81_FR_36324 81 FR 36216 - Guide Concerning Fuel Economy Advertising for New Automobiles

81 FR 36216 - Guide Concerning Fuel Economy Advertising for New Automobiles

FEDERAL TRADE COMMISSION

Federal Register Volume 81, Issue 108 (June 6, 2016)

Page Range36216-36228
FR Document2016-13098

The Federal Trade Commission (``FTC'' or ``Commission'') seeks comments on proposed amendments to the Guide Concerning Fuel Economy Advertising for New Automobiles (``Fuel Economy Guide'' or ``Guide'') to reflect current Environmental Protection Agency (``EPA'') and National Highway Traffic Safety Administration (``NHTSA'') fuel economy labeling rules and to consider advertising claims prevalent in the market.

Federal Register, Volume 81 Issue 108 (Monday, June 6, 2016)
[Federal Register Volume 81, Number 108 (Monday, June 6, 2016)]
[Proposed Rules]
[Pages 36216-36228]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-13098]


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FEDERAL TRADE COMMISSION

16 CFR Part 259


Guide Concerning Fuel Economy Advertising for New Automobiles

AGENCY: Federal Trade Commission

ACTION: Proposed amendments.

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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') seeks 
comments on proposed amendments to the Guide Concerning Fuel Economy 
Advertising for New Automobiles (``Fuel Economy Guide'' or ``Guide'') 
to reflect current Environmental Protection Agency (``EPA'') and 
National Highway Traffic Safety Administration (``NHTSA'') fuel economy 
labeling rules and to consider advertising claims prevalent in the 
market.

DATES: Comments must be received by August 8, 2016.

ADDRESSES: Interested parties may file a comment online or on paper by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Fuel Economy Guide 
Amendments, R711008'' on your comment, and file your comment online at 
https://ftcpublic.commentworks.com/ftc/fueleconomyamendments by 
following the instructions on the web-based form. If you prefer to file 
your comment on paper, write ``Fuel Economy Guide Amendments, R711008'' 
on your comment and on the envelope, and mail your comment to the 
following address: Federal Trade Commission, Office of the Secretary, 
600 Pennsylvania Avenue NW., Suite CC-5610 (Annex B), Washington, DC 
20580, or deliver your comment to the following address: Federal Trade 
Commission, Office of the Secretary, Constitution Center, 400 7th 
Street SW., 5th Floor, Suite 5610 (Annex B), Washington, DC 20024.

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

    The Commission issued the Fuel Economy Guide (16 CFR part 259) on 
September 10, 1975 (40 FR 42003) to prevent deceptive fuel economy 
advertising for new automobiles and thus facilitate the use of fuel 
efficiency information in advertising. To accomplish this goal, the 
current 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.
    On April 28, 2009 (74 FR 19148), the Commission published a notice 
soliciting comments on proposed amendments to the Guide as part of its 
regulatory review program. The Commission then postponed its review in 
a June 1, 2011 notice (76 FR 31467) pending new fuel economy labeling 
requirements from the EPA and completion of the FTC's Alternative Fuels 
Rule (16 CFR part 309) review. The Commission explained that Fuel 
Economy Guide revisions would be premature before the conclusion of 
these regulatory proceedings. With those activities complete,\1\ the 
Commission resumed its review of the Guide on May 15, 2014) (79 FR 
27820) (``2014 Notice'') seeking comment on potential amendments to 
address changes to the EPA and NHTSA (hereinafter ``EPA'') fuel economy 
labeling rules, address advertising for alternative fueled vehicles, 
and consider other advertising claims prevalent in the market. The 
Commission also announced plans to conduct consumer research on fuel 
economy advertising claims.
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    \1\ The Commission announced final revisions to the Alternative 
Fuels Rule in an April 23, 2013 Notice (78 FR 23832). In 2011, EPA 
and NHTSA completed revisions to their fuel economy labeling 
requirements, which, among other things, addressed labels for 
alternative fueled vehicles (AFVs) not specifically addressed in 
past EPA requirements. See 76 FR 39478 (July 6, 2011) (see 40 CFR 
parts 85, 86, and 600; and 49 CFR part 575).
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    After reviewing the comments generated by the 2014 Notice \2\ and 
the consumer research results, the Commission proposes Guide amendments 
for comment. In considering these proposals, commenters should focus on 
information that helps advertisers avoid deceptive or unfair claims 
prohibited by the FTC Act.\3\ The Guide does not identify disclosures 
that are merely helpful or desirable to consumers. Likewise, commenters 
should 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 scope of the Guide.
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    \2\ The comments are available at https://www.ftc.gov/policy/public-comments/initiative-573. The commenters included: Alliance of 
Automobile Manufacturers (Alliance) (#00004), Association of Global 
Automakers, Inc. (AGA) (#00007), Consumer Federation of America (on 
behalf of several organizations) (referred herein as ``consumer 
groups'') (#00006), LaRosa (#00002), National Automobile Dealers 
Association (NADA) (#00008), and Rodriguez (#00003).
    \3\ 15 U.S.C. 45(a). The Guides do not have the force and effect 
of law and are not independently enforceable. However, failure to 
comply with industry guides may result in law enforcement action 
under applicable statutory provisions. The Commission, therefore, 
can take action under the FTC Act if a business makes fuel economy 
claims inconsistent with the Guides. In any such enforcement action, 
the Commission must prove that the act or practice at issue is 
unfair or deceptive in violation of Section 5 of the FTC Act.
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II. Consumer Research

    To aid the Commission in developing the proposed Guide amendments, 
the Commission conducted an Internet-based research study to explore 
consumer perceptions of certain fuel economy marketing claims.\4\ Using 
a

[[Page 36217]]

treatment-control comparison methodology, the study compared 
participant responses regarding their understanding of a variety of 
claim types, such as general fuel economy claims (e.g., ``this car gets 
great gas mileage''), specific MPG claims (e.g., ``25 MPG in the 
city''), driving range claims, electric vehicle claims, and ``up to'' 
mileage claims. The study collected responses from U.S. automobile 
consumers representing a broad spectrum of the U.S. adult 
population.\5\ By comparing the responses to various scenarios, the 
study provided useful insights about respondents' understanding of fuel 
economy claims.\6\ This Notice contains relevant discussion of the 
proposed amendments, as well as specific study results. The Commission 
invites commenters to identify additional consumer research that may 
aid the FTC in considering the proposed Guide revisions.
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    \4\ The Commission announced the study in its May 2014 Notice 
and provided further information in two additional notices (79 FR 
26428 (May 8, 2014) and 79 FR 62618 (Oct. 20, 2014)).
    \5\ The study sampled members of an Internet panel consisting of 
individuals recruited through a variety of convenience sampling 
procedures. The sample for this research, therefore, does not 
constitute a true, random sample of the adult U.S. population. 
However, because the study focused primarily on comparing responses 
across randomly assigned treatment groups, the Internet panel 
provided an appropriate sample frame.
    \6\ 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.
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III. Guide Benefits

    Comments received in response to the 2014 Notice expressed general 
support for maintaining the Guide and provided general recommendations 
for improvement. Given this broad support, the Commission plans to 
retain the Guide. However, as detailed in this Notice, the Commission 
proposes to revise the Guide's format and update its content to address 
new technologies and new types of claims.
    In expressing support for the Guide, several commenters discussed 
its benefits. NADA, for example, explained that the Guide helps 
prospective new vehicle purchasers obtain consistent and objective fuel 
economy information by advising manufacturers and dealers ``to disclose 
fuel economy estimates in a fair, even-handed, and clear and 
conspicuous manner.'' The consumer groups added that ``automobile 
purchases are among the largest expenditures consumers make and bind 
them to purchase the fuel necessary to run their vehicles.'' In their 
view, accurate mileage information benefits consumers, facilitates 
market functions, serves as a powerful incentive to increase fuel 
efficiency, and contributes significantly to the overall public good. 
These various comments are consistent with the Commission's past 
observation that ``the Guide has been a benefit to consumers, providing 
fuel economy numbers in advertising that allow meaningful comparisons 
of different vehicle models.'' \7\
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    \7\ 67 FR 9924 (Mar. 5, 2002).
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    Commenters also provided Guide recommendations related to EPA label 
developments and market changes in recent years. For example, NADA and 
the Alliance emphasized the need to ensure the Guide reflects current 
EPA fuel economy labeling requirements. The Alliance added that the 
updated Guide should reflect new vehicle technologies, existing 
terminology, and the current EPA label format, while still providing 
advertisers flexibility in how they inform consumers about fuel 
economy. In addition, NADA and the Alliance recommended the Guide 
afford flexibility in the content and format of claims, as long as such 
claims maintain accuracy and clarity.
    In response to these comments, the Commission proposes to update 
the Guide, as detailed below, to take into account current EPA and 
NHTSA requirements, new vehicle technology, and new terminology. In 
addition, where appropriate, the proposed revisions provide flexibility 
to advertisers as long as they avoid deceptive claims.

IV. Proposed Guide Revisions

    The Commission sought comments in the 2014 Notice on general issues 
related to the Guide, including a new format, technical definitions, 
citation format, types of fuel economy claims (including claims 
involving EPA-based MPG, non-EPA tests, vehicle configuration, fuel 
economy range, and alternative fueled vehicles), and limited-format 
advertising such as on mobile devices. The Commission discusses each of 
these issues below.

A. Guide Format

    Background: In the 2014 Notice, 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.\8\ Under the proposed format, the Guide includes a list of 
general principles to help advertisers avoid deceptive practices with 
detailed examples to illustrate those principles.
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    \8\ See Guides for the Use of Environmental Marketing Claims 
(Green Guides) (16 CFR part 260).
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    Comments: Commenters supported updating the Guide's format. For 
example, NADA explained updates would help dealers maximize the clarity 
and utility of their fuel economy advertising. The Alliance noted that 
revisions would aid manufacturers, particularly in addressing potential 
claims not specifically addressed by the Guide. However, several 
commenters (e.g., NADA and AGA) urged the Commission to publish such 
changes for comment before making final amendments.
    Discussion: In response to comments, the Commission proposes to 
revise the Guide format to be consistent with recent Guide revisions 
for other topics, such as environmental claims. Specifically, the 
proposed revisions include a list of general principles for fuel 
economy advertising illustrated by specific examples.

B. Definitions

    Background: In the 2014 Notice, the Commission proposed five 
changes related to the Guide's definitions section (16 CFR 259.1).\9\ 
First, the Commission proposed to replace several outdated terms to 
ensure consistency with EPA's current fuel economy rules.\10\ 
Specifically, the Commission proposed changing the definitions 
``estimated city miles per gallon'' to ``estimated city fuel economy;'' 
and ``estimated highway miles per gallon'' to ``estimated highway fuel 
economy.'' It also proposed revising the definition of the term ``fuel 
economy.'' In addition, the Commission proposed eliminating the term 
``estimated in-use fuel economy range'' because EPA's fuel economy 
label no longer provides such information.\11\ Second, the Commission 
proposed adding the term ``combined fuel economy'' to Section 259.1 to 
ensure consistency and reduce potential confusion because EPA now uses 
this term on its label.\12\ The new term would expand the Commission's 
guidance to advertisers whose vehicles now display

[[Page 36218]]

an estimate of combined fuel economy required by the EPA. Third, the 
Commission proposed to amend the Guide's definition of ``new 
automobile'' to include ``medium-duty passenger vehicle,'' consistent 
with EPA's existing fuel labeling requirements.\13\ Fourth, the 
Commission proposed several minor revisions, including eliminating the 
phrase ``in use'' in the definition of ``range of fuel economy,'' and 
changing the definitions for ``estimated city MPG'' and ``estimated 
highway MPG'' to ensure consistency with EPA's terms and definitions. 
The Commission also proposed eliminating an obsolete reference to the 
term ``unique nameplate'' in footnote 2 and replacing it with the more 
appropriate EPA term ``model type.'' \14\ Finally, the Commission 
proposed reorganizing the definition of ``new automobile'' to reduce 
its length and potential confusion. Specifically, the proposed 
amendment would remove the definitions of ``dealer,'' ``manufacturer,'' 
and ``ultimate purchaser'' from ``new automobile'' and list them as 
separate terms under section 259.1.\15\
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    \9\ The Commission, in the 2009 Notice, also proposed to add two 
terms, ``Fuel'' and ``Alternative Fueled Vehicles,'' to distinguish 
vehicles that would be covered by EPA's label requirements from 
those covered by the proposed guidance regarding AFVs. 74 FR 19148, 
19153.
    \10\ See 40 CFR 600.002.
    \11\ The current Guide defines ``estimated in-use fuel economy 
range'' as the ``estimated range of city and highway fuel economy of 
the particular new automobile on which the label is affixed, as 
determined in accordance with procedures employed by the U.S. 
Environmental Protection Agency as described in 40 CFR 600.311 (for 
the appropriate model year), and expressed in miles-per-gallon, to 
the nearest whole mile-per-gallon, as measured, reported or accepted 
by the U.S. Environment Protection Agency.'' 16 CFR 259.1(e).
    \12\ See 40 CFR 600, Appendix VI.
    \13\ 40 CFR 86.1803-01. Previously, EPA required fuel economy 
labels for only passenger automobiles and light trucks.
    \14\ 74 FR at 19151.
    \15\ The Commission does not propose otherwise altering these 
definitions.
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    Comments: Commenters supported conforming the definitions to 
current EPA label regulations.\16\ AGA, for example, explained that 
using EPA's recent terminology would provide additional clarity and 
help ensure the Guide's consistent use. AGA also recommended 
eliminating the term ``estimated in-use fuel economy range'' because 
EPA no longer uses it. Likewise, it concurred with the proposal to 
remove the term ``in use'' from the Guide because the term furthers 
consumers' expectations that they will actually achieve the EPA 
numbers.
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    \16\ See, e.g., Alliance, Global Automakers, and NADA.
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    Discussion: Given commenters' support for these proposed changes, 
the Commission proposes to revise the definitions consistent with its 
proposals. In addition, the Commission has added the term ``EPA'' to 
the various ``fuel economy'' estimate definitions to clarify that such 
estimates are derived from required EPA test procedures. Furthermore, 
consistent with several proposed amendments discussed below, the 
proposed Guide contains new definitions for ``alternative fueled 
vehicle,'' ``flexible fuel vehicle,'' ``EPA driving range estimate,'' 
``EPA regulations,'' and ``fuel.'' \17\
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    \17\ See section 259.1 of the proposed Guide.
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C. Regulatory Citations

    Background: In its previous Notice, the FTC proposed to replace all 
specific regulatory citations to EPA regulations in the Guide with a 
general citation (40 CFR part 600) to reduce the frequency of future 
Guide changes should EPA amend its regulations. Earlier comments noted 
that this proposal would create confusion because the cited general EPA 
provisions contain two different sets of fuel economy requirements, one 
of which is not directly applicable to FTC's Guide. See 79 FR at 27821.
    Comments: In response to the 2014 Notice, NADA urged the Commission 
to use only a general citation to EPA's regulations (i.e., 40 CFR part 
600), arguing the benefits of a general citation (e.g., it would 
require fewer updates) outweigh any potential risks of confusion.
    Discussion: To avoid confusion identified in the comments, the 
Commission proposes to simplify the citations by using a general 
citation to ``EPA regulations,'' but defining that term to mean EPA's 
``fuel economy labeling requirements in 40 CFR part 600, subpart D,'' 
as opposed to other EPA vehicle-related regulations. This will clarify 
that the EPA regulations referenced in the Guide apply to that agency's 
labeling requirements and not other EPA requirements inapplicable to 
the Guide.

D. Types of Fuel Economy Claims

    As discussed below, the Commission sought comment on specific types 
of advertising claims, including EPA-based miles-per-gallon claims, 
claims based on non-EPA tests, claims related to vehicle configuration, 
range of fuel economy claims, and AFV claims.
1. Miles-Per-Gallon (MPG) Claims
    Background: In the 2014 Notice, the Commission sought comments on 
various aspects of the MPG provision of the current Guide (section 
259.2(a)). Specifically, the Notice invited comments on the following 
issues: (1) Whether a general fuel economy claim (e.g., ``XYZ car gets 
great mileage'') should be accompanied by a specific MPG disclosure to 
prevent consumer deception or unfairness; (2) whether an advertisement 
is unfair or deceptive if it provides only one type of mileage rating 
(e.g., an advertisement that only provides highway MPG); (3) whether an 
unspecified MPG claim (e.g., ``37 MPG'') is deceptive if the 
advertisement fails to identify whether the rating is city, highway, or 
combined; (4) how consumers understand ``up to'' MPG claims (e.g., ``up 
to 45 MPG''); (5) whether the combined EPA MPG rating should serve as 
the default disclosure for unspecified fuel economy claims (instead of 
the city MPG as currently indicated in the Guide); (6) whether the 
Guide should advise advertisers to avoid statements that imply a linear 
relationship between MPG and fuel costs; (7) whether fuel economy 
advertisements containing MPG claims should identify EPA as the source 
of the ratings; and (8) whether the FTC should provide additional 
guidance regarding disclaimers that the EPA ratings are only estimates. 
Each of these issues is addressed below.
    a. General Fuel Economy Claims
    Background: In the 2014 Notice, the Commission sought comments on 
whether a general fuel economy claim should be accompanied by a 
specific mileage disclosure to prevent consumer deception or 
unfairness. The Guide has advised advertisers to include such 
disclosures since its initial publication in the 1970's. Specifically, 
section 259.2(a) states that an advertisement with a general fuel 
economy claim should disclose the vehicle's city mileage rating.\18\ 
That section also indicates that any claim about city or highway 
driving should contain estimated city or highway MPG rating.
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    \18\ At the time the Guide was created, EPA did not require 
combined fuel economy on the label. Therefore, the guidance pointed 
to the city mileage number as the default disclosure.
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    Comments: Commenters supported the current Guide's approach to 
specific mileage disclosures for general fuel economy claims. The 
Alliance explained that such mileage disclosures provide consumers 
``with context and backup for the specific claim being made.'' 
Rodriquez stated that, given the potential for deception in general 
advertising claims, the Guide should continue to advise advertisers to 
include the fuel economy ratings.
    Discussion: The Commission proposes to retain the existing guidance 
advising advertisers to provide the EPA mileage estimates whenever they 
make a fuel economy claim. As discussed below, this approach, supported 
by commenters, is consistent with the recent consumer research, as well 
as the guidance the Commission has provided consistently for decades.
    In releasing the Guide in 1975, the Commission explained that 
``when no specific fuel economy figure is cited in advertising, the use 
of such vague and ill-defined terms as `saves gas,' or `gas stingy 
engine' may . . . be deceptive by implying existence of some level of 
`good fuel economy' which may be perceived differently by different

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individuals.''\19\ In choosing to retain the provision in 1995, the 
Commission explained that ``it is important that the EPA estimate 
accompany implicit as well as explicit mileage claims. Any mileage 
claim inherently involves a comparison to other vehicles. The EPA 
estimates provide consumers with a meaningful method of comparing 
competing claims.'' \20\
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    \19\ 40 FR 42003 (Sept. 10, 1975).
    \20\ 60 FR 56230, 56231 (Nov. 8, 1995).
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    The recent FTC consumer study supports these conclusions.\21\ Study 
respondents tended to assign multiple meanings to general fuel economy 
claims. For example, when asked about the meaning of the claim ``this 
car gets great gas mileage,'' various respondents said the vehicle had 
better mileage than other cars of its size, better mileage than all 
other cars, better mileage than similarly priced cars, or none of those 
choices.\22\ When the study narrowed the general fuel economy claim to 
a particular class size (``This car gets great gas mileage compared to 
other compact cars''), respondents offered varied responses about 
whether such claims applied to all, most, or many cars in the 
class.\23\ When asked to describe the meaning of a general fuel economy 
claim in an open-ended format, the results were similarly diverse. 
Specifically, when respondents were asked about the meaning of the 
claim ``This car gets great gas mileage,'' they variously answered 
``more miles per gallon/saves money/less gas''; ``gets over 30 miles or 
more''; gets ``good'' or ``great'' mileage; and ``gets over 20 miles or 
more.'' \24\
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    \21\ Section II of this Notice contains background information 
about the study.
    \22\ Specifically, when asked about a general claim's meaning 
(Q1d), study participants, selecting from five responses, indicated 
the vehicle had better mileage than other cars of its size (36.8%), 
better mileage than all other cars (14.1%), better mileage than 
similarly priced cars (12.0%), not sure (15.6%), and none of above 
(21.5%). The responses were significant compared to control 
questions where the general claim was narrowed (Q1e and Q1f) (e.g., 
great mileage compared ``to other compact cars'' or ``similarly 
priced cars''). In response to those questions, the vast majority of 
respondents correctly identified the relevant comparison. 
Specifically, in Q1e where the claim included ``other compact 
cars,'' 78.8% of respondents accurately identified the comparison as 
``other cars of its size'' while the results for all other choices 
were fewer than 10%. Where the claim involved a comparison of 
``similar priced'' cars in Q1f, 62.7% accurately identified the 
comparison as ``cars with a similar sales price'' though 20.6% still 
identified the relevant comparison as ``other cars of its size'' 
even though the claim specifically identified ``similarly-priced 
cars.''
    \23\ When the advertisement said ``This car gets great gas 
mileage compared to other compact cars'' (Q2b), 23% of respondents 
indicated the car got better gas mileage than ``all'' other compact 
cars; 37% believed it got better gas mileage than ``almost all'' 
other compact cars; and 18% indicated it got better mileage than 
``at least half.'' When the claim was altered to say ``This car gets 
great gas mileage compared to many other compact cars'' (Q2d), the 
responses also varied with 10% indicating the car had better mileage 
than all cars, 30% indicating better than almost all, and 30% 
indicating better than at least half. Only when respondents viewed a 
control which stated ``This car gets great gas mileage compared to 
all other compact cars'' (Q2c) did the variation decrease, with 52% 
indicating the advertised car got better mileage than all other 
cars. However, even under this scenario, 23% said the car got better 
mileage than ``almost all'' other compact cars.
    \24\ Q1a. None of these various answers corresponded to more 
than 5% of participants' responses.
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    These varied interpretations are likely impossible for an 
advertiser to substantiate simultaneously. To overcome such potential 
deception, the Commission has consistently recommended that advertisers 
disclose the EPA MPG ratings in advertisements that contain general 
fuel economy claims. Such ratings adequately qualify general fuel 
economy claims by providing clear objective information that allows 
consumers to compare competing models and thus mitigates the deceptive 
conclusions consumers may draw from general claims. Given the results 
of the research and the overwhelming commenter support for the existing 
guidance, the Commission does not propose to change it.
    b. Combined EPA MPG Rating as Default Disclosure
    Background: In the 2014 Notice, the Commission also solicited 
comments on whether the EPA combined city/highway rating, rather than 
the city MPG, should serve as the default disclosure for general fuel 
economy claims. The current Guide (section 259.2(a)(1)(iii)), which the 
Commission issued before EPA began requiring the combined rating on the 
label, directs advertisers to provide the EPA city rating as the 
default disclosure to accompany any general fuel economy claim that 
does not reference city or highway driving. In 2011, EPA altered the 
fuel economy label's design and content to feature the combined city-
highway rating.\25\ The EPA label continues to provide both the city 
and highway MPG ratings in a font smaller than that used for the 
combined rating.
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    \25\ 76 FR 39478 (July 6, 2011).
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    Comments: Commenters generally supported designating the combined 
(city/highway) mileage rating as the default disclosure for general 
fuel economy claims. In particular, the Alliance preferred the combined 
rating because it is the most prominent disclosure on EPA's current 
label. The Alliance also explained that the city rating is no longer 
the lowest or most conservative value in all instances. For many hybrid 
vehicles, the city MPG rating is higher. AGA argued that advertisers 
should be able to disclose all the rating types--city, highway, and 
combined--in combination or alone because these ratings may be 
beneficial in specific cases (e.g., where a vehicle is intended 
primarily for city driving).
    The consumer groups argued that including all three ratings is the 
best way to avoid deception, though they noted the combined number 
alone may be appropriate in some cases. In addition, Rodriguez added 
that advertisements should include fuel economy ratings for both 
highway and city because evidence suggests that typical driving time is 
almost evenly split between the two, contrary to the EPA combined 
estimate, which weights 55% city and 45% highway. In Rodriguez's view, 
such city and highway disclosures allow for more accurate fuel economy 
comparisons.
    Discussion: The Commission proposes advising advertisers to 
disclose either the combined fuel economy rating, or both the city and 
highway numbers, when using fuel economy claims that do not 
specifically mention city or highway driving. Based on an EPA-specified 
weighted ratio of city and highway driving, the combined number is now 
the most prominent EPA label disclosure. It provides an effective 
default disclosure because it serves as a common consistent indicator 
of a vehicle's overall mileage. Additionally, the proposed guidance 
gives advertisers the option to disclose the city and highway estimates 
together. This disclosure allows consumers to gauge their expected 
mileage based on their own ratio of city-highway driving. Accordingly, 
the proposed provision would provide advertisers the flexibility to 
disclose either the combined rating or the city and highway ratings 
together. The Commission seeks comments on this approach.\26\
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    \26\ 74 FR at 19150. Currently, section 259.2(a) does not 
prohibit disclosure of both the city and highway estimates.
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    c. Single Mileage Ratings
    Background: The Commission also asked whether an advertisement is 
deceptive or unfair if it provides only one type of rating (e.g., an 
advertisement that only discloses highway MPG). The current Guide 
states 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. For example, under the current approach, only 
the ``estimated highway MPG'' need be disclosed if the representation 
clearly refers only to

[[Page 36220]]

highway fuel economy. 16 CFR 259.2(a)(1)(ii).
    Comments: Commenters offered different opinions on the use of a 
single mileage rating (e.g., ``43 MPG on the highway''). For example, 
the consumer groups argued that single rating disclosures are clearly 
deceptive because few, if any, consumers drive solely on highways or 
local streets. Thus in their view, most consumers will not obtain the 
fuel efficiency represented by single highway ratings. The consumer 
groups also indicated that many advertisers use the highway rating ``to 
present their vehicle in the best light possible.'' To avoid deception, 
they argued that advertisers should disclose mileage estimates in one 
of two ways: (1) All three ratings together (i.e., city, highway, and 
combined) with the combined rating presented most prominently, or (2) 
the combined rating only where space for content is limited.
    Other commenters, particularly industry members, disagreed. For 
instance, NADA argued that advertisements containing a single fuel 
economy rating are not inherently unfair or deceptive. The Alliance 
agreed, stating that advertisers should have the flexibility to provide 
information that they believe is most relevant for each vehicle.\27\ 
The Alliance asserted that consumers ``have had many years to become 
familiar with the City, Highway, and Combined rating system'' and thus 
are unlikely to become confused by a single rating. Several of these 
commenters argued that the Guide should provide manufactures the 
flexibility to disclose the rating most relevant to the consumers of a 
particular product. The Alliance explained, for example, that consumers 
shopping for a compact car designed primarily for urban use are likely 
to be most interested in the city value. In its view, an advertisement 
is not deceptive as long as it discloses the EPA label value and 
identifies the rating involved (e.g., city mileage).
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    \27\ Both NADA and the Alliance emphasized that appropriate 
disclosures should be included in ads.
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    Discussion: Consistent with the current guidance, the proposed 
Guide does not discourage single mileage ratings in advertisements tied 
to a particular type of driving (e.g., ``This vehicle is rated at 40 
MPG on the highway according to the EPA estimate''). Such single-rating 
claims are not likely to be deceptive 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.
    The FTC's consumer study supports this approach. 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 respondents (74.6%) correctly answered that car would 
likely achieve that MPG in highway driving, and the responses for 
alternative interpretations were low.\28\ The results were similar when 
respondents were asked about a claim for a combination of city and 
highway driving.\29\
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    \28\ 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%).
    \29\ 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%). When the question presented an unspecified 
MPG claim (Q5b) (car `` . . . rated at 25 miles per gallon . . .''), 
the responses were: combined (40.4%), highway (30.5%), city (8.5%), 
not sure (16.7%), and none of the above (4.1%).
---------------------------------------------------------------------------

    In addition, respondents were able to distinguish between highway 
and combined driving ranges when asked whether they expected to achieve 
a certain mileage rating if they used the advertised vehicle for all 
their driving. For instance, when shown a 25 MPG highway claim, (Q6c) 
62.2% of respondents indicated they would expect to get ``a lot'' or a 
``little'' less than 25 MPG when driving the advertised car, while only 
48.1% answered similarly when shown the 25 MPG combined driving claim 
(Q6d).\30\ When asked to identify the conditions that might lead to 
mileage higher or lower than the EPA estimate, more than half of 
respondents mentioned highway driving, city driving, or both.\31\
---------------------------------------------------------------------------

    \30\ The results for respondents expecting to achieve ``a 
little'' or ``a lot'' more than the stated rating were 7.6% for Q6c 
(highway claim) and 6.9% for Q6d (combined claim), with no control.
    \31\ In both cases, the number of respondents indicating they 
would get better mileage than the stated MPG rating was low. These 
results suggest that a significant number of respondents expected to 
achieve lower mileage in combined driving than highway driving and 
believe that EPA test results may overstate actual mileage, 
regardless of the type of driving.
---------------------------------------------------------------------------

    The research therefore suggests that consumers are not deceived by 
single mileage claims as long as the claim specifies the type of 
driving involved (e.g., highway, combined, etc.). Moreover, consumers 
have seen such estimates in advertising and on EPA labels for decades. 
In light of this ongoing exposure, it seems unlikely that a single, 
clearly-identified mileage estimate will lead to deception. 
Accordingly, absent additional evidence demonstrating that such claims 
are deceptive, the Commission does not propose changing its approach on 
this issue. However, consistent with the existing Guide, the proposed 
amendments (section 259.4(c)) advise marketers that EPA fuel economy 
estimates should match the driving claims appearing in the 
advertisements.
d. Unspecified MPG Claims
    Background: The 2014 Notice also asked commenters whether an 
unspecified MPG claim (e.g., ``37 MPG'') is deceptive if the 
advertisement fails to identify whether the rating is city, highway, or 
combined. The current Guide advises advertisers to tie specific mileage 
ratings to specific driving modes (i.e., city or highway).\32\
---------------------------------------------------------------------------

    \32\ See section 259.2(a)(1)(iii). The Guide also advises 
disclosure of the ``estimated city MPG'' if advertisers make a 
``general fuel economy claim without reference to either city or 
highway, or if the representation refers to any combined fuel 
economy number.'' As noted above, at the time the Guide was created, 
EPA did not require combined fuel economy on the label. Therefore, 
the guidance pointed to the city mileage number as the default 
disclosure. However, the current EPA label features combined city/
highway MPG as the primary disclosure.
---------------------------------------------------------------------------

    Comments: The consumer groups argued that an unspecified MPG rating 
is clearly deceptive because consumers do not know the driving mode 
upon which such a claim is based and, in cases where the number 
reflects the highway rating, consumers are unlikely to consistently 
achieve such mileage. Citing similar concerns, the Alliance recommended 
that, whenever an EPA label value appears in an advertisement, the 
advertiser disclose which EPA value applies (city, highway, or 
combined).
    Discussion: The Commission plans to continue to advise against 
using mileage ratings claims that fail to specify the type of rating 
(i.e., city, highway, or combined). The FTC consumer study suggests 
that such unqualified claims lead to confusion and potential deception 
because respondents interpreted them in different ways. For example, 
when presented with the claim that a car was ``rated at 25 MPG,'' 30.5% 
of the respondents linked the figure to highway driving, while 40.4% 
indicated it applied to a combination of highway and city driving.\33\ 
The results are consistent with the assumption underlying the current 
Guide that consumers' interpretation of such unspecified mileage claims 
varies significantly in the absence of specific information (i.e., 
highway, city or combined), and that consumers do not

[[Page 36221]]

uniformly assume such estimates apply to a particular type of driving 
(e.g., highway). Accordingly, advertisers failing to identify the 
driving type associated with an MPG claim are likely to deceive a 
significant percentage of consumers regarding the rating's basis.\34\
---------------------------------------------------------------------------

    \33\ Q5b. The contrasting questions lend validity to these 
results. As discussed above, in a separate question (5c), when told 
the car was rated at 25 MPG on the highway, 74.6% indicated the car 
would get about 25 MPG on the highway. Similarly, when told the car 
was rated at 25 MPG in combined driving (Q5d), 76.6% responded that 
the car would achieve about 25 MPG in combined driving.
    \34\ This guidance assumes the city and highway ratings for a 
particular vehicle are different, which is almost always the case.
---------------------------------------------------------------------------

e. ``Up To'' Claims
    Background: The Commission also asked commenters to address how 
consumers understand ``up to'' MPG claims, which currently appear in 
dealership advertisements (e.g., ``up to 45 MPG''). In making such 
claims, advertisers often seek to convey that the advertised MPG 
applies to a specific version of the model (e.g., style, trim line, or 
option package), while other versions of the model have lower ratings. 
The current guidance does not address such claims.
    Comments: Commenters split on this issue, with the consumer groups 
arguing that the Guide should discourage ``up to'' claims and industry 
members disagreeing. In the Alliance's view, such claims allow sellers 
to advertise a nameplate or family of vehicles by communicating ``the 
range of capabilities across a nameplate or family.'' The Alliance 
asserted that eliminating these claims would limit manufacturer 
flexibility and potentially prohibit simple ``reasonably understood'' 
information about vehicle groups. NADA added that, because single 
models have various engine and transmission options, the ``up to'' 
qualifier may be necessary to avoid deception. Alternatively, NADA 
suggested that dealers and manufacturers disclose a range of fuel 
economy label ratings when an advertisement involves multiple vehicles.
    The consumer groups, however, stated that ``up to'' claims are 
deceptive and, to avoid such deception, mileage ratings in ads must 
reflect the ``vehicle configuration expected to be most popular for 
that year.'' If a specific model configuration has a better fuel 
economy rating, the groups argued that the advertisement can present 
that rating in addition to the MPG of the most popular version.
    Discussion: The FTC proposes amending the Guide to advise 
advertisers to avoid unqualified ``up to'' MPG claims. The FTC consumer 
study suggested significant consumer confusion regarding these claims. 
In particular, the study gauged respondents' interpretation of three 
versions of an ``up to'' claim, ranging from a basic claim with no 
explanatory information, to one that provided a detailed explanation. 
Most respondents (73.1%) interpreted ``up to'' in an unqualified claim 
to mean the depicted vehicle would achieve the stated MPG if it was 
driven in a certain way.\35\ In addition, when respondents were asked 
in an open-ended format to explain their understanding of a simple ``up 
to'' claim (i.e., ``This model gets up to 30 miles per gallon''), very 
few respondents mentioned that the claim relates to the MPG rating for 
a specific version of the model (Q3a).
---------------------------------------------------------------------------

    \35\ Specifically, 28.4% stated that ``up to'' meant the 
advertised MPG depended on the type of driving (e.g., highway or 
city), and 44.7% indicated the stated MPG could be achieved if the 
car was driven efficiently (Q3c). Only a few respondents (9.3%) 
interpreted the unqualified ``up to'' claim to mean the MPG rating 
applied to a specific model version, the meaning often intended by 
car advertisers.
---------------------------------------------------------------------------

    However, when respondents viewed a more detailed, qualified claim 
explaining that ``up to'' referred to a specific model version (Q3e 
(close-ended question)), the confusion decreased significantly, with a 
majority (51.9%) indicating the claim meant a version of the advertised 
model was rated at 30 miles per gallon.\36\ With this more detailed 
disclosure, 30% of respondents interpreted the stated MPG as referring 
to the way in which the vehicle is driven, compared to the 73.1% who 
took away the same interpretation from the unqualified claim in 
Q3c.\37\ Caution should be used in interpreting this 30%, as it is an 
uncontrolled result. Thus, we cannot be sure how many of the responses 
actually indicate deception. However, it does suggest that drafting an 
adequate qualifying disclosure may be difficult. Accordingly, to 
minimize the risk of deception, advertisers should be careful to ensure 
that qualifying language properly conveys the meaning and limitations 
of any ``up to'' claims.
---------------------------------------------------------------------------

    \36\ The claim in Q3e read: ``Different options for engine size 
and other features are available. Depending on the options chosen, 
this model gets up to 30 miles per gallon.''
    \37\ Specifically, 14.2% choose type of driving (e.g., highway 
or city), and 15.8% indicated the stated MPG could be achieved if 
the car was driven efficiently (Q3e).
---------------------------------------------------------------------------

    In sum, the consumer study strongly suggests that unqualified ``up 
to'' claims are likely to be deceptive where the advertiser intends to 
communicate that a version of the advertised model will achieve the 
stated fuel economy rating. In addition, under the same circumstances, 
the results suggest that it is difficult to fashion qualifying language 
that adequately avoids consumer confusion. However, given available 
information, the Commission cannot conclude that such ``up to'' claims 
are categorically deceptive. Therefore, the proposed guidance advises 
advertisers to ensure that qualifying language adequately clarifies 
such claims to prevent deception.
f. Non-Linear Relationship Between MPG and Fuel Costs
    Background: In the 2014 Notice, the Commission asked whether the 
Guide should advise advertisers to avoid statements that imply a linear 
relationship between MPG and fuel costs. As explained in the earlier 
notice, MPG ratings and fuel savings do not increase proportionally. 
For instance, fuel savings due to an increase from 10 MPG to 20 MPG is 
much greater than from an increase from 50 to 60 MPG. Given this fact, 
some have recommended use of a different efficiency metric, such as 
``gallons per 100 miles,'' which exhibits a linear relationship with 
fuel cost.\38\ Indeed, EPA requires a ``gallons per 100 miles'' figure 
as a secondary disclosure on its label.
---------------------------------------------------------------------------

    \38\ See, e.g., Larrick, R.P. and J.B. Soll, ``The MPG 
Illusion,'' Science 320:1593-1594 (2008).
---------------------------------------------------------------------------

    Comments: Commenters agreed that advertisers should not imply that 
there is a linear relationship between MPG and fuel costs. However, 
they also stated that no such claims currently appear in advertisements 
and thus did not identify a need for the Guide to address them.\39\
---------------------------------------------------------------------------

    \39\ See Alliance and NADA comments.
---------------------------------------------------------------------------

    Discussion: Because commenters indicated that no claims currently 
appear in advertising implying a linear relationship between mileage 
and fuel cost, the Commission does not propose addressing this issue in 
the Guide.\40\ However, advertisers should remain mindful of the non-
linear relationship between MPG and fuel costs and avoid claims that 
state or imply such a relationship.
---------------------------------------------------------------------------

    \40\ As EPA has indicated in the past, a metric such as 
``gallons per 100 miles'' provides consumers with ``a better tool 
for making economically sound decisions'' than traditional MPG 
disclosure. Accordingly, EPA now includes such a figure on the label 
despite its unfamiliarity to most consumers. 76 FR 39478, 39486 
(July 6, 2011).
---------------------------------------------------------------------------

g. EPA as the Source of Estimate
    Background: The Commission also invited comments on whether it 
should retain its current advice that fuel economy values in 
advertisements should disclose that EPA is the source of the 
``estimated city MPG'' and ``estimated highway MPG.''
    Comments: Commenters agreed that the Guide should continue to 
advise advertisers to identify EPA as the source

[[Page 36222]]

of the estimates. The consumer groups explained that advertisements 
should always list EPA as the rating's source because this designation 
reinforces the rating's ``official nature'' and ensures consumers can 
make true vehicle-to-vehicle comparisons. In their view, the FTC's 
recommended disclosures help consumers understand that the fuel economy 
values do not derive from an unofficial process for marketing or 
advertising purposes. NADA agreed and urged the Commission to recognize 
the value in additional disclosures directing consumers to 
www.fueleconomy.gov.
    Discussion: The Commission does not propose changing its guidance 
for identifying EPA as the source of the estimates. No information on 
the record suggests a change is necessary. As comments explained, this 
disclosure clarifies the basis for mileage disclosures and thus helps 
avoids deception. The consumer research provides some support for this 
guidance. Although the study did not address this issue directly, 
respondents indicated significant confusion about the source of tests 
for driving range claims related to electric vehicles, suggesting the 
absence of the EPA disclosures could lead to deception.\41\ Finally, 
the Commission expects most advertisers will identify the EPA 
disclosure as a matter of course. Accordingly, continuing the guidance 
is unlikely to place any significant burden on advertisers.
---------------------------------------------------------------------------

    \41\ In Question 4c, the Commission asked respondents about the 
source of a test used to determine a driving range claim. In open-
ended responses, study participants pointed to a variety of results, 
with about 30% identifying the car company as the source, 11% 
identifying a government agency, and more than 40% indicating they 
were not sure.
---------------------------------------------------------------------------

h. Additional Guidance on Ratings as ``Estimates''
    Background: The current Guide advises advertisers to disclose that 
the EPA ratings are ``estimates.'' \42\ In the 2014 Notice, the 
Commission asked whether the FTC should provide additional guidance on 
this issue.
---------------------------------------------------------------------------

    \42\ See section 259.2(a)(2).
---------------------------------------------------------------------------

    Comments: Commenters urged the Commission to retain its guidance 
regarding the estimate disclosure. NADA explained that the EPA fuel 
economy ratings do not convey the mileage particular vehicles will 
actually achieve, but, instead, furnish estimates to help prospective 
purchasers make vehicle comparisons. Rodriguez also cautioned that the 
EPA test cannot accurately predict fuel economy for all drivers and all 
driving conditions. The Alliance, which also supported the existing 
guidance, argued that any additional disclosures on this issue would 
increase consumer confusion. AGA suggested that FTC caution against 
phrases such as ``X vehicle gets xx MPG in the city/on the highway'' 
because such language may lead consumers to believe that they will 
actually achieve such mileage in their own driving. However, AGA 
recommended that advertisers use the term ``rating'' instead of 
``estimate,'' because the latter term may mislead consumers into 
believing they will actually achieve the stated MPG number.\43\ The 
term ``rating,'' it argued, would help manage consumers' expectations 
given other types of ratings, reviews, and other comparative tools 
typically based on individuals' experience. AGA noted that the EPA uses 
``rating'' somewhat interchangeably with ``estimated fuel economy'' on 
the fueleconomy.gov Web site.
---------------------------------------------------------------------------

    \43\ AGA noted that, in the European Union, advertisements must 
include additional text stating: ``The mpg figures quoted are 
sourced from official EU-regulated test results, are provided for 
comparability purposes and may not reflect your actual driving 
experience.''
---------------------------------------------------------------------------

    Discussion: The Commission does not propose to change its guidance 
advising advertisers to disclose that EPA numbers are ``estimates.'' 
The term ``estimate'' helps prevent deception by signaling to consumers 
that their actual mileage will vary. Specifically, the term helps 
reduce the likelihood consumers will believe they will achieve or 
``get'' a certain mileage.\44\
---------------------------------------------------------------------------

    \44\ The revised Guidance also contains an example warning 
against the use of the term ``gets'' without adequate qualification.
---------------------------------------------------------------------------

    Moreover, although one commenter recommended that the Guide 
discourage using the term ``estimate,'' there is no indication this 
term is deceptive other than that comment. In addition, EPA regulations 
and the underlying statute employ this term, and it has appeared on EPA 
labels and in advertising for decades.\45\ At the same time, the 
Commission recognizes that the term ``estimate'' does not represent the 
only non-deceptive means to inform consumers that their fuel economy 
results may vary from the EPA rating.
---------------------------------------------------------------------------

    \45\ See 40 CFR part 600, and 49 U.S.C. 32908.
---------------------------------------------------------------------------

2. Claims Related to Model Types
    Background: The current Guide advises manufacturers to limit fuel 
economy ratings to the model type being advertised. Doing so ensures 
advertised fuel economy ratings match the advertised vehicles 
specification.\46\ Specifically, section 259.2, n. 2 of the Guide warns 
against using a single fuel economy estimate for all vehicles bearing a 
common model name, if separate vehicles within that model group have 
different fuel economy ratings. The Commission sought comment on this 
issue including whether the FTC should provide further guidance to help 
advertisers avoid deceptive claims in this context.
---------------------------------------------------------------------------

    \46\ The EPA's fuel economy regulations define ``model type'' as 
``a unique combination of car line, basic engine, and transmission 
class.'' 40 CFR 600.002-85.
---------------------------------------------------------------------------

    Comments: In response, NADA indicated that, where an advertisement 
includes only one model version, advertisers should not use mileage 
ratings for a different version of the same make or model. The Alliance 
agreed and argued the current Guide provides adequate guidance on this 
issue. In its opinion, additional information would create lengthy and 
unwieldy disclosures, with little benefit to consumers. The Alliance 
noted that several sources, including manufacturer Web sites, 
fueleconomy.gov, the vehicle's EPA label, and dealers, have more 
detailed information about vehicle configuration to help consumers. 
Finally, AGA cautioned against revising guidance, explaining that EPA 
has been working to address how models are grouped for mileage 
purposes. Accordingly, AGA urged EPA and FTC to coordinate efforts to 
ensure consistency.
    Discussion: Responding to these comments, the Commission proposes 
to update its existing guidance on claims related to make or model 
groups to include current EPA terminology. Specifically, the proposed 
amendments remove the outdated term ``unique nameplate'' and replace it 
with the more general term ``model type.'' However, the proposed Guide 
remains consistent with existing advice. In particular, the proposal 
states that it is deceptive to state or imply that a rated fuel economy 
figure applies to vehicles not included in the same model type featured 
in the advertisement. Fuel economy estimates assigned to model types 
under EPA's regulations apply only to specific versions of the model. 
Thus, any fuel economy claim for a vehicle should apply to the model 
type being advertised (e.g., a version with a 1.0 liter engine, 
automatic transmission).
3. Claims Based on Non-EPA Estimates
    Background: In the 2014 Notice, the Commission sought comment on 
the Guide's treatment of 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

[[Page 36223]]

enable them to compare advertised automobiles on the basis of fuel 
economy.'' \47\ To address this issue, the Guide advises advertisers to 
provide several disclosures whenever they make a fuel economy claim 
based on non-EPA information. Specifically, section 259.2(c) states 
that fuel economy claims based on non-EPA 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. The 
Commission sought input on this issue, asking commenters to address, 
among other things, the prevalence of non-EPA fuel economy claims, 
including both traditional fuel economy claims (e.g., MPG), as well as 
electric vehicle driving range claims (e.g., ``100 miles per charge'') 
and the adequacy of the current guidance for preventing deception.
---------------------------------------------------------------------------

    \47\ 40 FR 42003 (Sept. 10, 1975).
---------------------------------------------------------------------------

    Comments: Commenters offered conflicting views on the Guide's 
treatment of non-EPA fuel economy claims. Industry members agreed with 
the existing guidance but questioned its relevance. In AGA's view, the 
current guidance could help consumers make comparisons when non-EPA 
ratings appear in advertisements. However, both NADA and AGA explained 
that manufacturers and dealers simply do not refer to such ratings in 
advertising, and there is no expectation they will do so in the future. 
Thus, both organizations questioned whether the guidance on non-EPA 
source is still necessary.
    Conversely, the consumer groups argued the Guide should ``prevent 
the use of anything but standardized EPA MPG ratings'' because such 
ratings provide the only means to avoid ``significant deception.'' The 
groups explained that the EPA ratings have become the standard on which 
manufacturers compete. In their view, many different techniques can 
produce mileage estimates, and the dissemination of such alternative 
ratings ``would substantially increase deceptive advertising.'' They 
argued that the EPA numbers, which appear on every vehicle sold in the 
U.S., must appear in the advertisements to avoid deception and 
confusion. They further asserted that EPA's single rating system allows 
for ``true competition and avoids the deception associated with 
multiple rating systems'' and different testing methodologies. In their 
view, alternative (non-EPA) rating results prevent vehicle-to-vehicle 
comparisons and lead to ``manipulation and skepticism.''
    Discussion: The Commission does not propose changing the Guide's 
basic approach to advertising claims based on non-EPA data. The 
Commission has identified no basis to prohibit all fuel economy 
advertising claims based on non-EPA tests. There is no evidence that 
such claims are deceptive if adequately qualified. In addition, though 
advertisers may not commonly use non-EPA MPG ratings in advertising, 
that may not be the case for other claims, such as driving range 
representations for electric vehicles.\48\ Accordingly, the proposed 
Guide continues to recommend specific disclosures related to non-EPA 
claims to reduce the possibility of deception.\49\ The Commission seeks 
further comment on this issue, particularly whether non-EPA claims, 
including non-EPA driving range claims for electric vehicles, are 
common. Finally, the current Guide addresses the relative size and 
prominence of fuel economy claims based on non-EPA and EPA estimates in 
television, radio, and print advertisements. The Commission proposes to 
retain this guidance. The Commission, however, proposes to clarify that 
it applies to any advertising medium (not solely television, radio, and 
print).
---------------------------------------------------------------------------

    \48\ In addition, to the extent such claims do not appear in 
advertising, the Guide imposes no burden on such claims.
    \49\ The guidance assumes that the advertised non-EPA estimates 
are not identical to the EPA estimates.
---------------------------------------------------------------------------

4. Claims for Alternative Fueled Vehicles
    Background: In the 2014 Notice, the Commission sought comment on 
whether the Guide should address advertising for flexible fueled 
vehicles (FFVs), particularly pertaining to different fuel economy 
estimates for different fuels.\50\ Specifically, the Commission asked 
commenters to address whether advertisements that provide a vehicle's 
gasoline MPG rating and identify the vehicle as an FFV should include 
disclosures about that vehicle's alternative fuel MPG rating.
---------------------------------------------------------------------------

    \50\ Previously, the Commission had sought comments on Guide 
amendments specifically related to alternative fueled vehicles 
labeled under the Alternative Fuels Rule (16 CFR part 309). 74 FR at 
19152. However, in April 2013, the Commission amended the 
Alternative Fuels Rule to consolidate the FTC's alternative fueled 
vehicle labels with EPA's new fuel economy labels. Because those 
amendments removed any potential conflict between FTC and EPA 
labels, the Guides need not address FTC alternative fueled vehicles 
labels. 78 FR 23832 (April 23, 2013).
---------------------------------------------------------------------------

    Comments: In response, commenters recommended that the Guide 
address alternative fueled vehicles, particularly electric vehicles, 
given their recent proliferation in the market. However, they 
recommended different approaches to addressing this issue.
    Electric Vehicle Driving Range: First, AGA recommended the Guide 
address plug-in hybrid electric vehicles (PHEVs), battery electric 
vehicles (BEVs), and fuel cell electric vehicles (FCEVs) to ensure 
consistent use of fuel economy ratings among these increasingly 
prevalent vehicles. AGA also recommended that the FTC consult with EPA 
to develop best practices for BEV, FCEV, and PHEV fuel economy 
advertising. In particular, AGA asked the Commission to consider 
guidance on driving range claims for alternative fueled vehicles to 
provide a better ``apples-to-apples'' comparison across all fuel and 
vehicle types, particularly given the importance of this information 
for PHEVs and ``electric-only'' ranges. In the Alliance's view, any 
claims for a vehicle's driving range should follow the same disclosure 
principles applicable to other claims. NADA added that the Commission's 
guidance should promote uniformity and clarity in the use of all 
government fuel economy labeling for all AFVs in the same manner as 
conventionally fueled vehicles.
    Miles Per Gallon Equivalent (MPGe): The consumer groups recommended 
that electric vehicle advertisements disclose the vehicle's miles per 
gallon equivalent (MPGe), which appears on the EPA label and converts 
the energy efficiency of electric vehicles into a miles per gallon 
estimate. However, to help consumers understand such information, the 
commenters suggested the following disclosure: ``This vehicle does not 
use gasoline, the conversion from electric efficiency to miles per 
gallon is for comparative purposes.'' For plug-in hybrid electric 
vehicles, the consumer groups argued that the fuel economy ratings 
should include separate ratings for operation on gasoline (or other 
combustion engine fuel) and on electricity, in equal prominence.
    Alternative Fuel: Finally, the consumer groups argued that FFV 
advertisements should disclose two MPG ratings: One for the model's 
gasoline rating and one for the biofuel blend. However, they indicated 
that, if the advertisement does not mention the vehicle's FFV 
capability, it would be adequate to disclose the gasoline-only MPG.
    Discussion: The Commission has considered issues related to 
electric vehicle driving range, MPGe

[[Page 36224]]

disclosures, and claims for FFVs. We discuss each below:
    Electric Driving Range Information: The Commission proposes to 
address driving range claims for several reasons. First, as with 
general fuel economy claims, general driving range claims (e.g., ``will 
go far on a single charge'') are likely to generate a variety of 
consumer interpretations about the vehicle's range relative to other 
vehicle's on the market. These multiple interpretations are likely 
impossible for many advertisers to substantiate simultaneously. 
Disclosing the EPA range estimates will help prevent deception by 
providing clear, objective information that allows consumers to compare 
the driving ranges of competing vehicles. Second, the consumer research 
suggested that confusion may exist regarding the source of driving 
range claims. Specifically, in response to an open-ended question about 
the source of the test used to derive a driving range (Q4c), 
respondents pointed to a variety of results, with about 30% identifying 
the car company as the source, 11% identifying a government agency, and 
more than 40% indicating they were not sure.\51\ Finally, driving range 
estimates are becoming increasingly important and prevalent. As with 
MPG disclosures for gasoline vehicles, range estimates for electric 
vehicles provide a fundamental measurement of an electric vehicle's 
performance based on EPA testing requirements. Given these various 
considerations, the proposed Guide advises advertisers to disclose EPA-
mandated driving range results whenever they make a general driving 
range claim.
---------------------------------------------------------------------------

    \51\ The balance of respondents (about 19%) identified other 
sources such as non-governmental organizations.
---------------------------------------------------------------------------

    Miles Per Gallon Equivalent (MPGe): The Commission does not propose 
advising advertisers to always disclose MPGe in advertising for 
electric vehicles as some comments suggested. It is unclear whether 
such disclosures are essential to preventing deception. Because MPGe is 
a relatively new and unfamiliar concept to most consumers, the extent 
to which they would understand and use such a disclosure is unclear. 
Indeed, the consumer research supports this. When viewing an MPGe claim 
(i.e., ``This electric car is rated at 93 MPGe'') (Q4d), respondents 
assigned a variety of interpretations to the term. Specifically, only 
about 35% understood that MPGe reflected the electric vehicle's 
relative energy use (or energy cost) compared to conventional gasoline 
vehicles, and 40% indicated they were not sure what the term meant.\52\ 
In addition, in shopping for electric vehicles, consumers are likely to 
focus on other energy performance metrics, such as driving range. 
Furthermore, it is likely that consumer understanding of MPGe will 
evolve rapidly as more electric vehicles enter the market. For now, 
however, the concept is too novel to incorporate into the guidance.
---------------------------------------------------------------------------

    \52\ The research (Q4e) suggests that respondents were much more 
likely to understand the term ``MPGe'' when the claims included 
extensive explanatory information.
---------------------------------------------------------------------------

    Alternative Fuel: The Commission agrees with commenters that, if 
the advertisement mentions the vehicle's alternative fuel capability, 
FFV advertisements should provide both the vehicle's gasoline and 
alternative fuel ratings. Without such disclosures, consumers may 
assume the advertised MPG rating applies both to gasoline and 
alternative fuel operation.
5. Fuel Economy Range Claims for Specific Models
    Background: In the 2014 Notice, the Commission proposed to 
eliminate its guidance on ``estimated in-use fuel economy range'' 
claims (e.g., ``expected range for most drivers 15 to 21 MPG''). 
Because EPA's label no longer contains this information, and no 
evidence suggests such claims are prevalent, the Commission proposed to 
eliminate this specific provision.
    Comments: The Alliance supported the proposal, explaining that the 
provision, as written, no longer applies to most vehicles.
    Discussion: For the reasons discussed above, including commenter 
support, the Commission proposes to eliminate the Guides' provision 
related to ``estimated in-use fuel economy range'' (259.2(b)(1)).

E. Limited Format Advertising

    Background and Comments: The Alliance urged the Commission to 
address space-constrained advertising, particularly in newer media 
formats. It recommended the Guide ``grant maximum flexibility'' for 
fuel economy advertising in new media formats while ensuring a level 
playing field and fair disclosures to consumers. Specifically, it 
suggested the Commission set general guidelines to allow familiar 
short-hand and weblinks in limited format advertising to direct 
consumers to mandated disclosures while avoiding overly prescriptive 
provisions. The Alliance stressed that such advertisements typically 
serve as a ``starting point'' for consumer awareness of the product and 
lead consumers to conduct additional research elsewhere. According to 
the Alliance, consumers understand that restricted[hyphen]format 
advertisements do not contain complete information and routinely click 
on hyperlinks to access more detailed information. In its view, such 
links are more effective in providing disclosures to consumers than 
``attempting to include detailed footnotes that clutter a 
restricted[hyphen]format advertisement and make it more difficult to 
read.'' \53\
---------------------------------------------------------------------------

    \53\ The consumer groups added that television and radio 
advertisements should include a clear, audible representation of the 
MPG.
---------------------------------------------------------------------------

    The Alliance provided two specific suggestions. First, it 
recommended the Guide allow fuel economy advertisers to make 
abbreviated, but clearly understandable, disclosures of EPA label 
values in restricted-format media (e.g., ``EPA[hyphen]est. 35 MPG 
Hwy''). Second, it argued that, in restricted format advertising, the 
Guide allow advertisers to provide necessary disclosures through web 
links directing consumers to the required information.
    Discussion: The Commission does not propose to cover space-
constrained advertising in the Fuel Economy Guide because these issues 
are already addressed by the FTC's ``.Com Disclosures: How to Make 
Effective Disclosures in Digital Advertising'' (``.Com 
Disclosures'').\54\ That guidance clarifies that advertisers are not 
exempt from general disclosure requirements simply because an 
advertisement has space constraints. However, it also provides 
recommendations for making disclosures in such contexts. The general 
principles in .Com Disclosures for space-constrained advertising hold 
true for fuel economy advertising. The Commission expects that 
advertisers will be able to include abbreviated forms of most 
disclosures identified in the proposed Guidance. Terms such as ``EPA 
estimate'' and ``highway MPG'' have been widespread in advertisements 
over the last four decades. Given the prevalence of these terms, the 
Commission expects that abbreviated disclosures, such as 
``EPA[hyphen]est. 35 MPG Hwy,'' coupled with a link to more detailed 
information, should be effective in conveying the disclosures to 
consumers.\55\ However, since the Commission cannot anticipate every 
abbreviated disclosure advertisers may use, empirical evidence may be

[[Page 36225]]

necessary to demonstrate that certain abbreviations or icons are 
effective. The Commission seeks further comment on these issues.\56\
---------------------------------------------------------------------------

    \54\ See https://www.ftc.gov/sites/default/files/attachments/press-releases/ftc-staff-revises-online-advertising-disclosure-guidelines/130312dotcomdisclosures.pdf.
    \55\ In addition, if consumers do not click the link for more 
detailed disclosures, they will have an opportunity to see the 
information in the showroom on the EPA label, which appears on every 
new car in the showroom.
    \56\ The Commission does not propose to recommend audible MPG 
disclosures in all advertisements. Instead, consistent with the 
existing Guide, the proposed amendments continue to recommend that 
disclosures appear in the same format as the claim. For example, if 
the estimated MPG appears in the video of a television 
advertisement, the recommended disclosure should appear in the 
video.
---------------------------------------------------------------------------

V. Request for Comments

    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before August 8, 2016. 
Write ``Proposed Fuel Economy Guide Revisions'' on your comment. Your 
comment--including your name and your state--will be placed on the 
public record of this proceeding, including, to the extent practicable, 
on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the Commission tries to 
remove individuals' home contact information from comments before 
placing them on the Commission Web site.
    Because your comment will be made public, you are solely 
responsible for making sure that your comment does not include any 
sensitive personal information, such as anyone's Social Security 
number, date of birth, driver's license number or other state 
identification number or foreign country equivalent, passport number, 
financial account number, or credit or debit card number. You are also 
solely responsible for making sure that your comment does not include 
any sensitive health information, such as medical records or other 
individually identifiable health information. In addition, do not 
include any ``[t]rade secret or any commercial or financial information 
which is . . . privileged or confidential,'' as discussed in Section 
6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 
4.10(a)(2). In particular, do not include competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    If you want the Commission to give your comment confidential 
treatment, you must file it in paper form, with a request for 
confidential treatment, and you have to follow the procedure explained 
in FTC Rule 4.9(c), 16 CFR 4.9(c).\57\ Your comment will be kept 
confidential only if the FTC General Counsel grants your request in 
accordance with the law and the public interest.
---------------------------------------------------------------------------

    \57\ In particular, the written request for confidential 
treatment that accompanies the comment must include the factual and 
legal basis for the request, and must identify the specific portions 
of the comment to be withheld from the public record. See FTC Rule 
4.9(c), 16 CFR 4.9(c).
---------------------------------------------------------------------------

    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/fueleconomyrevisions, by following the instruction on the web-based 
form. If this Notice appears at http://www.regulations.gov, you also 
may file a comment through that Web site.
    If you prefer to file your comment on paper, write ``Fuel Economy 
Guide Amendments, R711008'' on your comment and on the envelope, and 
mail your comment to the following address: Federal Trade Commission, 
Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC-5610 
(Annex B), Washington, DC 20580, or deliver your comment to the 
following address: Federal Trade Commission, Office of the Secretary, 
Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex 
B), Washington, DC 20024.
    Visit the Commission Web site at http://www.ftc.gov to read this 
Notice and the News Release describing this proceeding. The FTC Act and 
other laws that the Commission administers permit the collection of 
public comments to consider and use in this proceeding, as appropriate. 
The Commission will consider all timely and responsive public comments 
that it receives on or before August 8, 2016. You can find more 
information, including routine uses permitted by the Privacy Act, in 
the Commission's privacy policy, at https://www.ftc.gov/site-information/privacy-policy.

VI. Proposed Amendments

List of Subjects in 16 CFR Part 259

    Advertising, Fuel economy, Trade practices.

    For the reasons set forth in this document, the Commission proposes 
to revise 16 CFR part 259 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.

    This Guide 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:
    (a) Alternative fueled vehicle. Any vehicle that qualifies as a 
covered vehicle under 16 CFR part 309.
    (b) 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.''
    (c) 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.
    (d) EPA. The U.S. Environmental Protection Agency.
    (e) EPA city fuel economy estimate. The city fuel economy 
determined in accordance with the city test procedure as defined and 
determined pursuant to EPA regulations.
    (f) 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 EPA regulations.
    (g) EPA driving range estimate. An estimate of the number of miles 
a

[[Page 36226]]

vehicle will travel between refueling as defined and determined 
pursuant to EPA regulations.
    (h) 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 EPA regulations.
    (i) EPA highway fuel economy estimate. The highway fuel economy 
determined in accordance with the highway test procedure as defined and 
determined pursuant to EPA regulations.
    (j) EPA regulations. EPA regulatory requirements for fuel economy 
labeling set forth in 40 CFR part 600, subpart D.
    (k) Flexible Fuel Vehicle. Any motor vehicle (or motor vehicle 
engine) engineered and designed to be operated on any mixture of two or 
more different fuels.
    (l) Fuel. (1) Gasoline and diesel fuel for gasoline- or diesel-
powered automobiles; or
    (2) Electricity for electrically-powered automobiles; or
    (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 EPA regulations.
    (m) 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.
    (n) Model type. A unique combination of car line, basic engine, and 
transmission class as defined by EPA regulations.
    (o) Ultimate purchaser or lessee. The first person, other than a 
dealer purchasing in his or her capacity as a dealer, who in good faith 
purchases a new automobile for purposes other than resale or leases 
such vehicle for his or her personal use.
    (p) 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 estimated MPG appears in the video, the 
disclosure recommended by this Guide should appear in the visual 
format; if the estimated MPG 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 likely to be 
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 
likely to be 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 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 likely to mislead 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 likely to mislead 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 likely 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:

[[Page 36227]]

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 likely 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 disclose EPA as the source of the test so consumers 
understand that the estimate is comparable to 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.

    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. Therefore, the advertisement may be 
deceptive.

    (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 likely 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 likely deceptive.

    (h) Comparing Different Model Types: Fuel economy estimates are 
assigned to specific model types under EPA regulations (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 vehicles not included in the model type 
featured in the advertisement, unless such rating in fact applies to 
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 likely to be 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 term by clearly explaining the stated MPG applies to 
a particular vehicle model type.

    Example 1:  An advertisement claims that a vehicle model VXR 
will achieve ``up to 40 MPG on the highway'' without further 
explanation. 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 likely deceptive. To address 
this problem, the advertisement should clearly explain 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 basis for 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 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. Without such disclosures, consumers are 
likely to assume the stated fuel economy estimate for gasoline 
operation also applies to 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 likely deceptive.

    (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

[[Page 36228]]

comparison as well as the extent to which the advertised vehicle's 
driving range differs from other models. Because it is highly unlikely 
that advertisers can substantiate all reasonable interpretations of 
these claims, 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 likely to be 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' reliance on 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 confuse such estimates 
with fuel economy ratings derived from EPA-required tests. Accordingly, 
advertisers should avoid such claims and disclose the EPA fuel economy 
or driving range estimates whenever possible. 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:
    (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 likely to be 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 driving range figure is comparable to 
an EPA driving range estimate for the vehicle. The advertisement is 
likely 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. 2016-13098 Filed 6-3-16; 8:45 am]
 BILLING CODE 6750-01-P



                                                  36216                        Federal Register / Vol. 81, No. 108 / Monday, June 6, 2016 / Proposed Rules

                                                  PART 71—DESIGNATION OF CLASS A,                            SUPPLEMENTARY INFORMATION section                      those activities complete,1 the
                                                  B, C, D, AND E AIRSPACE AREAS; AIR                         below. Write ‘‘Fuel Economy Guide                      Commission resumed its review of the
                                                  TRAFFIC SERVICE ROUTES; AND                                Amendments, R711008’’ on your                          Guide on May 15, 2014) (79 FR 27820)
                                                  REPORTING POINTS                                           comment, and file your comment online                  (‘‘2014 Notice’’) seeking comment on
                                                                                                             at https://ftcpublic.commentworks.com/                 potential amendments to address
                                                  ■ 1. The authority citation for 14 CFR                     ftc/fueleconomyamendments by                           changes to the EPA and NHTSA
                                                  part 71 continues to read as follows:                      following the instructions on the web-                 (hereinafter ‘‘EPA’’) fuel economy
                                                    Authority: 49 U.S.C. 106(f), 106(g); 40103,              based form. If you prefer to file your                 labeling rules, address advertising for
                                                  40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR,               comment on paper, write ‘‘Fuel                         alternative fueled vehicles, and consider
                                                  1959–1963 Comp., p. 389.                                   Economy Guide Amendments,                              other advertising claims prevalent in the
                                                                                                             R711008’’ on your comment and on the                   market. The Commission also
                                                  § 71.1       [Amended]
                                                                                                             envelope, and mail your comment to the                 announced plans to conduct consumer
                                                  ■ 2. The incorporation by reference in                     following address: Federal Trade                       research on fuel economy advertising
                                                  14 CFR 71.1 of FAA Order 7400.9Z,                          Commission, Office of the Secretary,                   claims.
                                                  Airspace Designations and Reporting                        600 Pennsylvania Avenue NW., Suite                        After reviewing the comments
                                                  Points, dated August 6, 2015, and                          CC–5610 (Annex B), Washington, DC                      generated by the 2014 Notice 2 and the
                                                  effective September 15, 2015, is                           20580, or deliver your comment to the                  consumer research results, the
                                                  amended as follows:                                        following address: Federal Trade                       Commission proposes Guide
                                                  Section 5000        Class D Airspace.                      Commission, Office of the Secretary,                   amendments for comment. In
                                                  *        *      *       *      *                           Constitution Center, 400 7th Street SW.,               considering these proposals,
                                                                                                             5th Floor, Suite 5610 (Annex B),                       commenters should focus on
                                                  AGL IN D Grissom ARB, IN [Amended]                         Washington, DC 20024.                                  information that helps advertisers avoid
                                                  Peru, Grissom Air Reserve Base, IN                                                                                deceptive or unfair claims prohibited by
                                                    (Lat. 40°38′53″ N., long. 086°09′08″ W.)                 FOR FURTHER INFORMATION CONTACT:
                                                                                                             Hampton Newsome, (202) 326–2889,                       the FTC Act.3 The Guide does not
                                                    That airspace extending upward from the                                                                         identify disclosures that are merely
                                                  surface to and including 3,300 feet MSL                    Attorney, Division of Enforcement,
                                                                                                             Bureau of Consumer Protection, Federal                 helpful or desirable to consumers.
                                                  within a 5.8 mile radius of Grissom ARB.
                                                  This Class D airspace is effective during the              Trade Commission, Room C–9528, 600                     Likewise, commenters should not
                                                  specific dates and times established in                    Pennsylvania Avenue NW., Washington,                   address the adequacy of EPA fuel
                                                  advance by a Notice to Airmen. The effective               DC 20580.                                              economy test procedures or the
                                                  date and time will thereafter be continuously                                                                     accuracy of EPA label content. Such
                                                                                                             SUPPLEMENTARY INFORMATION:
                                                  published in the Airport/Facility Directory.                                                                      issues fall within the EPA’s purview
                                                   Issued in Fort Worth, TX, on May 25, 2016.                I. Background                                          and are generally outside the scope of
                                                  Walter L. Tweedy,                                                                                                 the Guide.
                                                                                                                The Commission issued the Fuel
                                                  Acting Manager, Operations Support Group,                  Economy Guide (16 CFR part 259) on                     II. Consumer Research
                                                  ATO Central Service Center.                                September 10, 1975 (40 FR 42003) to
                                                  [FR Doc. 2016–13144 Filed 6–3–16; 8:45 am]
                                                                                                                                                                      To aid the Commission in developing
                                                                                                             prevent deceptive fuel economy                         the proposed Guide amendments, the
                                                  BILLING CODE 4910–13–P                                     advertising for new automobiles and                    Commission conducted an Internet-
                                                                                                             thus facilitate the use of fuel efficiency             based research study to explore
                                                                                                             information in advertising. To                         consumer perceptions of certain fuel
                                                  FEDERAL TRADE COMMISSION                                   accomplish this goal, the current Guide                economy marketing claims.4 Using a
                                                                                                             advises advertisers to disclose
                                                  16 CFR Part 259                                            established EPA fuel economy estimates                   1 The Commission announced final revisions to

                                                                                                             (e.g., miles per gallon or ‘‘MPG’’)                    the Alternative Fuels Rule in an April 23, 2013
                                                  Guide Concerning Fuel Economy                              whenever they make any fuel economy                    Notice (78 FR 23832). In 2011, EPA and NHTSA
                                                  Advertising for New Automobiles                            claim based on those estimates. In                     completed revisions to their fuel economy labeling
                                                                                                                                                                    requirements, which, among other things,
                                                  AGENCY:       Federal Trade Commission                     addition, if advertisers make claims                   addressed labels for alternative fueled vehicles
                                                  ACTION:      Proposed amendments.                          based on non-EPA tests, the Guide                      (AFVs) not specifically addressed in past EPA
                                                                                                             advises them to disclose EPA-derived                   requirements. See 76 FR 39478 (July 6, 2011) (see
                                                  SUMMARY:    The Federal Trade                              information and provide details about                  40 CFR parts 85, 86, and 600; and 49 CFR part 575).
                                                                                                                                                                      2 The comments are available at https://
                                                  Commission (‘‘FTC’’ or ‘‘Commission’’)                     the non-EPA tests, such as the test’s                  www.ftc.gov/policy/public-comments/initiative-573.
                                                  seeks comments on proposed                                 source, driving conditions, and vehicle                The commenters included: Alliance of Automobile
                                                  amendments to the Guide Concerning                         configurations.                                        Manufacturers (Alliance) (#00004), Association of
                                                  Fuel Economy Advertising for New                              On April 28, 2009 (74 FR 19148), the                Global Automakers, Inc. (AGA) (#00007), Consumer
                                                  Automobiles (‘‘Fuel Economy Guide’’ or                                                                            Federation of America (on behalf of several
                                                                                                             Commission published a notice                          organizations) (referred herein as ‘‘consumer
                                                  ‘‘Guide’’) to reflect current                              soliciting comments on proposed                        groups’’) (#00006), LaRosa (#00002), National
                                                  Environmental Protection Agency                            amendments to the Guide as part of its                 Automobile Dealers Association (NADA) (#00008),
                                                  (‘‘EPA’’) and National Highway Traffic                     regulatory review program. The                         and Rodriguez (#00003).
                                                                                                                                                                      3 15 U.S.C. 45(a). The Guides do not have the
                                                  Safety Administration (‘‘NHTSA’’) fuel                     Commission then postponed its review                   force and effect of law and are not independently
                                                  economy labeling rules and to consider                     in a June 1, 2011 notice (76 FR 31467)                 enforceable. However, failure to comply with
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                                                  advertising claims prevalent in the                        pending new fuel economy labeling                      industry guides may result in law enforcement
                                                  market.                                                    requirements from the EPA and                          action under applicable statutory provisions. The
                                                                                                                                                                    Commission, therefore, can take action under the
                                                  DATES: Comments must be received by                        completion of the FTC’s Alternative                    FTC Act if a business makes fuel economy claims
                                                  August 8, 2016.                                            Fuels Rule (16 CFR part 309) review.                   inconsistent with the Guides. In any such
                                                  ADDRESSES: Interested parties may file a                   The Commission explained that Fuel                     enforcement action, the Commission must prove
                                                                                                             Economy Guide revisions would be                       that the act or practice at issue is unfair or deceptive
                                                  comment online or on paper by                                                                                     in violation of Section 5 of the FTC Act.
                                                  following the instructions in the                          premature before the conclusion of                       4 The Commission announced the study in its

                                                  Request for Comment part of the                            these regulatory proceedings. With                     May 2014 Notice and provided further information



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                                                                            Federal Register / Vol. 81, No. 108 / Monday, June 6, 2016 / Proposed Rules                                                     36217

                                                  treatment-control comparison                            increase fuel efficiency, and contributes                 Comments: Commenters supported
                                                  methodology, the study compared                         significantly to the overall public good.              updating the Guide’s format. For
                                                  participant responses regarding their                   These various comments are consistent                  example, NADA explained updates
                                                  understanding of a variety of claim                     with the Commission’s past observation                 would help dealers maximize the clarity
                                                  types, such as general fuel economy                     that ‘‘the Guide has been a benefit to                 and utility of their fuel economy
                                                  claims (e.g., ‘‘this car gets great gas                 consumers, providing fuel economy                      advertising. The Alliance noted that
                                                  mileage’’), specific MPG claims (e.g.,                  numbers in advertising that allow                      revisions would aid manufacturers,
                                                  ‘‘25 MPG in the city’’), driving range                  meaningful comparisons of different                    particularly in addressing potential
                                                  claims, electric vehicle claims, and ‘‘up               vehicle models.’’ 7                                    claims not specifically addressed by the
                                                  to’’ mileage claims. The study collected                   Commenters also provided Guide                      Guide. However, several commenters
                                                  responses from U.S. automobile                          recommendations related to EPA label                   (e.g., NADA and AGA) urged the
                                                  consumers representing a broad                          developments and market changes in                     Commission to publish such changes for
                                                  spectrum of the U.S. adult population.5                 recent years. For example, NADA and                    comment before making final
                                                  By comparing the responses to various                   the Alliance emphasized the need to                    amendments.
                                                  scenarios, the study provided useful                    ensure the Guide reflects current EPA                     Discussion: In response to comments,
                                                  insights about respondents’                             fuel economy labeling requirements.                    the Commission proposes to revise the
                                                  understanding of fuel economy claims.6                  The Alliance added that the updated                    Guide format to be consistent with
                                                  This Notice contains relevant discussion                Guide should reflect new vehicle                       recent Guide revisions for other topics,
                                                  of the proposed amendments, as well as                  technologies, existing terminology, and                such as environmental claims.
                                                  specific study results. The Commission                  the current EPA label format, while still              Specifically, the proposed revisions
                                                  invites commenters to identify                          providing advertisers flexibility in how               include a list of general principles for
                                                  additional consumer research that may                   they inform consumers about fuel                       fuel economy advertising illustrated by
                                                  aid the FTC in considering the proposed                 economy. In addition, NADA and the                     specific examples.
                                                  Guide revisions.                                        Alliance recommended the Guide afford                  B. Definitions
                                                  III. Guide Benefits                                     flexibility in the content and format of                  Background: In the 2014 Notice, the
                                                                                                          claims, as long as such claims maintain                Commission proposed five changes
                                                     Comments received in response to the                 accuracy and clarity.
                                                  2014 Notice expressed general support                                                                          related to the Guide’s definitions section
                                                                                                             In response to these comments, the                  (16 CFR 259.1).9 First, the Commission
                                                  for maintaining the Guide and provided                  Commission proposes to update the
                                                  general recommendations for                                                                                    proposed to replace several outdated
                                                                                                          Guide, as detailed below, to take into                 terms to ensure consistency with EPA’s
                                                  improvement. Given this broad support,                  account current EPA and NHTSA
                                                  the Commission plans to retain the                                                                             current fuel economy rules.10
                                                                                                          requirements, new vehicle technology,                  Specifically, the Commission proposed
                                                  Guide. However, as detailed in this                     and new terminology. In addition,
                                                  Notice, the Commission proposes to                                                                             changing the definitions ‘‘estimated city
                                                                                                          where appropriate, the proposed                        miles per gallon’’ to ‘‘estimated city fuel
                                                  revise the Guide’s format and update its                revisions provide flexibility to
                                                  content to address new technologies and                                                                        economy;’’ and ‘‘estimated highway
                                                                                                          advertisers as long as they avoid                      miles per gallon’’ to ‘‘estimated highway
                                                  new types of claims.                                    deceptive claims.
                                                     In expressing support for the Guide,                                                                        fuel economy.’’ It also proposed revising
                                                  several commenters discussed its                        IV. Proposed Guide Revisions                           the definition of the term ‘‘fuel
                                                  benefits. NADA, for example, explained                                                                         economy.’’ In addition, the Commission
                                                                                                             The Commission sought comments in                   proposed eliminating the term
                                                  that the Guide helps prospective new                    the 2014 Notice on general issues
                                                  vehicle purchasers obtain consistent                                                                           ‘‘estimated in-use fuel economy range’’
                                                                                                          related to the Guide, including a new                  because EPA’s fuel economy label no
                                                  and objective fuel economy information                  format, technical definitions, citation
                                                  by advising manufacturers and dealers                                                                          longer provides such information.11
                                                                                                          format, types of fuel economy claims                   Second, the Commission proposed
                                                  ‘‘to disclose fuel economy estimates in                 (including claims involving EPA-based
                                                  a fair, even-handed, and clear and                                                                             adding the term ‘‘combined fuel
                                                                                                          MPG, non-EPA tests, vehicle                            economy’’ to Section 259.1 to ensure
                                                  conspicuous manner.’’ The consumer                      configuration, fuel economy range, and
                                                  groups added that ‘‘automobile                                                                                 consistency and reduce potential
                                                                                                          alternative fueled vehicles), and limited-             confusion because EPA now uses this
                                                  purchases are among the largest                         format advertising such as on mobile
                                                  expenditures consumers make and bind                                                                           term on its label.12 The new term would
                                                                                                          devices. The Commission discusses                      expand the Commission’s guidance to
                                                  them to purchase the fuel necessary to                  each of these issues below.
                                                  run their vehicles.’’ In their view,                                                                           advertisers whose vehicles now display
                                                  accurate mileage information benefits                   A. Guide Format
                                                                                                                                                                   9 The Commission, in the 2009 Notice, also
                                                  consumers, facilitates market functions,
                                                                                                             Background: In the 2014 Notice, the                 proposed to add two terms, ‘‘Fuel’’ and ‘‘Alternative
                                                  serves as a powerful incentive to                                                                              Fueled Vehicles,’’ to distinguish vehicles that
                                                                                                          Commission proposed improving the
                                                                                                                                                                 would be covered by EPA’s label requirements from
                                                  in two additional notices (79 FR 26428 (May 8,
                                                                                                          Guide’s format by making it consistent                 those covered by the proposed guidance regarding
                                                  2014) and 79 FR 62618 (Oct. 20, 2014)).                 with recently amended FTC guides,                      AFVs. 74 FR 19148, 19153.
                                                    5 The study sampled members of an Internet            such as the Guides for the Use of                        10 See 40 CFR 600.002.

                                                  panel consisting of individuals recruited through a     Environmental Marketing Claims.8                         11 The current Guide defines ‘‘estimated in-use

                                                  variety of convenience sampling procedures. The         Under the proposed format, the Guide                   fuel economy range’’ as the ‘‘estimated range of city
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                                                  sample for this research, therefore, does not                                                                  and highway fuel economy of the particular new
                                                  constitute a true, random sample of the adult U.S.      includes a list of general principles to               automobile on which the label is affixed, as
                                                  population. However, because the study focused          help advertisers avoid deceptive                       determined in accordance with procedures
                                                  primarily on comparing responses across randomly        practices with detailed examples to                    employed by the U.S. Environmental Protection
                                                  assigned treatment groups, the Internet panel           illustrate those principles.                           Agency as described in 40 CFR 600.311 (for the
                                                  provided an appropriate sample frame.                                                                          appropriate model year), and expressed in miles-
                                                    6 Additional information about the study,                                                                    per-gallon, to the nearest whole mile-per-gallon, as
                                                                                                            7 67
                                                                                                               FR 9924 (Mar. 5, 2002).                           measured, reported or accepted by the U.S.
                                                  including the questionnaire and results, is available
                                                  on the FTC Web site. See https://www.ftc.gov/             8 SeeGuides for the Use of Environmental             Environment Protection Agency.’’ 16 CFR 259.1(e).
                                                  policy/public-comments.                                 Marketing Claims (Green Guides) (16 CFR part 260).       12 See 40 CFR 600, Appendix VI.




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                                                  36218                     Federal Register / Vol. 81, No. 108 / Monday, June 6, 2016 / Proposed Rules

                                                  an estimate of combined fuel economy                    C. Regulatory Citations                                whether the combined EPA MPG rating
                                                  required by the EPA. Third, the                            Background: In its previous Notice,                 should serve as the default disclosure
                                                  Commission proposed to amend the                        the FTC proposed to replace all specific               for unspecified fuel economy claims
                                                  Guide’s definition of ‘‘new automobile’’                regulatory citations to EPA regulations                (instead of the city MPG as currently
                                                  to include ‘‘medium-duty passenger                      in the Guide with a general citation (40               indicated in the Guide); (6) whether the
                                                  vehicle,’’ consistent with EPA’s existing               CFR part 600) to reduce the frequency                  Guide should advise advertisers to
                                                  fuel labeling requirements.13 Fourth, the                                                                      avoid statements that imply a linear
                                                                                                          of future Guide changes should EPA
                                                  Commission proposed several minor                                                                              relationship between MPG and fuel
                                                                                                          amend its regulations. Earlier comments
                                                  revisions, including eliminating the                                                                           costs; (7) whether fuel economy
                                                                                                          noted that this proposal would create
                                                  phrase ‘‘in use’’ in the definition of                                                                         advertisements containing MPG claims
                                                                                                          confusion because the cited general EPA
                                                  ‘‘range of fuel economy,’’ and changing                                                                        should identify EPA as the source of the
                                                                                                          provisions contain two different sets of
                                                  the definitions for ‘‘estimated city MPG’’                                                                     ratings; and (8) whether the FTC should
                                                                                                          fuel economy requirements, one of
                                                  and ‘‘estimated highway MPG’’ to                                                                               provide additional guidance regarding
                                                                                                          which is not directly applicable to
                                                  ensure consistency with EPA’s terms                                                                            disclaimers that the EPA ratings are
                                                                                                          FTC’s Guide. See 79 FR at 27821.
                                                  and definitions. The Commission also                                                                           only estimates. Each of these issues is
                                                                                                             Comments: In response to the 2014
                                                  proposed eliminating an obsolete                                                                               addressed below.
                                                  reference to the term ‘‘unique                          Notice, NADA urged the Commission to
                                                                                                          use only a general citation to EPA’s                      a. General Fuel Economy Claims
                                                  nameplate’’ in footnote 2 and replacing                                                                           Background: In the 2014 Notice, the
                                                  it with the more appropriate EPA term                   regulations (i.e., 40 CFR part 600),
                                                                                                                                                                 Commission sought comments on
                                                  ‘‘model type.’’ 14 Finally, the                         arguing the benefits of a general citation
                                                                                                                                                                 whether a general fuel economy claim
                                                  Commission proposed reorganizing the                    (e.g., it would require fewer updates)
                                                                                                                                                                 should be accompanied by a specific
                                                  definition of ‘‘new automobile’’ to                     outweigh any potential risks of
                                                                                                                                                                 mileage disclosure to prevent consumer
                                                  reduce its length and potential                         confusion.
                                                                                                                                                                 deception or unfairness. The Guide has
                                                  confusion. Specifically, the proposed                      Discussion: To avoid confusion
                                                                                                                                                                 advised advertisers to include such
                                                  amendment would remove the                              identified in the comments, the
                                                                                                                                                                 disclosures since its initial publication
                                                  definitions of ‘‘dealer,’’ ‘‘manufacturer,’’            Commission proposes to simplify the
                                                                                                                                                                 in the 1970’s. Specifically, section
                                                  and ‘‘ultimate purchaser’’ from ‘‘new                   citations by using a general citation to
                                                                                                                                                                 259.2(a) states that an advertisement
                                                  automobile’’ and list them as separate                  ‘‘EPA regulations,’’ but defining that
                                                                                                                                                                 with a general fuel economy claim
                                                  terms under section 259.1.15                            term to mean EPA’s ‘‘fuel economy
                                                                                                                                                                 should disclose the vehicle’s city
                                                     Comments: Commenters supported                       labeling requirements in 40 CFR part
                                                                                                                                                                 mileage rating.18 That section also
                                                  conforming the definitions to current                   600, subpart D,’’ as opposed to other
                                                                                                                                                                 indicates that any claim about city or
                                                  EPA label regulations.16 AGA, for                       EPA vehicle-related regulations. This
                                                                                                                                                                 highway driving should contain
                                                  example, explained that using EPA’s                     will clarify that the EPA regulations
                                                                                                                                                                 estimated city or highway MPG rating.
                                                  recent terminology would provide                        referenced in the Guide apply to that
                                                                                                                                                                    Comments: Commenters supported
                                                  additional clarity and help ensure the                  agency’s labeling requirements and not
                                                                                                                                                                 the current Guide’s approach to specific
                                                  Guide’s consistent use. AGA also                        other EPA requirements inapplicable to
                                                                                                                                                                 mileage disclosures for general fuel
                                                  recommended eliminating the term                        the Guide.
                                                                                                                                                                 economy claims. The Alliance
                                                  ‘‘estimated in-use fuel economy range’’                 D. Types of Fuel Economy Claims                        explained that such mileage disclosures
                                                  because EPA no longer uses it. Likewise,                                                                       provide consumers ‘‘with context and
                                                  it concurred with the proposal to                         As discussed below, the Commission
                                                                                                          sought comment on specific types of                    backup for the specific claim being
                                                  remove the term ‘‘in use’’ from the                                                                            made.’’ Rodriquez stated that, given the
                                                  Guide because the term furthers                         advertising claims, including EPA-based
                                                                                                          miles-per-gallon claims, claims based on               potential for deception in general
                                                  consumers’ expectations that they will                                                                         advertising claims, the Guide should
                                                  actually achieve the EPA numbers.                       non-EPA tests, claims related to vehicle
                                                                                                          configuration, range of fuel economy                   continue to advise advertisers to include
                                                     Discussion: Given commenters’
                                                                                                          claims, and AFV claims.                                the fuel economy ratings.
                                                  support for these proposed changes, the                                                                           Discussion: The Commission proposes
                                                  Commission proposes to revise the                       1. Miles-Per-Gallon (MPG) Claims                       to retain the existing guidance advising
                                                  definitions consistent with its                                                                                advertisers to provide the EPA mileage
                                                  proposals. In addition, the Commission                     Background: In the 2014 Notice, the
                                                                                                          Commission sought comments on                          estimates whenever they make a fuel
                                                  has added the term ‘‘EPA’’ to the                                                                              economy claim. As discussed below,
                                                  various ‘‘fuel economy’’ estimate                       various aspects of the MPG provision of
                                                                                                          the current Guide (section 259.2(a)).                  this approach, supported by
                                                  definitions to clarify that such estimates                                                                     commenters, is consistent with the
                                                  are derived from required EPA test                      Specifically, the Notice invited
                                                                                                          comments on the following issues: (1)                  recent consumer research, as well as the
                                                  procedures. Furthermore, consistent                                                                            guidance the Commission has provided
                                                  with several proposed amendments                        Whether a general fuel economy claim
                                                                                                          (e.g., ‘‘XYZ car gets great mileage’’)                 consistently for decades.
                                                  discussed below, the proposed Guide                                                                               In releasing the Guide in 1975, the
                                                  contains new definitions for ‘‘alternative              should be accompanied by a specific
                                                                                                          MPG disclosure to prevent consumer                     Commission explained that ‘‘when no
                                                  fueled vehicle,’’ ‘‘flexible fuel vehicle,’’                                                                   specific fuel economy figure is cited in
                                                  ‘‘EPA driving range estimate,’’ ‘‘EPA                   deception or unfairness; (2) whether an
                                                                                                          advertisement is unfair or deceptive if it             advertising, the use of such vague and
                                                  regulations,’’ and ‘‘fuel.’’ 17                                                                                ill-defined terms as ‘saves gas,’ or ‘gas
                                                                                                          provides only one type of mileage rating
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                                                     13 40 CFR 86.1803–01. Previously, EPA required       (e.g., an advertisement that only                      stingy engine’ may . . . be deceptive by
                                                  fuel economy labels for only passenger automobiles      provides highway MPG); (3) whether an                  implying existence of some level of
                                                  and light trucks.                                       unspecified MPG claim (e.g., ‘‘37 MPG’’)               ‘good fuel economy’ which may be
                                                     14 74 FR at 19151.
                                                                                                          is deceptive if the advertisement fails to             perceived differently by different
                                                     15 The Commission does not propose otherwise

                                                  altering these definitions.
                                                                                                          identify whether the rating is city,                     18 At the time the Guide was created, EPA did not
                                                     16 See, e.g., Alliance, Global Automakers, and       highway, or combined; (4) how                          require combined fuel economy on the label.
                                                  NADA.                                                   consumers understand ‘‘up to’’ MPG                     Therefore, the guidance pointed to the city mileage
                                                     17 See section 259.1 of the proposed Guide.          claims (e.g., ‘‘up to 45 MPG’’); (5)                   number as the default disclosure.



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                                                                               Federal Register / Vol. 81, No. 108 / Monday, June 6, 2016 / Proposed Rules                                                     36219

                                                  individuals.’’19 In choosing to retain the                   meaning of a general fuel economy                    many hybrid vehicles, the city MPG
                                                  provision in 1995, the Commission                            claim in an open-ended format, the                   rating is higher. AGA argued that
                                                  explained that ‘‘it is important that the                    results were similarly diverse.                      advertisers should be able to disclose all
                                                  EPA estimate accompany implicit as                           Specifically, when respondents were                  the rating types—city, highway, and
                                                  well as explicit mileage claims. Any                         asked about the meaning of the claim                 combined—in combination or alone
                                                  mileage claim inherently involves a                          ‘‘This car gets great gas mileage,’’ they            because these ratings may be beneficial
                                                  comparison to other vehicles. The EPA                        variously answered ‘‘more miles per                  in specific cases (e.g., where a vehicle
                                                  estimates provide consumers with a                           gallon/saves money/less gas’’; ‘‘gets over           is intended primarily for city driving).
                                                  meaningful method of comparing                               30 miles or more’’; gets ‘‘good’’ or                    The consumer groups argued that
                                                  competing claims.’’ 20                                       ‘‘great’’ mileage; and ‘‘gets over 20 miles          including all three ratings is the best
                                                     The recent FTC consumer study                             or more.’’ 24                                        way to avoid deception, though they
                                                  supports these conclusions.21 Study                             These varied interpretations are likely           noted the combined number alone may
                                                  respondents tended to assign multiple                        impossible for an advertiser to                      be appropriate in some cases. In
                                                  meanings to general fuel economy                             substantiate simultaneously. To                      addition, Rodriguez added that
                                                  claims. For example, when asked about                        overcome such potential deception, the               advertisements should include fuel
                                                  the meaning of the claim ‘‘this car gets                     Commission has consistently                          economy ratings for both highway and
                                                  great gas mileage,’’ various respondents                     recommended that advertisers disclose                city because evidence suggests that
                                                  said the vehicle had better mileage than                     the EPA MPG ratings in advertisements                typical driving time is almost evenly
                                                  other cars of its size, better mileage than                  that contain general fuel economy                    split between the two, contrary to the
                                                  all other cars, better mileage than                          claims. Such ratings adequately qualify              EPA combined estimate, which weights
                                                  similarly priced cars, or none of those                      general fuel economy claims by                       55% city and 45% highway. In
                                                  choices.22 When the study narrowed the                       providing clear objective information                Rodriguez’s view, such city and
                                                  general fuel economy claim to a                              that allows consumers to compare                     highway disclosures allow for more
                                                  particular class size (‘‘This car gets great                 competing models and thus mitigates                  accurate fuel economy comparisons.
                                                  gas mileage compared to other compact                        the deceptive conclusions consumers                     Discussion: The Commission proposes
                                                  cars’’), respondents offered varied                          may draw from general claims. Given                  advising advertisers to disclose either
                                                  responses about whether such claims                          the results of the research and the                  the combined fuel economy rating, or
                                                  applied to all, most, or many cars in the                    overwhelming commenter support for                   both the city and highway numbers,
                                                  class.23 When asked to describe the                          the existing guidance, the Commission                when using fuel economy claims that do
                                                                                                               does not propose to change it.                       not specifically mention city or highway
                                                    19 40  FR 42003 (Sept. 10, 1975).                             b. Combined EPA MPG Rating as                     driving. Based on an EPA-specified
                                                    20 60  FR 56230, 56231 (Nov. 8, 1995).
                                                     21 Section II of this Notice contains background
                                                                                                               Default Disclosure                                   weighted ratio of city and highway
                                                  information about the study.
                                                                                                                  Background: In the 2014 Notice, the               driving, the combined number is now
                                                     22 Specifically, when asked about a general               Commission also solicited comments on                the most prominent EPA label
                                                  claim’s meaning (Q1d), study participants, selecting         whether the EPA combined city/                       disclosure. It provides an effective
                                                  from five responses, indicated the vehicle had               highway rating, rather than the city                 default disclosure because it serves as a
                                                  better mileage than other cars of its size (36.8%),
                                                  better mileage than all other cars (14.1%), better
                                                                                                               MPG, should serve as the default                     common consistent indicator of a
                                                  mileage than similarly priced cars (12.0%), not sure         disclosure for general fuel economy                  vehicle’s overall mileage. Additionally,
                                                  (15.6%), and none of above (21.5%). The responses            claims. The current Guide (section                   the proposed guidance gives advertisers
                                                  were significant compared to control questions               259.2(a)(1)(iii)), which the Commission              the option to disclose the city and
                                                  where the general claim was narrowed (Q1e and
                                                  Q1f) (e.g., great mileage compared ‘‘to other
                                                                                                               issued before EPA began requiring the                highway estimates together. This
                                                  compact cars’’ or ‘‘similarly priced cars’’). In             combined rating on the label, directs                disclosure allows consumers to gauge
                                                  response to those questions, the vast majority of            advertisers to provide the EPA city                  their expected mileage based on their
                                                  respondents correctly identified the relevant                rating as the default disclosure to                  own ratio of city-highway driving.
                                                  comparison. Specifically, in Q1e where the claim
                                                  included ‘‘other compact cars,’’ 78.8% of                    accompany any general fuel economy                   Accordingly, the proposed provision
                                                  respondents accurately identified the comparison as          claim that does not reference city or                would provide advertisers the flexibility
                                                  ‘‘other cars of its size’’ while the results for all other   highway driving. In 2011, EPA altered                to disclose either the combined rating or
                                                  choices were fewer than 10%. Where the claim                 the fuel economy label’s design and                  the city and highway ratings together.
                                                  involved a comparison of ‘‘similar priced’’ cars in
                                                  Q1f, 62.7% accurately identified the comparison as           content to feature the combined city-                The Commission seeks comments on
                                                  ‘‘cars with a similar sales price’’ though 20.6% still       highway rating.25 The EPA label                      this approach.26
                                                  identified the relevant comparison as ‘‘other cars of        continues to provide both the city and                  c. Single Mileage Ratings
                                                  its size’’ even though the claim specifically                                                                        Background: The Commission also
                                                  identified ‘‘similarly-priced cars.’’
                                                                                                               highway MPG ratings in a font smaller
                                                     23 When the advertisement said ‘‘This car gets            than that used for the combined rating.              asked whether an advertisement is
                                                  great gas mileage compared to other compact cars’’              Comments: Commenters generally                    deceptive or unfair if it provides only
                                                  (Q2b), 23% of respondents indicated the car got              supported designating the combined                   one type of rating (e.g., an advertisement
                                                  better gas mileage than ‘‘all’’ other compact cars;          (city/highway) mileage rating as the                 that only discloses highway MPG). The
                                                  37% believed it got better gas mileage than ‘‘almost
                                                  all’’ other compact cars; and 18% indicated it got           default disclosure for general fuel                  current Guide states that, if an MPG
                                                  better mileage than ‘‘at least half.’’ When the claim        economy claims. In particular, the                   claim involves only city or only
                                                  was altered to say ‘‘This car gets great gas mileage         Alliance preferred the combined rating               highway fuel economy, the
                                                  compared to many other compact cars’’ (Q2d), the             because it is the most prominent                     advertisement need only disclose the
                                                  responses also varied with 10% indicating the car
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                                                  had better mileage than all cars, 30% indicating             disclosure on EPA’s current label. The               corresponding EPA city or highway
                                                  better than almost all, and 30% indicating better            Alliance also explained that the city                estimate. For example, under the
                                                  than at least half. Only when respondents viewed             rating is no longer the lowest or most               current approach, only the ‘‘estimated
                                                  a control which stated ‘‘This car gets great gas                                                                  highway MPG’’ need be disclosed if the
                                                  mileage compared to all other compact cars’’ (Q2c)
                                                                                                               conservative value in all instances. For
                                                  did the variation decrease, with 52% indicating the                                                               representation clearly refers only to
                                                                                                                 24 Q1a. None of these various answers
                                                  advertised car got better mileage than all other cars.
                                                  However, even under this scenario, 23% said the              corresponded to more than 5% of participants’          26 74 FR at 19150. Currently, section 259.2(a) does

                                                  car got better mileage than ‘‘almost all’’ other             responses.                                           not prohibit disclosure of both the city and highway
                                                  compact cars.                                                  25 76 FR 39478 (July 6, 2011).                     estimates.



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                                                  36220                     Federal Register / Vol. 81, No. 108 / Monday, June 6, 2016 / Proposed Rules

                                                  highway fuel economy. 16 CFR                               The FTC’s consumer study supports                     issue. However, consistent with the
                                                  259.2(a)(1)(ii).                                        this approach. For example, when                         existing Guide, the proposed
                                                     Comments: Commenters offered                         shown a single highway mileage claim                     amendments (section 259.4(c)) advise
                                                  different opinions on the use of a single               (e.g., ‘‘This car is rated at 25 miles per               marketers that EPA fuel economy
                                                  mileage rating (e.g., ‘‘43 MPG on the                   gallon on the highway according to the                   estimates should match the driving
                                                  highway’’). For example, the consumer                   EPA estimate’’), the vast majority of                    claims appearing in the advertisements.
                                                  groups argued that single rating                        respondents (74.6%) correctly answered
                                                                                                                                                                   d. Unspecified MPG Claims
                                                  disclosures are clearly deceptive                       that car would likely achieve that MPG
                                                  because few, if any, consumers drive                    in highway driving, and the responses                       Background: The 2014 Notice also
                                                  solely on highways or local streets. Thus               for alternative interpretations were                     asked commenters whether an
                                                  in their view, most consumers will not                  low.28 The results were similar when                     unspecified MPG claim (e.g., ‘‘37 MPG’’)
                                                  obtain the fuel efficiency represented by               respondents were asked about a claim                     is deceptive if the advertisement fails to
                                                  single highway ratings. The consumer                    for a combination of city and highway                    identify whether the rating is city,
                                                  groups also indicated that many                         driving.29                                               highway, or combined. The current
                                                  advertisers use the highway rating ‘‘to                    In addition, respondents were able to                 Guide advises advertisers to tie specific
                                                  present their vehicle in the best light                 distinguish between highway and                          mileage ratings to specific driving
                                                  possible.’’ To avoid deception, they                    combined driving ranges when asked                       modes (i.e., city or highway).32
                                                                                                          whether they expected to achieve a                          Comments: The consumer groups
                                                  argued that advertisers should disclose
                                                                                                          certain mileage rating if they used the                  argued that an unspecified MPG rating
                                                  mileage estimates in one of two ways:
                                                                                                          advertised vehicle for all their driving.                is clearly deceptive because consumers
                                                  (1) All three ratings together (i.e., city,
                                                                                                          For instance, when shown a 25 MPG                        do not know the driving mode upon
                                                  highway, and combined) with the
                                                                                                          highway claim, (Q6c) 62.2% of                            which such a claim is based and, in
                                                  combined rating presented most                                                                                   cases where the number reflects the
                                                  prominently, or (2) the combined rating                 respondents indicated they would
                                                                                                          expect to get ‘‘a lot’’ or a ‘‘little’’ less             highway rating, consumers are unlikely
                                                  only where space for content is limited.                                                                         to consistently achieve such mileage.
                                                                                                          than 25 MPG when driving the
                                                     Other commenters, particularly                                                                                Citing similar concerns, the Alliance
                                                                                                          advertised car, while only 48.1%
                                                  industry members, disagreed. For                                                                                 recommended that, whenever an EPA
                                                                                                          answered similarly when shown the 25
                                                  instance, NADA argued that                                                                                       label value appears in an advertisement,
                                                                                                          MPG combined driving claim (Q6d).30
                                                  advertisements containing a single fuel                                                                          the advertiser disclose which EPA value
                                                                                                          When asked to identify the conditions
                                                  economy rating are not inherently unfair                that might lead to mileage higher or                     applies (city, highway, or combined).
                                                  or deceptive. The Alliance agreed,                      lower than the EPA estimate, more than                      Discussion: The Commission plans to
                                                  stating that advertisers should have the                half of respondents mentioned highway                    continue to advise against using mileage
                                                  flexibility to provide information that                 driving, city driving, or both.31                        ratings claims that fail to specify the
                                                  they believe is most relevant for each                     The research therefore suggests that                  type of rating (i.e., city, highway, or
                                                  vehicle.27 The Alliance asserted that                   consumers are not deceived by single                     combined). The FTC consumer study
                                                  consumers ‘‘have had many years to                      mileage claims as long as the claim                      suggests that such unqualified claims
                                                  become familiar with the City, Highway,                 specifies the type of driving involved                   lead to confusion and potential
                                                  and Combined rating system’’ and thus                   (e.g., highway, combined, etc.).                         deception because respondents
                                                  are unlikely to become confused by a                    Moreover, consumers have seen such                       interpreted them in different ways. For
                                                  single rating. Several of these                         estimates in advertising and on EPA                      example, when presented with the
                                                  commenters argued that the Guide                        labels for decades. In light of this                     claim that a car was ‘‘rated at 25 MPG,’’
                                                  should provide manufactures the                         ongoing exposure, it seems unlikely that                 30.5% of the respondents linked the
                                                  flexibility to disclose the rating most                 a single, clearly-identified mileage                     figure to highway driving, while 40.4%
                                                  relevant to the consumers of a particular               estimate will lead to deception.                         indicated it applied to a combination of
                                                  product. The Alliance explained, for                    Accordingly, absent additional evidence                  highway and city driving.33 The results
                                                  example, that consumers shopping for a                  demonstrating that such claims are                       are consistent with the assumption
                                                  compact car designed primarily for                      deceptive, the Commission does not                       underlying the current Guide that
                                                  urban use are likely to be most                         propose changing its approach on this                    consumers’ interpretation of such
                                                  interested in the city value. In its view,                                                                       unspecified mileage claims varies
                                                  an advertisement is not deceptive as                      28 See Q5c. The response results for other choices,    significantly in the absence of specific
                                                  long as it discloses the EPA label value                with no control, were: city rating (5.8%), combined      information (i.e., highway, city or
                                                  and identifies the rating involved (e.g.,               rating (10.7%), unsure (5.5%), and none of the           combined), and that consumers do not
                                                  city mileage).                                          above (3.5%).
                                                                                                            29 The results for Q5d were, not accounting for a
                                                                                                                                                                     32 See section 259.2(a)(1)(iii). The Guide also
                                                     Discussion: Consistent with the                      control: Combined (76.6%), highway (10%), city           advises disclosure of the ‘‘estimated city MPG’’ if
                                                  current guidance, the proposed Guide                    (4.2%), not sure (6.2%), and none of the above           advertisers make a ‘‘general fuel economy claim
                                                  does not discourage single mileage                      (2.5%). When the question presented an                   without reference to either city or highway, or if the
                                                  ratings in advertisements tied to a                     unspecified MPG claim (Q5b) (car ‘‘ . . . rated at       representation refers to any combined fuel economy
                                                                                                          25 miles per gallon . . .’’), the responses were:        number.’’ As noted above, at the time the Guide was
                                                  particular type of driving (e.g., ‘‘This                combined (40.4%), highway (30.5%), city (8.5%),          created, EPA did not require combined fuel
                                                  vehicle is rated at 40 MPG on the                       not sure (16.7%), and none of the above (4.1%).          economy on the label. Therefore, the guidance
                                                  highway according to the EPA                              30 The results for respondents expecting to
                                                                                                                                                                   pointed to the city mileage number as the default
                                                  estimate’’). Such single-rating claims are              achieve ‘‘a little’’ or ‘‘a lot’’ more than the stated   disclosure. However, the current EPA label features
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                                                                                                          rating were 7.6% for Q6c (highway claim) and 6.9%        combined city/highway MPG as the primary
                                                  not likely to be deceptive as long as the               for Q6d (combined claim), with no control.               disclosure.
                                                  advertisement clearly identifies the type                 31 In both cases, the number of respondents              33 Q5b. The contrasting questions lend validity to
                                                  of estimate (e.g., city, highway, or                    indicating they would get better mileage than the        these results. As discussed above, in a separate
                                                  combined), and the estimate matches                     stated MPG rating was low. These results suggest         question (5c), when told the car was rated at 25
                                                  the content of the advertised claims.                   that a significant number of respondents expected        MPG on the highway, 74.6% indicated the car
                                                                                                          to achieve lower mileage in combined driving than        would get about 25 MPG on the highway. Similarly,
                                                                                                          highway driving and believe that EPA test results        when told the car was rated at 25 MPG in combined
                                                    27 Both NADA and the Alliance emphasized that         may overstate actual mileage, regardless of the type     driving (Q5d), 76.6% responded that the car would
                                                  appropriate disclosures should be included in ads.      of driving.                                              achieve about 25 MPG in combined driving.



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                                                                             Federal Register / Vol. 81, No. 108 / Monday, June 6, 2016 / Proposed Rules                                                          36221

                                                  uniformly assume such estimates apply                    versions of an ‘‘up to’’ claim, ranging                   available information, the Commission
                                                  to a particular type of driving (e.g.,                   from a basic claim with no explanatory                    cannot conclude that such ‘‘up to’’
                                                  highway). Accordingly, advertisers                       information, to one that provided a                       claims are categorically deceptive.
                                                  failing to identify the driving type                     detailed explanation. Most respondents                    Therefore, the proposed guidance
                                                  associated with an MPG claim are likely                  (73.1%) interpreted ‘‘up to’’ in an                       advises advertisers to ensure that
                                                  to deceive a significant percentage of                   unqualified claim to mean the depicted                    qualifying language adequately clarifies
                                                  consumers regarding the rating’s basis.34                vehicle would achieve the stated MPG                      such claims to prevent deception.
                                                                                                           if it was driven in a certain way.35 In
                                                  e. ‘‘Up To’’ Claims                                                                                                f. Non-Linear Relationship Between
                                                                                                           addition, when respondents were asked
                                                     Background: The Commission also                                                                                 MPG and Fuel Costs
                                                                                                           in an open-ended format to explain their
                                                  asked commenters to address how                          understanding of a simple ‘‘up to’’ claim                    Background: In the 2014 Notice, the
                                                  consumers understand ‘‘up to’’ MPG                       (i.e., ‘‘This model gets up to 30 miles per               Commission asked whether the Guide
                                                  claims, which currently appear in                        gallon’’), very few respondents                           should advise advertisers to avoid
                                                  dealership advertisements (e.g., ‘‘up to                 mentioned that the claim relates to the                   statements that imply a linear
                                                  45 MPG’’). In making such claims,                        MPG rating for a specific version of the                  relationship between MPG and fuel
                                                  advertisers often seek to convey that the                model (Q3a).                                              costs. As explained in the earlier notice,
                                                  advertised MPG applies to a specific                        However, when respondents viewed a                     MPG ratings and fuel savings do not
                                                  version of the model (e.g., style, trim                  more detailed, qualified claim                            increase proportionally. For instance,
                                                  line, or option package), while other                    explaining that ‘‘up to’’ referred to a                   fuel savings due to an increase from 10
                                                  versions of the model have lower                         specific model version (Q3e (close-                       MPG to 20 MPG is much greater than
                                                  ratings. The current guidance does not                   ended question)), the confusion                           from an increase from 50 to 60 MPG.
                                                  address such claims.                                     decreased significantly, with a majority                  Given this fact, some have
                                                     Comments: Commenters split on this                    (51.9%) indicating the claim meant a                      recommended use of a different
                                                  issue, with the consumer groups arguing                  version of the advertised model was                       efficiency metric, such as ‘‘gallons per
                                                  that the Guide should discourage ‘‘up                    rated at 30 miles per gallon.36 With this                 100 miles,’’ which exhibits a linear
                                                  to’’ claims and industry members                         more detailed disclosure, 30% of                          relationship with fuel cost.38 Indeed,
                                                  disagreeing. In the Alliance’s view, such                respondents interpreted the stated MPG                    EPA requires a ‘‘gallons per 100 miles’’
                                                  claims allow sellers to advertise a                      as referring to the way in which the                      figure as a secondary disclosure on its
                                                  nameplate or family of vehicles by                       vehicle is driven, compared to the                        label.
                                                  communicating ‘‘the range of                             73.1% who took away the same                                 Comments: Commenters agreed that
                                                  capabilities across a nameplate or                       interpretation from the unqualified                       advertisers should not imply that there
                                                  family.’’ The Alliance asserted that                     claim in Q3c.37 Caution should be used                    is a linear relationship between MPG
                                                  eliminating these claims would limit                     in interpreting this 30%, as it is an                     and fuel costs. However, they also stated
                                                  manufacturer flexibility and potentially                 uncontrolled result. Thus, we cannot be                   that no such claims currently appear in
                                                  prohibit simple ‘‘reasonably                             sure how many of the responses actually                   advertisements and thus did not
                                                  understood’’ information about vehicle                   indicate deception. However, it does                      identify a need for the Guide to address
                                                  groups. NADA added that, because                         suggest that drafting an adequate                         them.39
                                                  single models have various engine and                    qualifying disclosure may be difficult.                      Discussion: Because commenters
                                                                                                           Accordingly, to minimize the risk of                      indicated that no claims currently
                                                  transmission options, the ‘‘up to’’
                                                                                                           deception, advertisers should be careful                  appear in advertising implying a linear
                                                  qualifier may be necessary to avoid
                                                                                                           to ensure that qualifying language                        relationship between mileage and fuel
                                                  deception. Alternatively, NADA
                                                                                                           properly conveys the meaning and                          cost, the Commission does not propose
                                                  suggested that dealers and
                                                                                                           limitations of any ‘‘up to’’ claims.                      addressing this issue in the Guide.40
                                                  manufacturers disclose a range of fuel
                                                                                                              In sum, the consumer study strongly                    However, advertisers should remain
                                                  economy label ratings when an
                                                                                                           suggests that unqualified ‘‘up to’’ claims                mindful of the non-linear relationship
                                                  advertisement involves multiple
                                                                                                           are likely to be deceptive where the                      between MPG and fuel costs and avoid
                                                  vehicles.
                                                                                                           advertiser intends to communicate that                    claims that state or imply such a
                                                     The consumer groups, however,
                                                                                                           a version of the advertised model will                    relationship.
                                                  stated that ‘‘up to’’ claims are deceptive
                                                  and, to avoid such deception, mileage                    achieve the stated fuel economy rating.                   g. EPA as the Source of Estimate
                                                  ratings in ads must reflect the ‘‘vehicle                In addition, under the same
                                                                                                           circumstances, the results suggest that it                   Background: The Commission also
                                                  configuration expected to be most                                                                                  invited comments on whether it should
                                                  popular for that year.’’ If a specific                   is difficult to fashion qualifying
                                                                                                           language that adequately avoids                           retain its current advice that fuel
                                                  model configuration has a better fuel                                                                              economy values in advertisements
                                                  economy rating, the groups argued that                   consumer confusion. However, given
                                                                                                                                                                     should disclose that EPA is the source
                                                  the advertisement can present that                          35 Specifically, 28.4% stated that ‘‘up to’’ meant     of the ‘‘estimated city MPG’’ and
                                                  rating in addition to the MPG of the                     the advertised MPG depended on the type of                ‘‘estimated highway MPG.’’
                                                  most popular version.                                    driving (e.g., highway or city), and 44.7% indicated         Comments: Commenters agreed that
                                                     Discussion: The FTC proposes                          the stated MPG could be achieved if the car was           the Guide should continue to advise
                                                  amending the Guide to advise                             driven efficiently (Q3c). Only a few respondents
                                                                                                           (9.3%) interpreted the unqualified ‘‘up to’’ claim to
                                                                                                                                                                     advertisers to identify EPA as the source
                                                  advertisers to avoid unqualified ‘‘up to’’               mean the MPG rating applied to a specific model
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                                                  MPG claims. The FTC consumer study                       version, the meaning often intended by car                   38 See, e.g., Larrick, R.P. and J.B. Soll, ‘‘The MPG

                                                  suggested significant consumer                           advertisers.                                              Illusion,’’ Science 320:1593–1594 (2008).
                                                                                                              36 The claim in Q3e read: ‘‘Different options for         39 See Alliance and NADA comments.
                                                  confusion regarding these claims. In
                                                                                                           engine size and other features are available.                40 As EPA has indicated in the past, a metric such
                                                  particular, the study gauged                             Depending on the options chosen, this model gets          as ‘‘gallons per 100 miles’’ provides consumers with
                                                  respondents’ interpretation of three                     up to 30 miles per gallon.’’                              ‘‘a better tool for making economically sound
                                                                                                              37 Specifically, 14.2% choose type of driving (e.g.,   decisions’’ than traditional MPG disclosure.
                                                     34 This guidance assumes the city and highway         highway or city), and 15.8% indicated the stated          Accordingly, EPA now includes such a figure on
                                                  ratings for a particular vehicle are different, which    MPG could be achieved if the car was driven               the label despite its unfamiliarity to most
                                                  is almost always the case.                               efficiently (Q3e).                                        consumers. 76 FR 39478, 39486 (July 6, 2011).



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                                                  36222                     Federal Register / Vol. 81, No. 108 / Monday, June 6, 2016 / Proposed Rules

                                                  of the estimates. The consumer groups                   existing guidance, argued that any                      Guide warns against using a single fuel
                                                  explained that advertisements should                    additional disclosures on this issue                    economy estimate for all vehicles
                                                  always list EPA as the rating’s source                  would increase consumer confusion.                      bearing a common model name, if
                                                  because this designation reinforces the                 AGA suggested that FTC caution against                  separate vehicles within that model
                                                  rating’s ‘‘official nature’’ and ensures                phrases such as ‘‘X vehicle gets xx MPG                 group have different fuel economy
                                                  consumers can make true vehicle-to-                     in the city/on the highway’’ because                    ratings. The Commission sought
                                                  vehicle comparisons. In their view, the                 such language may lead consumers to                     comment on this issue including
                                                  FTC’s recommended disclosures help                      believe that they will actually achieve                 whether the FTC should provide further
                                                  consumers understand that the fuel                      such mileage in their own driving.                      guidance to help advertisers avoid
                                                  economy values do not derive from an                    However, AGA recommended that                           deceptive claims in this context.
                                                  unofficial process for marketing or                     advertisers use the term ‘‘rating’’ instead                Comments: In response, NADA
                                                  advertising purposes. NADA agreed and                   of ‘‘estimate,’’ because the latter term                indicated that, where an advertisement
                                                  urged the Commission to recognize the                   may mislead consumers into believing                    includes only one model version,
                                                  value in additional disclosures directing               they will actually achieve the stated                   advertisers should not use mileage
                                                  consumers to www.fueleconomy.gov.                       MPG number.43 The term ‘‘rating,’’ it                   ratings for a different version of the
                                                    Discussion: The Commission does not                   argued, would help manage consumers’                    same make or model. The Alliance
                                                  propose changing its guidance for                       expectations given other types of                       agreed and argued the current Guide
                                                  identifying EPA as the source of the                    ratings, reviews, and other comparative                 provides adequate guidance on this
                                                  estimates. No information on the record                 tools typically based on individuals’                   issue. In its opinion, additional
                                                  suggests a change is necessary. As                      experience. AGA noted that the EPA                      information would create lengthy and
                                                  comments explained, this disclosure                     uses ‘‘rating’’ somewhat interchangeably                unwieldy disclosures, with little benefit
                                                  clarifies the basis for mileage                         with ‘‘estimated fuel economy’’ on the                  to consumers. The Alliance noted that
                                                  disclosures and thus helps avoids                       fueleconomy.gov Web site.                               several sources, including manufacturer
                                                  deception. The consumer research                           Discussion: The Commission does not                  Web sites, fueleconomy.gov, the
                                                  provides some support for this                          propose to change its guidance advising                 vehicle’s EPA label, and dealers, have
                                                  guidance. Although the study did not                    advertisers to disclose that EPA                        more detailed information about vehicle
                                                  address this issue directly, respondents                numbers are ‘‘estimates.’’ The term                     configuration to help consumers.
                                                  indicated significant confusion about                   ‘‘estimate’’ helps prevent deception by                 Finally, AGA cautioned against revising
                                                  the source of tests for driving range                   signaling to consumers that their actual                guidance, explaining that EPA has been
                                                  claims related to electric vehicles,                    mileage will vary. Specifically, the term               working to address how models are
                                                  suggesting the absence of the EPA                       helps reduce the likelihood consumers                   grouped for mileage purposes.
                                                  disclosures could lead to deception.41                  will believe they will achieve or ‘‘get’’               Accordingly, AGA urged EPA and FTC
                                                  Finally, the Commission expects most                    a certain mileage.44                                    to coordinate efforts to ensure
                                                  advertisers will identify the EPA                          Moreover, although one commenter                     consistency.
                                                  disclosure as a matter of course.                       recommended that the Guide discourage                      Discussion: Responding to these
                                                  Accordingly, continuing the guidance is                 using the term ‘‘estimate,’’ there is no                comments, the Commission proposes to
                                                  unlikely to place any significant burden                indication this term is deceptive other                 update its existing guidance on claims
                                                                                                          than that comment. In addition, EPA                     related to make or model groups to
                                                  on advertisers.
                                                                                                          regulations and the underlying statute                  include current EPA terminology.
                                                  h. Additional Guidance on Ratings as                    employ this term, and it has appeared                   Specifically, the proposed amendments
                                                  ‘‘Estimates’’                                           on EPA labels and in advertising for                    remove the outdated term ‘‘unique
                                                     Background: The current Guide                        decades.45 At the same time, the                        nameplate’’ and replace it with the more
                                                  advises advertisers to disclose that the                Commission recognizes that the term                     general term ‘‘model type.’’ However,
                                                  EPA ratings are ‘‘estimates.’’ 42 In the                ‘‘estimate’’ does not represent the only                the proposed Guide remains consistent
                                                  2014 Notice, the Commission asked                       non-deceptive means to inform                           with existing advice. In particular, the
                                                  whether the FTC should provide                          consumers that their fuel economy                       proposal states that it is deceptive to
                                                  additional guidance on this issue.                      results may vary from the EPA rating.                   state or imply that a rated fuel economy
                                                     Comments: Commenters urged the                                                                               figure applies to vehicles not included
                                                                                                          2. Claims Related to Model Types                        in the same model type featured in the
                                                  Commission to retain its guidance
                                                  regarding the estimate disclosure.                         Background: The current Guide                        advertisement. Fuel economy estimates
                                                  NADA explained that the EPA fuel                        advises manufacturers to limit fuel                     assigned to model types under EPA’s
                                                  economy ratings do not convey the                       economy ratings to the model type being                 regulations apply only to specific
                                                  mileage particular vehicles will actually               advertised. Doing so ensures advertised                 versions of the model. Thus, any fuel
                                                  achieve, but, instead, furnish estimates                fuel economy ratings match the                          economy claim for a vehicle should
                                                  to help prospective purchasers make                     advertised vehicles specification.46                    apply to the model type being
                                                  vehicle comparisons. Rodriguez also                     Specifically, section 259.2, n. 2 of the                advertised (e.g., a version with a 1.0 liter
                                                  cautioned that the EPA test cannot                                                                              engine, automatic transmission).
                                                                                                             43 AGA noted that, in the European Union,
                                                  accurately predict fuel economy for all                                                                         3. Claims Based on Non-EPA Estimates
                                                                                                          advertisements must include additional text stating:
                                                  drivers and all driving conditions. The                 ‘‘The mpg figures quoted are sourced from official         Background: In the 2014 Notice, the
                                                  Alliance, which also supported the                      EU-regulated test results, are provided for             Commission sought comment on the
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                                                                                                          comparability purposes and may not reflect your
                                                    41 In Question 4c, the Commission asked               actual driving experience.’’                            Guide’s treatment of fuel economy
                                                  respondents about the source of a test used to             44 The revised Guidance also contains an example     claims based on non-EPA tests. In
                                                  determine a driving range claim. In open-ended          warning against the use of the term ‘‘gets’’ without    issuing the Guide in 1975, the
                                                  responses, study participants pointed to a variety of   adequate qualification.                                 Commission explained that ‘‘the use in
                                                  results, with about 30% identifying the car                45 See 40 CFR part 600, and 49 U.S.C. 32908.
                                                                                                                                                                  advertising of fuel economy results
                                                  company as the source, 11% identifying a                   46 The EPA’s fuel economy regulations define
                                                  government agency, and more than 40% indicating         ‘‘model type’’ as ‘‘a unique combination of car line,
                                                                                                                                                                  obtained from disparate test procedures
                                                  they were not sure.                                     basic engine, and transmission class.’’ 40 CFR          may unfairly and deceptively deny to
                                                    42 See section 259.2(a)(2).                           600.002–85.                                             consumers information which will


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                                                                              Federal Register / Vol. 81, No. 108 / Monday, June 6, 2016 / Proposed Rules                                            36223

                                                  enable them to compare advertised                         vehicle-to-vehicle comparisons and lead                alternative fueled vehicles, particularly
                                                  automobiles on the basis of fuel                          to ‘‘manipulation and skepticism.’’                    electric vehicles, given their recent
                                                  economy.’’ 47 To address this issue, the                     Discussion: The Commission does not                 proliferation in the market. However,
                                                  Guide advises advertisers to provide                      propose changing the Guide’s basic                     they recommended different approaches
                                                  several disclosures whenever they make                    approach to advertising claims based on                to addressing this issue.
                                                  a fuel economy claim based on non-EPA                     non-EPA data. The Commission has                          Electric Vehicle Driving Range: First,
                                                  information. Specifically, section                        identified no basis to prohibit all fuel               AGA recommended the Guide address
                                                  259.2(c) states that fuel economy claims                  economy advertising claims based on                    plug-in hybrid electric vehicles
                                                  based on non-EPA information should:                      non-EPA tests. There is no evidence that               (PHEVs), battery electric vehicles
                                                  (1) Disclose the corresponding EPA                        such claims are deceptive if adequately                (BEVs), and fuel cell electric vehicles
                                                  estimates with more prominence than                       qualified. In addition, though                         (FCEVs) to ensure consistent use of fuel
                                                  other estimates; (2) identify the source                  advertisers may not commonly use non-                  economy ratings among these
                                                  of the non-EPA information; and (3)                       EPA MPG ratings in advertising, that                   increasingly prevalent vehicles. AGA
                                                  disclose how the non-EPA test differs                     may not be the case for other claims,                  also recommended that the FTC consult
                                                  from the EPA test in terms of driving                     such as driving range representations for              with EPA to develop best practices for
                                                  conditions and other relevant variables.                  electric vehicles.48 Accordingly, the                  BEV, FCEV, and PHEV fuel economy
                                                  The Commission sought input on this                       proposed Guide continues to                            advertising. In particular, AGA asked
                                                  issue, asking commenters to address,                      recommend specific disclosures related                 the Commission to consider guidance
                                                  among other things, the prevalence of                     to non-EPA claims to reduce the                        on driving range claims for alternative
                                                  non-EPA fuel economy claims,                              possibility of deception.49 The                        fueled vehicles to provide a better
                                                  including both traditional fuel economy                   Commission seeks further comment on                    ‘‘apples-to-apples’’ comparison across
                                                  claims (e.g., MPG), as well as electric                   this issue, particularly whether non-                  all fuel and vehicle types, particularly
                                                  vehicle driving range claims (e.g., ‘‘100                 EPA claims, including non-EPA driving                  given the importance of this information
                                                  miles per charge’’) and the adequacy of                   range claims for electric vehicles, are                for PHEVs and ‘‘electric-only’’ ranges. In
                                                  the current guidance for preventing                       common. Finally, the current Guide                     the Alliance’s view, any claims for a
                                                  deception.                                                addresses the relative size and                        vehicle’s driving range should follow
                                                     Comments: Commenters offered                           prominence of fuel economy claims                      the same disclosure principles
                                                  conflicting views on the Guide’s                          based on non-EPA and EPA estimates in                  applicable to other claims. NADA added
                                                  treatment of non-EPA fuel economy                         television, radio, and print                           that the Commission’s guidance should
                                                  claims. Industry members agreed with                      advertisements. The Commission                         promote uniformity and clarity in the
                                                  the existing guidance but questioned its                  proposes to retain this guidance. The                  use of all government fuel economy
                                                  relevance. In AGA’s view, the current                     Commission, however, proposes to                       labeling for all AFVs in the same
                                                  guidance could help consumers make                        clarify that it applies to any advertising             manner as conventionally fueled
                                                  comparisons when non-EPA ratings                          medium (not solely television, radio,                  vehicles.
                                                  appear in advertisements. However,                        and print).                                               Miles Per Gallon Equivalent (MPGe):
                                                  both NADA and AGA explained that
                                                                                                            4. Claims for Alternative Fueled                       The consumer groups recommended
                                                  manufacturers and dealers simply do
                                                                                                            Vehicles                                               that electric vehicle advertisements
                                                  not refer to such ratings in advertising,
                                                                                                               Background: In the 2014 Notice, the                 disclose the vehicle’s miles per gallon
                                                  and there is no expectation they will do
                                                  so in the future. Thus, both                              Commission sought comment on                           equivalent (MPGe), which appears on
                                                  organizations questioned whether the                      whether the Guide should address                       the EPA label and converts the energy
                                                  guidance on non-EPA source is still                       advertising for flexible fueled vehicles               efficiency of electric vehicles into a
                                                  necessary.                                                (FFVs), particularly pertaining to                     miles per gallon estimate. However, to
                                                     Conversely, the consumer groups                        different fuel economy estimates for                   help consumers understand such
                                                  argued the Guide should ‘‘prevent the                     different fuels.50 Specifically, the                   information, the commenters suggested
                                                  use of anything but standardized EPA                      Commission asked commenters to                         the following disclosure: ‘‘This vehicle
                                                  MPG ratings’’ because such ratings                        address whether advertisements that                    does not use gasoline, the conversion
                                                  provide the only means to avoid                           provide a vehicle’s gasoline MPG rating                from electric efficiency to miles per
                                                  ‘‘significant deception.’’ The groups                     and identify the vehicle as an FFV                     gallon is for comparative purposes.’’ For
                                                  explained that the EPA ratings have                       should include disclosures about that                  plug-in hybrid electric vehicles, the
                                                  become the standard on which                              vehicle’s alternative fuel MPG rating.                 consumer groups argued that the fuel
                                                  manufacturers compete. In their view,                        Comments: In response, commenters                   economy ratings should include
                                                  many different techniques can produce                     recommended that the Guide address                     separate ratings for operation on
                                                  mileage estimates, and the                                                                                       gasoline (or other combustion engine
                                                  dissemination of such alternative ratings                    48 In addition, to the extent such claims do not    fuel) and on electricity, in equal
                                                  ‘‘would substantially increase deceptive                  appear in advertising, the Guide imposes no burden     prominence.
                                                  advertising.’’ They argued that the EPA                   on such claims.                                           Alternative Fuel: Finally, the
                                                                                                               49 The guidance assumes that the advertised non-
                                                  numbers, which appear on every vehicle                                                                           consumer groups argued that FFV
                                                                                                            EPA estimates are not identical to the EPA
                                                  sold in the U.S., must appear in the                      estimates.                                             advertisements should disclose two
                                                  advertisements to avoid deception and                        50 Previously, the Commission had sought            MPG ratings: One for the model’s
                                                  confusion. They further asserted that                     comments on Guide amendments specifically              gasoline rating and one for the biofuel
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                                                  EPA’s single rating system allows for                     related to alternative fueled vehicles labeled under   blend. However, they indicated that, if
                                                                                                            the Alternative Fuels Rule (16 CFR part 309). 74 FR
                                                  ‘‘true competition and avoids the                         at 19152. However, in April 2013, the Commission
                                                                                                                                                                   the advertisement does not mention the
                                                  deception associated with multiple                        amended the Alternative Fuels Rule to consolidate      vehicle’s FFV capability, it would be
                                                  rating systems’’ and different testing                    the FTC’s alternative fueled vehicle labels with       adequate to disclose the gasoline-only
                                                  methodologies. In their view, alternative                 EPA’s new fuel economy labels. Because those           MPG.
                                                                                                            amendments removed any potential conflict
                                                  (non-EPA) rating results prevent                          between FTC and EPA labels, the Guides need not
                                                                                                                                                                      Discussion: The Commission has
                                                                                                            address FTC alternative fueled vehicles labels. 78     considered issues related to electric
                                                    47 40   FR 42003 (Sept. 10, 1975).                      FR 23832 (April 23, 2013).                             vehicle driving range, MPGe


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                                                  36224                     Federal Register / Vol. 81, No. 108 / Monday, June 6, 2016 / Proposed Rules

                                                  disclosures, and claims for FFVs. We                    they were not sure what the term                       conduct additional research elsewhere.
                                                  discuss each below:                                     meant.52 In addition, in shopping for                  According to the Alliance, consumers
                                                     Electric Driving Range Information:                  electric vehicles, consumers are likely to             understand that restricted-format
                                                  The Commission proposes to address                      focus on other energy performance                      advertisements do not contain complete
                                                  driving range claims for several reasons.               metrics, such as driving range.                        information and routinely click on
                                                  First, as with general fuel economy                     Furthermore, it is likely that consumer                hyperlinks to access more detailed
                                                  claims, general driving range claims                    understanding of MPGe will evolve                      information. In its view, such links are
                                                  (e.g., ‘‘will go far on a single charge’’)              rapidly as more electric vehicles enter                more effective in providing disclosures
                                                  are likely to generate a variety of                     the market. For now, however, the                      to consumers than ‘‘attempting to
                                                  consumer interpretations about the                      concept is too novel to incorporate into               include detailed footnotes that clutter a
                                                  vehicle’s range relative to other                       the guidance.                                          restricted-format advertisement and
                                                  vehicle’s on the market. These multiple                    Alternative Fuel: The Commission                    make it more difficult to read.’’ 53
                                                  interpretations are likely impossible for               agrees with commenters that, if the                       The Alliance provided two specific
                                                  many advertisers to substantiate                        advertisement mentions the vehicle’s                   suggestions. First, it recommended the
                                                  simultaneously. Disclosing the EPA                      alternative fuel capability, FFV                       Guide allow fuel economy advertisers to
                                                  range estimates will help prevent                       advertisements should provide both the                 make abbreviated, but clearly
                                                  deception by providing clear, objective                 vehicle’s gasoline and alternative fuel                understandable, disclosures of EPA
                                                  information that allows consumers to                    ratings. Without such disclosures,                     label values in restricted-format media
                                                  compare the driving ranges of                           consumers may assume the advertised                    (e.g., ‘‘EPA-est. 35 MPG Hwy’’). Second,
                                                  competing vehicles. Second, the                         MPG rating applies both to gasoline and                it argued that, in restricted format
                                                  consumer research suggested that                        alternative fuel operation.                            advertising, the Guide allow advertisers
                                                  confusion may exist regarding the                                                                              to provide necessary disclosures
                                                                                                          5. Fuel Economy Range Claims for
                                                  source of driving range claims.                                                                                through web links directing consumers
                                                                                                          Specific Models
                                                  Specifically, in response to an open-                                                                          to the required information.
                                                  ended question about the source of the                     Background: In the 2014 Notice, the                    Discussion: The Commission does not
                                                  test used to derive a driving range (Q4c),              Commission proposed to eliminate its                   propose to cover space-constrained
                                                  respondents pointed to a variety of                     guidance on ‘‘estimated in-use fuel                    advertising in the Fuel Economy Guide
                                                  results, with about 30% identifying the                 economy range’’ claims (e.g., ‘‘expected               because these issues are already
                                                  car company as the source, 11%                          range for most drivers 15 to 21 MPG’’).                addressed by the FTC’s ‘‘.Com
                                                  identifying a government agency, and                    Because EPA’s label no longer contains                 Disclosures: How to Make Effective
                                                  more than 40% indicating they were not                  this information, and no evidence                      Disclosures in Digital Advertising’’
                                                  sure.51 Finally, driving range estimates                suggests such claims are prevalent, the                (‘‘.Com Disclosures’’).54 That guidance
                                                  are becoming increasingly important                     Commission proposed to eliminate this                  clarifies that advertisers are not exempt
                                                  and prevalent. As with MPG disclosures                  specific provision.                                    from general disclosure requirements
                                                  for gasoline vehicles, range estimates for                 Comments: The Alliance supported                    simply because an advertisement has
                                                  electric vehicles provide a fundamental                 the proposal, explaining that the                      space constraints. However, it also
                                                  measurement of an electric vehicle’s                    provision, as written, no longer applies               provides recommendations for making
                                                  performance based on EPA testing                        to most vehicles.                                      disclosures in such contexts. The
                                                                                                             Discussion: For the reasons discussed               general principles in .Com Disclosures
                                                  requirements. Given these various
                                                                                                          above, including commenter support,                    for space-constrained advertising hold
                                                  considerations, the proposed Guide
                                                                                                          the Commission proposes to eliminate                   true for fuel economy advertising. The
                                                  advises advertisers to disclose EPA-
                                                                                                          the Guides’ provision related to                       Commission expects that advertisers
                                                  mandated driving range results
                                                                                                          ‘‘estimated in-use fuel economy range’’                will be able to include abbreviated
                                                  whenever they make a general driving
                                                                                                          (259.2(b)(1)).                                         forms of most disclosures identified in
                                                  range claim.
                                                     Miles Per Gallon Equivalent (MPGe):                  E. Limited Format Advertising                          the proposed Guidance. Terms such as
                                                  The Commission does not propose                                                                                ‘‘EPA estimate’’ and ‘‘highway MPG’’
                                                                                                             Background and Comments: The                        have been widespread in advertisements
                                                  advising advertisers to always disclose                 Alliance urged the Commission to
                                                  MPGe in advertising for electric vehicles                                                                      over the last four decades. Given the
                                                                                                          address space-constrained advertising,                 prevalence of these terms, the
                                                  as some comments suggested. It is                       particularly in newer media formats. It
                                                  unclear whether such disclosures are                                                                           Commission expects that abbreviated
                                                                                                          recommended the Guide ‘‘grant                          disclosures, such as ‘‘EPA-est. 35 MPG
                                                  essential to preventing deception.                      maximum flexibility’’ for fuel economy
                                                  Because MPGe is a relatively new and                                                                           Hwy,’’ coupled with a link to more
                                                                                                          advertising in new media formats while                 detailed information, should be effective
                                                  unfamiliar concept to most consumers,                   ensuring a level playing field and fair
                                                  the extent to which they would                                                                                 in conveying the disclosures to
                                                                                                          disclosures to consumers. Specifically,                consumers.55 However, since the
                                                  understand and use such a disclosure is                 it suggested the Commission set general
                                                  unclear. Indeed, the consumer research                                                                         Commission cannot anticipate every
                                                                                                          guidelines to allow familiar short-hand                abbreviated disclosure advertisers may
                                                  supports this. When viewing an MPGe                     and weblinks in limited format
                                                  claim (i.e., ‘‘This electric car is rated at                                                                   use, empirical evidence may be
                                                                                                          advertising to direct consumers to
                                                  93 MPGe’’) (Q4d), respondents assigned                  mandated disclosures while avoiding                      53 The consumer groups added that television and
                                                  a variety of interpretations to the term.               overly prescriptive provisions. The                    radio advertisements should include a clear,
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                                                  Specifically, only about 35%                            Alliance stressed that such                            audible representation of the MPG.
                                                  understood that MPGe reflected the                      advertisements typically serve as a                      54 See https://www.ftc.gov/sites/default/files/

                                                  electric vehicle’s relative energy use (or                                                                     attachments/press-releases/ftc-staff-revises-online-
                                                                                                          ‘‘starting point’’ for consumer awareness              advertising-disclosure-guidelines/
                                                  energy cost) compared to conventional                   of the product and lead consumers to                   130312dotcomdisclosures.pdf.
                                                  gasoline vehicles, and 40% indicated                                                                             55 In addition, if consumers do not click the link
                                                                                                            52 The research (Q4e) suggests that respondents      for more detailed disclosures, they will have an
                                                    51 The balance of respondents (about 19%)             were much more likely to understand the term           opportunity to see the information in the showroom
                                                  identified other sources such as non-governmental       ‘‘MPGe’’ when the claims included extensive            on the EPA label, which appears on every new car
                                                  organizations.                                          explanatory information.                               in the showroom.



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                                                                            Federal Register / Vol. 81, No. 108 / Monday, June 6, 2016 / Proposed Rules                                              36225

                                                  necessary to demonstrate that certain                   confidential only if the FTC General                   § 259.1   Purpose.
                                                  abbreviations or icons are effective. The               Counsel grants your request in                           This Guide contains administrative
                                                  Commission seeks further comment on                     accordance with the law and the public                 interpretations of laws enforced by the
                                                  these issues.56                                         interest.                                              Federal Trade Commission. Specifically,
                                                                                                             Postal mail addressed to the                        the Guide addresses the application of
                                                  V. Request for Comments
                                                                                                          Commission is subject to delay due to                  Section 5 of the FTC Act (15 U.S.C. 45)
                                                     You can file a comment online or on                  heightened security screening. As a                    to the use of fuel economy information
                                                  paper. For the Commission to consider                   result, we encourage you to submit your                in advertising for new automobiles. This
                                                  your comment, we must receive it on or                  comments online. To make sure that the                 guidance provides the basis for
                                                  before August 8, 2016. Write ‘‘Proposed                 Commission considers your online                       voluntary compliance with the law by
                                                  Fuel Economy Guide Revisions’’ on                       comment, you must file it at https://                  advertisers and endorsers. Practices
                                                  your comment. Your comment—                             ftcpublic.commentworks.com/ftc/                        inconsistent with this Guide may result
                                                  including your name and your state—                     fueleconomyrevisions, by following the                 in corrective action by the Commission
                                                  will be placed on the public record of                  instruction on the web-based form. If                  under Section 5 if, after investigation,
                                                  this proceeding, including, to the extent               this Notice appears at http://                         the Commission has reason to believe
                                                  practicable, on the public Commission                   www.regulations.gov, you also may file                 that the practices fall within the scope
                                                  Web site, at http://www.ftc.gov/os/                     a comment through that Web site.                       of conduct declared unlawful by the
                                                  publiccomments.shtm. As a matter of                        If you prefer to file your comment on               statute. The Guide sets forth the general
                                                  discretion, the Commission tries to                     paper, write ‘‘Fuel Economy Guide                      principles that the Commission will use
                                                  remove individuals’ home contact                        Amendments, R711008’’ on your                          in such an investigation together with
                                                  information from comments before                        comment and on the envelope, and mail                  examples illustrating the application of
                                                  placing them on the Commission Web                      your comment to the following address:                 those principles. The Guide does not
                                                  site.                                                   Federal Trade Commission, Office of the                purport to cover every possible use of
                                                     Because your comment will be made                    Secretary, 600 Pennsylvania Avenue                     fuel economy in advertising. Whether a
                                                  public, you are solely responsible for                  NW., Suite CC–5610 (Annex B),                          particular advertisement is deceptive
                                                  making sure that your comment does                      Washington, DC 20580, or deliver your                  will depend on the specific
                                                  not include any sensitive personal                      comment to the following address:                      advertisement at issue.
                                                  information, such as anyone’s Social                    Federal Trade Commission, Office of the
                                                  Security number, date of birth, driver’s                Secretary, Constitution Center, 400 7th                § 259.2   Definitions.
                                                  license number or other state                           Street SW., 5th Floor, Suite 5610                         For the purposes of this part, the
                                                  identification number or foreign country                (Annex B), Washington, DC 20024.                       following definitions shall apply:
                                                  equivalent, passport number, financial                     Visit the Commission Web site at                       (a) Alternative fueled vehicle. Any
                                                  account number, or credit or debit card                 http://www.ftc.gov to read this Notice                 vehicle that qualifies as a covered
                                                  number. You are also solely responsible                 and the News Release describing this                   vehicle under 16 CFR part 309.
                                                  for making sure that your comment does                  proceeding. The FTC Act and other laws                    (b) Automobile. Any new passenger
                                                  not include any sensitive health                        that the Commission administers permit                 automobile, medium duty passenger
                                                  information, such as medical records or                 the collection of public comments to                   vehicle, or light truck for which a fuel
                                                  other individually identifiable health                  consider and use in this proceeding, as                economy label is required under the
                                                  information. In addition, do not include                appropriate. The Commission will                       Energy Policy and Conservation Act (42
                                                  any ‘‘[t]rade secret or any commercial or               consider all timely and responsive                     U.S.C. 32901 et seq.) or rules
                                                  financial information which is . . .                    public comments that it receives on or                 promulgated thereunder, the equitable
                                                  privileged or confidential,’’ as discussed              before August 8, 2016. You can find                    or legal title to which has never been
                                                  in Section 6(f) of the FTC Act, 15 U.S.C.               more information, including routine                    transferred by a manufacturer,
                                                  46(f), and FTC Rule 4.10(a)(2), 16 CFR                  uses permitted by the Privacy Act, in                  distributor, or dealer to an ultimate
                                                  4.10(a)(2). In particular, do not include               the Commission’s privacy policy, at                    purchaser or lessee. For the purposes of
                                                  competitively sensitive information                     https://www.ftc.gov/site-information/                  this part, the terms ‘‘vehicle’’ and ‘‘car’’
                                                  such as costs, sales statistics,                        privacy-policy.                                        have the same meaning as
                                                  inventories, formulas, patterns, devices,                                                                      ‘‘automobile.’’
                                                  manufacturing processes, or customer                    VI. Proposed Amendments                                   (c) Dealer. Any person located in the
                                                  names.                                                  List of Subjects in 16 CFR Part 259                    United States or any territory thereof
                                                     If you want the Commission to give                                                                          engaged in the sale or distribution of
                                                                                                            Advertising, Fuel economy, Trade                     new automobiles to the ultimate
                                                  your comment confidential treatment,
                                                                                                          practices.                                             purchaser.
                                                  you must file it in paper form, with a
                                                  request for confidential treatment, and                   For the reasons set forth in this                       (d) EPA. The U.S. Environmental
                                                  you have to follow the procedure                        document, the Commission proposes to                   Protection Agency.
                                                  explained in FTC Rule 4.9(c), 16 CFR                    revise 16 CFR part 259 as follows:                        (e) EPA city fuel economy estimate.
                                                  4.9(c).57 Your comment will be kept                                                                            The city fuel economy determined in
                                                                                                          PART 259—GUIDE CONCERNING                              accordance with the city test procedure
                                                    56 The Commission does not propose to
                                                                                                          FUEL ECONOMY ADVERTISING FOR                           as defined and determined pursuant to
                                                  recommend audible MPG disclosures in all                NEW AUTOMOBILES                                        EPA regulations.
                                                  advertisements. Instead, consistent with the                                                                      (f) EPA combined fuel economy
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                                                  existing Guide, the proposed amendments continue        Sec
                                                  to recommend that disclosures appear in the same        259.1    Purpose.                                      estimate. The fuel economy value
                                                  format as the claim. For example, if the estimated      259.2    Definitions.                                  determined for a vehicle (or vehicles) by
                                                  MPG appears in the video of a television                259.3    Qualifications and disclosures.               harmonically averaging the city and
                                                  advertisement, the recommended disclosure should        259.4    Advertising guidance.                         highway fuel economy values, weighted
                                                  appear in the video.
                                                    57 In particular, the written request for               Authority: 15 U.S.C. 41–58.                          0.55 and 0.45 respectively, determined
                                                  confidential treatment that accompanies the                                                                    pursuant to EPA regulations.
                                                  comment must include the factual and legal basis        portions of the comment to be withheld from the           (g) EPA driving range estimate. An
                                                  for the request, and must identify the specific         public record. See FTC Rule 4.9(c), 16 CFR 4.9(c).     estimate of the number of miles a


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                                                  36226                     Federal Register / Vol. 81, No. 108 / Monday, June 6, 2016 / Proposed Rules

                                                  vehicle will travel between refueling as                should avoid making inconsistent                       To address this problem, the advertisement
                                                  defined and determined pursuant to                      statements or using distracting elements               should disclose the vehicle’s EPA fuel
                                                  EPA regulations.                                        that could undercut or contradict the                  economy estimate.
                                                     (h) EPA fuel economy estimate. The                   disclosure. The disclosures should also                   (c) Matching the EPA Estimate to the
                                                  average number of miles traveled by an                  appear in the same format as the claim.                Claim: EPA fuel economy estimates
                                                  automobile per volume of fuel                           For example, for television                            should match the driving claim
                                                  consumed (i.e., Miles-Per-Gallon                        advertisements, if the estimated MPG                   appearing in the advertisement. If they
                                                  (‘‘MPG’’) rating) as calculated under                   appears in the video, the disclosure                   do not, consumers are likely to associate
                                                  EPA regulations.                                        recommended by this Guide should                       the stated fuel economy estimate with a
                                                     (i) EPA highway fuel economy                         appear in the visual format; if the                    different type of driving. Specifically, if
                                                  estimate. The highway fuel economy                      estimated MPG is audio, the disclosure                 an advertiser makes a city or a highway
                                                  determined in accordance with the                       should be in audio.                                    fuel economy claim, it should disclose
                                                  highway test procedure as defined and                                                                          the corresponding EPA-estimated city or
                                                  determined pursuant to EPA                              § 259.4    Advertising guidance.
                                                                                                                                                                 highway fuel economy estimate. If the
                                                  regulations.                                              (a) Misrepresentations: It is deceptive              advertiser makes both a city and a
                                                     (j) EPA regulations. EPA regulatory                  to misrepresent, directly or by                        highway fuel economy claim, it should
                                                  requirements for fuel economy labeling                  implication, the fuel economy or driving               disclose both the EPA estimated city
                                                  set forth in 40 CFR part 600, subpart D.                range of an automobile.                                and highway fuel economy rating. If the
                                                     (k) Flexible Fuel Vehicle. Any motor                   (b) General Fuel Economy Claims:                     advertiser makes a general fuel economy
                                                  vehicle (or motor vehicle engine)                       General unqualified fuel economy                       claim without specifically referencing
                                                  engineered and designed to be operated                  claims, which do not reference a                       city or highway driving, it should
                                                  on any mixture of two or more different                 specific fuel economy estimate, likely                 disclose the EPA combined fuel
                                                  fuels.                                                  convey a wide range of meanings about                  economy estimate, or, alternatively,
                                                     (l) Fuel. (1) Gasoline and diesel fuel               a vehicle’s fuel economy relative to                   both the EPA city and highway fuel
                                                  for gasoline- or diesel-powered                         other vehicles. Such claims, which                     economy estimates.
                                                  automobiles; or                                         inherently involve comparisons to other
                                                                                                          vehicles, can mislead consumers about                     Example 1: An automobile advertisement
                                                     (2) Electricity for electrically-powered
                                                                                                                                                                 states that model ‘‘XYZ gets great gas mileage
                                                  automobiles; or                                         the vehicle class included in the
                                                                                                                                                                 in town.’’ However, the advertisement does
                                                     (3) Alcohol for alcohol-powered                      comparison, as well as the extent to                   not disclose the EPA city fuel economy
                                                  automobiles;                                            which the advertised vehicle’s fuel                    estimate. Instead, it only discloses the EPA
                                                     (4) Natural gas for natural gas-                     economy differs from other models.                     highway fuel economy estimate, which is
                                                  powered automobiles; or                                 Because it is highly unlikely that                     higher than the model’s city estimate. This
                                                     (5) any other fuel type used in a                    advertisers can substantiate all                       claim likely conveys to a significant
                                                  vehicle for which EPA requires a fuel                   reasonable interpretations of these                    proportion of reasonable consumers that the
                                                  economy label under EPA regulations.                    claims, advertisers making general fuel                highway estimate disclosed in the
                                                     (m) Manufacturer. Any person                         economy claims should disclose the                     advertisement applies to city driving. Thus,
                                                  engaged in the manufacturing or                                                                                the advertisement is likely to mislead
                                                                                                          advertised vehicle’s EPA fuel economy
                                                                                                                                                                 consumers. To remedy this problem, the
                                                  assembling of new automobiles,                          estimate in the form of the EPA MPG                    advertisement should disclose the EPA city
                                                  including any person importing new                      rating.                                                fuel economy estimate (e.g., ‘‘32 MPG in the
                                                  automobiles for resale and any person                      Example 1: A new car advertisement                  city according to the EPA estimate’’).
                                                  who acts for, and is under the control,                 states: ‘‘This vehicle gets great mileage.’’ The          Example 2: A new car advertisement states
                                                  of such manufacturer, assembler, or                     claim is likely to convey a variety of                 that model ‘‘XZA gives you great gas
                                                  importer in connection with the                         meanings, including that the vehicle has a             mileage’’ but only provides the EPA highway
                                                  distribution of new automobiles.                        better MPG rating than all or almost all other         fuel economy estimate. Given the likely
                                                     (n) Model type. A unique combination                 cars on the market. However, the advertised            inconsistency between the general fuel
                                                  of car line, basic engine, and                          vehicle’s EPA fuel economy estimates are               economy claim, which does not reference a
                                                                                                          only slightly better than the average vehicle          specific type of driving, and the disclosed
                                                  transmission class as defined by EPA                    on the market. Because the advertiser cannot           EPA highway estimate, the advertisement is
                                                  regulations.                                            substantiate that the vehicle’s rating is better       likely to mislead consumers. To address this
                                                     (o) Ultimate purchaser or lessee. The                than all or almost all other cars on the               problem, the advertisement should disclose
                                                  first person, other than a dealer                       market, the advertisement is likely to be              the EPA combined estimate (e.g., ‘‘37 MPG
                                                  purchasing in his or her capacity as a                  deceptive. In addition, the advertiser may not         for combined driving according to the EPA
                                                  dealer, who in good faith purchases a                   be able to substantiate other reasonable               estimate’’), or both the EPA city and highway
                                                  new automobile for purposes other than                  interpretations of the claim. To avoid                 fuel economy estimates.
                                                  resale or leases such vehicle for his or                deception, the advertisement should disclose              Example 3: An advertisement states
                                                                                                          the vehicle’s EPA fuel economy estimate                ‘‘according to EPA estimates, new cars in this
                                                  her personal use.                                       (e.g., ‘‘EPA-estimated 27 combined MPG’’).
                                                     (p) Vehicle configuration. The unique                                                                       class are rated at between 20 and 32 MPG,
                                                                                                             Example 2: An advertisement states: ‘‘This          while the EPA estimate for this car is an
                                                  combination of automobile features, as                  car gets great gas mileage compared to other           impressive 35 MPG highway.’’ The
                                                  defined in 40 CFR part 600.                             compact cars.’’ The claim is likely to convey          advertisement is likely to imply that the 20
                                                                                                          a variety of meanings, including that the              to 32 MPG range and 35 MPG estimate are
                                                  § 259.3   Qualifications and disclosures.               vehicle gets better gas mileage than all or            comparable. In fact, the ‘‘20 and 32 MPG’’
                                                    To prevent deceptive claims,                          almost all other compact cars. However, the
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                                                                                                                                                                 range reflects EPA city estimates. Therefore,
                                                  qualifications and disclosures should be                vehicle’s EPA fuel economy estimates are               the advertisement is likely deceptive. To
                                                  clear, prominent, and understandable.                   only slightly better than average compared to          address this problem, the advertisement
                                                  To make disclosures clear and                           other models in its class. Because the                 should only provide an apples-to-apples
                                                                                                          advertiser cannot substantiate that the                comparison—either using the highway range
                                                  prominent, marketers should use plain                   vehicle’s rating is better than all or almost all
                                                  language and sufficiently large type for                                                                       for the class or using the city estimate for the
                                                                                                          other compact cars, the advertisement is               advertised vehicle.
                                                  a person to see and understand them,                    likely to be deceptive. In addition, the
                                                  should place disclosures in close                       advertiser may not be able to substantiate               (d) Identifying Fuel Economy and
                                                  proximity to the qualified claim, and                   other reasonable interpretations of the claim.         Driving Range Ratings as Estimates:


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                                                                            Federal Register / Vol. 81, No. 108 / Monday, June 6, 2016 / Proposed Rules                                                36227

                                                  Advertisers citing EPA fuel economy or                  such as combined or highway, which                        (i) ‘‘Up To’’ Claims: Advertisers
                                                  driving range figures should disclose                   may not be the driving type the                        should avoid using the term ‘‘up to’’
                                                  that these numbers are estimates.                       advertiser intended. Thus, such                        without adequate explanatory language
                                                  Without such disclosures, consumers                     consumers may believe the model’s fuel                 if they intend to communicate that
                                                  may incorrectly assume that they will                   economy rating is higher than it actually              certain versions of a model (i.e., model
                                                  achieve the mileage or range stated in                  is.                                                    types) are rated at a stated fuel economy
                                                  the advertisement. In fact, their actual                   Example 1: A television commercial for              estimate. A significant proportion of
                                                  mileage or range will likely vary for                   the car model ‘‘ZTA’’ informs consumers that           reasonable consumers are likely to
                                                  many reasons, including driving                         the ZTA is rated at ‘‘25 miles per gallon              interpret such claims to mean that the
                                                  conditions, driving habits, and vehicle                 according to the EPA estimate’’ but does not           stated MPG can be achieved if the
                                                  maintenance. To address potential                       disclose whether this number is a highway,             vehicle is driven under certain
                                                  deception, advertisers may state that the               city, or combined estimate. The                        conditions. Therefore, to address the
                                                  values are ‘‘EPA estimate(s),’’ or use                  advertisement likely conveys to a significant          risk of deception, advertisers should
                                                  equivalent language that informs                        proportion of reasonable consumers that the            qualify the term by clearly explaining
                                                                                                          25 MPG figure reflects normal driving (i.e., a
                                                  consumers that they will not necessarily                                                                       the stated MPG applies to a particular
                                                                                                          combination of city and highway driving),
                                                  achieve the stated MPG rating or driving                not the highway rating as intended by the
                                                                                                                                                                 vehicle model type.
                                                  range.                                                  advertiser. In fact, the 25 MPG rating is the             Example 1: An advertisement claims that
                                                     Example 1: An automobile manufacture’s               vehicle’s EPA highway estimate. Therefore,             a vehicle model VXR will achieve ‘‘up to 40
                                                  Web site states, without qualification, ‘‘This          the advertisement is likely deceptive.                 MPG on the highway’’ without further
                                                  car gets 40 MPG on the highway.’’ The claim                                                                    explanation. The advertisement is based on
                                                  likely conveys to a significant proportion of              (g) Within Vehicle Class Comparisons:               a particularly efficient type of this model,
                                                  reasonable consumers that they will achieve             If an advertisement contains an express                with specific options, with an EPA highway
                                                  40 MPG driving this vehicle on the highway.             comparative fuel economy claim where                   estimate of 40 MPG. However, other types of
                                                  The advertiser based its claim on an EPA                                                                       model VXR have lower EPA MPG estimates.
                                                                                                          the relevant comparison is to any group
                                                  highway estimate. However, EPA provides                                                                        A significant proportion of reasonable
                                                                                                          or class, other than all available                     consumers likely interpret the ‘‘up to’’ claim
                                                  that estimate primarily for comparison
                                                  purposes—it does not necessarily reflect real           automobiles, the advertisement should                  as applying to all VXR model types.
                                                  world driving results. Therefore, the claim is          identify the group or class of vehicles                Therefore, the advertisement is likely
                                                  likely deceptive. In addition, the use of the           used in the comparison. Without such                   deceptive. To address this problem, the
                                                  term ‘‘gets,’’ without qualification, may lead          qualifying information, many                           advertisement should clearly explain that the
                                                  some consumers to believe not only that they            consumers are likely to assume that the                40 MPG rating does not apply to all model
                                                  can, but will consistently, achieve the stated          advertisement compares the vehicle to                  types of the VXR or use language other than
                                                  mileage. To address these problems, the                                                                        ‘‘up to’’ that better conveys the basis for the
                                                                                                          all new automobiles.                                   claim.
                                                  advertisement should clarify that the MPG
                                                  value is an estimate by stating ‘‘EPA                      Example 1: An advertisement claims that                (j) Claims for Flexible-Fueled
                                                  estimate’’ or equivalent language.                      sports car X ‘‘outpaces other cars’ gas
                                                                                                          mileage.’’ The claim likely conveys a variety
                                                                                                                                                                 Vehicles: Advertisements for flexible-
                                                     (e) Disclosing EPA Test as Source of                                                                        fueled vehicles should not mislead
                                                                                                          of meanings to a significant proportion of
                                                  Fuel Economy and Driving Range                          reasonable consumers, including that this              consumers about the vehicle’s fuel
                                                  Estimates: Advertisers citing any EPA                   vehicle has a higher MPG rating than all or            economy when operated with
                                                  fuel economy or driving range figures                   almost all other vehicles on the market.               alternative fuel. If an advertisement for
                                                  should disclose EPA as the source of the                Although the vehicle’s MPG rating compares             a flexible fueled vehicle mentions the
                                                  test so consumers understand that the                   favorably to other sports cars, its fuel               vehicle’s flexible fuel capability and
                                                  estimate is comparable to estimates for                 economy is only better than roughly half of            makes a fuel economy claim, it should
                                                  competing models. Doing so prevents                     all new automobiles on the market.                     include the EPA fuel economy estimates
                                                  deception by ensuring that consumers                    Therefore, the claim is likely deceptive.              for both gasoline and alternative fuel
                                                  do not associate the claimed ratings                                                                           operation. Without such disclosures,
                                                                                                            (h) Comparing Different Model Types:
                                                  with a test other than the EPA-required                                                                        consumers are likely to assume the
                                                                                                          Fuel economy estimates are assigned to
                                                  procedures. Advertisers may avoid                                                                              stated fuel economy estimate for
                                                                                                          specific model types under EPA
                                                  deception by stating that the values are                                                                       gasoline operation also applies to
                                                                                                          regulations (i.e., unique combinations of
                                                  ‘‘EPA estimate(s),’’ or equivalent                                                                             alternative fuel operation.
                                                                                                          car line, basic engine, and transmission
                                                  language that identifies the EPA test as
                                                                                                          class). Therefore, advertisers citing MPG                 Example 1: An automobile advertisement
                                                  the source.                                                                                                    states: ‘‘This flex-fuel powerhouse has a 30
                                                                                                          ratings for certain models should ensure
                                                     Example 1: A radio commercial for the                that the rating applies to the model type              MPG highway rating according to the EPA
                                                  ‘‘XTQ’’ car states that the vehicle ‘‘is rated at                                                              estimate.’’ The advertisement likely implies
                                                                                                          depicted in the advertisement. It is
                                                  an estimated 28 MPG in the city’’ but does                                                                     that the 30 MPG rating applies to both
                                                                                                          deceptive to state or imply that a rated               gasoline and alternative fuel operation. In
                                                  not disclose that an EPA test is the source of
                                                  this MPG estimate. This advertisement may               fuel economy figure applies to vehicles                fact, the ethanol EPA estimate for this vehicle
                                                  convey that the source of this test is an entity        not included in the model type featured                is 25 MPG. Therefore, the advertisement is
                                                  other than EPA. Therefore, the advertisement            in the advertisement, unless such rating               likely deceptive.
                                                  may be deceptive.                                       in fact applies to that model type.                       (k) General Driving Range Claims:
                                                     (f) Specifying Driving Modes for Fuel                   Example 1: A manufacturer’s                         General unqualified driving range
                                                  Economy Estimates: If an advertiser                     advertisement states that model ‘‘PDQ’’ gets           claims, which do not reference a
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                                                  cites an EPA fuel economy estimate, it                  ‘‘great gas mileage’’ but depicts the MPG              specific driving range estimate, are
                                                  should identify the particular type of                  numbers for a similar model type known as              difficult for consumers to interpret and
                                                  driving associated with the estimate                    the ‘‘Econo-PDQ.’’ The advertisement is                likely convey a wide range of meanings
                                                                                                          likely to convey that the claimed MPG rating
                                                  (i.e., estimated city, highway, or                      applies to all types of the PDQ model.
                                                                                                                                                                 about a vehicle’s range relative to other
                                                  combined MPG). Advertisements failing                   However, the ‘‘Econo-PDQ’’ has a better fuel           vehicles. Such claims, which inherently
                                                  to do so can deceive consumers who                      economy rating than other types of the                 involve comparisons to other vehicles,
                                                  incorrectly assume the disclosure                       ‘‘PDQ’’ model. Therefore, the advertisement            can mislead consumers about the
                                                  applies to a specific type of driving,                  is likely to be deceptive.                             vehicle class included in the


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                                                  36228                     Federal Register / Vol. 81, No. 108 / Monday, June 6, 2016 / Proposed Rules

                                                  comparison as well as the extent to                        (i) For visual disclosures on television:             By direction of the Commission.
                                                  which the advertised vehicle’s driving                  If the fuel economy claims appear only                 Donald S. Clark,
                                                  range differs from other models.                        in the visual portion, the EPA figures                 Secretary.
                                                  Because it is highly unlikely that                      should appear in numbers twice as large                [FR Doc. 2016–13098 Filed 6–3–16; 8:45 am]
                                                  advertisers can substantiate all                        as those used for any other estimate, and              BILLING CODE 6750–01–P
                                                  reasonable interpretations of these                     should remain on the screen at least as
                                                  claims, advertisers making general                      long as any other estimate. Each EPA
                                                  driving range claims should disclose the                figure should be broadcast against a                   DEPARTMENT OF JUSTICE
                                                  advertised vehicle’s EPA driving range                  solid color background that contrasts
                                                  estimate.                                               easily with the color used for the                     28 CFR Part 16
                                                     Example 1: An advertisement for an                   numbers when viewed on both color
                                                                                                          and black and white television.                        [CPCLO Order No. 005–2016]
                                                  electric vehicle states: ‘‘This car has a great
                                                  driving range.’’ This claim likely conveys a               (ii) For audio disclosures: For radio               Privacy Act of 1974; Implementation;
                                                  variety of meanings, including that the                 and television advertisements in which
                                                  vehicle has a better driving range than all or
                                                                                                                                                                 Extension of Comment Period
                                                  almost all other electric vehicles. However,
                                                                                                          any other estimate is used only in the
                                                                                                          audio, equal prominence should be                      AGENCY:   Federal Bureau of
                                                  the EPA driving range estimate for this                                                                        Investigation, United States Department
                                                  vehicle is only slightly better than roughly            given to the EPA figures. The
                                                  half of all other electric vehicles on the              Commission will regard the following as                of Justice.
                                                  market. Because the advertiser cannot                   constituting equal prominence: the EPA                 ACTION: Notice of proposed rulemaking;
                                                  substantiate that the vehicle’s driving range           estimated city and/or highway MPG                      extension of comment period.
                                                  is better than all or almost all other electric         should be stated, either before or after
                                                  vehicles, the advertisement is likely to be             each disclosure of such other estimate,                SUMMARY:   The Department of Justice
                                                  deceptive. In addition, the advertiser may not
                                                                                                          at least as audibly as such other                      (Department or DOJ), Federal Bureau of
                                                  be able to substantiate other reasonable                                                                       Investigation (FBI), is extending the
                                                  interpretations of the claim. To address this           estimate.
                                                                                                                                                                 comment period for its proposal to
                                                  problem, the advertisement should disclose                 (iii) For print and Internet disclosures:           exempt ‘‘The Next Generation
                                                  the vehicle’s EPA driving range estimate (e.g.,         The EPA figures should appear in                       Identification (NGI) System,’’ JUSTICE/
                                                  ‘‘EPA-estimated range of 70 miles per                   clearly legible type at least twice as
                                                  charge’’).
                                                                                                                                                                 FBI–009, from certain provisions of the
                                                                                                          large as that used for any other estimate.             Privacy Act, published in the Federal
                                                    (l) Use of Non-EPA Estimates.—(1)                     The EPA figures should appear against                  Register on May 5, 2016 (81 FR 27288).
                                                  Disclosure Content: Given consumers’                    a solid color, and contrasting                         The original comment period is
                                                  reliance on EPA estimated fuel economy                  background. They may not appear in a                   scheduled to expire on June 6, 2016.
                                                  values over the last several decades, fuel              footnote unless all references to fuel                 The Department is now extending the
                                                  economy and driving range estimates                     economy appear in a footnote.                          time period for public comments by 30
                                                  derived from non-EPA tests can lead to                     Example 1: An internet advertisement                days. The updated comment period is
                                                  deception if consumers confuse such                     states: ‘‘Independent driving experts took the         scheduled to expire on July 6, 2016.
                                                  estimates with fuel economy ratings                     QXT car for a weekend spin and managed to              This action will allow interested
                                                  derived from EPA-required tests.                        get 55 miles-per-gallon under a variety of             persons additional time to analyze the
                                                  Accordingly, advertisers should avoid                   driving conditions.’’ It does not disclose the         proposal and prepare their comments.
                                                  such claims and disclose the EPA fuel                   actual EPA fuel economy estimates, nor does
                                                                                                          it explain how conditions during the                   DATES: Comments on the notice of
                                                  economy or driving range estimates                                                                             proposed rulemaking published May 5,
                                                  whenever possible. However, if an                       ‘‘weekend spin’’ differed from those under
                                                                                                          the EPA tests. This advertisement likely               2016 (81 FR 27288) must be submitted
                                                  advertisement includes a claim about a                  conveys that the 55 MPG figure is the same             on or before July 6, 2016.
                                                  vehicle’s fuel economy or driving range                 or comparable to an EPA fuel economy                   ADDRESSES: Address all comments to
                                                  based on a non-EPA estimate,                            estimate for the vehicle. This claim is likely
                                                  advertisers should disclose the EPA                                                                            the Privacy Analyst, Privacy and Civil
                                                                                                          to be deceptive because it fails to disclose
                                                  estimate and disclose with substantially                that fuel economy information is based on a            Liberties Office, National Place
                                                  more prominence than the non-EPA                        non-EPA test, the source of the non-EPA test,          Building, 1331 Pennsylvania Ave. NW.,
                                                  estimate:                                               the EPA fuel economy estimates for the                 Suite 1000, Washington, DC 20530–
                                                    (i) That the fuel economy or driving                  vehicle, and all driving conditions or vehicle         0001 or facsimile 202–307–0693. To
                                                  range information is based on a non-                    configurations simulated by the non-EPA test           ensure proper handling, please
                                                                                                          that are different from those used in the EPA          reference either this CPCLO Order No.,
                                                  EPA test;
                                                                                                          test.                                                  or the CPCLO Order No. from the
                                                    (ii) The source of the non-EPA test;
                                                                                                             Example 2: An advertisement states: ‘‘The           original notice of proposed rulemaking
                                                    (iii) The EPA fuel economy estimates                  XZY electric car has a driving range of 110
                                                  or EPA driving range estimates for the                                                                         (CPCLO Order No. 003–2016) on your
                                                                                                          miles per charge in summer conditions
                                                  vehicle; and                                            according to our expert’s test.’’ It provides no       correspondence. You may review an
                                                    (iv) All driving conditions or vehicle                additional information regarding this driving          electronic version of the proposed rule
                                                  configurations simulated by the non-                    range claim. This advertisement likely                 at http://www.regulations.gov. You may
                                                  EPA test that are different from those                  conveys that this 110 driving range figure is          also comment via the Internet to either
                                                  used in the EPA test. Such conditions                   comparable to an EPA driving range estimate            ProposedRegulations@usdoj.gov; or by
                                                  and variables may include, but are not                  for the vehicle. The advertisement is likely           using the http://www.regulations.gov
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                                                  limited to, road or dynamometer test,                   deceptive because it does not clearly state            comment form. When submitting
                                                  average speed, range of speed, hot or                   that the test is a non-EPA test; it does not           comments electronically, you must
                                                                                                          provide the EPA estimated driving range; and
                                                  cold start, temperature, and design or                                                                         include the CPCLO Order No., as
                                                                                                          it does not explain how conditions referred
                                                  equipment differences.                                  to in the advertisement differed from those            described above, in the subject box.
                                                    (2) Disclosure format: The                            under the EPA tests. Without this                         Please note that the Department is
                                                  Commission regards the following as                     information, consumers are likely to confuse           requesting that electronic comments be
                                                  constituting ‘‘substantially more                       the claims with range estimates derived from           submitted before midnight Eastern
                                                  prominence’’:                                           the official EPA test procedures.                      Daylight Savings Time on the day the


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Document Created: 2016-06-04 00:16:35
Document Modified: 2016-06-04 00:16:35
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionProposed Rules
ActionProposed amendments.
DatesComments must be received by August 8, 2016.
ContactHampton 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.
FR Citation81 FR 36216 
CFR AssociatedAdvertising; Fuel Economy and Trade Practices

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