Legislator seeks overturning Auto Franchise rule

Utah's tourism economy could see a boost, courtesy of Tesla Motors. The company has paid for and installed Tesla Supercharger stations in Blanding, Green River, Moab and Richfield. Photo courtesy of the U.S. Department of Energy

In the state of Utah, and in many other states, laws are on the books that prohibit new car companies from selling directly to consumers without using a third-party dealership or franchise. Utah Representative Kim Coleman would like to change that. On KVNU’s For the People program on Tuesday, Coleman said this franchise protection had its start around the 1930’s.

Rep. Coleman told For the People’s Jason Williams, “We have a Supreme Court decision in Sylvania and then we have multiple Federal Trade Commission opinions that have said if that was necessary at some point in our past it’s no longer necessary and in fact has now become anti-competitive (and) anti-consumer. So the time for this may have existed in the past but it is no longer needed and it is now detrimental to free trade”

Coleman says that currently two companies, Tesla and Vanderhall (a Utah manufacturer), have been prohibited from selling cars in Utah. Kirkham Motorsports, a Utah manufacturer for 22 years, may also be facing the same anti-competition threat.

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