FTC Issues Blistering Rebuke Of States Limiting Tesla’s Direct Consumer Sales
The Federal Trade Commission is not big on state’s limiting the ability of electric car manufacturer Tesla to sell its cars directly to consumers. In a post published today, fittingly on its Competition Matters blog, the FTC whacked such restrictions, detailing how legal protections for dealers were built, and how they in time evolved into the opposite of their original intention. New Jersey recently became the third state to enact a ban, joining Arizona and Texas.
Tesla has just gained a valuable ally in its battle to sell cars directly to customers : the Federal Trade Commission. The regulator now argues that state bans on direct sales are "protectionist," propping up the traditional dealership business model rather than protecting companies from unfair abuses by automakers. The FTC also doesn't buy the notion that Tesla's modest US sales are a threat to the wider industry.
Amazon said it was prepared to take the Federal Trade Commission to court in defense of allegations it had failed to prevent unauthorized transactions by children on its tablets. Amazon said it would fight any U.S. regulator fines levied against it on those charges, countering that its parental controls are already far stricter than those the FTC requires. For instance, Amazon's Kindle has settings whereby parents can limit the time children spend on devices. PINs can also be assigned to authori
The Federal Trade Commission is clamping down this year on misleading auto dealership advertising, in a series of cases the FTC named Operation Steer Clear. Since January, the FTC has disclosed settlements with 10 dealerships in seven states. The latest example was last week, involving Courtesy Auto Group in Attleboro, Mass. According to the FTC, the group advertised “$0 down payment” without adequately disclosing other fees.
Today the New Jersey Motor Vehicle Commission passed a rule that will end Tesla’s direct sales of cars to consumers. TheNew Jersey Coalition of Automotive Retailers was in favor of the rule change, unsurprisingly.
Yelp's stock is down on news the Federal Trade Commission is investigating over 2,000 complaints against the online review site. TheStreet's Jim Cramer points out a piece by a SunTrust analyst saying the number of complaints to the FTC are typical for any business. Cramer thinks the complaints will not affect Yelp and the decline may be as a result of pressure on many tech companies that went public at the same time. Cramer recommends Yelp long-term because it is a social, mobile and cloud play.
Men's Wearhouse was given the go ahead to acquire rival Joseph A. Bank by regulators at the Federal Trade Commission. The FTC cited ample competition and differing customer bases as reasons for its approval. Regulators say that Men's Wearhouse skews towards younger, trendier customers while Jos. A Bank tends to skew towards older customers. Men's Wearhouse agreed to purchase the retailer for $1.8 billion in May, 5 months after Jos. A Bank proposed to purchase Men's Wearhouse for $2.3 billion. Sh
Electric car company Tesla can now once again sell cars direct to consumers in New Jersey, after a ban earlier this year based on an old law enabled Governor Chris Christie to bow to pressure from local auto dealers to get sales of Elon Musk’s magical future cars put on hold.
Missouri legislators are considering banning car makers selling direct to the public, in another challenge to Tesla Motors push to bypass car dealers. A ban would make Missouri the fourth state after Texas, Arizona and New Jersey to stop Tesla selling its electric sports cars directly to drivers. State auto dealers have proposed new language in an existing bill that would force consumers to buy new vehicles only through franchised dealers.
A bill in the legislature may soon bar direct car sales. New language in House Bill 1124 would require Missouri consumers to purchase cars from middlemen franchised dealers. This would affect those interested in buying electric Tesla cars– the automaker’s business model is structured by a direct sale to consumers through their website. It’s this that explains the car dealership laws that Tesla is facing. It’s much the same story in the beer distribution business and many others.