STF Upholds Brazil’s 1979 ‘Lei Ferrari’ Governing Automaker–Dealer Ties

Overview

• In a unanimous ruling, Brazil’s Supreme Federal Court said the Lei Ferrari is constitutional and can keep regulating contracts between carmakers and dealerships.
• The Procuradoria-Geral da República challenged the law after the antitrust authority CADE warned in 2022 that it enables exclusivity and territorial limits that can curb competition.
• Relator Edson Fachin wrote that the statute is a long-standing regulatory choice that fits the Constitution and that the Court should not redesign the auto market.
• The justices clarified that the law does not grant antitrust immunity, so competition rules still apply and authorities can investigate and punish abusive conduct.
• The law sets brand exclusivity and defined sales areas for dealers, and industry groups welcomed the legal certainty as any policy change now hinges on Congress.