The Federal Trade Commission recently backed US luxury electric automaker Tesla Motors, reporting in a letter that a Michigan bill passed late last year that orders the company to stop direct sales of its cars will hinder fair competition and restrict consumer opportunities.
Governor Rick Snyder last fall signed a law that seeks to discourage Tesla Motors’ direct sales business venture in the state, disallowing it to deliver its cars to customers through wholly-owned stores. The law brought new barriers alongside an already existing Michigan bill that already deemed illegal direct sales of new autos in the entire state – and without specifically mentioning Tesla, the bill was passed exactly when the electric carmaker was preparing to expand its company-owned stores network. “States should allow consumers to choose not only the cars they buy, but also how they buy them,” said three senior FTC officials in an eleven-page long letter, with a summary of it being posted on the agency’s website.
This is not the first time the FTC officials speak on the behalf of Tesla Motors and its direct sales practice, with the letter referring to the company’s ongoing legislation and litigation efforts seen while establishing its sales network. The letter was also a response to a request from a US senator that wanted to know the agency’s opinion on an upcoming bill discussion that would bring the possibility to make exemptions from the laws that seek to stop the direct sales practice. Still, the FTC can only advise, as it has limited decision power and each state will enforce its own rules on the matter.