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European Automobile Distribution: Globalization and Incomplete Liberalization

Jullien Bernard

Car distribution in Europe has evolved significantly since the 1990s. During this period, the industry has also been regularly reviewed by the European Directorate-General (DG) Competition and, on two occasions, the block exemption from which it benefits has been called into question. In 2009, the rules that apply to automobile distribution and servicing will once again be revisited. Our research seeks to understand the link between the industrial and public policy developments and to explain the logic behind the intervention of the DG Competition in this field as well as the political work undertaken prior to and following the definition of rules by the actors in the industry. Such analysis will help us understand the impact of EU intervention on the industry's dynamics.This research approach allows us to show that the DG Competition has, over the years, significantly altered the logic behind its intervention and it has distanced itself quiet clearly from an industrial logic to one in which globalisation has become the dominant underlying force for competition policy. Despite this development, the work of different actors has managed to limit to a large degree the ability of the DG Competition to impose the regulatory changes that it claims will lead to the desired results. To explain why this is, our analysis of the economic and political organisation of industries highlights the fundamental incompleteness of European measures on industry activities.

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