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FTC complaint

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By having this reported in the national news as a flashpoint issue in a few states, consumers are made aware of Tesla Motors’ direct sales and service method without the need for advertising. It may induce people to purchase a Model S. Meanwhile it should help develop grassroots support for overturning state dealership mandates and voting out politicians more concerned about campaign contributions from lobbyists than the desires of their constituents.

Eventually the federal government and courts should see things Tesla’s way. The interstate commerce clause of the US Constitution would set things right. In the meantime, Elon is getting loads of free publicity for the Model S and the movement to overturn antiquated state laws. He's playing this game splendidly.

Agree!


Sent from my iPad using Tapatalk HD
 
Here's the response I received from the FTC:
_____________________________________

The “state action doctrine” is grounded in principles of federalism and state sovereignty. As determined by the Supreme Court, the state action doctrine protects from liability under the Sherman Act (1) actions that a State itself may take, and (2) certain conduct of private entities that (a) is undertaken pursuant to a “clearly articulated and affirmatively expressed” state policy to displace competition with regulation, and (b) is “actively supervised” by the State itself.

The following report concerns the state action doctrine:

http://www.ftc.gov/opa/2003/09/stateaction.shtm

FTC staff members do advocate in certain circumstances when invited to submit comments. Such advocacies are listed on our web site at:

http://www.ftc.gov/opp/advocacy_subject.shtm

Alan Friedman

Unfortunately, this is consistent with the opinion I got from a friend who, until recently, was the U.S. Deputy Assistant Attorney General for Economics and Antitrust. The Internet purchase ban in NC may be actionable, though not the laws in Texas, Virginia and similar.
 
Unfortunately, this is consistent with the opinion I got from a friend who, until recently, was the U.S. Deputy Assistant Attorney General for Economics and Antitrust. The Internet purchase ban in NC may be actionable, though not the laws in Texas, Virginia and similar.

But isn't Texas etc laws unconstitutional ?

Musk has said before in April that they may file a lawsuit (but since they aren't talking about it now-a-days makes me wonder).

DailyTech - Tesla CEO Elon Musk Willing to Take Auto Dealer Fight to Federal Level
 
Am I the only one who is amazed that the TX general assembly is not convening again until 2015??

You're the only one if everyone on this board has resided in TX. For those of us who have and know it, this fact is surprising only because it's as soon as 2015. Any self respecting Texan would understand that a congress that convenes at all, is a congress deserved to be disbanded
 
...Eventually the federal government and courts should see things Tesla’s way. The interstate commerce clause of the US Constitution would set things right. In the meantime, Elon is getting loads of free publicity for the Model S and the movement to overturn antiquated state laws. He's playing this game splendidly.

Additionally, what would be such delicious irony: if, in dealers' glee over bullying a currently insignificant player--Tesla--they end up generating a groundswell of public indignance towards decades of dealer price gouging--culminating in the US Supreme Court striking down ALL laws against company-owned dealers.
 
What I just sent to my congressman:

Hi Patrick,
We met briefly during your campaign at Big Apple Pizza and my wife and I supported your candidacy both by action and financially.
Recently, we took delivery of our second Tesla Model S. This is an all electric sedan that carries 5 adults + 2 children 300 miles and can be recharged for another 300 miles in as little as 20 minutes. It is built in Fremont California by Tesla Motors which is a public company (TSLA). Tesla recently paid back its 465 million dollar loan from the DOE ATVM program 9 years early and at a profit to tax payers.


Tesla has a unique marketing strategy in that it has no franchise agreements to sell their vehicles. As a matter of fact, we had the pleasure of buying our 2 vehicles simply by ordering them on the Internet and they were delivered to our house. Tesla also has a different business model in that very little in the way of servicing the vehicle mechanically has to be done. In fact Elon Musk, the company CEO, has directed that the service portion of the business NOT to be a profit center.


So why all of this information? Currently, many states have regulations that REQUIRE vehicles only to be sold through a dealer, making direct sales from the manufacturer illegal. Of course these laws stem from the outdated notion of protecting the mom and pop corner car dealer of years past from being crushed by the giant auto manufacter opening up a "factory" store and to assure consumers had a place to have their automobiles serviced. All relavent 50 years ago. Now, a large number of dealers are nothing more than large corporations themselves dedicated to the "sell Em cheap and make it up in service " business model. Of course they want to protect their money making machines. The NADA is actively involved in supporting legislation not only to extend these kinds of anticapitalist anticonsumer and competition stifling laws, they are looking to make it illegal for a company to sell product via the Internet as well. (North Carolina)


Clearly, these efforts fly in the face of the interstate commerce clause of the constitution as well as the Sherman antitrust act amongst other laws designed to thwart anticompetitive and monopolistic practices. These are the kinds of practices that crush the American middle class consumer economic engine and ultimately, stifle inovation, economic growth and prosperity.


I am asking that you ask the FTC and DOJ look into both the existing and proposed state laws that have been and are being written right now. The NADA says it is acting to protect the consumer which is just pure hyperbole. If anything the BBB will tell you more about protecting consumers from auto dealer practices than dealers protecting consumer interests. I understand the various auto dealer associations garner an inordinate level of influence in various legislative bodies via lobbying and financial support of campaigns. These practices have truly perverted our democratic process that we all value and for which so many have given so much for to preserve for our children.


I would love to give you and your staff the opportunity to see and drive the Tesla Model S so you can speak with your peers on the subject from first hand knowledge. This is truly a paradigm shift (think Henry Ford and Model T) for personal transportation in the making as well as a shining example of business working with government that results in regaining of American leadership in technology and inovation that has lead directly to producing durable goods and jobs which necessarily is resulting in economic benefit and the rebuilding a strong middle class in our country.


If you are interested I would be happy to bring the Model S to you and speak with you further on the subject and have you drive the vehicle first hand at your convenience.


Thanx in advance,


Dave Israel
Constituent