States' limits on Internet new auto sales cost consumers $25 billion

WASHINGTON – The Consumer Federation of America is calling on the Federal Trade Commission to intervene in court cases to overturn what the consumer group claims are “anticompetitive state laws” that prevent direct sale of cars to consumers over the Internet, restrict the location of dealers, or prevent competition in the provision of warranty and other auto-related services. Testifying at recent FTC hearings, Dr. Mark Cooper, CFA’s Director of Research said the restrictions cost consumers more than $25 billion annually. “It’s time for the Federal Trade Commission, which found these restraints on trade to be anti-competitive 15 years ago, to take another look,” said Cooper. “We are certain the FTC will find that these practices make even less sense in the Internet age. The FTC should then intervene in court cases opposing these laws when they are filed.” A new CFA report, “Bringing New Auto Sales and Service Into The 21st Century” was submitted by the group as part of the public record at the FTC’s recent workshop on E-Commerce: Possible Anticompetitive Efforts to Restrict Competition on the Internet. According to the CFA, the report finds that “these anti-competitive laws have dramatically increased the burden on consumers by effectively preventing e-commerce from increasing the efficiency of automobile distribution.”