FTC Seeks Comments on Warranty Act


The Federal Trade Commission is seeking public comment on consumer product warranty rules under the Magnuson-Moss Warranty Act, and key industry groups may take the opportunity to air their grievances about General Motors Dexos1 motor oil.

The act prohibits tying arrangements that require the warranted products purchaser buy a particular brand item or service to use with the product to be eligible for warranty coverage, unless the item or service is provided free of charge.

Earlier this year, a coalition including the Independent Lubricant Manufacturers Association, Valvoline and the Automotive Oil Change Association asked the FTC to investigate alleged anti-competitive and deceptive practices by General motors concerning its Dexos1 motor oil. Among other things, the groups claimed GM used language in its web site, owners manuals and marketing materials to mislead car owners into believing use of anything other than officially licensed Dexos motor oil can damage their engines and void their warranty.

John Haraldson, senior counsel for Valvoline parent company Ashland Consumer Markets, told Lube Report, We [the coalition] are reviewing the federal register notice and evaluating whether and to what extent the coalition might participate in the review process.

ILMA General Counsel Jeffrey Leiter noted this represents the first review of the Magnuson-Moss Warranty Act since about 1995 to 1996. Weve complained to the FTC about GMs Dexos program, and the FTC has told us of their interest in the issue, he said, noting that due to the lack of available resources, the commission hasnt investigated as ILMA would like. They have pointed out that this Magnuson-Moss Warranty Act Review would be an opportunity for us to comment to them, and perhaps as a result of that, they might address the situation through specific statements or guidance.

Leiter noted what is increasingly alarming people in the aftermarket automotive business in general is when OEMs try to take intellectual property rights and extend them to a bumper, fender or other product. So they try to trademark a bumper or a fender, he added. Its the same thing on Dexos on engine oil – using the intellectual property rights to inhibit competition and also consumer choice.

Pat Wirth, president of quick lube group Automotive Oil Change Association, said the organization also plans to submit comments.

For the complete Aug. 23 Federal Register item, visit GPO Access at www.gpoaccess.gov/fr/ and search for Magnuson-Moss. Written comments must be received on or before Oct. 24.

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