Is it actually illegal or just a violation of their contact with dealerships?

I understand that legacy agreements with dealerships are a contributor to The Failure as are (we keep hearing) legacy agreements with unions. But overall I think that people are very quick to believe a "they lobbied dumb politicians" story over "they signed dumb agreements stories."

If you had bought a license to sell Ford cars, you might want an agreement not to go around you at a later date.