FTC Comes Out Swinging in Defense of Tesla Motors; Singles Out Missouri, New Jersey
May 20, 2014 9:00 AM
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The FTC takes another stand against "harmful" laws forbidding direct-to-consumer auto sales
It looks as though Tesla Motors has some friends in high places. Just last month,
three Federal Trade Commission (FTC) directors wrote a blog post
in which they blasted states that have implemented laws to
forbid Tesla from selling cars directly to the public
“In this case and others, many state and local regulators have eliminated the direct purchasing option for consumers, by taking steps to protect existing middlemen from new competition,” wrote the directors in April. “We believe this is bad policy.”
Now the FTC staff has issued a press release that
singles out Missouri
New Jersey for their bans on direct-to-consumers auto sales bans
. The FTC’s Office of Policy Planning, Bureau of Competition, and Bureau of Economics note that both states “operate as a special protection for [independent motor vehicle dealers] – a protection that is likely harming both competition and consumers.”
The FTC singles out the abuse of Tesla in particular, stating:
The prohibitions on direct sales in Missouri and New Jersey particularly affect Tesla Motors, a relatively new entrant in the auto market that has been prevented from selling directly to consumers, the staff comment states. But their effects are likely more far-reaching.
The FTC goes on to conclude that the legislatures for the states of Missouri and New Jersey should “permit manufacturers and consumers to reengage the normal competitive process that prevails in most other industries.”
We have the feeling that
National Auto Dealers Association
(NADA) won’t take too kindly to the strong wording from the FTC. When the FTC’s pro-Tesla blog was posted last month, the NADA responded by claiming that “the fierce competition between local dealers in a given market drives down prices both in and across brands” and that “buying a car isn’t like buying a pair of shoes online. Cars require licensing to operate, insurance and financing to take home, and contain hazardous materials, so states are fully within their rights to protect consumers by standardizing the way cars are sold.”
The NADA, which represents
nearly 16,000 auto dealerships and 32,000 franchise locations
, will likely also respond to the latest comments from the FTC, and we will provide you with an update once a statement is provided.
Federal Trade Commission
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5/25/2014 11:48:59 AM
The FTC and most of the comments are simply hypocritical. It didn't bother anyone for decades that car companies were prohibited from selling direct but suddenly when darling of the left has to obey the same rules it is somehow an outrage. I happen to side with the states. The ban on car direct sales is the law of the land and everyone should obey the same rules. If you don't like it, change the rules for everyone. That is the only fair position. Why would Tesla had unfair advantage when Nissan Leaf, some Ford EVs or Chevy Volt would have to be sold through dealerships ? This would be blatant favoritism of the government handpicking a winner. Not unheard of in the past but still wrong. One can argue then maybe all EV cars should be allowed for direct sales. I disagree. I think EVs are toys for the rich, still useless. Giving them advantage is a hidden tax for the poor who will end up buying gasoline cars. Therefore there is absolutely no reason to favor EV over the gasoline car.
5/26/2014 3:27:59 PM
Wow, Just when you thought you had an issue a conservative could get behind…. Your take on this is just absurd. The outrage is that your brain is running around loose in your head.
First off, this is restraint of trade. Tesla is the first to come along that was a serious threat to the status quo and therefore this is an issue now. Tesla is not the darling of the left I don’t know where you get that?
Second all of the other manufacturers you mention benefit from the old system they do operate under the old rules.
The government isn't picking winners here to not do away with those laws would be picking winners.
Third, everything else you just said is just crazy convoluted lunacy.
You post proves that even a confused rabidly conservative nitwit can type.
"Well, there may be a reason why they call them 'Mac' trucks! Windows machines will not be trucks." -- Microsoft CEO Steve Ballmer
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