German Federal Cartel Office Declares Outlet Center's Radius Clauses Invalid

The German Federal Cartel Office ("FCO") – Bundeskartellamt – recently published its decision regarding so-called Radius Clauses used by a factory outlet center ("Outlet Center") in all its contracts with the tenants (Case No. B 1 - 62/13).

A Radius Clause keeps tenants, in the case at hand mostly shops for branded clothing, from opening another store in a different center, thereby enhancing or maintaining the exclusivity and attractiveness of a shopping facility. The Clause underlying the FCO's decision prohibited all tenants from opening further stores in a radius of 150 km of the Outlet Center. The complainant was a company that planned to create an Outlet Center in a distance of 147 km.