[Federal Register Volume 60, Number 216 (Wednesday, November 8, 1995)]
[Rules and Regulations]
[Pages 56229-56232]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-27686]
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FEDERAL TRADE COMMISSION
16 CFR Part 259
Guide Concerning Fuel Economy Advertising of New Automobiles
AGENCY: Federal Trade Commission.
ACTION: Final Amendment of the Guide.
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SUMMARY: The Federal Trade Commission (FTC) is amending the ``Guide
Concerning Fuel Economy Advertising for New Automobiles'' to conform to
the Environmental Protection Agency's (EPA) rule regarding fuel economy
labeling of new automobiles. In particular, the amendments are intended
to conform the Guide to those portions of EPA's rule that now require
disclosure of certain fuel economy information, including adjusted city
and adjusted highway miles-per-gallon (mpg) numbers, rather than the
one ``estimated mpg'' number previously required.
EFFECTIVE DATE: December 8, 1995.
FOR FURTHER INFORMATION CONTACT:
Brinley H. Williams, Attorney, or Gerald C. Zeman, Attorney, Cleveland
Regional Office, Federal Trade Commission, 668 Euclid Avenue, Suite
520-A, Cleveland, Ohio 44114. Telephone (216) 522-4210.
SUPPLEMENTARY INFORMATION:
I. Background
The FTC's ``Guide Concerning Fuel Economy Advertising for New
Automobiles'' was first promulgated in 1975.\1\ The Guide was issued in
response to a dramatic increase in advertising fuel economy claims
based on a proliferation of different test procedures. The record of
that proceeding showed both the importance of fuel economy to consumers
in their automobile purchasing decisions and the need for meaningful
fuel economy information based on a standard testing procedure. The
original Guide adopted in 1975 by the Commission stated that fuel
economy representations in advertising should be accompanied by
disclosure of estimated city and highway mpg figures based on EPA test
procedures.
\1\ 40 FR 42003 (September 10, 1975).
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In 1978 the FTC Guide was amended to make advertising disclosures
consistent with changed EPA requirements for fuel economy labels on new
automobiles.\2\ At that time, the EPA mandated disclosure of a single
number, designated ``estimated mpg,'' and the FTC Guide was amended to
require that fuel economy advertising representations be accompanied by
disclosure of this figure.
\2\ 43 FR 55757 (November 29, 1978).
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Subsequently, in 1984, the EPA again amended its rule to require
that adjusted city and highway mpg estimates, as well as certain other
fuel economy information, appear on labels for new automobiles. By
Federal Register notice of March 21, 1985 (50 FR 11378) (comment period
reopened November 7, 1985, 50 FR 46300), the FTC proposed amendments to
conform its Guide to the revised EPA rule. In publishing its request
for comments, the Commission stated that because the revised EPA rule
was already in effect, automobile manufacturers and dealers could make
fuel economy claims consistent with the proposal pending final
amendment of the Guide. Thus, the proposal has been in effect
informally since its date of original publication. The Commission now
takes the final step of formally adopting the changes to its
advertising Guide.
II. Public Comments
In the preamble to the 1985 Federal Register notice, the FTC
discussed the history of the Guide and the changes in the EPA fuel
economy labeling rule which led to the proposed changes in the
advertising Guide. The preamble also described the changes to the Guide
that the FTC proposed to make based on the changes to the EPA rule and
the FTC's own experience with the advertising Guide. Additionally, in
the preamble, the FTC requested comments regarding the cost of
providing the information, the effect the Guide has on fuel economy
advertising, and the utility of the information to consumers.
Comments were received from: the American Automobile Association;
CBS, Inc.; the Center for Auto Safety; Dancer Fitzgerald Sample; the
Department of Energy; the Environmental Protection Agency; General
Motors Corporation; the Leo Burnett Advertising Agency; the National
Association of Broadcasters; and the National Automobiles Dealers
Association. Three comments were also received from individuals: Arthur
and Louise Britton; Ralph Williams; and Walt and Cathy Zimmerman.
A. General Comments
Some comments received from the automobile industry, the
broadcasting industry, and one advertising agency either opposed
retention of fuel economy disclosure requirements, or proposed that the
disclosure requirements be limited to specific circumstances, such as
advertisements making quantitative or comparative fuel economy claims.
The comments opposing retention contended that the requirements are
burdensome, costly, and do not provide useful information to consumers.
On the other hand, comments from individuals, public interest groups,
the Department of Energy, EPA, and another advertising agency generally
favored retention of the disclosure requirements. These comments
contended that disclosure of the EPA mpg figures provides consumers
with useful comparative fuel economy information, while adding little
to advertising costs. One comment contended that elimination of these
requirements would precipitate a variety of confusing fuel economy
claims.
The FTC continues to believe that disclosure of EPA mpg numbers
provides to consumers useful and understandable comparative fuel
economy information. (See 40 FR 42003, September 10, 1975.) While there
is undoubtedly a cost to providing this information, the FTC believes
that the cost is relatively small \3\ and is more than offset by the
value of the information, which enables consumers to judge the relative
fuel economy of comparative automobile models. Moreover, the 1985
proposed amendments to the Guide substantially shortened the
disclosures that must accompany advertised EPA estimates, thereby
reducing costs. Furthermore, as discussed below, the FTC is allowing
certain fuel economy advertisements to disclose only one EPA estimate--
either the highway estimate or the city estimate--without simultaneous
disclosure of the other number. Thus, advertisers now have both a
shorter disclosure requirement and more flexibility when advertising
fuel economy of new automobiles than was the case under the previously
existing Guide.
\3\ General Motors was the only commenting party to submit
specific cost data. Its figures were disputed by the Center for Auto
Safety. Dancer Fitzgerald Sample, an advertising agency, stated that
it believed the cost of providing EPA estimates in fuel economy
advertising to be minimal.
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B. EPA Estimates
Some commenters contended that both the city and highway estimates
should be disclosed in all fuel economy advertisements in order to
maintain consistency with the EPA labeling rule. Other comments
suggested that disclosure of the EPA estimate should be required only
when explicit mileage claims are made.
The FTC has determined to adhere to the 1985 proposal, requiring
disclosure of the EPA number corresponding to the claim that is made.
For example, if only a highway mileage claim is made in the
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ad, then only the EPA highway estimate must be disclosed. If a general
(i.e., nonspecific) mileage claim is made, only the city estimate must
be disclosed. However, if the advertising claim addresses both city and
highway driving, then both figures must be disclosed.
The FTC is adopting these disclosure requirements because the
current EPA city and highway numbers more accurately predict actual in-
use mileage. As a result, the FTC believes that disclosure of the city
estimate may not be necessary in advertisements directed only to
highway driving. Of course, advertisers are always free to disclose
both city and highway numbers in their advertising.
Based on the reliability of the EPA city and highway numbers, the
FTC's 1985 proposal did not include the lengthy disclosure, required
under the previous Guide, warning that the consumer's actual mileage
probably will be less and will depend upon factors such as weather
conditions and driving speed.
The FTC, however, continues to believe that it is important that
the EPA estimate accompany implicit as well as explicit mileage claims.
Any mileage claim inherently involves a comparison to other vehicles.
The EPA estimates provide consumers with a meaningful method of
comparing competing claims.
The 1985 proposal, which has been in effect informally during the
intervening years, is now time-tested. It appears that the proposal has
worked well, and the Commission has not seen evidence of deceptive or
misleading claims because of the changed disclosures. Therefore, formal
adoption of the proposed Guide is warranted.
C. Non-EPA Test Results
The greatest number of comments addressed use of non-EPA test
results. The comments ranged from advocating a prohibition on the use
of such test results to espousing elimination of all disclosure of EPA
estimates in ads using non-EPA results. Some comments also objected to
the specific proposal that would allow the EPA estimates to be
disclosed in ``equal prominence'' to the non-EPA results, in the audio
portion of broadcast ads, instead of requiring ``greater prominence''
than the non-EPA results.
The FTC believes that if a non-EPA test is advertised, the
appropriate EPA estimate should be disclosed with greater prominence,
except in audio portions of advertisements. In the prior version of the
Guide, the requirement had been that the EPA estimate had to be given
before and after the non-EPA estimate in audio broadcast ads. As a
result, advertisers had less flexibility in developing broadcast ads
than they did print ads. Unlike a printed disclosure, which may not be
seen among other textual material unless it is more prominently
displayed, however, an audio disclosure of the EPA estimate will be as
likely to be heard as the non-EPA estimate. Accordingly, the FTC
believes that adopting an ``equal prominence'' provision for audio
portions of advertisements will reasonably ensure that the EPA
estimates are conveyed to the listener without unduly burdening the
advertiser.
List of Subjects in 16 CFR Part 259
Advertising, Fuel economy, Trade practices.
For the reasons set forth in the preamble, 16 CFR Part 259 is
amended to read as follows:
PART 259--GUIDE CONCERNING FUEL ECONOMY ADVERTISING FOR NEW
AUTOMOBILES
Sec.
259.1 Definitions.
259.2 Advertising disclosures.
Authority: 15 U.S.C. 41-58.
Sec. 259.1 Definitions.
For the purposes of this part, the following definitions shall
apply:
(a) New automobile. Any passenger automobile or light truck for
which a fuel economy label is required under the Energy Policy and
Conservation Act (42 U.S.C. 6201 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. The term ``manufacturer'' shall mean 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 control of such manufacturer, assembler, or importer in
connection with the distribution of new automobiles. The term
``dealer'' shall mean any person, resident or located in the United
States or any territory thereof, engaged in the sale or distribution of
new automobiles to the ultimate purchaser. The term ``ultimate
purchaser'' means, for purposes of this part, the first person, other
than a dealer purchasing in his or her capacity as a dealer, who in
good faith purchases such new automobile for purposes other than
resale, including a person who leases such vehicle for his or her
personal use.
(b) Estimated city mpg. The gasoline consumption or mileage of new
automobiles as determined in accordance with the city test procedure
employed and published by the U.S. Environmental Protection Agency as
described in 40 CFR 600.209-85 and expressed in miles-per-gallon, to
the nearest whole mile-per-gallon, as measured, reported, published, or
accepted by the U.S. Environmental Protection Agency.
(c) Estimated highway mpg. The gasoline consumption or mileage of
new automobiles as determined in accordance with the highway test
procedure employed and published by the U.S. Environmental Protection
Agency as described in 40 CFR 600.209-85 and expressed in miles-per-
gallon, to the nearest whole mile-per-gallon, as measured, reported,
published, or accepted by the U.S. Environmental Protection Agency.
(d) Vehicle configuration. The unique combination of automobile
features, as defined in 40 CFR 600.002-85(24).
(e) Estimated in-use fuel economy range. The estimated range of
city and highway fuel economy of the particular new automobile on which
the label is affixed, as determined in accordance with procedures
employed by the U.S. Environmental Protection Agency as described in 40
CFR 600.311 (for the appropriate model year), and expressed in miles-
per-gallon, to the nearest whole mile-per-gallon, as measured, reported
or accepted by the U.S. Environment Protection Agency.
(f) Range of estimated fuel economy values for the class of new
automobiles. The estimated city and highway fuel economy values of the
class of automobile (e.g., compact) as determined by the U.S.
Environmental Protection Agency pursuant to 40 CFR 600.315 (for the
appropriate model year) and expressed in miles-per-gallon, to the
nearest whole mile-per-gallon.
Sec. 259.2 Advertising disclosures.
(a) No manufacturer or dealer shall make any express or implied
representation in advertising concerning the fuel economy of any new
automobile \1\ unless such representation is accompanied by the
following clear and conspicuous disclosures:
\1\ The Commission will regard as an express or implied fuel
economy representation one which a reasonable consumer, upon
considering the representation in the context of the entire
advertisement, would understand as referring to the fuel economy
performance of the vehicle or vehicles advertised.
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(1) If the advertisement makes:
(i) Both a city and a highway fuel economy representation, both the
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``estimated city mpg'' and the ``estimated highway mpg'' of such new
automobile,\2\ must be disclosed;
\2\ For purposes of Sec. 259.2(a), the ``estimated city mpg''
and the ``estimated highway mpg'' must be those applicable to the
specific nameplate being advertised. Fuel economy estimates assigned
to ``unique nameplates'' (see 40 CFR 600.207-86(a)(2)) apply only to
such unique car lines. For example, if a manufacturer has a model
named the ``XZA'' that has fuel economy estimates assigned to it and
a derivative model named the ``Econo-XZA'' that has separate, higher
fuel economy estimates assigned to it, these higher numbers assigned
to the ``Econo-XZA'' cannot be used in advertisements for the
``XZA.''
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(ii) A representation regarding only city or only highway fuel
economy, only the corresponding EPA estimate must be disclosed; \3\
\3\ For example, if the representation clearly refers only to
highway fuel economy, only the ``estimated highway mpg'' need be
disclosed.
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(iii) A general fuel economy claim without reference to either city
or highway, or if the representation refers to any combined fuel
economy number, the ``estimated city mpg'' must be disclosed; \4\ and
\4\ Nothing in this section should be construed as prohibiting
disclosure of both the city and highway estimates.
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(2) That the U.S. Environmental Protection Agency is the source of
the ``estimated city mpg'' and ``estimated highway mpg'' and that the
numbers are estimates.\5\
\5\ The Commission will regard the following as the minimum
disclosure necessary to comply with Sec. 259.2(a)(2), regardless of
the media in which the advertisement appears: ``EPA estimate(s).''
For television, if the estimated mpg appears in the video, the
disclosure must appear in the video; if the estimated mpg is audio,
the disclosure must be audio.
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(b) If an advertisement for a new automobile cites:
(1) The ``estimated in-use fuel economy range,'' the advertisement
must state with equal prominence both the upper and lower number of the
range, an explanation of the meaning of the numbers (i.e., city mpg
range or highway mpg range or both), and that the U.S. Environmental
Protection Agency is the source of the figures.
(2) The ``range of estimated fuel economy values for the class of
new automobiles'' as a basis for comparing the fuel economy of two or
more automobiles, such comparison must be made to the same type of
range (i.e., city or highway).\6\
\6\ For example, an advertisement could not state that
``according to EPA estimates new automobiles in this class get as
little as X mpg (citing a figure from the city range) while EPA
estimates that this automobile gets X + mpg (citing the EPA highway
estimates or a number from the EPA estimated in-use fuel economy
highway range for the automobile).
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(c) Fuel economy estimates derived from a non-EPA test may be
disclosed provided that:
(1) The advertisement also discloses the ``estimated city mpg''
and/or the ``estimated highway mpg,'' as required by Sec. 259.2(a), and
the disclosure required by Sec. 259.2(a), and gives the ``estimated
city mpg'' and/or the ``estimated highway mpg'' figure(s) substantially
more prominence than any other estimate; \7\ provided, however, for
radio and television advertisements in which any other estimate is used
only in the audio, equal prominence must be given the ``estimated city
mpg'' and/or the ``estimated highway mpg'' figure(s); \8\
\7\ The Commission will regard the following as constituting
``substantially more prominence:''
For television only: If the estimated city and/or highway mpg
and any other mileage estimate(s) appear only in the visual portion,
the estimated city and/or highway mpg must appear in numbers twice
as large as those used for any other estimate, and must remain on
the screen at least as long as any other estimate. If the estimated
city and highway mpg appear in the audio portion, visual broadcast
of any other estimate must be accompanied by the simultaneous, at
least equally prominent, visual broadcast of the estimated city and/
or highway mpg. Each visual estimated city and highway mpg must 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.
For print only: The estimated city and/or highway mpg must
appear in clearly legible type at least twice as large as that used
for any other estimate. Alternatively, if the estimated city and
highway mpg appear in type of the same size as such other estimate,
they must be clearly legible and conspicuously circled. The
estimated city and highway mpg must appear against a solid color,
contrasting background. They may not appear in a footnote unless all
references to fuel economy appear in a footnote.
\8\ The Commission will regard the following as constituting
equal prominence. For radio and television when any other estimate
is used in the audio: The estimated city and/or highway mpg must be
stated, either before or after each disclosure of such other
estimate at least as audibly as such other estimate.
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(2) The source of the non-EPA test is clearly and conspicuously
identified;
(3) The driving conditions and variables simulated by the test
which differ from those used to measure the ``estimated city mpg'' and/
or the ``estimated highway mpg,'' and which result in a change in fuel
economy, are clearly and conspicuously disclosed.\9\ Such conditions
and variables may include, but are not limited to, road or dynamometer
test, average speed, range of speed, hot or cold start, and
temperature; and
\9\ For dynamometer tests any difference between the EPA and
non-EPA tests must be disclosed. For in-use tests, the Commission
realizes that it is impossible to duplicate the EPA test conditions,
and that in-use tests may be designed to simulate a particular
driving situation. It must be clear from the context of the
advertisement what driving situation is being simulated (e.g., cold
weather driving, highway driving, heavy load conditions).
Furthermore, any driving or vehicle condition must be disclosed if
it is significantly different from that which an appreciable number
of consumers (whose driving condition is being simulated) would
expect to encounter.
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(4) The advertisement clearly and conspicuously discloses any
distinctions in ``vehicle configuration'' and other equipment affecting
mileage performance (e.g., design or equipment differences which
distinguish subconfigurations as defined by EPA) between the
automobiles tested in the non-EPA test and the EPA tests.
By direction of the Commission.
Donald S. Clark,
Secretary.
Concurring Statement of Commissioner Mary L. Azcuenaga, New Automobile
Mileage Guide, Matter No. P844508
Today, the Commission issues amendments to the Fuel Economy
Advertising Guide. I join the Commission in issuing the amended
Guide because the amendments are needed to conform the Guide to the
Environmental Protection Agency's rules concerning fuel economy and
because the amendments otherwise appear to be improvements. The
Commission proposed these amendments to the Guide and received
comments on them in 1985. Given that the record on which the
amendments are based closed a decade ago, I would have preferred,
before finalizing the amendments, to reopen the comment period for
thirty days to ascertain whether the amendments should be issued as
is or should be revised to reflect any new information.\1\
\1\ Reopening the comment period would have been consistent with
the Commission's ongoing regulatory review program under which its
rules and guides are reviewed at least once every ten years.
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When the proposed amendments were published for comment, the
Commission stated that it would not consider advertising that
complied with the amendments to violate Section 5 of the FTC Act. It
is my understanding that most fuel economy advertising since 1985
has been consistent with the proposed amendments to the Guide. It is
also my understanding that fuel economy advertising has become less
prevalent since 1985. The decrease in fuel economy advertising may
be due to changes in the relative importance that consumers attach
to fuel economy information when making a new automobile purchase.
In the alternative, fuel economy advertising may have become less
prevalent because the standards contained in the amended Guide are
overly regulatory and have deterred truthful as well as deceptive
advertising. The record supporting the amendments, having closed a
decade ago, sheds no light on why fuel economy advertising has
decreased during the ensuing years. Given the potential value of
truthful fuel economy advertising, it would have been worthwhile to
seek public comment again before issuing the amended Guide to ensure
that it not only helps to prevent deception but also does not deter
truthful advertising.
[FR Doc. 95-27686 Filed 11-7-95; 8:45 am]
BILLING CODE 6750-01-M
