartellamt: “Standardisation projects are cooperation projects between companies and as such must always comply with the principles of competition law. As part of such processes companies agree on shared norms and standards instead of competing with one another to find the best solution. Competition law does not stand in the way of such projects. However, it has to be ensured that such cooperation projects are objectively intended to promote standardisation and that the standardisation process is non-discriminatory, transparent and open to all companies concerned.”

The wire harness comprises practically all wires in a vehicle and is one of the most complex and expensive vehicle components. In the foreseeable future, wire harnesses will become even more important and complex, because vehicles are becoming increasingly digital. So far, their production is a largely manual process which varies depending on the individual combination of (extra) equipment and the vehicle type. For several reasons, automating the production of wire harnesses has been very complex so far.

This automotive industry initiative intends to develop plug connections and cable routings as well as other methods and tools that facilitate automation and thus improve this situation. The results obtained so far have been included in a new DIN standard, which is the first in the world to standardise technical aspects of production processes for wire harnesses in cars.

The project comprises both research and development (R&D) and standardisation aspects. From a competition law perspective, such a “mixed” cooperation raises the question of the legal requirements based on which its compliance with competition law is to be assessed, as different criteria apply to the competitiveness of R&D cooperation projects and cooperation projects in the area of standardisation. In R&D for example, it is normally undesirable from a competition law perspective to see the majority of market participants pursue a single technology path when they are only just beginning to look for a solution.

After the Bundeskartellamt had provided guidance on the competition law requirements their cooperation project had to meet, the participants restructured their original plans to separate its R&D parts more clearly from its standardisation part.