Some dealers and dealership consultants are worried that the just-launched Federal Trade Commission investigation into whether dealers colluded last year to harm TrueCar will chill dealer commentary on blogs and other Web sites.
It's a hot topic among dealers because the FTC has singled out in its probe individuals at dealerships who criticized TrueCar, the online consumer shopping site, on blogs in late 2011 and early 2012.
The FTC is seeking documents and evidence to determine whether people in the "retail automobile industry" violated federal competition laws "by agreeing to refuse to deal with TrueCar." Those individuals received letters from the FTC this month requesting the information. A copy of a letter was obtained by Automotive News.
Bryan Armstrong, an e-commerce director at a dealership, said it would be tragic if the investigation stifled discourse among dealership personnel. Armstrong, who works at Volkswagen Southtowne in suburban Salt Lake City, said his comments reflected his opinions and not the dealership's. He did not receive an FTC letter.
He said dealerships and their vendors need feedback from customers to improve their operations. TrueCar is a case in point, he said.
After TrueCar came under fire from dealers and state regulators in 2012, the company changed its business model to comply with advertising and consumer laws in all states, Armstrong said. TrueCar also was criticized for pushing down transaction prices.
TrueCar says it is profitable today and has a record 6,500 participating franchises. TrueCar says the participating dealerships generally are earning better profits on TrueCar leads than they were before the restructuring.
Armstrong said dealer criticism prompted the changes. "That's the true tragedy here: You can stifle the impetus for change."
In late 2011, Jim Ziegler, a dealership consultant, wrote a blog critical of TrueCar that was posted on DealerELITE.net and other sites. He received an FTC letter.
He said dealers had concerns about the way TrueCar was extracting sales data from dealerships, and TrueCar has since put those concerns to rest.
Ziegler said he, too, worries that dealers will be less willing to share insights and critiques.
He said: "There will be dealers who will not want their employees to express opinions for fear they will come back on them."