Ford’s site, fordpreowned.com, let internet users view a
selection of used cars. Users could then arrange to have their
choice of car delivered to a local Ford-licensed dealership for a
test-drive before possibly purchasing the car.
Under the Texas Motor Vehicle Commission Code, car manufacturers
are prohibited from owning a dealership and acting in the capacity
of a dealer in the state. Direct sales must also be made by
licensed dealers in the state.
The Texas Department of Transportation’s Motor Vehicle Division
complained to the Texas Motor Vehicle Board about Ford’s site. In
response, Ford filed a lawsuit in the US District Court,
challenging the complaint.
The Court upheld the Commission’s Code, rejecting arguments from
Ford that the Code was restricting e-commerce within the state. It
held that the Code protects the citizens of Texas by only licensing
dealers who comply with certain warranties and conditions.
