[badkungfu]

Any dissenters around here? We're going through this stuff now in Georgia. I like the ideal of trying different market approaches than your competitors, and I generally think businesses should; but I did read a counter point[0] that at least made me think.

If a large number of individuals or businesses are heavily invested in the-way-things-are, is it ever dangerous to rapidly change the market rules that we've built up- usually for the purposes of consumer protection or fostering businesses that benefit the larger community?

--

[0] http://www.peachpundit.com/2014/09/05/tesla-uber-internet-sa...

[cratermoon]

Somewhat of a dissent: A law that protects dealers from being screwed over by manufacturers and distributors is a good thing, but the court said that the law protects dealers for car maker G from being harmed by the actions of G, not the actions of car maker T. But if car maker T can act in ways that harm dealers for other car maker G, then some protection is probably needed.

I would expect that the standing issue would be different if dealer for G could show harm by the actions of maker T.

This article gives more info about the decision: http://www.reuters.com/article/2014/09/15/us-tesla-motors-ma...

[thisjepisje]

What's this thing about protecting others from harm? Isn't harming your opponent what competition is all about? Not directly harming them, of course, but simply by being better than them, which is the case here.

[cratermoon]

There's a specific legal definition of "harm" that applies. Someone with experience in litigating that kind of thing could explain it, but like most things legal, it isn't what the dictionary says.

[dang]

Thanks. Url changed to that from http://www.pddnet.com/news/2014/09/court-tesla-motors-can-se....

[chrismcb]

How do you expect maker T harming dealer G? Other than making a better product and outselling G? Maker t can't force maker G to change its relationship with dealer G or undercut G. I would expect that if maker T is harming dealer G other than by normal market forces, then they are probably already doing something illegal and no further protection is actually needed.

[cratermoon]

That a good question, and apparently the court used something like that line of reasoning in this case: that a car dealer could only be harmed (in the legal sense) by the car maker they sell for.

[zo1]

"If a large number of individuals or businesses are heavily invested in the-way-things-are, is it ever dangerous to rapidly change the market rules that we've built up- usually for the purposes of consumer protection or fostering businesses that benefit the larger community?"

Drastic and radical changes that happen quickly are probably quite a shock to a lot of business/industries/people. However, we must take care in what "regulation" or "consumer protection" as you call it, we add lest we actually make the subsequent change more drastic and actually harmful(more so than the harm we're trying to prevent by putting the regulation in place).

We're only in this situation because of regulation designed to protect already-invested businesses. At the time it was probably argued that having them fail would be a "dangerous and rapid change", or something to that effect. And the regulation sort of propped up or let the businesses get even more heavily invested into their ideas with no fear of alternative markets etc.

We could argue that if those regulations never got in place, those relatively smallish businesses would have failed at the time. The then owners would have adjusted, started over, or re-tooled their business to fit in.

[pseudometa]

Never under estimate the ridgidity of those who make money by maintaining the status quo.

[badkungfu]

Eh, yeah, I'm just not sure it's that simple.

In the article, he points out that Tesla's been given a lot of taxpayer money plus a lot of incentives for buyers to make their product more attractive. And now they now get to skirt around the market rules that other companies have been stuck with and had to build infrastructure and procedures to deal with more effectively.

Maybe Tesla's handouts should be pared back as they grow and are allowed to bypass the old rules.

[toomuchtodo]

Besides the Gigafactory, can you point out taxpayer money they were "given"? They had a DOE energy loan that was paid back much earlier than required, with interest. That is not a gift.

Also, their vehicles receive the same incentives as other EVs produced by other manufactures. Perhaps other manufacturers should make more EVs (or EVs people will buy) if they would like to capture the benefit of those government incentives.

[rahimnathwani]

> That is not a gift.

Yes, it is a gift. The loan was priced way below market, considering the level of risk and other conditions attached. The difference between the interest rate Tesla paid, and the market interest rate for the same amount of money, is a subsidy (or 'gift', if you prefer) from the taxpayer to Tesla.

http://www.slate.com/articles/business/moneybox/2013/05/tesl...

[toomuchtodo]

A subsidy is not a gift. It is an incentive to take a specific action, no different than the mortgage income tax deduction, credit on your taxes for children, or deductions for charitable contributions.

If you have any thought that the US is an efficient pure free market, I am sorry to inform you that is not the case.

[rahimnathwani]

Let me be more clear. You said:

'can you point out taxpayer money they were "given"'

My point is that the subsidised interest rate _is_ taxpayer money they were given. They were given the difference between the market interest and the interest they actually paid.

I'm _not_ arguing either that (i) 'the US is an efficient pure market' or (ii) that this specific subsidy was a good or bad thing.

[curun1r]

> Tesla's been given a lot of taxpayer money plus a lot of incentives for buyers to make their product more attractive.

One could argue that by not taxing the externality of their business (CO2 emissions), auto manufacturer's that make traditional gas guzzlers have been given far more government assistance than Tesla. The incentives that you speak of are intended to produce a positive benefit to society (less pollution) rather than as a handout to help Tesla.

[gknoy]

The market rules were there to prevent car companies from undercutting their own dealerships, however.

[twoodfin]

I'd only dissent so far as I'm unconvinced that the Court wouldn't have reached a different opinion if, say, some newly independent spinoff brand of GM was muscling in on its parent company's dealers by trying to sell directly to consumers. That is, I am suspicious it helped that Tesla had the green halo it does.

If the law is producing bad outcomes, the legislature should face pressure to change the law. We shouldn't rely on the Court to stretch as far as it can to get the "right" result.

But JackC's summary of the opinion makes a reasonable case that the standing issue was properly decided.