The automobile company Tesla has had an ongoing battle with certain states for the right to sell their vehicles directly to consumers. Arizona, New Jersey, Texas, and Virginia have banned the highly popular Model S. Yesterday, the Federal Trade Commission defended the innovative automobile manufacturer, stating that shutting down or preventing retail sales directly to the consumer is “bad policy for a number of reasons.” The FTC also went on to say, “American consumers and businesses benefit from a dynamic and diverse economy where new technologies and business models can and have disrupted stable and stagnant industries, When that occurs in an industry long subject to extensive regulation, existing businesses often respond by urging legislators or regulators to restrict or even bar the new firms that threaten to shake up their market.”
Numerous laws that protect the business model for car manufacturers in certain states are decades-old, and some of them actually threaten or prevent innovation and technological advances. “Our point has not been that new methods of sale are necessarily superior to the traditional methods — just that the determination should be made through the competitive process,” The FTC said. “Change is a critical dimension of that competitive process.”
The decision is ultimately up to the states, but I certainly hope that those states do realize that leaps in technological advances ultimately set the bar for competitiveness, which leads to continuous innovation. In other words, out with the old, in with the new.