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  • William Maley
    William Maley

    Three FTC Officials Call For End To The Anti-Tesla Store Laws

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      Three FTC Officials Call Out Dealer Franchise Laws On Direct Sales

    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.

    Source: Reuters, FTC

    William Maley is a staff writer for Cheers & Gears. He can be reached at william.maley@cheersandgears.com or you can follow him on twitter at @realmudmonster.

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    They have it right, make the dealers compete on service. If you truly offer superior service for a small increase in purchase cost I will buy, but if you as most dealers do, harass me to the point of hating the buying experience and lack of service, then prepare to go out of business.

    There was a reason for these laws long ago, but not any more. Time to update to the 21st century and dealerships who screwed over customers will go away which is what capitalism is all about. Service, Service, Service at a fair price.

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    "Removing these regulatory impediments may be essential to allow consumers access to new ways of shopping that have become available in many other industries."

    ^^This

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