In a surprising move today, three top officials from the Federal Trade Commission have come out against the laws that ban automakers like Tesla from selling their vehicles directly to consumers.
Andrew Gavil, director of the FTC's Office of Policy Planning; Deborah Feinstein, director of the Bureau of Competition; and Martin Gaynor, director of the Bureau of Economics wrote in a blog piece on the FTC site that states the dealer franchise laws are a 'bad idea' since it doesn't allow consumers to shop in new ways.
"For decades, local laws in many states have required consumers to purchase their cars solely from local, independent auto dealers," the three said in the post. "Removing these regulatory impediments may be essential to allow consumers access to new ways of shopping that have become available in many other industries."
Dealers argue the franchise model works because they compete on price and offer long-term service. However, direct sales offer a threat and could cause other manufacturers to go down the same road. Dealers have turned to lobbyists to sue Tesla in court and urge state representatives to tighten dealer laws. This has only angered the public and legislators from both parties.
"How manufacturers choose to supply their products and services to consumers is just as much a function of competition as what they sell--and competition ultimately provides the best protections for consumers and the best chances for new businesses to develop and succeed," the three stated in the piece. "Our point has not been that new methods of sale are necessarily superior to the traditional methods--just that the determination should be made through the competitive process."
Now it should be noted that the posting is of the authors and not the FTC.
William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] or you can follow him on twitter at @realmudmonster.
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