The California Legislature gets into the fight against “Autono-Trust”
In our recent three-part series on the marketing of automated and autonomous driving systems, we discussed the mounting pressure OEM’s are facing on multiple fronts as regulators and politicians are increasingly scrutinizing not just the safety and actual functional capabilities of autonomous driving systems, but also how they are being represented to the public.
On the heels of a complaint filed by the California DMV against Tesla alleging false advertising of its Full Self Driving and Autopilot technologies, the California legislature turned up the heat even further last week by quickly passing a new bill that would codify into state law certain prohibitions on false advertising of autonomous functions in automobiles.
The bill, which now only requires a signature from Governor Gavin Newsom, is not “just” a ban on false advertising related to advanced vehicle technology. It also sets new standards for how an OEM can market the capabilities and limits of partial-automation technology when a new car is delivered and when software is updated. Governor Newsom will have until the end of September to formally sign or veto the new legislation. If Governor Newsom ends up signing the bill, this new law could be a harbinger of things to come as other regulators and politicians could quickly jump into the fray and follow suit.
Although the bill targets misleading advertising on self-driving technology in general, it appears that Tesla clearly is the automaker in the crosshairs of this legislation. California Senate Transportation Committee Chair Lena Gonzalez, who sponsored the bill, said “‘No one else is doing this, just Tesla. . . . GM, Ford, BMW, Mercedes, they’re all doing the right thing’ by making clear the limits of automated technology.” In fact, Gonzalez reported that she worked closely with the American Automobile Association and several unidentified OEMs during the drafting of the bill’s language, which also is supported by consumer groups. Gonzalez said she and other lawmakers stepped up to craft the bill after the state DMV was slow to enforce its rules that prohibit advertising cars as "self-driving" if they're not truly autonomous.
If the bill does become law, the potential impact of the new legislation is currently unclear. Although strict enforcement of the new law could require Tesla to change the names of its Autopilot and Full Self Driving Technologies, most industry observers do not believe such draconian sanctions will be enforced, since the responsibility for enforcing the new law will remain under the jurisdiction of the California DMV. Despite its complaints about Tesla’s advertising, representatives of the California DMV have thus far not shown an appetite for coming down this hard on Tesla.
Time will tell if this new legislation substantively impacts Tesla’s and other OEM’s ongoing marketing initiatives. As we have noted previously, another recent effort to ban the use of “Autopilot” and “FSD” in Germany was rejected after Tesla appealed an initial adverse ruling. But now that they are facing scrutiny from California, the National Highway Traffic Safety Administration, and many other public officials, it will be interesting to see if Tesla (and other OEM’s) will make any changes in the way they represent their technologies to the public.
Copyright Nelson Niehaus LLC
The opinions expressed in this blog are those of the author(s) and do not necessarily reflect the views of the Firm, its clients, or any of its or their respective affiliates. This blog post is for general information purposes and is not intended to be and should not be taken as legal advice.