Guide Concerning Fuel Economy Advertising for New Automobiles |
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Donald S. Clark
Federal Trade Commission
19 September 2017
[Federal Register Volume 82, Number 180 (Tuesday, September 19, 2017)]
[Rules and Regulations]
[Pages 43682-43690]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-19869]
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FEDERAL TRADE COMMISSION
16 CFR Part 259
Guide Concerning Fuel Economy Advertising for New Automobiles
AGENCY: Federal Trade Commission.
ACTION: Final rule; adoption of revised guides.
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[[Page 43683]]
SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'')
issues final amendments to the Guide Concerning Fuel Economy
Advertising for New Automobiles (``Fuel Economy Guide'' or ``Guide'')
to address advertising claims prevalent in the market and harmonize
with current Environmental Protection Agency (``EPA'') and National
Highway Traffic Safety Administration (``NHTSA'') fuel economy labeling
rules.
DATES: Effective October 19, 2017.
FOR FURTHER INFORMATION CONTACT: Hampton Newsome, (202) 326-2889,
Attorney, Division of Enforcement, Bureau of Consumer Protection,
Federal Trade Commission, Room C-9528, 600 Pennsylvania Avenue NW.,
Washington, DC 20580.
SUPPLEMENTARY INFORMATION:
I. Background
In 1975, the Commission issued the Fuel Economy Guide (16 CFR part
259) (40 FR 42003 (Sep. 10, 1975)) to prevent deceptive fuel economy
advertising for new automobiles and facilitate the use of fuel
efficiency information in advertising. To accomplish these goals, the
Guide advises advertisers to disclose established EPA fuel economy
estimates (e.g., miles per gallon or ``MPG'') whenever they make any
fuel economy claim based on those estimates. In addition, if
advertisers make claims based on non-EPA tests, the Guide advises them
to disclose EPA-derived information and provide details about the non-
EPA tests, such as the test's source, driving conditions, and vehicle
configurations.
The Guide helps advertisers avoid deceptive or unfair fuel economy
claims.\1\ It does not address the adequacy of EPA fuel economy test
procedures or the accuracy of EPA label content. Such issues fall
within the EPA's purview and are generally outside the Guide's scope.
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\1\ The Guide does not have the force and effect of law and is
not independently enforceable. However, failure to comply with
industry guides may be an unfair or deceptive practice. The
Commission can take action if a business engages in unfair or
deceptive practices in violation of Section 5 of the FTC Act (15
U.S.C. 45(a)).
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II. Guide Amendments
On June 6, 2016, the Commission sought comment on proposed
amendments to the Guide (81 FR 36216) (``2016 Notice''). Consistent
with the Commission's other guides, these proposed changes updated the
Guide's format with a list of general principles to help advertisers
avoid deceptive practices and detailed examples to illustrate those
principles. Additionally, the proposed amendments provided guidance on
claims involving EPA-based MPG ratings, non-EPA tests, vehicle
configuration, fuel economy range, and alternative fueled vehicles. The
Commission conducted Internet-based research exploring consumer
perceptions of certain fuel economy marketing claims.\2\ The Commission
based the proposed amendments on this research, as well as the EPA and
NHTSA regulations, which have been amended since the last Guide review.
The Commission received seven comments in response.\3\ Having reviewed
these comments, the Commission now publishes its final amendments to
the Guide.
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\2\ Additional information about the study, including the
questionnaire and results, is available on the FTC Web site. See
https://www.ftc.gov/policy/public-comments/initiative-663.
\3\ The comments can be found at https://www.ftc.gov/policy/public-comments/initiative-663. They include: Consumer Federation of
America (CFA) and the Center for Auto Safety (CAS) (jointly)
(referred herein as ``CFA'') (#13); National Automobile Dealers
Association (NADA) (#11); Association of Global Automakers (Global
Automakers) #9; Auto Alliance (Alliance) (#10); Growth Energy (#8);
Isenberg (#6), and Hilandera (#7).
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III. Issues Discussed in the Comments
As discussed below, the comments addressed several issues,
including the Guide's overall benefits, single mileage claims,
alternative fueled vehicle claims, non-EPA estimates in advertising,
and the Guide's format and wording.
A. Guide Benefits
The commenters generally supported the proposed Guide revisions.
For example, the Alliance noted that the amendments ``represent a
constructive revision.'' Commenter Hilandera added that the changes
``add transparency to advertising by local dealers and national media''
and help consumers ``evaluate whether or not to purchase a particular
car model.'' Commenters also commended the FTC consumer research. The
Global Automakers stated that the study results ``allow for better,
data-based evaluation of advertising statements, rather than
speculating on how consumers might interpret those statements.'' \4\
NADA noted the research lends ``support to several of the proposed
changes to the Guide.''
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\4\ One commenter (Isenberg) noted that EPA and FTC should
improve fuel economy testing. However, as explained above, testing
accuracy falls outside of the Guide's scope.
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B. Single Mileage Claims
Background: The previous Guide stated that, if an MPG claim
involves only city or only highway fuel economy, the advertisement need
only disclose the corresponding EPA city or highway estimate (16 CFR
259.2(a)(1)(ii)). In the 2016 Notice, the Commission did not propose
changing this approach. The Commission explained that single mileage
(i.e., single driving mode) claims are not likely to deceive consumers
as long as the advertisement clearly identifies the type of estimate
(e.g., city, highway, or combined), and the estimate matches the
content of the advertised claims. Moreover, consumers have seen such
estimates in advertising and on EPA labels for decades. In light of
this consumer experience, the Commission stated that it seems unlikely
that a single, clearly-identified mileage estimate would lead to
deception.
The 2016 Notice further explained that the FTC consumer study
supports the conclusion that consumers would not be deceived. For
example, when shown a single highway mileage claim (e.g., ``This car is
rated at 25 miles per gallon on the highway according to the EPA
estimate''), the vast majority of study respondents (74.6%) correctly
answered that the car would likely achieve that MPG in highway driving,
and the responses for alternative interpretations were low.\5\ The
results were similar when respondents were asked about a claim for a
combination of city and highway driving.\6\
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\5\ See Q5c. The response results for other choices, with no
control, were: city rating (5.8%), combined rating (10.7%), unsure
(5.5%), and none of the above (3.5%).
\6\ The results for Q5d were, not accounting for a control:
combined (76.6%), highway (10%), city (4.2%), not sure (6.2%), and
none of the above (2.5%).
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As the Commission explained, this research suggests that single
mileage claims do not deceive consumers as long as the claim specifies
the mode of driving involved (e.g., highway, combined, etc.). Given the
absence of evidence demonstrating that such claims are deceptive, the
Commission did not propose changes. Thus, consistent with the previous
Guide, the Commission proposed a provision (Sec. 259.4(c)) that
continued to advise marketers that EPA fuel economy estimates should
match the type of driving claims (e.g., city, highway, general, etc.)
appearing in the advertisements. For instance, if the advertiser makes
a city fuel economy claim, it should disclose the city rating.
Likewise, where an advertiser makes a general fuel economy claim, it
should disclose both the highway and city rating (or combined) to
prevent deception.
[[Page 43684]]
Comments: The comments differed about the proposed guidance for
single mileage claims. Some supported the Commission's proposal. For
instance, Global Automakers argued that the consumer research supports
the Commission's conclusion and that, after 40 years of federally-
mandated fuel economy information, ``consumers are very aware of the
significance of city vs. highway fuel economy estimates.'' However, CFA
strongly disagreed, arguing that a single city or highway MPG number is
deceptive.
According to CFA, advertisers' failure to disclose city or combined
ratings along with the highway rating constitutes a material omission
likely to mislead consumers. In CFA's view, because no consistent
relationship exists between city and highway estimates, consumers
cannot infer one of the ratings based solely on the other or predict
their own experience based on a single rating. Accordingly, CFA argued
that automobile advertisers should present both the highway and city
numbers, the combined, or all three in their fuel economy advertising.
As detailed below, in support of this position, CFA discussed the FTC's
research, submitted its own research, and highlighted additional
arguments supporting its contention that highway-only MPG claims are
misleading.
First, CFA addressed and critiqued the FTC research and associated
analysis, claiming that the Commission failed to highlight a key result
and that the study's question ordering led to biased responses.
Specifically, CFA argued the results of Question 6c reveal that a
single mileage claim is likely to deceive a significant minority of
consumers. The question presented respondents with a claim stating that
``This car is rated at 25 miles per gallon on the highway according to
the EPA estimate'' (Q6c) and then asked them whether they would expect
to achieve that rating if they used the advertised vehicle for all
their driving. According to the results, 20.7% of the respondents said
they would probably get 25 MPG overall for all their driving. CFA
contended this result demonstrates that, even if accompanied by a clear
and prominent disclaimer that applies only to highway driving, a single
mileage number misleads a significant minority of consumers into
overestimating the MPG they will achieve.
Additionally, CFA claimed the questions most relevant to the single
mileage claim appeared after ``respondents had already experienced a
number of questions emphasizing the distinction between highway and
city driving and estimates.'' \7\ CFA contended the appearance of the
city and highway mileage claims earlier in the questionnaire biased
responses to subsequent questions.
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\7\ These prior questions included Q3b, Q3c-e, and Q5a.
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CFA also highlighted its own research. Its national telephone
survey presented three questions. First, it showed respondents an
advertisement stating ``31 miles per gallon EPA highway estimate'' and
then asked whether they would be more or less likely to consider buying
the vehicle if that advertisement also stated ``19 miles per gallon EPA
city estimate.'' Overall, 43% of respondents said the city number would
affect their behavior (26% said it would make them less likely to buy
the car, while 17% said it would make them more likely). CFA asserted
that, because over two-fifths of the respondents said the city rating
disclosure would change their behavior, advertising should present both
numbers.
Second, the CFA survey asked respondents whether ``it is misleading
to allow advertisers to present only a vehicle's miles per gallon
estimate for highway driving.'' Before presenting this question, the
survey informed participants that ``[v]ehicles nearly always get more
miles per gallon, or higher mileage per gallon, on highway driving than
on city driving.'' Sixty four percent of respondents indicated that
presenting only the highway number in advertising is misleading. Third,
the CFA survey asked respondents which type of claim (i.e., highway and
city MPG, combined MPG, city MPG only, or highway MPG only) automobile
advertisers should be required to make in ``a fuel economy claim.'' In
response, 65% identified both highway and city, 23% pointed to a
combined estimate, 6% to the city rating, and only 3% to the highway
number.
Finally, CFA made several additional points. First, it explained
that consumers are less likely to drive on the highway than in the
city. It noted that, in approximating typical consumer driving
patterns, the EPA combined number assumes 45% highway driving and 55%
city driving. Second, it presented data demonstrating that little
correlation exists for the majority of vehicles between a vehicle's
highway MPG and its corresponding city or combined MPG. Given this
variability, CFA concluded that consumers cannot accurately infer a
model's city or combined MPG from a single highway rating, and those
who attempt to make such an inference would be misled by a single
mileage number.\8\ CFA further argued that, despite this variability,
FTC has concluded consumers have a particular understanding of the
relationship between city and highway ratings that leads them to
``impute their own expected mileage, or compare mileages, based on just
the highway number.'' CFA concluded that the city and highway MPG
figures together allow consumers better to assess, based on their own
personal experience, MPG differences among vehicles.
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\8\ Likewise, CFA asserted that the appearance of the city
rating only in an advertisement is equally misleading. However, CFA
stated that ``[i]f the FTC were to allow only one number, which we
don't recommend, in order to avoid deception, they should only allow
just the city as that is the condition under which most people
drive, according to the EPA.''
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Discussion: Consistent with the Commission's previous guidance, the
final Guide does not advise against advertisers making single mileage
claims.\9\ Neither the FTC study nor the comments provide clear
evidence that such claims are deceptive. As detailed in the 2016
Notice, the FTC research suggests single mileage claims do not lead
consumers to believe they will achieve that rating in other modes of
driving. In addition, as discussed below, such claims do not appear to
constitute a deceptive omission. While including MPG ratings for
multiple modes of driving in advertising (e.g., disclosure of both city
and highway MPG, or combined MPG) provides consumers with more
information about vehicle fuel economy, the FTC Act requires
advertisers to disclose only information that is necessary to prevent
consumers from being misled--not all information that consumers may
deem useful. As discussed below, the Commission disagrees with CFA's
interpretation of the FTC study results. In addition, CFA's own
research does not provide convincing evidence of deception.
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\9\ The final Guide continues to advise against unqualified
mileage claims that fail to specify driving mode (e.g., 46 MPG)
(Sec. 259.4(c)).
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First, the Commission disagrees with CFA's assertion that the
question Q6 responses demonstrate a single mileage claim deceives a
significant minority of consumers. Question Q6c specifically asked
respondents to read the statement ``This car is rated at 25 miles per
gallon on the highway according to the EPA estimate,'' and to choose a
closed-ended answer that ``best describes what you would expect to get
if you used this car for all your driving.'' Respondents chose from
several close-ended answers indicating whether their results, based on
their own driving, would be higher than, lower than, or similar to the
advertised rating. As CFA noted, 20.7%
[[Page 43685]]
of participants responded, ``I would probably get 25 miles per
gallon.'' In CFA's view, this figure demonstrates that the claim
deceived a significant minority because these participants believed the
highway rating would be achieved in all of their driving.
However, the responses to Q6 do not provide a reliable measure of
whether a highway-driving claim leads respondents to take away a false
or misleading claim about ratings for other driving modes. First,
because the survey asked respondents to consider their own driving
habits, some portion of this 20% may be consumers who drive a lot on
the highway. Those consumers' answers do not demonstrate that the
disclosure was deceptive. Second, because there is no control for these
particular results, some portion of the answers likely represents
random guessing, confusion about the question, or other factors absent
in a real-world advertising context.\10\ Thus, although comparing
responses across questions Q6a-c helps to gauge how respondents'
expectations for their own mileage may generally differ depending on
the claim, the responses to these individual questions, considered in
isolation, do not provide meaningful, specific measures of whether any
of these claims are false or misleading.
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\10\ See, e.g., Diamond, Shari S. ``Reference Guide on Survey
Research.'' Reference Manual on Scientific Evidence, Third Edition,
Federal Judicial Center, 359-424, https://www.fjc.gov/sites/default/files/2015/SciMan3D01.pdf.
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Second, contrary to the commenters' suggestions, the question
sequence in the FTC study is unlikely to have significantly impacted
the research results. According to CFA, questions involving different
driving modes appeared early in the survey. In its view, these
questions ``sensitized'' (or ``educated'') participants and caused them
to answer later questions about driving modes differently than they
would have if they had not been exposed to these prior questions. CFA
pointed to three examples of questions appearing early in the study
(Q3b, Q3c-e, and Q5a) that, in its view, tainted later results.
However, the questions themselves did not mention different driving
modes. Additionally, two of these three examples (Q3b and Q5a) were
open-ended questions, where participants typed their answers into a
blank text box.\11\ Though some respondents mentioned highway and city
driving in their typed responses, no respondent could see any answer
other than their own. Therefore, the questions could not have
sensitized study participants.
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\11\ Terms listed in the questionnaire codebook (e.g.,
``highway'' in Question 18) may have suggested that these questions
presented respondents with specific answer choices (i.e., were
close-ended). In fact, the terms listed in the codebook are the code
categories used to sort respondents' individual answers to these
open-ended questions.
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Additionally, the other example offered by the commenters, Q3c-3e
(each respondent answered only one of these), is unlikely to have
biased respondents. These questions displayed several closed-ended
answers, one of which read, ``This model gets up to 30 miles per gallon
depending on whether it's highway or city driving.'' The questions did
not specify whether one mode of driving yields different mileage than
the other.\12\ Despite the mention of highway and city driving, it is
unlikely the mention of these modes of driving biased respondents in
answering subsequent questions. For decades, miles per gallon ratings
for highway and city driving have been familiar concepts in
advertising. These ratings routinely appear in television advertising,
on Web sites, and on vehicle labels in showrooms. Thus, the reference
to modes of driving is not likely to be novel to typical consumers,
particularly the recent or prospective car purchasers who participated
in the study. Accordingly, the limited mention of driving modes in this
prior question is unlikely to have affected significantly respondents'
subsequent answers.
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\12\ Although consumers may have their own preconceived notions
about the significance of different fuel economy ratings, the
question itself did not provide such information.
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Third, several aspects of the CFA study reduce its utility in
addressing the question at hand. For instance, CFA's first study
question, QE1, asked whether adding a city rating to a highway rating
claim would change the likelihood participants would purchase a
particular car. As constructed, the question merely provides evidence
that the city mileage rating may be useful to the consumer's decision.
It does not demonstrate that the highway rating, standing alone, is
deceptive. In addition, the two other principal questions in the study
(questions QE2 and QE3) sought the respondents' personal opinions about
whether certain claims would be misleading or desirable. Such opinion
questions do not furnish reliable evidence about deception because they
rely on respondents' opinions about the claim's effects, as well as
their own understanding of what deception means. QE3 is additionally
problematic because it asks respondents only to identify disclosures
that ``auto advertisers should be required to include if making a fuel
economy claim,'' even though consumers could have various reasons other
than the prevention of deception for wanting advertisers to disclose
this information. Finally, the study's lack of control questions
reduces its usefulness, particularly given that CFA's questions seek
respondents' personal opinions, as discussed above.
Fourth, CFA argued that a highway mileage-only claim constitutes a
misleading omission because consumers are not aware that city ratings
can be substantially lower than highway numbers and, instead, believe a
city rating can be derived from the vehicle's highway number. As CFA
explained, no consistent relationship exists between city and highway
ratings among models on the market.\13\ Compared to the highway
ratings, city ratings can be much lower, slightly lower, and even
greater in some cases. These facts do not demonstrate that single
mileage claims are deceptive. In its Policy Statement on Deception, the
Commission explained that a ``misleading omission occurs when
qualifying information necessary to prevent a practice, claim,
representation, or reasonable expectation or belief from being
misleading is not disclosed.'' \14\ In this case, the FTC research
suggests that consumers are not misled by stand-alone highway mode
claims. As discussed above, the CFA research does not clearly indicate
otherwise. Additionally, there is no clear indication consumers
misperceive the relationship between city and highway ratings in a
particular way that renders otherwise truthful highway mileage claims
misleading. In fact, given the
[[Page 43686]]
wide, longstanding availability of highway and city mileage ratings in
the market, such misperception seems unlikely.
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\13\ CFA asserted that the FTC has concluded consumers have a
particular understanding of the relationship between city and
highway ratings that leads them to ``impute their own expected
mileage, or compare mileages, based on just the highway number.''
Although the Commission observed that many respondents expect the
combined MPG to be lower than highway (81 FR at 36220, n. 31), the
Commission did not intend to imply that consumers can impute the
combined or city MPG based on the highway number.
\14\ See FTC Policy Statement on Deception, appended to
Cliffdale Associates, Inc., 103 F.T.C. 110, 174 (1984) (https://www.ftc.gov/public-statements/1983/10/ftc-policy-statement-deception) (``Deception Policy Statement''). ``In determining
whether an omission is deceptive, the Commission will examine the
overall impression created by a practice, claim, or representation.
For example, the practice of offering a product for sale creates an
implied representation that it is fit for the purposes for which it
is sold. Failure to disclose that the product is not fit constitutes
a deceptive omission. . . . Omissions may also be deceptive where
the representations made are not literally misleading, if those
representations create a reasonable expectation or belief among
consumers which is misleading, absent the omitted disclosure.'' Id.
at n. 4.
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C. Alternative Fuels
Background: The proposed Guide amendments advise marketers that, if
a flexible fueled vehicle (FFV) advertisement mentions the vehicle's
flexible fuel capability and makes a fuel economy claim, it should
include the EPA fuel economy estimates for both gasoline and
alternative fuel operation. The proposed Guide further explains that,
without such disclosures, consumers may assume the advertised MPG
rating applies both to gasoline and alternative fuel operation.
Comments: The comments raised two concerns about this guidance.
First, the Alliance asked the Commission to clarify that advertisers
may provide only one fuel economy rating for FFVs if the advertisement
clearly states the rating applies to gasoline operation. In the
Alliance's view, the manufacturer should be able to highlight the
vehicle's rating under a single fuel without adding unnecessary wording
to disclose both fuel ratings. According to the Alliance, such claims
are not deceptive as long as ``the advertised rating cannot reasonably
be understood by the consumer to apply to both fuels.''
Second, the Global Automakers and the Alliance asked for
clarification that the proposed flex-fuel guidance does not apply to
plug-in hybrids (PHEVs), which are rated for both charge-depleting
(expressed in MPGe) and charge-sustaining operation. These commenters
noted that the Commission did not propose advising advertisers to
disclose MPGe in advertising for electric vehicles because it is
unclear whether such disclosures are essential to preventing deception
and whether consumers understand and use such disclosures.\15\
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\15\ Growth Energy also asked for clarification that the
proposed Guide amendments do not create any changes to the EPA-
required labels. They do not. In addition, Growth Energy asked
whether the Guide ``in any way limit truthful and substantiated
statements an advertiser may make regarding the benefits of FFVs,''
such as environmental benefits. The Guide does not specifically
address claims outside of the fuel economy context. However,
marketers may wish to consult additional Commission guidance, such
as the Guides for the Use of Environmental Marketing Claims (Green
Guides) (16 CFR part 260).
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Discussion: The Commission has modified the FFV guidance to address
the Alliance's suggestion regarding qualifications for FFV gasoline
mileage claims. We agree that a clear and prominent disclosure limited
to gasoline operation may obviate the need to disclose the vehicle's
alternative fuel mileage. The final amendments contain language
acknowledging this possibility.\16\ In addition, in response to
comments about PHEVs, the Commission has modified the final Guide to
clarify the example does not apply to such vehicles.
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\16\ See Sec. 259.4(j).
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D. Non-EPA Estimates
Background: Since its initial publication, the Guide has addressed
fuel economy claims based on non-EPA tests. In issuing the Guide in
1975, the Commission explained that ``the use in advertising of fuel
economy results obtained from disparate test procedures may unfairly
and deceptively deny to consumers information which will enable them to
compare advertised automobiles on the basis of fuel economy.'' \17\ The
current Guide advises advertisers to provide several disclosures
whenever they make a fuel economy claim based on non-EPA information.
Specifically, Sec. 259.2(c) states that fuel economy claims based on
such information should: (1) Disclose the corresponding EPA estimates
with more prominence than other estimates; (2) identify the source of
the non-EPA information; and (3) disclose how the non-EPA test differs
from the EPA test in terms of driving conditions and other relevant
variables.
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\17\ 40 FR 42003 (Sept. 10, 1975).
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In its 2016 Notice, the Commission did not propose changing this
approach. The Commission identified no evidence that fuel economy
claims are deceptive if accompanied by the clear and prominent
disclosures described above. Therefore, consistent with the previous
Guide, the proposed Guide recommended specific disclosures related to
non-EPA claims to reduce the possibility of deception.\18\ Finally, the
previous Guide addressed the relative size and prominence of fuel
economy claims based on non-EPA and EPA estimates in television, radio,
and print advertisements. The Commission proposed retaining this
guidance but also clarifying that it applies to any advertising medium
(not solely television, radio, and print).
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\18\ The guidance assumes that the advertised non-EPA estimates
are not identical to the EPA estimates.
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Comments: Though the comments generally supported the guidance on
non-EPA estimates, they raised two issues. First, the Alliance
explained that, although such claims are not common, advertisers
believe actual driving results achieved under controlled conditions
other than the EPA testing methodology may be valuable to consumers in
some circumstances. Both the Alliance and the Global Automakers noted
that, under limited conditions, manufacturers may want to use non-EPA
claims prior to a new vehicle launch when the formal EPA estimates are
not yet available. In this case, a manufacturer may give its projection
of the anticipated EPA estimates based on its testing using the EPA
methodology. If such estimates are clearly identified as projections,
the commenters asserted they are not deceptive.
Second, Global Automakers noted that, in some cases, a manufacturer
may wish to include actual on-road test results from reputable
organizations to provide additional information regarding the vehicle's
fuel economy. In explaining the road test procedures and conditions,
according to Global Automakers, it should be sufficient to simply state
that the data is generated through on-road tests and specify the
organization that conducted the tests, without providing extensive
details regarding the test procedures and conditions.
Discussion: In the final Guide, the Commission has not changed the
non-EPA claims section. Specifically, the final Guide does not address
the use of ``preliminary'' test results in advertising. It is not clear
how consumers interpret such claims. In addition, the Commission
disagrees with Global Automakers regarding disclosures for
advertisements containing ``on-road'' test results. Without the full
set of disclosures recommended by the Guide, it is not clear whether
consumers will understand that such ``road test'' results are
inconsistent with the EPA-approved ratings. Given this uncertainty as
to what consumers would take away from preliminary test results in
advertising, the Commission has decided not to alter the non-EPA claims
section.
E. Guide Format and Language
Background: The Commission proposed improving the Guide's format by
making it consistent with recently amended FTC guides, such as the
Guides for the Use of Environmental Marketing Claims.\19\ Under this
approach, the Guide includes a list of general principles to help
advertisers avoid deceptive practices with detailed examples to
illustrate those principles.
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\19\ See Guides for the Use of Environmental Marketing Claims
(Green Guides) (16 CFR part 260).
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Comments: The commenters generally agreed with, or did not comment
on, the revised format. CFA, however, raised concerns about the
language used to
[[Page 43687]]
identify deceptive claims in the proposed Guide examples.\20\ It noted
that, the conclusions in several examples state that the claim in
question is ``likely'' to be deceptive. CFA noted this approach
conflicts with the Green Guides, which generally states the example
claims ``are'' deceptive. In the commenters' view, the weaker language
in the reformatted Guide serves neither businesses, which seek clear,
firm guidance, nor consumers who may fall victim to unscrupulous
businesses that make claims inconsistent with the Guides and then point
to the Guides' vagueness as a defense. CFA further stated that the lack
of clarity hampers the enforcement efforts of state and local consumer
protection agencies and private attorneys.\21\
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\20\ The Alliance agreed with the Commission's decision not to
provide specific guidance related to fuel economy claims in limited-
format advertising. Interested parties may contact the FTC to
discuss specific limited-format situations as they arise. Further
developments in this area may suggest the need for the development
of additional guidelines in the future.
\21\ CFA also recommended that the Commission replace the phrase
``estimated MPG'' with ``fuel economy claim'' in proposed Sec.
259.3. The Commission has made this change to clarify the guidance's
breadth. In addition, CFA recommended the section clarify that if a
MPG number appears in an advertisement, the qualifying information
recommended by the Guides (e.g., EPA estimate) should be clearly,
conspicuously, and prominently displayed adjacent to the MPG number.
The final Guide does not include such a change because the guidance
already states such disclosures should appear in ``close proximity''
to the claim.
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Discussion: The Commission agrees that the guidance should be
consistent with similar documents such as the Green Guides (16 CFR part
260) and Endorsement Guides (16 CFR part 255). Because these guides
reflect the Commission's understanding of how consumers are likely to
interpret the applicable claims, it is reasonable to follow a
consistent format for the examples in each. The guides set forth
general principles, together with instructive examples, designed to
help marketers avoid deceptive claims. However, as noted in the guides
themselves, determinations regarding particular claims will depend on
the specific advertisement at issue.\22\ Nevertheless, to ensure
consistency with other guidance and avoid confusion, the Commission has
modified the examples in the final Guide consistent with the
commenters' suggestion.
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\22\ In determining whether an advertisement, including its
format, misleads consumers, the Commission considers the overall
``net impression'' it conveys. See Deception Policy Statement, 103
F.T.C. at 175.
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List of Subjects in 16 CFR Part 259
Advertising, Fuel economy, Trade practices.
Final Amendments
0
For the reasons set forth in the preamble, the Commission revises 16
CFR part 259 to read as follows:
PART 259--GUIDE CONCERNING FUEL ECONOMY ADVERTISING FOR NEW
AUTOMOBILES
Sec.
259.1 Purpose.
259.2 Definitions.
259.3 Qualifications and disclosures.
259.4 Advertising guidance.
Authority: 15 U.S.C. 41-58.
Sec. 259.1 Purpose.
The Guide in this part contains administrative interpretations of
laws enforced by the Federal Trade Commission. Specifically, the Guide
addresses the application of Section 5 of the FTC Act (15 U.S.C. 45) to
the use of fuel economy information in advertising for new automobiles.
This guidance provides the basis for voluntary compliance with the law
by advertisers and endorsers. Practices inconsistent with this Guide
may result in corrective action by the Commission under Section 5 if,
after investigation, the Commission has reason to believe that the
practices fall within the scope of conduct declared unlawful by the
statute. The Guide sets forth the general principles that the
Commission will use in such an investigation together with examples
illustrating the application of those principles. The Guide does not
purport to cover every possible use of fuel economy in advertising.
Whether a particular advertisement is deceptive will depend on the
specific advertisement at issue.
Sec. 259.2 Definitions.
For the purposes of this part, the following definitions shall
apply:
Alternative fueled vehicle. Any vehicle that qualifies as a covered
vehicle under part 309 of this chapter.
Automobile. Any new passenger automobile, medium duty passenger
vehicle, or light truck for which a fuel economy label is required
under the Energy Policy and Conservation Act (42 U.S.C. 32901 et seq.)
or rules promulgated thereunder, the equitable or legal title to which
has never been transferred by a manufacturer, distributor, or dealer to
an ultimate purchaser or lessee. For the purposes of this part, the
terms ``vehicle'' and ``car'' have the same meaning as ``automobile.''
Dealer. Any person located in the United States or any territory
thereof engaged in the sale or distribution of new automobiles to the
ultimate purchaser.
EPA. The U.S. Environmental Protection Agency.
EPA city fuel economy estimate. The city fuel economy determined in
accordance with the city test procedure as defined and determined
pursuant to 40 CFR part 600, subpart D.
EPA combined fuel economy estimate. The fuel economy value
determined for a vehicle (or vehicles) by harmonically averaging the
city and highway fuel economy values, weighted 0.55 and 0.45
respectively, determined pursuant to 40 CFR part 600, subpart D.
EPA driving range estimate. An estimate of the number of miles a
vehicle will travel between refueling as defined and determined
pursuant to 40 CFR part 600, subpart D.
EPA fuel economy estimate. The average number of miles traveled by
an automobile per volume of fuel consumed (i.e., Miles-Per-Gallon
(``MPG'') rating) as calculated under 40 CFR part 600, subpart D.
EPA highway fuel economy estimate. The highway fuel economy
determined in accordance with the highway test procedure as defined and
determined pursuant to 40 CFR part 600, subpart D.
Flexible fueled vehicle. Any motor vehicle (or motor vehicle
engine) engineered and designed to be operated on any mixture of two or
more different fuels.
Fuel. (1) Gasoline and diesel fuel for gasoline- or diesel-powered
automobiles;
(2) Electricity for electrically-powered automobiles;
(3) Alcohol for alcohol-powered automobiles;
(4) Natural gas for natural gas-powered automobiles; or
(5) Any other fuel type used in a vehicle for which EPA requires a
fuel economy label under 40 CFR part 600, subpart D.
Manufacturer. Any person engaged in the manufacturing or assembling
of new automobiles, including any person importing new automobiles for
resale and any person who acts for, and is under the control, of such
manufacturer, assembler, or importer in connection with the
distribution of new automobiles.
Model type. A unique combination of car line, basic engine, and
transmission class as defined by 40 CFR part 600, subpart D.
Ultimate purchaser or lessee. The first person, other than a dealer
purchasing in his or her capacity as a dealer, who
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in good faith purchases a new automobile for purposes other than resale
or leases such vehicle for his or her personal use.
Vehicle configuration. The unique combination of automobile
features, as defined in 40 CFR part 600.
Sec. 259.3 Qualifications and disclosures.
To prevent deceptive claims, qualifications and disclosures should
be clear, prominent, and understandable. To make disclosures clear and
prominent, marketers should use plain language and sufficiently large
type for a person to see and understand them, should place disclosures
in close proximity to the qualified claim, and should avoid making
inconsistent statements or using distracting elements that could
undercut or contradict the disclosure. The disclosures should also
appear in the same format as the claim. For example, for television
advertisements, if the fuel economy claim appears in the video, the
disclosure recommended by this Guide should appear in the visual
format; if the fuel economy claim is audio, the disclosure should be in
audio.
Sec. 259.4 Advertising guidance.
(a) Misrepresentations. It is deceptive to misrepresent, directly
or by implication, the fuel economy or driving range of an automobile.
(b) General fuel economy claims. General unqualified fuel economy
claims, which do not reference a specific fuel economy estimate, likely
convey a wide range of meanings about a vehicle's fuel economy relative
to other vehicles. Such claims, which inherently involve comparisons to
other vehicles, can mislead consumers about the vehicle class included
in the comparison, as well as the extent to which the advertised
vehicle's fuel economy differs from other models. Because it is highly
unlikely that advertisers can substantiate all reasonable
interpretations of these claims, advertisers making general fuel
economy claims should disclose the advertised vehicle's EPA fuel
economy estimate in the form of the EPA MPG rating.
Example 1: A new car advertisement states: ``This vehicle gets
great mileage.'' The claim is likely to convey a variety of
meanings, including that the vehicle has a better MPG rating than
all or almost all other cars on the market. However, the advertised
vehicle's EPA fuel economy estimates are only slightly better than
the average vehicle on the market. Because the advertiser cannot
substantiate that the vehicle's rating is better than all or almost
all other cars on the market, the advertisement is deceptive. In
addition, the advertiser may not be able to substantiate other
reasonable interpretations of the claim. To avoid deception, the
advertisement should disclose the vehicle's EPA fuel economy
estimate (e.g., ``EPA-estimated 27 combined MPG'').
Example 2: An advertisement states: ``This car gets great gas
mileage compared to other compact cars.'' The claim is likely to
convey a variety of meanings, including that the vehicle gets better
gas mileage than all or almost all other compact cars. However, the
vehicle's EPA fuel economy estimates are only slightly better than
average compared to other models in its class. Because the
advertiser cannot substantiate that the vehicle's rating is better
than all or almost all other compact cars, the advertisement is
deceptive. In addition, the advertiser may not be able to
substantiate other reasonable interpretations of the claim. To
address this problem, the advertisement should disclose the
vehicle's EPA fuel economy estimate.
(c) Matching the EPA estimate to the claim. EPA fuel economy
estimates should match the mode of driving claim appearing in the
advertisement. If they do not, consumers are likely to associate the
stated fuel economy estimate with a different type of driving.
Specifically, if an advertiser makes a city or a highway fuel economy
claim, it should disclose the corresponding EPA-estimated city or
highway fuel economy estimate. If the advertiser makes both a city and
a highway fuel economy claim, it should disclose both the EPA estimated
city and highway fuel economy rating. If the advertiser makes a general
fuel economy claim without specifically referencing city or highway
driving, it should disclose the EPA combined fuel economy estimate, or,
alternatively, both the EPA city and highway fuel economy estimates.
Example 1: An automobile advertisement states that model ``XYZ
gets great gas mileage in town.'' However, the advertisement does
not disclose the EPA city fuel economy estimate. Instead, it only
discloses the EPA highway fuel economy estimate, which is higher
than the model's city estimate. This claim likely conveys to a
significant proportion of reasonable consumers that the highway
estimate disclosed in the advertisement applies to city driving.
Thus, the advertisement is deceptive to consumers. To remedy this
problem, the advertisement should disclose the EPA city fuel economy
estimate (e.g., ``32 MPG in the city according to the EPA
estimate'').
Example 2: A new car advertisement states that model ``XZA
gives you great gas mileage'' but only provides the EPA highway fuel
economy estimate. Given the likely inconsistency between the general
fuel economy claim, which does not reference a specific type of
driving, and the disclosed EPA highway estimate, the advertisement
is deceptive to consumers. To address this problem, the
advertisement should disclose the EPA combined estimate (e.g., ``37
MPG for combined driving according to the EPA estimate''), or both
the EPA city and highway fuel economy estimates.
Example 3: An advertisement states: ``according to EPA
estimates, new cars in this class are rated at between 20 and 32
MPG, while the EPA estimate for this car is an impressive 35 MPG
highway.'' The advertisement is likely to imply that the 20 to 32
MPG range and 35 MPG estimate are comparable. In fact, the ``20 and
32 MPG'' range reflects EPA city estimates. Therefore, the
advertisement is deceptive. To address this problem, the
advertisement should only provide an apples-to-apples comparison--
either using the highway range for the class or using the city
estimate for the advertised vehicle.
(d) Identifying fuel economy and driving range ratings as
estimates. Advertisers citing EPA fuel economy or driving range figures
should disclose that these numbers are estimates. Without such
disclosures, consumers may incorrectly assume that they will achieve
the mileage or range stated in the advertisement. In fact, their actual
mileage or range will likely vary for many reasons, including driving
conditions, driving habits, and vehicle maintenance. To address
potential deception, advertisers may state that the values are ``EPA
estimate(s),'' or use equivalent language that informs consumers that
they will not necessarily achieve the stated MPG rating or driving
range.
Example 1: An automobile manufacture's Web site states, without
qualification, ``This car gets 40 MPG on the highway.'' The claim
likely conveys to a significant proportion of reasonable consumers
that they will achieve 40 MPG driving this vehicle on the highway.
The advertiser based its claim on an EPA highway estimate. However,
EPA provides that estimate primarily for comparison purposes--it
does not necessarily reflect real world driving results. Therefore,
the claim is deceptive. In addition, the use of the term ``gets,''
without qualification, may lead some consumers to believe not only
that they can, but will consistently, achieve the stated mileage. To
address these problems, the advertisement should clarify that the
MPG value is an estimate by stating ``EPA estimate'' or equivalent
language.
(e) Disclosing EPA test as source of fuel economy and driving range
estimates. Advertisers citing any EPA fuel economy or driving range
figures should identify EPA as the source of the test so consumers
understand that the estimate is comparable to EPA estimates for
competing models. Doing so prevents deception by ensuring that
consumers do not associate the claimed ratings with a test other than
the EPA-required procedures. Advertisers may avoid deception by stating
that the values are ``EPA estimate(s),'' or equivalent language that
identifies the EPA test as the source.
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Example 1: A radio commercial for the ``XTQ'' car states that
the vehicle ``is rated at an estimated 28 MPG in the city'' but does
not disclose that an EPA test is the source of this MPG estimate.
This advertisement may convey that the source of this test is an
entity other than EPA. To avoid deception, the advertisement should
state that the MPG figures are EPA estimates.
(f) Specifying driving modes for fuel economy estimates. If an
advertiser cites an EPA fuel economy estimate, it should identify the
particular type of driving associated with the estimate (i.e.,
estimated city, highway, or combined MPG). Advertisements failing to do
so can deceive consumers who incorrectly assume the disclosure applies
to a specific type of driving, such as combined or highway, which may
not be the driving type the advertiser intended. Thus, such consumers
may believe the model's fuel economy rating is higher than it actually
is.
Example 1: A television commercial for the car model ``ZTA''
informs consumers that the ZTA is rated at ``25 miles per gallon
according to the EPA estimate'' but does not disclose whether this
number is a highway, city, or combined estimate. The advertisement
likely conveys to a significant proportion of reasonable consumers
that the 25 MPG figure reflects normal driving (i.e., a combination
of city and highway driving), not the highway rating as intended by
the advertiser. In fact, the 25 MPG rating is the vehicle's EPA
highway estimate. Therefore, the advertisement is deceptive.
(g) Within vehicle class comparisons. If an advertisement contains
an express comparative fuel economy claim where the relevant comparison
is to any group or class, other than all available automobiles, the
advertisement should identify the group or class of vehicles used in
the comparison. Without such qualifying information, many consumers are
likely to assume that the advertisement compares the vehicle to all new
automobiles.
Example 1: An advertisement claims that sports car X ``outpaces
other cars' gas mileage.'' The claim likely conveys a variety of
meanings to a significant proportion of reasonable consumers,
including that this vehicle has a higher MPG rating than all or
almost all other vehicles on the market. Although the vehicle's MPG
rating compares favorably to other sports cars, its fuel economy is
only better than roughly half of all new automobiles on the market.
Therefore, the claim is deceptive.
(h) Comparing different model types. Fuel economy estimates are
assigned to specific model types under 40 CFR part 600, subpart D
(i.e., unique combinations of car line, basic engine, and transmission
class). Therefore, advertisers citing MPG ratings for certain models
should ensure that the rating applies to the model type depicted in the
advertisement. It is deceptive to state or imply that a rated fuel
economy figure applies to a vehicle featured in an advertisement if the
estimate does not apply to vehicles of that model type.
Example 1: A manufacturer's advertisement states that model
``PDQ'' gets ``great gas mileage'' but depicts the MPG numbers for a
similar model type known as the ``Econo-PDQ.'' The advertisement is
likely to convey that the claimed MPG rating applies to all types of
the PDQ model. However, the ``Econo-PDQ'' has a better fuel economy
rating than other types of the ``PDQ'' model. Therefore, the
advertisement is deceptive.
(i) ``Up to'' claims. Advertisers should avoid using the term ``up
to'' without adequate explanatory language if they intend to
communicate that certain versions of a model (i.e., model types) are
rated at a stated fuel economy estimate. A significant proportion of
reasonable consumers are likely to interpret such claims to mean that
the stated MPG can be achieved if the vehicle is driven under certain
conditions. Therefore, to address the risk of deception, advertisers
should qualify the claim by clearly and prominently disclosing the
stated MPG applies to a particular vehicle model type.
Example 1: An advertisement states, without further
explanation, that a vehicle model VXR will achieve ``up to 40 MPG on
the highway.'' The advertisement is based on a particularly
efficient type of this model, with specific options, with an EPA
highway estimate of 40 MPG. However, other types of model VXR have
lower EPA MPG estimates. A significant proportion of reasonable
consumers likely interpret the ``up to'' claim as applying to all
VXR model types. Therefore, the advertisement is deceptive. To
address this problem, the advertisement should clearly and
prominently disclose that the 40 MPG rating does not apply to all
model types of the VXR or use language other than ``up to'' that
better conveys the claim.
(j) Claims for flexible-fueled vehicles. Advertisements for
flexible-fueled vehicles should not mislead consumers about the
vehicle's fuel economy when operated with alternative fuel. If an
advertisement for a flexible-fueled vehicle (other than a plug-in
hybrid electric vehicle) mentions the vehicle's flexible-fuel
capability and makes a fuel economy claim, it should clearly and
prominently qualify the claim to identify the type of fuel used.
Without such qualification, consumers are likely to take away that the
stated fuel economy estimate applies to both gasoline and alternative
fuel operation.
Example 1: An automobile advertisement states: ``This flex-fuel
powerhouse has a 30 MPG highway rating according to the EPA
estimate.'' The advertisement likely implies that the 30 MPG rating
applies to both gasoline and alternative fuel operation. In fact,
the ethanol EPA estimate for this vehicle is 25 MPG. Therefore, the
advertisement is deceptive. To address this problem, the
advertisement could clearly and prominently qualify the claim or
disclose the MPG ratings for both gasoline and alternative fuel
operation.
(k) General driving range claims. General unqualified driving range
claims, which do not reference a specific driving range estimate, are
difficult for consumers to interpret and likely convey a wide range of
meanings about a vehicle's range relative to other vehicles. Such
claims, which inherently involve comparisons to other vehicles, can
mislead consumers about the vehicle class included in the comparison as
well as the extent to which the advertised vehicle's driving range
differs from other models. Consumers may take away a range of
reasonable interpretations from these claims. To avoid possible
deception, advertisers making general driving range claims should
disclose the advertised vehicle's EPA driving range estimate.
Example 1: An advertisement for an electric vehicle states:
``This car has a great driving range.'' This claim likely conveys a
variety of meanings, including that the vehicle has a better driving
range than all or almost all other electric vehicles. However, the
EPA driving range estimate for this vehicle is only slightly better
than roughly half of all other electric vehicles on the market.
Because the advertiser cannot substantiate that the vehicle's
driving range is better than all or almost all other electric
vehicles, the advertisement is deceptive. In addition, the
advertiser may not be able to substantiate other reasonable
interpretations of the claim. To address this problem, the
advertisement should disclose the vehicle's EPA driving range
estimate (e.g., ``EPA-estimated range of 70 miles per charge'').
(l) Use of non-EPA estimates--(1) Disclosure content. Given
consumers' exposure to EPA estimated fuel economy values over the last
several decades, fuel economy and driving range estimates derived from
non-EPA tests can lead to deception if consumers understand such
estimates to be fuel economy ratings derived from EPA-required tests.
Accordingly, advertisers should avoid such claims and disclose the EPA
fuel economy or driving range estimates. However, if an advertisement
includes a claim about a vehicle's fuel economy or driving range based
on a non-EPA estimate, advertisers should disclose the EPA estimate and
disclose with substantially more prominence than the non-EPA estimate:
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(i) That the fuel economy or driving range information is based on
a non-EPA test;
(ii) The source of the non-EPA test;
(iii) The EPA fuel economy estimates or EPA driving range estimates
for the vehicle; and
(iv) All driving conditions or vehicle configurations simulated by
the non-EPA test that are different from those used in the EPA test.
Such conditions and variables may include, but are not limited to, road
or dynamometer test, average speed, range of speed, hot or cold start,
temperature, and design or equipment differences.
(2) Disclosure format. The Commission regards the following as
constituting ``substantially more prominence'':
(i) For visual disclosures on television. If the fuel economy
claims appear only in the visual portion, the EPA figures should appear
in numbers twice as large as those used for any other estimate, and
should remain on the screen at least as long as any other estimate.
Each EPA figure should be broadcast against a solid color background
that contrasts easily with the color used for the numbers when viewed
on both color and black and white television.
(ii) For audio disclosures. For radio and television advertisements
in which any other estimate is used only in the audio, equal prominence
should be given to the EPA figures. The Commission will regard the
following as constituting equal prominence: The EPA estimated city and/
or highway MPG should be stated, either before or after each disclosure
of such other estimate, at least as audibly as such other estimate.
(iii) For print and Internet disclosures. The EPA figures should
appear in clearly legible type at least twice as large as that used for
any other estimate. The EPA figures should appear against a solid
color, and contrasting background. They may not appear in a footnote
unless all references to fuel economy appear in a footnote.
Example 1: An Internet advertisement states: ``Independent
driving experts took the QXT car for a weekend spin and managed to
get 55 miles-per-gallon under a variety of driving conditions.'' It
does not disclose the actual EPA fuel economy estimates, nor does it
explain how conditions during the ``weekend spin'' differed from
those under the EPA tests. This advertisement likely conveys that
the 55 MPG figure is the same or comparable to an EPA fuel economy
estimate for the vehicle. This claim is deceptive because it fails
to disclose that fuel economy information is based on a non-EPA
test, the source of the non-EPA test, the EPA fuel economy estimates
for the vehicle, and all driving conditions or vehicle
configurations simulated by the non-EPA test that are different from
those used in the EPA test.
Example 2: An advertisement states: ``The XZY electric car has
a driving range of 110 miles per charge in summer conditions
according to our expert's test.'' It provides no additional
information regarding this driving range claim. This advertisement
likely conveys that this 110-mile driving range figure is comparable
to an EPA driving range estimate for the vehicle. The advertisement
is deceptive because it does not clearly state that the test is a
non-EPA test; it does not provide the EPA estimated driving range;
and it does not explain how conditions referred to in the
advertisement differed from those under the EPA tests. Without this
information, consumers are likely to confuse the claims with range
estimates derived from the official EPA test procedures.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2017-19869 Filed 9-18-17; 8:45 am]
BILLING CODE 6750-01-P