Live revision! Join us for our free exam revision livestreams Watch now

In the News

Information Economics and Car Service Costs

Graham Watson

2nd March 2017

This is really interesting, and I say that not as an economist - it just is. There's currently a debate about who gets access to all the data generated by new cars. "So what?", you say.

Well, manufacturers are trying to argue that they own this intellectual property and are unwilling to share it with others such as independent repair shops, fleet operators, insurance companies and so on. This, these groups argue is anti-competitive.

I can see that this might well be the case for the independent repair shops, and to a lesser extent the fleet operators. However, I suspect that fleet operators and insurance companies have the means to be able to pay for this to a greater degree than independent repair shops. However, even here, there must be some way of marketizing the data: it is clearly a private good that has an intrinsic value that people would be willing to pay for.

As Neil Pattemore, technical director at FIGIEFA, the European association representing car parts retailers and repair shops, explains though "While the manufacturer is monitoring the car, it has the power to recommend its own spare parts. This is a privileged position and would distort the market".

A fascinating debate that's going to run and run..

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to Tutor2U, reads voraciously and is interested in all aspects of Teaching and Learning.

© 2002-2024 Tutor2u Limited. Company Reg no: 04489574. VAT reg no 816865400.