April 24, 2014 / 3:01 PM / in 4 years

Ban on Tesla's direct-to-consumer sales "bad policy" - FTC officials

WASHINGTON, April 24 (Reuters) - In an unusual move, three top officials with the U.S. Federal Trade Commission on Thursday came out in opposition to laws that ban automakers like Tesla Motors Inc, from selling their automobiles directly to consumers.

Laws that ban car manufacturers from selling their own products are “bad policy” and outdated, the FTC officials said in a blog post. Such laws are currently in place in Arizona, Maryland, New Jersey, Texas and Virginia.

The authors were Andrew Gavil, director of the FTC’s Office of Policy Planning; Deborah Feinstein, director of the Bureau of Competition; and Martin Gaynor, director of the Bureau of Economics.

The views are their own and not those of the commission, the three said in the posting. It is not clear if the FTC is considering other action on the auto sales issue.

Dealers argue that their business model is good for consumers because dealers compete on price and offer long-term service. The clash pits Elon Musk, billionaire CEO of Tesla, which makes electric cars, against 17,000 car dealerships, often family-owned, sprawled across the United States.

“Change can sometimes be difficult for established competitors that are used to operating in a particular way, but consumers can benefit from change that also challenges longstanding competitors,” the FTC officials wrote. (Reporting by Diane Bartz, editing by Ros Krasny and Doina Chiacu)

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