FTC Hosting Public Workshop To Analyze State Regulation Of Auto Distribution

The Federal Trade Commission (FTC) will be hosting a one-day public workshop to analyze the competition issues that arise from state level regulation of automotive distribution, and to determine to what extent there is a need for the current laws to continue to exist.

The event will be held Jan. 19 at the FTC’s Constitution Center Auditorium in Washington, D.C., and will be webcast live on the Commission’s website starting at 9 a.m. EST. Topics of discussion will include the regulation of dealer location, laws relating to reimbursement for warranty services and restrictions on manufacturers’ ability to engage in direct sales to consumers. Additionally, the workshop will examine new developments in the auto industry that affect distribution, such as autonomous vehicles, connected cars, and car-sharing services, and raise questions about whether or not the current regulatory framework and the future market can work together.

The FTC seeks to enrich its knowledge about the automotive sector and to facilitate discussion of the competition and related issues. To help achieve this goal, the Commission is accepting public comments, which may be submitted online or in paper form up until March 4, 2016. It seeks the views of consumers, industry representatives, economists, lawyers, academics, and other interested parties.

In a notice titled “The FTC opens the hood on automobile distribution,” Tara Isa Koslov from the Office of Policy Planning and James Frost from the Bureau of Competition discussed the importance of the workshop.

“While the retail landscape has changed dramatically in the last 50 years, the system of automobile sales in the United States has stayed mostly the same,” wrote Koslov and Frost. “Are consumers benefiting from the current distribution system for automobiles or are changes needed?”

The notice explains the fact that although most consumers don’t realize it, their state government plays a significant role in determining how purchasing an automobile works. The relationship between a dealer who sells a car and the manufacturer who made it is extensively regulated. While some in the auto industry believe that the traditional distribution model benefits both dealers and car buyers, there are others who suggest that these regulations are outdated and in fact make it more difficult for manufacturers to experiment with alternative distribution methods that do not rely entirely on dealers.

Additional information about the event is available in the FTC’s press release.