Press Release: Competition: new rules for car distribution bring dealers greater freedom to compete across the EU

As of 1 October 2005, so-called 'location clauses' in contracts between carmakers and dealers, no longer benefit from automatic ('block') exemption from the EC Treaty's prohibition on restrictive business practices (Article 81) under the European Commission's car distribution Block Exemption Regulation 1400/2002. These clauses served to stop dealers from opening outlets outside geographical territories defined by carmakers, including other EU Member States. The change was meant to allow dealers to compete more widely, thereby facilitating price competition and stimulating innovation in distribution.