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FTC Closes Antitrust Case Against Dealers, TrueCar Says

August 13, 2015

By Brittany-Marie Swanson

SANTA MONICA, Calif. — It’s case closed for a federal investigation into whether dealers refusing to do business with TrueCar in 2011 and 2012 violated antitrust laws, according to a regulatory report filed by the car-shopping site Wednesday.

Four years ago, TrueCar came under fire from a vocal group of dealers who called the site a margin killer that aimed to turn dealerships into TrueCar outlets, a charge the lead-generation site denied. And when they banded together to oppose TrueCar’s policies — including canceling their subscriptions to its service — the Federal Trade Commission (FTC)’s Bureau of Competition launched an investigation into whether they had violated the FTC Act. The act prohibits joint conduct among competitors that would lessen competition in the marketplace.

“Some of the information that we obtain from dealers is competitively sensitive and, if disclosed inappropriately, could potentially be used by dealers to impede competition or otherwise diminish independent pricing activity,” TrueCar’s filing read, in part.

The car-shopping site also disclosed that it received a Civil Investigative Demand from the FTC in February 2014 requesting that it produce certain documents and information related to the investigation. TrueCar noted: “We responded to the request and consider the matter to be closed.”

The filing also addressed a more recent regulatory matter — a lawsuit filed by the California New Car Dealers Association (CNCDA) in May alleging that TrueCar is operating in California as an unlicensed dealer and autobroker. On the same day TrueCar filed its report, the association updated its lawsuit to include statements made by TrueCar officials in recent weeks.

One of those statements was a quote from CEO Scott Painter in a July Los Angeles Times article. Painter, who announced this month that he will be stepping down from his post at year’s end, noted that “Our competition is the non-TrueCar dealers.” 

“We believe that statements such as those by Mr. Painter saying ‘Our competition is the non-TrueCar dealer’ are a clear indication that Mr. Painter’s company is operating as an auto dealer/auto broker,” said CNCDA President Brian Maas in a statement. “CNCDA is asking for a very simple and clear ruling by the court that TrueCar must comply with the rules and regulations that all auto dealers and auto brokers in the state of California are required to follow.”

According to TrueCar’s Aug. 12 filing, the car-shopping site requested late last month that the case be dismissed.

“We believe that the complaint is without merit and intend to vigorously defend ourselves in this matter,” the filing read, in part.

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