Pub. 1 2019-2020 Issue 4

18 Guidance Is Needed to Tame the Internet AdvertisingWildWest Anthony Bento, Director of Legal Affairs T he retail automotive industry in California is in desperate need of guidance from the DMV on vehicle advertising law. Many of the statutes and regulations governing vehicle advertisements predate the internet, and industry “disruptors” actively flaunt existing law. How can dealers provide adequate disclosures on Internet advertisements, when internet platforms (e.g., Google, Facebook) impose strict text and character limitations? How can dealers fairly compete against disruptors like Tesla, if regulators refuse to en- force existing law (e.g., prohibitions on customer referral programs) against those disruptors? And how can dealers be expected to comply with advertising laws when manu- facturers force them to use 50-state vendors and adver- tising programs that don’t comply with California law? Over the past several months, Brian Maas (CNCDA president), Alisa Reinhardt (CNCDA director of regulatory affairs), and I have met with senior DMV leadership on a variety of issues impacting our industry. One key item that we continue to emphasize is the desperate need for guidance from the DMV on vehicle advertising law. Specifically, we need the DMV to explain how all ac- tors (dealers, manufacturers, etc.) are expected to apply California law to internet vehicle advertising. Following our initial meetings at the DMV, the New Motor Vehicle Board (NMVB) agreed to host a special meeting on vehicle advertising law on Wednesday, September 18. At the meeting, Alisa and I discussed several issues involving illegal practices employed by industry disrup- tors. After our presentation, dealer counsel Rob Robards provided vivid examples of the disconnect between the law and the realities of internet advertising. Attorney Bert Rasmussen and an official from the FTC also presented on this important issue. CNCDA thanks the New Motor Vehicle Board and its executive director, Tim Corcoran, for agreeing to host this important meeting. The conversation was lively and informative, and the members of the New Motor Vehicle Board asked penetrating questions. However, the NMVB is not empowered by current law to issue regulations or formal guidance on vehicle advertising law. As such, we hope that the DMV will hold a workshop on this issue and include all relevant stakeholders. In our conversations with DMV leadership, we will con- tinue to emphasize this issue. The status quo on vehicle advertising is untenable; it hurts consumers and places ethical dealers at a competitive disadvantage. Reform and guidance are needed. 3