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Ford should be fined $1.7 million for Web sales, Texas judge says
December 5, 2000
BY RAJIV NARAYANA
BLOOMBERG NEWS
AUSTIN, Texas -- Ford Motor Co., the world's second-largest automaker, should be fined $1.7 million for its part in selling used vehicles last year on the Internet, an administrative law judge in Texas recommended.
Ford will appeal the Austin, Texas, judge's recommendation, said company spokesman Pete Olsen. The automaker has until Monday to file an appeal, and the Texas Motor Vehicle Board will review the recommendation in January.
The Texas Motor Vehicle Division's enforcement section last year filed a complaint against the automaker and its Fordpreowned.com Web site, which listed for sale mostly Ford cars and trucks on which leases had ended and referred consumers to dealers. The enforcement section said the site violated a state law prohibiting automakers from operating vehicle dealerships.
Ford "was selling directly to retail customers through this Web site," said Karen Cox, a lawyer for the enforcement section.
The company shut down the Fordpreowned.com site in Houston last year after getting a letter from Texas regulators saying dealers participating in the online service could be fined as much as $10,000 a day. The Houston site was started as a pilot project two years ago. Ford still runs such sites in cities including San Francisco, Boston, New York and Atlanta, Olsen said.
"We're not selling direct," Olsen said. "It's an inventory that the dealer purchases from us."
The Web site let consumers view used vehicles. If customers decided to test-drive a vehicle, they picked a dealership and Ford transferred the title to the dealership before shipping the car or truck. If the customer decided to buy the vehicle, the dealer concluded the sale, Olsen said.
The Dearborn, Michigan-based automaker previously had lost a federal court ruling against the Texas Motor Vehicle Division over Fordpreowned.com. Ford has appealed that ruling, in which Judge Sam Sparks declined to decide whether the company's plan violated Texas law. The Motor Vehicle Division, which is part of the state Transportation Department, licenses and oversees auto dealers and manufacturers.
The Dallas Morning News earlier reported the administrative law judge's recommendation.
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Whats everyone think of this? Should Ford be allowed to sell vehicles directly on the Internet?
December 5, 2000
BY RAJIV NARAYANA
BLOOMBERG NEWS
AUSTIN, Texas -- Ford Motor Co., the world's second-largest automaker, should be fined $1.7 million for its part in selling used vehicles last year on the Internet, an administrative law judge in Texas recommended.
Ford will appeal the Austin, Texas, judge's recommendation, said company spokesman Pete Olsen. The automaker has until Monday to file an appeal, and the Texas Motor Vehicle Board will review the recommendation in January.
The Texas Motor Vehicle Division's enforcement section last year filed a complaint against the automaker and its Fordpreowned.com Web site, which listed for sale mostly Ford cars and trucks on which leases had ended and referred consumers to dealers. The enforcement section said the site violated a state law prohibiting automakers from operating vehicle dealerships.
Ford "was selling directly to retail customers through this Web site," said Karen Cox, a lawyer for the enforcement section.
The company shut down the Fordpreowned.com site in Houston last year after getting a letter from Texas regulators saying dealers participating in the online service could be fined as much as $10,000 a day. The Houston site was started as a pilot project two years ago. Ford still runs such sites in cities including San Francisco, Boston, New York and Atlanta, Olsen said.
"We're not selling direct," Olsen said. "It's an inventory that the dealer purchases from us."
The Web site let consumers view used vehicles. If customers decided to test-drive a vehicle, they picked a dealership and Ford transferred the title to the dealership before shipping the car or truck. If the customer decided to buy the vehicle, the dealer concluded the sale, Olsen said.
The Dearborn, Michigan-based automaker previously had lost a federal court ruling against the Texas Motor Vehicle Division over Fordpreowned.com. Ford has appealed that ruling, in which Judge Sam Sparks declined to decide whether the company's plan violated Texas law. The Motor Vehicle Division, which is part of the state Transportation Department, licenses and oversees auto dealers and manufacturers.
The Dallas Morning News earlier reported the administrative law judge's recommendation.
----------------
Whats everyone think of this? Should Ford be allowed to sell vehicles directly on the Internet?