• Implications for marine retailers — how the MRAA is fighting for you

By Chad Tokowicz, MRAA Government Relations Manager

In late May, the Alliance for Automotive Innovation, a powerful trade group representing automakers and suppliers, responded to a public comment request from the Department of Justice’s newly created Anticompetitive Regulations Task Force . This task force was established under Trump Administration executive orders to review and assess existing regulations.

Critical Context

This new task force seeks to eliminate anti-competitive state and federal laws and regulations, which may undermine free market competition and harm consumers and businesses alike. One of the first actions taken by the task force was to seek public input to identify anti-competitive laws and regulations. After receiving input, the taskforce may then advocate for the elimination of those laws and regulations.

It was this request for input that the Alliance for Automotive Innovation responded to sending this letter. It suggests that existing state auto franchise and warranty laws, many of which have been in place for several decades, are anti-competitive and hurt consumers and should be targeted by the Department of Justice. Watch this excellent interview featuring Len Bellavia of DealerLaw.com on CBT News to learn more about the Alliance’s letter and the National Automobile Dealers Association’s response.

As Len points out, the Alliance’s letter doesn’t really make sense in the context of anti-competitive laws hurting small businesses. How would removing laws protecting thousands of auto-dealers in order to allow a small handful of colossal automakers to sell directly to consumers help small businesses and consumers?

What Does This Mean for Marine Retailers?

Now, what does this potential conflict between automakers and their dealers mean for marine retailers? Well luckily, not much, at the moment.

• First, the task force would need to decide that it agrees with the Alliance’s arguments and begin a more thorough review of these state laws and actively advocate for their elimination.
• Second, the elimination of these state laws would require some unlikely and rather arduous steps. The Department of Justice would need to essentially sue all 50 states on the grounds that these laws are somehow unconstitutional or violate federal antitrust law (which itself opens up an even bigger can of worms as these laws don’t exist in a vacuum and any litigation against them may result in disruption of other areas of state law).
  
  Instead, the DOJ could encourage Congress to pass a law regulating the relationship between automakers and auto dealers that would supersede state laws, something Congress has shown little interest in for almost 70 years. While Congress’s appetite for intervening in how states regulate business within their jurisdiction isn’t always consistent, it rarely comes in the form of blowing a giant hole in how the many-billion-dollar auto industry has operated for decades. Should this be the case, the MRAA is well prepared to launch a comprehensive advocacy strategy. We will work with recreational boating champions on Capitol Hill to fight such a proposal.

• The third important consideration is a purely political one: auto dealers have been strong supporters of President Trump since his first successful run for President in 2016. Where is the political benefit for the President in attacking one of his most loyal supporter groups, especially as they navigate weakened consumer confidence and uncertainty around trade policy?

Impact on State Laws?

If we set aside those important issues, what impact would this have on marine dealers? Well, it depends. The biggest issue to consider is that few manufacturer-dealer relationships are regulated as extensively as those in the auto industry. Largely because of the collective power of both automakers and dealers and the long history of legislative battles over those regulations.

State laws directly regulate only some parts of the dealer-manufacturer relationship in the marine industry, typically covering warranty repairs and reimbursement — but these regulations vary inconsistently across all 50 states. If the Alliance succeeds in disrupting auto industry regulations, this disruption could ripple into state laws that model themselves on auto industry standards, even though marine industry protections remain comparatively weaker.

The MRAA’s Role — Diamond Ambassador Members

As we continue to monitor and engage on this issue, we encourage you to sign up as a Diamond Ambassador Member. You directly help fuel our ability to defend marine retailers from threats like these. Diamond Ambassador Members make an investment of $1,000 per retail rooftop location, which goes directly to the MRAA Government Relations Team. It fuels our ability to connect with key decision makers, travel to and lobby in priority states and pay for important legislative tracking software that allows us to engage on issues before it’s too late. To learn more and sign up, click here.

The MRAA will continue monitoring the specific issue of dealer-manufacturer relationships and the output of the Anticompetitive Regulations Task Force and keep you informed if this threat does materialize. That said — and with consideration of just how unprecedented many government actions are these days — we are confident that this specific effort on the part of the automakers will not yield their desired result. It may instead get auto dealers more fired up to oppose it.

The MRAA Government Relations Team fights for all marine retailers. But to do our best, we need you to fight with us. Do not hesitate to reach out with any questions or advocacy issues of concern in your neck of the woods.