Antitrust Law Daily Wrap Up, ANTITRUST NEWS: FTC staff comments on Illinois Senate bill to repeal ban on Sunday auto sales, (Mar 27, 2014)

By Linda O’Brien, J.D., LL.M.

The staff of the FTC’s Office of Policy Planning, Bureau of Competition, and Bureau of Economics, in response to a request from the Illinois State Senate, provided comments on March 26 on the competitive impact of repealing the state’s prohibition on the sale or long-term lease of vehicles on Sundays. The staff comments state that repealing the mandatory Sunday closing provisions of the Illinois Vehicle Code would enhance competition and benefit consumers.

The FTC has a longstanding interest in the automobile industry and has opposed limits on hours of operation by automobile dealers, whether by state law or through agreement among dealers.

In responding to Illinois Senate Bill 2629, the FTC staff notes that because auto dealers also provide repair services and sell replacement parts, probable effects of the law extend beyond vehicle sales and long-term leasing. In the view of FTC staff, Illinois law currently eliminates the possibility of competition among auto dealers to determine the Sunday hours of operation that would be most responsive to consumer preferences and most beneficial to consumers.

“The current law makes it more difficult for Illinois consumers to comparison shop and raises their search costs, which may lead to higher prices, less favorable terms of sale and lease, reduced output of sales and service, and a market that is unresponsive to consumer preferences,” according to the staff comments.

The FTC staff noted that there were no procompetitive efficiencies to support mandatory Sunday closing laws for automobile dealers. The comments urged Illinois legislators to consider whether there was anything unique to the automobile industry to support arguments that limiting hours of operations would decrease costs, expand output, improve quality, or provide any consumer benefits that would justify such a significant restraint. In the staff’s view, the repeal of the ban would demonstrate why more competition, not less, is good for consumers. The passage of Senate Bill 2629 would enhance competition and provide significant benefits for Illinois consumers, the staff comments concluded.

The Commission vote approving staff’s comments was 4-0.

News: Antitrust FederalTradeCommissionNews