TrueCar and automotive dealerships just can't seem to stay out of the spotlight. An investigation is underway by the Federal Trade Commission into a number of dealers that stand accused of "agreeing to refuse to deal with TrueCar," according to an FTC letter obtained by Automotive News. The alleged collusion, which would violate federal competition laws, has triggered a non-public investigation that has had many dealerships, and TrueCar itself, served with letters demanding documents.
It's believed that the investigation stems from a pair of incidents in 2011 and 2012 that led a number of dealerships to abandon the price-quoting and research website, although TrueCar claims it had nothing to do with initiating the investigation. Regarding the odd timing, almost two years after the last issue took place, TrueCar CEO, Scott Painter, told AN, "It's like calling in reinforcements for a battle that's already over."
In 2011, a number of dealers stopped doing business with TrueCar due to a system that required salespeople from dealers to bid against each other to win shoppers, with many losing money on the no-haggle transaction price. Regulators got involved in 2012, when TrueCar was accused of violating consumer protection laws in some states over its sale of leads, a practice known as "bird-dogging." In both cases, TrueCar changed it's position, canceling the 2011 policy and switching to a subscription-based payment system in states where consumer protection was an issue.
We'll continue to follow the investigation, and bring you any news that pops up.
It's believed that the investigation stems from a pair of incidents in 2011 and 2012 that led a number of dealerships to abandon the price-quoting and research website, although TrueCar claims it had nothing to do with initiating the investigation. Regarding the odd timing, almost two years after the last issue took place, TrueCar CEO, Scott Painter, told AN, "It's like calling in reinforcements for a battle that's already over."
In 2011, a number of dealers stopped doing business with TrueCar due to a system that required salespeople from dealers to bid against each other to win shoppers, with many losing money on the no-haggle transaction price. Regulators got involved in 2012, when TrueCar was accused of violating consumer protection laws in some states over its sale of leads, a practice known as "bird-dogging." In both cases, TrueCar changed it's position, canceling the 2011 policy and switching to a subscription-based payment system in states where consumer protection was an issue.
We'll continue to follow the investigation, and bring you any news that pops up.
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