FTC Staff Comment Before the Missouri House of Representatives Regarding House Bill 1124, Which Would Expand the Current Prohibition on Direct-to-Consumer Sales by Manufacturers of Automobiles

Matter Number:

V140010

Summary

FTC staff submitted a comment, in response to a request from Missouri State Representative Michael J. Colona, regarding Missouri House Bill 1124. The bill would amend the Missouri Motor Vehicle Franchise Act, which prohibited franchisors of new motor vehicles from owning or operating a new motor vehicle dealership in the state. The proposed amendments would expand the scope of the existing restrictions on direct sales, and require that all new motor vehicles in Missouri be sold through independent dealers. The staff comment noted that the current law likely harmed both competition and consumers and the proposed amendments would amplify such adverse effects and discourage innovation. Furthermore, the comment encouraged Missouri to consider abandoning existing law and to permit manufacturers and consumers to reengage the normal competitive process that prevails in most other industries.