Pub. 56 2015-2016 Issue 3

31 SPRING 2016 With not only common sense but also data confirming that this state’s current system of competition allows for lower prices versus the one price-one location-one seller-one provider-one choice distribution system, the Texas statute allows for a competitive and responsive system for the consumer. 51 As pointed out by Peter Roff, the Phoenix Center’s work con- cludes that “when dealers selling the same make of automobiles compete against each other in a given market, auto prices drop significantly. It’s Economics 101: ‘the law of supply and demand.’ So it should come as no surprise the study also found less com- petition leads to higher prices.” 52 The FTC’s position is also questioned by The Hill in an article entitled “FTC Staff Bias on Intra-Brand Car Competition is a Bad Deal for Consumers.” 53 The article allows that “the error in the FTC’s thinking is echoed by many other opponents to automobile franchise laws. . .Automobile analysts believe that repeal of state franchise laws would result in a substantial contraction in the number of sellers–and we know from data that this would mean higher prices for consumers.” As pointed out in a joint letter to FTC Chairwoman Ramirez and Commissioners Brill, Ohlhausen andMcSweeny and signed by Grover Norquist with Americans for Tax Reform, Phil Kerpen with American Commitment, AndrewLanger with Institute for Liberty, GeorgeLandrith, Frontiers of Freedom, and JeffreyL.Mazzellawith the Center for Individual Freedom: Finally, we find it a bit ironic that the FTC is investigating in detail the effect of state dealer franchise laws when it was the federal antitrust laws that motivated the enactment of such laws in the first instance. As you know, auto retailers are prohibited by federal antitrust laws from collectively negotiating their contracts with manufacturers, and this artificial intrusion created an imbalance that disadvantaged dealers. Because exercising their collective economic power is prohibited by federal law, dealers had no choice but to turn to state legislatures to level the playing fieldwhile bargaining withmanufacturers. Atruly freemarketplacewouldnot have these antitrust prohibitions against auto retailers, nor state franchise laws. But eliminating one andnot bothwould create an imbalance in the manufacturer-retailer relationship, and is tantamount to the government pickingwinners and losers. Bottom line: there is no fact-based evidence in the public sphere that the current franchised dealer distribution system does not benefit consumers. All available evidence says that consumers will pay more for their vehicles if intra-brand price competition through dealers is eliminated. Given these facts, and the lack of any real world evidence to the contrary, it is troubling that the FTC would spend valuable time and resources looking into an issue where no evidence of a problem exists. 54  DEALER FRANCHISE — CONTINUED ON PAGE 33 When you have the capabilities, execution is precise. J.A.M. has the capabilities to do it all— from design of a high-performance shop layout based on your needs to providing you sales, service and installation of every piece of equipment. • Facility Design • Alignment Systems • Air Compressors • Air Delivery Systems • Battery Chargers • Brake Lathes & Accessories • Floor Jacks • Freon Recyclers • Fuel Management Systems • Hose Reels • Lifts – InGround, Surface, HD • Lubrication Delivery Equipment • Lube Center Accessories • Parts Shelving / Racks • Parts Washers • Shop Furniture • Tanks – Oil/Gasoline/Diesel • Tank Monitoring Systems • Tire Changing Equipment • Waste Oil Systems • Wheel Balancers 800-288-3848 JAMDistributing.com/equipment Precision Execution (See Attachment 3.) ...