FTC replies to CEI in auto dealer rule, still full of hot, nitrogen-poor air

Photo Credit: Getty

This week, the Federal Trade Commission issued its long-awaited, nearly-400 page nannyist final rule on auto and other motor vehicle dealers sales. The rule is entitled “Combating Auto Retail Scams (CARS),” but both the title and the rule are themselves sort of scammy.

Much of what the CARS rule bans or restrict are not deceptive, but certain add-ons on vehicle sales and what it calls “junk fees” at auto dealers. As I pointed out in my comments on the proposed rule on behalf of CEI – from which the final rule is largely unchanged – the results of this rule will be to raise costs and limit choices for consumers buying cars

However on page 209 of this massive paternalistic tome, there is at least one tiny bright spot. The FTC replied to and offered clarification to a point I raised in my comments on the rule, citing the specific CEI comments in the footnote on that page.

As an example of both how nannyist and how particular this rule got with auto dealer products and services, the rule banned – even if consumers wanted the item – “nitrogen-filled tire related-
products or services that contain no more nitrogen than naturally exists in the air.”

Among the many problem with this ban that I pointed out was that the phrase “the air” without further definition could mean collectively “all the air that stretches around the planet,” and that “no individual set of tires” could exceed that amount to satisfy the rule. The FTC conceded that point, stating in the final rule that “charging for a nitrogen-filled tire would fail by this standard if it contains no more nitrogen than the proportion that naturally exists in the air” (emphasis added).

While this is a nice concession, the ban is still ridiculous and tyrannical for reasons I discussed in the initial comments. The vast majority of consumers who buy this customization – whether at the dealer or auto shops (including those of popular retailers such as Costco – do not buy these tires because they are tricked into thinking they have more nitrogen than the air. They don’t care if they have more than in the air. They buy these tires for cars – as well as other vehicles like bikes – because of the other elements in air that are purged from this mixture, leading to a better performance for the tire from pure nitrogen.

It’s true that not everyone is that interested in high performance to buy these types of tires, but these are certainly not inherently deceptive products. The choice should be that of the consumer.

This rule will at the very least have the ridiculous outcome that consumers can buy nitrogen tires at a big chain like Costco, but not when they buy their cars at the local dealer. How does this advance the “competition” that Lina Khan and the other FTC commissioners say they are so interested in advancing?!