Guide Concerning Fuel Economy Advertising for New Automobiles, 43682-43690 [2017-19869]

Download as PDF 43682 Federal Register / Vol. 82, No. 180 / Tuesday, September 19, 2017 / Rules and Regulations asabaliauskas on DSKBBXCHB2PROD with RULES applicable checks, tests, and verifications thereafter at intervals not to exceed 12 months until the terminating action specified in paragraph (j) of this AD is done. Operators are not required to get replacement batteries from Ameri-King Corporation. (h) Additional Corrective Actions (1) If, during any action required by paragraph (g) of this AD, any ELT fails the functional test specified in step 6., the verification specified in step 7., or the activation check specified in step 8., of section 3.4, ‘‘Periodic Maintenance,’’ of Ameri-King Corporation Document IM–450, ‘‘INSTALLATION & OPERATION MANUAL,’’ Revision A, dated October 18, 1995, do the actions specified in paragraph (h)(1)(i) or (h)(1)(ii) of this AD. (i) Replace the affected Model AK–450–( ) ELT with a serviceable FAA-approved ELT as specified in paragraph (i) of this AD (‘‘Definition of Serviceable FAA-approved ELT’’), following 14 CFR 91.207(a), 14 CFR 91.207(f), and 14 CFR 135.168, as applicable, and other applicable operating rules. (ii) Repair the ELT using approved maintenance practices and following 14 CFR 91.207(a), 14 CFR 91.207(f), and 14 CFR 135.168, as applicable, and other applicable operating rules. (2) If, during any action required by paragraph (g) of this AD, any ELT fails any of the actions specified in paragraphs (h)(2)(i) through (h)(2)(v) of this AD: Replace the affected Model AK–451–( ) ELT with a serviceable FAA-approved ELT as specified in paragraph (i) of this AD (‘‘Definition of Serviceable FAA-approved ELT’’), following 14 CFR 91.207(a), 14 CFR 91.207(f), and 14 CFR 135.168, as applicable, and other applicable operating rules; or repair the ELT using approved maintenance practices and following 14 CFR 91.207(a), 14 CFR 91.207(f), and 14 CFR 135.168, as applicable, and other applicable operating rules. (i) The operational test specified in step 3.4.6 of section 3.4, ‘‘Periodic Maintenance (Instructions for Continued Airworthiness),’’ of Ameri-King Corporation Document IM– 451, ‘‘INSTALLATION AND OPERATION MANUAL,’’ Revision NC–4.1h, dated July 5, 2014. (ii) Any check specified in step 3.4.7 of section 3.4, ‘‘Periodic Maintenance (Instructions for Continued Airworthiness),’’ of Ameri-King Corporation Document IM– 451, ‘‘INSTALLATION AND OPERATION MANUAL,’’ Revision NC–4.1h, dated July 5, 2014. (iii) The digital message verification specified in step 3.4.8 of section 3.4, ‘‘Periodic Maintenance (Instructions for Continued Airworthiness),’’ of Ameri-King Corporation Document IM–451, ‘‘INSTALLATION AND OPERATION MANUAL,’’ Revision NC–4.1h, dated July 5, 2014. (iv) The registration verification specified in step 3.4.9 of section 3.4, ‘‘Periodic Maintenance (Instructions for Continued Airworthiness),’’ of Ameri-King Corporation Document IM–451, ‘‘INSTALLATION AND OPERATION MANUAL,’’ Revision NC–4.1h, dated July 5, 2014. (v) The verification of the ELT and global positioning system (GPS) interface specified VerDate Sep<11>2014 16:10 Sep 18, 2017 Jkt 241001 in step 3.4.10 of section 3.4, ‘‘Periodic Maintenance (Instructions for Continued Airworthiness),’’ of Ameri-King Corporation Document IM–451, ‘‘INSTALLATION AND OPERATION MANUAL,’’ Revision NC–4.1h, dated July 5, 2014. (3) If, during any action required by paragraph (g) of this AD, any of the discrepancies specified in paragraphs (h)(3)(i) through (h)(3)(vi) of this AD are found, repair all discrepancies using approved maintenance practices and following 14 CFR 91.207(a), 14 CFR 91.207(f), and 14 CFR 135.168, as applicable, and other applicable operating rules. (i) Any unsecured fastener or mechanical assembly. (ii) Any cuts or abrasions on the coaxial cable outer jacket. (iii) Any corrosion on the ‘‘BNC’’ connectors and mating plug on the antenna and the ELT main unit. (iv) Any wear or abrasion on the modular cable outer jacket. (v) Any corrosion on the jack and plug of the modular connecting cable. (vi) Any corrosion on the battery compartment. (i) Definition of Serviceable FAA-Approved ELT For the purposes of this AD, a serviceable FAA-approved ELT is any FAA-approved ELT other than a Model AK–450–( ) and AK– 451–( ) series ELT produced by Ameri-King Corporation. (j) Optional Terminating Action Doing the applicable action specified in paragraph (j)(1) or (j)(2) of this AD terminates the actions required by paragraphs (g) and (h) of this AD. (1) For aircraft required by operating regulations to be equipped with an ELT: Replace the ELT with a serviceable FAAapproved ELT as specified in paragraph (i) of this AD (‘‘Definition of Serviceable FAAapproved ELT’’). (2) For aircraft not required by operating regulations to be equipped with an ELT: Replace the ELT with a serviceable FAAapproved ELT as specified in paragraph (i) of this AD (‘‘Definition of Serviceable FAAapproved ELT’’). The ELT may be removed as an alternative to the ELT replacement; if an ELT is re-installed, it must be a serviceable ELT as specified in paragraph (i) of this AD (‘‘Definition of Serviceable FAAapproved ELT’’). (k) Alternative Methods of Compliance (AMOCs) (1) The Manager, Los Angeles Aircraft Certification Office, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the ACO, send it to the attention of the person identified in paragraph (l) of this AD. (2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager PO 00000 Frm 00016 Fmt 4700 Sfmt 4700 of the local flight standards district office/ certificate holding district office. (l) Related Information For more information about this AD, contact Gilbert Ceballos, Aerospace Engineer, Systems and Equipment Branch, ANM–130L, FAA, Los Angeles Aircraft Certification Office (ACO), 3960 Paramount Boulevard, Lakewood, CA 90712–4137; phone: 562–627– 5372; fax: 562–627–5210; email: gilbert.ceballos@faa.gov. (m) Material Incorporated by Reference (1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51. (2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise. (i) Section 3.4, ‘‘Periodic Maintenance,’’ Ameri-King Corporation Document IM–450, ‘‘INSTALLATION & OPERATION MANUAL,’’ Revision A, dated October 18, 1995. (ii) Section 3.4, ‘‘Periodic Maintenance (Instructions for Continued Airworthiness),’’ Ameri-King Corporation Document IM–451, ‘‘INSTALLATION AND OPERATION MANUAL,’’ Revision NC–4.1h, dated July 5, 2014. (3) For service information identified in this AD, contact Gilbert Ceballos, Aerospace Engineer, Systems and Equipment Branch, ANM–130L, FAA, Los Angeles Aircraft Certification Office (ACO), 3960 Paramount Boulevard, Lakewood, CA 90712–4137; phone: 562–627–5372; fax: 562–627–5210; email: gilbert.ceballos@faa.gov. (4) You may view this service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425–227–1221. (5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202–741–6030, or go to: http:// www.archives.gov/federal-register/cfr/ibrlocations.html. Issued in Renton, Washington, on July 19, 2017. Michael Kaszycki, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. 2017–16048 Filed 9–18–17; 8:45 am] BILLING CODE 4910–13–P FEDERAL TRADE COMMISSION 16 CFR Part 259 Guide Concerning Fuel Economy Advertising for New Automobiles Federal Trade Commission. Final rule; adoption of revised AGENCY: ACTION: guides. E:\FR\FM\19SER1.SGM 19SER1 Federal Register / Vol. 82, No. 180 / Tuesday, September 19, 2017 / Rules and Regulations 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: SUMMARY: asabaliauskas on DSKBBXCHB2PROD with RULES 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. 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, 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)). VerDate Sep<11>2014 16:10 Sep 18, 2017 Jkt 241001 the proposed amendments provided guidance on claims involving EPAbased MPG ratings, non-EPA tests, vehicle configuration, fuel economy range, and alternative fueled vehicles. The Commission conducted Internetbased 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. 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.’’ B. Single Mileage Claims Background: The previous Guide stated that, if an MPG claim involves only city or only highway fuel economy, 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). 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. PO 00000 Frm 00017 Fmt 4700 Sfmt 4700 43683 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 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 (§ 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. 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%). E:\FR\FM\19SER1.SGM 19SER1 asabaliauskas on DSKBBXCHB2PROD with RULES 43684 Federal Register / Vol. 82, No. 180 / Tuesday, September 19, 2017 / Rules and Regulations 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 highwayonly 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 VerDate Sep<11>2014 16:10 Sep 18, 2017 Jkt 241001 driving and estimates.’’ 7 CFA contended the appearance of the city and highway mileage claims earlier in the questionnaire biased responses to subsequent questions. 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 7 These prior questions included Q3b, Q3c–e, and Q5a. PO 00000 Frm 00018 Fmt 4700 Sfmt 4700 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. 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. 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% 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.’’ 9 The final Guide continues to advise against unqualified mileage claims that fail to specify driving mode (e.g., 46 MPG) (§ 259.4(c)). E:\FR\FM\19SER1.SGM 19SER1 Federal Register / Vol. 82, No. 180 / Tuesday, September 19, 2017 / Rules and Regulations asabaliauskas on DSKBBXCHB2PROD with RULES 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. 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 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. 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 openended questions. VerDate Sep<11>2014 16:10 Sep 18, 2017 Jkt 241001 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. 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. 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 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. PO 00000 Frm 00019 Fmt 4700 Sfmt 4700 43685 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 standalone 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 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/publicstatements/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. E:\FR\FM\19SER1.SGM 19SER1 43686 Federal Register / Vol. 82, No. 180 / Tuesday, September 19, 2017 / Rules and Regulations wide, longstanding availability of highway and city mileage ratings in the market, such misperception seems unlikely. asabaliauskas on DSKBBXCHB2PROD with RULES 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 chargedepleting (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 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 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). VerDate Sep<11>2014 16:10 Sep 18, 2017 Jkt 241001 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. 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, § 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. 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). 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 16 See § 259.4(j). FR 42003 (Sept. 10, 1975). 18 The guidance assumes that the advertised nonEPA estimates are not identical to the EPA estimates. 17 40 PO 00000 Frm 00020 Fmt 4700 Sfmt 4700 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 nonEPA 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. Comments: The commenters generally agreed with, or did not comment on, the revised format. CFA, however, raised concerns about the language used to 19 See Guides for the Use of Environmental Marketing Claims (Green Guides) (16 CFR part 260). E:\FR\FM\19SER1.SGM 19SER1 Federal Register / Vol. 82, No. 180 / Tuesday, September 19, 2017 / Rules and Regulations asabaliauskas on DSKBBXCHB2PROD with RULES 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 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. 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 § 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. 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. VerDate Sep<11>2014 16:10 Sep 18, 2017 Jkt 241001 List of Subjects in 16 CFR Part 259 Advertising, Fuel economy, Trade practices. Final Amendments 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. 259.1 259.2 259.3 259.4 Purpose. Definitions. Qualifications and disclosures. Advertising guidance. Authority: 15 U.S.C. 41–58. § 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. § 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.’’ PO 00000 Frm 00021 Fmt 4700 Sfmt 4700 43687 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 gaspowered 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 E:\FR\FM\19SER1.SGM 19SER1 43688 Federal Register / Vol. 82, No. 180 / Tuesday, September 19, 2017 / Rules and Regulations 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. § 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. § 259.4 Advertising guidance. asabaliauskas on DSKBBXCHB2PROD with RULES (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 VerDate Sep<11>2014 16:10 Sep 18, 2017 Jkt 241001 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 PO 00000 Frm 00022 Fmt 4700 Sfmt 4700 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 EPArequired 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. E:\FR\FM\19SER1.SGM 19SER1 Federal Register / Vol. 82, No. 180 / Tuesday, September 19, 2017 / Rules and Regulations 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. asabaliauskas on DSKBBXCHB2PROD with RULES (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 VerDate Sep<11>2014 16:10 Sep 18, 2017 Jkt 241001 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 PO 00000 Frm 00023 Fmt 4700 Sfmt 4700 43689 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., ‘‘EPAestimated 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 EPArequired 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: E:\FR\FM\19SER1.SGM 19SER1 43690 Federal Register / Vol. 82, No. 180 / Tuesday, September 19, 2017 / Rules and Regulations asabaliauskas on DSKBBXCHB2PROD with RULES (i) That the fuel economy or driving range information is based on a nonEPA 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 nonEPA 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 VerDate Sep<11>2014 16:10 Sep 18, 2017 Jkt 241001 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 FEDERAL TRADE COMMISSION 16 CFR Parts 300, 301, and 303 RIN 3084–AB29, 3084–AB27, 3084–AB30 Wool Products Labeling; Fur Products Labeling; Textile Fiber Products Identification Federal Trade Commission. Final rules. AGENCY: ACTION: The Federal Trade Commission (‘‘Commission’’ or ‘‘FTC’’) amends the Rules and Regulations Under the Wool Products Labeling Act of 1939 (‘‘Wool Rules’’), the Rules and Regulations Under Fur Products Labeling Act (‘‘Fur Rules’’), and the Rules and Regulations Under the Textile Fiber Products Identification Act (‘‘Textile Rules’’) (collectively, ‘‘Rules’’) to require the public to submit any requests to obtain, update, or cancel registered identification numbers via the FTC’s Web site. DATES: The amended Rules are effective October 19, 2017. FOR FURTHER INFORMATION CONTACT: Joshua S. Millard, (202) 326–2454, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Ave. NW., Washington, DC 20580. SUPPLEMENTARY INFORMATION: SUMMARY: I. Introduction The Commission is revising the Fur, Textile, and Wool Rules to require electronic filing of requests to obtain, update, or cancel registered identification numbers used on fur, textile, and wool product labels through PO 00000 Frm 00024 Fmt 4700 Sfmt 4700 the FTC’s Web site, unless the Commission or its designee instructs otherwise as specified below. The revisions facilitate the use of the Commission’s web-based registered identification number (‘‘RN’’) system, which will streamline the application and update process for participating businesses, and greatly increase the efficiency with which the FTC delivers RN services to the public. This document describes the background of the RN program and the grounds for revising the relevant parts of the Fur, Textile, and Wool Rules, and sets forth the amended Rules provisions. II. Background Federal labeling requirements mandate that most fur, textile, and wool products have a label identifying the manufacturer or other business responsible for marketing or handling the item.1 To comply with this mandate, a person or firm residing in the United States that imports, manufactures, markets, distributes, or otherwise handles fur, textile, or wool products may apply for an RN to display on product labels in lieu of the person or firm’s full name.2 RNs are not mandatory, but they occupy less space on a label and help buyers identify the person or firm responsible for a product. The public can find contact information for each RN registrant by searching the FTC’s public Web page dedicated to the RN program, https://rn.ftc.gov. For over 50 years, to obtain or update an RN, one had to complete and submit a paper form published in the Federal Register, or in more recent years, transmit the information requested on that form by electronic means.3 The FTC receives thousands of new RN applications every year in various formats, thus complicating and slowing the review process.4 1 See 15 U.S.C. 68b(a)(2)(C) (Wool Products Labeling Act of 1939) (‘‘Wool Act’’); 15 U.S.C. 69b(2)(E) (Fur Products Labeling Act) (‘‘Fur Act’’); 15 U.S.C. 70b(b)(3) (Textile Fiber Products Identification Act) (‘‘Textile Act’’); 16 CFR part 300 (Wool Rules); 16 CFR part 301 (Fur Rules); 16 CFR part 303 (Textile Rules). The FTC’s public Web site offers a detailed description of products that are subject to, or exempt from, these labeling requirements. See Federal Trade Commission, Threading Your Way Through the Labeling Requirements Under the Textile and Wool Acts, https://www.ftc.gov/tips-advice/business-center/ guidance/threading-your-way-through-labelingrequirements-under-textile. 2 See 16 CFR 300.4 (Wool Rules provision); 16 CFR 301.26 (Fur Rules provision); 16 CFR 303.30 (Textile Rules provision). 3 See 17 FR 6075, 6077 (July 8, 1952) (Fur Rule provision 16 CFR 301.26); 24 FR 4480, 4484 (June 2, 1959) (Textile Rule provision 16 CFR 303.20); 29 FR 6622 (May 21, 1964) (Wool Rule provision 16 CFR 300.4). 4 In recent years, the FTC has issued approximately 3,000 RNs per year. E:\FR\FM\19SER1.SGM 19SER1

Agencies

[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]


=======================================================================
-----------------------------------------------------------------------

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.

-----------------------------------------------------------------------

[[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.
---------------------------------------------------------------------------

    \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)).
---------------------------------------------------------------------------

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.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

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.''
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

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\
---------------------------------------------------------------------------

    \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%).
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \7\ These prior questions included Q3b, Q3c-e, and Q5a.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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.''
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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)).
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

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\
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \16\ See Sec.  259.4(j).
---------------------------------------------------------------------------

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.
---------------------------------------------------------------------------

    \17\ 40 FR 42003 (Sept. 10, 1975).
---------------------------------------------------------------------------

    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).
---------------------------------------------------------------------------

    \18\ The guidance assumes that the advertised non-EPA estimates 
are not identical to the EPA estimates.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \19\ See Guides for the Use of Environmental Marketing Claims 
(Green Guides) (16 CFR part 260).
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

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

[[Page 43688]]

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.


[[Page 43689]]


    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:

[[Page 43690]]

    (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