FTC supports enforcement program
The Federal Trade Commission (FTC) reiterated its support of a third-party enforcement program that would resolve disputes between aftermarket companies and the car manufacturers in matters related to the proposed "Right to Repair Act."
The letter was sent to Representatives Joe Barton (R-Texas), chief sponsor of the Right to Repair Act, and Cliff Stearns (R-Fla.), chairman of the House Subcommittee on Commerce, Trade and Consumer Protection.
The FTC recommended in a Dec. 22, 2005, letter to Congress that the use of a third-party review system would "provide important incentives for industry members." It further declared that "these programs can effectively address consumer or competitor complaints by assessing whether a particular practice violates industry standards. To help ensure the effectiveness of these self-regulatory initiatives, the Commission generally recommends that, in addressing the individual disputes, third party systems should be impartial and objective; be public; and apply standards consistently."
Kathleen Schmatz, CEO and president of the Automotive Aftermarket Industry Association (AAIA), said the association "welcomes the input from the FTC as an independent assessment of why the current process utilized by the National Automotive Service Task Force (NASTF) is not effective in ensuring the availability of service information."
The associations supporting the Right to Repair Act have maintained that any non-legislative solution must include a strong commitment regarding tools and service information by the manufacturers that is clear and comprehensive, she said. And a strong third-party enforcement component "would ensure that companies keep their commitment."
"Although we are continuing to push for passage of Right to Repair legislation, we stand ready to work with Representatives Barton and Stearns and other interested parties to develop an effective solution to the service information issue, one that will ensure the future viability of the independent aftermarket and would maintain competition for car owners seeking maintenance and repair of their vehicle."
The December letter from the FTC responded to questions from Representatives Stearns and Barton as to whether the FTC could form a commission composed of non-industry "independent" directors to oversee the service information issue.
While the FTC stated that it did not have such authority, it did state that it could help in the appointment of members of the board which should be comprised of both industry representatives with a stake in the issue and independent directors. The group would oversee resolution of the aftermarket service information and tools issues.
"AAIA supports such an effort by the FTC, but we believe that that governance of the board should be fair and represent both the aftermarket and car companies equally," says Schmatz.
The Right to Repair Act would require the car companies to make the same service information and tools capabilities available to independents service providers that they make available to their franchised dealer networks. It protects car company trade secrets (unless that information is provided to the franchised new car dealer).
Congressional support for The Motor Vehicle Owners' Right to Repair Act (H.R. 2048) has reached 77 co-sponsors.
For more information about the Right to Repair Act, visit www.RightToRepair.com.