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Block Exemption in depth - location clause unsuccessful, but cross-border competition has improved

The evaluation report shows the European Commission is pleased with progress on cross-border competition between retailers for the same franchise in different EU member states, but believes this could continue without sector-specific clauses in the motor trade Block Exemption.

Prices between member states have converged and cases of barriers to parallel trade, including complaints from consumers, have fallen significantly, states the document.

However the European Commision hints that elements of the motor trade-specific Block Exemption could be redundant, stating that overall "it would appear that the application of the general principles of competition law could be sufficient to protect parallel trade in the current market context."

BER has prevented carmakers from imposing quotas regarding dealers' sales to intermediaries operating across borders, and competition case law has deemed that a refusal to supply vehicles with foreign specifications is an indirect restriction on selling.

However the outcome of the 'Location Clause', which gives dealers the right to open additional sales outlets for their franchises in other regions and member states, has been "largely unsuccessful", it adds.

  • The report will be discussed in detail at the AM/NFDA Autoretailing conference (click here to book) on June 5 in Birmingham.
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