FTC Staff: Missouri & New Jersey Should Repeal Prohibitions on Direct Auto Sales

[DJ Frustration]

Huge Press Release that just popped online from the FTC. Tesla should put out a PR themselves and this should generate multiple news stories in the MSM.

FTC Staff: Missouri and New Jersey Should Repeal Their Prohibitions on Direct-to-Consumer Auto Sales by Manufacturers | Federal Trade Commission

Money quote:
“FTC staff offer no opinion on whether automobile distribution through independent dealerships is superior or inferior to direct distribution by manufacturers. . . .[C]onsumers are the ones best situated to choose for themselves both the cars they want to buy and how they want to buy them,” the staff states.

The Commission vote to issue each of the staff comments was 5-0."

 

[William13]

Great find. Too bad these advisories are usually ignored.

 

[Grendal]

Huge Press Release that just popped online from the FTC. Tesla should put out a PR themselves and this should generate multiple news stories in the MSM.

FTC Staff: Missouri and New Jersey Should Repeal Their Prohibitions on Direct-to-Consumer Auto Sales by Manufacturers | Federal Trade Commission

Money quote:
“FTC staff offer no opinion on whether automobile distribution through independent dealerships is superior or inferior to direct distribution by manufacturers. . . .[C]onsumers are the ones best situated to choose for themselves both the cars they want to buy and how they want to buy them,” the staff states.

The Commission vote to issue each of the staff comments was 5-0."

I've been saying for a while that fighting Tesla instead of working out an exemption or a compromise is going to cause big problems for the Dealerships. The press is against them and the public is against them. The politicians are with them because they are paid to do so. The problem with politicians is that they will turn on dealerships in a cool second the moment the media shines a spotlight on it. The public will not tolerate someone telling them they cannot buy something that they want, especially dealerships and politicians that they don't like anyway.

 

[PeterW]

Great find. Too bad these advisories are usually ignored.

I am confused, why will it be ignored?
Doesn't the FTC have the power to over-turn these State laws?
Does it take a customer (or customers) to complain? If so how would that process come about?
Could Telsa go through the Federal Courts? Why are they not taking this option? Does something have to come a head first? Is Tesla actually getting positive coverage because of this issue?

 

[Jack6591]

The Federal Trade Commission Act

​Under this Act, the Commission is empowered, among other things, to (a) prevent unfair methods of competition, and unfair or deceptive acts or practices in or affecting commerce; (b) seek monetary redress and other relief for conduct injurious to consumers; (c) prescribe trade regulation rules defining with specificity acts or practices that are unfair or deceptive, and establishing requirements designed to prevent such acts or practices; (d) conduct investigations relating to the organization, business, practices, and management of entities engaged in commerce; and (e) make reports and legislative recommendations to Congress.

Wouldn't now be a great time for the Obama administration to respond to the White House petition, citing the FTC recommendations?

 

[TexasEV]

The press is against them and the public is against them.

The local press is not against them--dealers are their biggest advertisers. Most of the public has never thought about the issue and buys new cars so infrequently it wouldn't be a big concern to them. Dealers are a classic special interest as they get the benefit of the laws and the costs are diffused over many people who each have a much smaller stake in the outcome.

 

[bonnie]

Really great find. I have no doubt that Tesla will have a new blog post up soon, referencing this release. And god help NADA if evidence is ever gathered showing a consistent and pervasive attack, state by state, to prevent consumers from buying a competitive product - because if they are not very very careful to not ever cross the line, they could find themselves accused of a criminal conspiracy.

That would be a shame.

 

[Chris Naps]

There is already a bill that was written by a senate majority leader and a congressman in regards to appealing the ban in New Jersey.

I believe this will be a battle that may eventually lead to a question at the polls possibly.

 

[Robert.Boston]

​
Wouldn't now be a great time for the Obama administration to respond to the White House petition, citing the FTC recommendations?

I think the FTC actions are the WH's response. And a far more effective response than some political statement or a bill that will die in committee. There's a fuller discussion of this over in the Investors' Forum: FTC on direct-sales model

 

[GoBlue88]

I think the FTC actions are the WH's response. And a far more effective response than some political statement or a bill that will die in committee. There's a fuller discussion of this over in the Investors' Forum: FTC on direct-sales model

Yep. FTC is part of the administration. They are responding.

 

[Jack6591]

I think the FTC actions are the WH's response. And a far more effective response than some political statement or a bill that will die in committee. There's a fuller discussion of this over in the Investors' Forum: FTC on direct-sales model

I must be the bad cop. I am mad as hell, that the Obama administration has not responded. More than 130,000 people ask request a response and it falls on deaf ears.

To ignore the voices of tens of thousands, is wrong. A secondary response from the federal trade commission, is not a proper response.

President Obama, I expect more.

 

[bonnie]

I must be the bad cop. I am mad as hell, that the Obama administration has not responded. More than 130,000 people ask request a response and it falls on deaf ears.

To ignore the voices of tens of thousands, is wrong. A secondary response from the federal trade commission, is not a proper response.

President Obama, I expect more.

Wait, what? The FTC IS responding and are the proper group to respond. If Obama speaks out directly, it immediately becomes a political football again. No one wants that. The FTC is the proper avenue to ultimately shut NADA down, imo.

 

[GoBlue88]

Wait, what? The FTC IS responding and are the proper group to respond. If Obama speaks out directly, it immediately becomes a political football again. No one wants that. The FTC is the proper avenue to ultimately shut NADA down, imo.

Agreed. The administration is playing this smartly.

Furthermore, the President shouldn't and can't directly respond to every petition that gets 100K+ signatures. There are currently 15 petitions with 100K+ signatures, including stuff like "Protect the Peace Monument in Glendale Central Library", "Remove offensive state (sic) in Glendale, CA public park", and "Legally Recognize Non-Binary Genders". I don't think any reasonable person should expect the President to directly respond to each and every one of these.

For the ones that have some federal merit, the response gets appropriately funneled to the right department, in this case the FTC.

 

[AudubonB]

Jackl1956, I live in the heart of RedState country, and may perhaps be either more sensitive to or more exposed to certain attitudes among this portion of the populace than you might be. That is, there is a significant fraction of this country who will react to whatever President Obama espouses by taking the opposing stance.

I did not vote for the current president, but, unlike so many, I respect both him and his office. In that light, I would like to believe that others in this thread are correct and the White House's response to the petition is the FTC action. I hope so, because this allows events to proceed in the fashion that all of us desire - without the onus that Mr Obama's hand in the kitchen would entail.

 

[dsm363]

Just as a political exercise I would find it interesting if the NADA was invited to the White House for a press conference where the president stood next to them and said he fully supports them and their business model.

 

[Jack6591]

Jackl1956, I live in the heart of RedState country, and may perhaps be either more sensitive to or more exposed to certain attitudes among this portion of the populace than you might be. That is, there is a significant fraction of this country who will react to whatever President Obama espouses by taking the opposing stance.

I did not vote for the current president, but, unlike so many, I respect both him and his office. In that light, I would like to believe that others in this thread are correct and the White House's response to the petition is the FTC action. I hope so, because this allows events to proceed in the fashion that all of us desire - without the onus that Mr Obama's hand in the kitchen would entail.

I am a hard core Democrat, and proud of my liberal beliefs. To the point, I voted for Barack Obama twice.

I very simply believe that the President ought to keep the promises he had made to his constituents.

The White House website states that petitions supported by 100,000 signatures will receive a response.

I am not saying how he should respond. I am saying that when that many citizens pose a question, it deserves the President's thoughtful consideration and response.

 

[Merrill]

Can someone who knows the federal laws explain to me what it means when the FTC says they should repeal the prohibitions on direct auto sales. Can they force the states to do this, or is this just a lot of hot air. Also why not Texas and other states that have the same laws about direct to consumer sales.

 

[GoBlue88]

I am a hard core Democrat, and proud of my liberal beliefs. To the point, I voted for Barack Obama twice.

I very simply believe that the President ought to keep the promises he had made to his constituents.

The White House website states that petitions supported by 100,000 signatures will receive a response.

I am not saying how he should respond. I am saying that when that many citizens pose a question, it deserves the President's thoughtful consideration and response.

This White House website says a response will be issued, yes. It does not say that the President himself will issue the response. Given the other examples I posted earlier, do you seriously believe, for example, that the President should directly respond to both sides of a local issue in Glendale, CA? Or should someone else handle it and basically say "work it out, Glendale"?

Why is it completely inconceivable to you that the FTC actions/statements could be the "response"?

 

[Jack6591]

This White House website says a response will be issued, yes. It does not say that the President himself will issue the response. Given the other examples I posted earlier, do you seriously believe, for example, that the President should directly respond to both sides of a local issue in Glendale, CA? Or should someone else handle it and basically say "work it out, Glendale"?

Why is it completely inconceivable to you that the FTC actions/statements could be the "response"?

I suspect that the actions taken by the Federal Trade Commission were born from discussions with the White House. I believe it is even probable that the White House has chosen this as the most politically astute manner in which to approach this issue.

However, the White House website petitions where pitched as a mechanism to provide the "people" with a voice in government. Further, when enough "people" raise an issue, the White House administration will respond. I would personally like to see Barack Obama discuss this issue. My personal desires aside, the White House administration should respond.

It is the precedent they have established on their website. When petitions reach a level of support (100,000 signatures), they will publish a response on the website. The Obama administration has not done this. I for one, think they ought to.

 

[Vger]

Can someone who knows the federal laws explain to me what it means when the FTC says they should repeal the prohibitions on direct auto sales. Can they force the states to do this, or is this just a lot of hot air. Also why not Texas and other states that have the same laws about direct to consumer sales.

As I understand it (I am a citizen, not a lawyer), there are two routes for the Federal government to actually overrule the state laws. One is by passing an overriding federal law through congress. We all know THAT is not going to happen with this do-nothing congress. The second option is for someone to sue the offending state (e.g. New Jersey) in Federal court, contending that the statute is unconstitutional (e.g. interference with interstate commerce), potentially reaching the Supreme Court.

The official statement of the FTC, while non-binding, might be seen as a warning to the states that the administration, perhaps through the Justice Dept., might support actions through the courts to overturn the law.