Many industry groups banded together as the Uniform Standards in Automotive Products Coalition to comment to the FTC. Coalition members include the Independent Lubricant Manufacturers Association, Ashland, the Automotive Oil Change Association, the Automotive Aftermarket Industry Association, Express Oil Change LLC, and dozens of other industry groups, including automotive repair and tire industry organizations and petroleum marketing groups.

Although warranty concerns about GMs Dexos motor oil specification were the most prominent examples cited, the coalition also cited the warranties of other carmakers such as Subaru, which requires its own proprietary motor oil formulation in its turbocharged vehicles, and Nissan, which requires use of its own branded automatic transmission fluid.

The coalition urged FTC to revise a section of its interpretations under the act to clarify that warranties may not directly or indirectly condition a products warranty coverage on the use of branded parts or services, unless that article or service is provided without charge under the terms of the warranty.

While the use of direct tying provisions in warranties is clearly prohibited by the Act, the FTC needs to make clear that warranty language that creates the impression that use of a branded product or service is required in order to maintain warranty coverage is equally impermissible, the coalition stated in its comments, explaining that the effect of the ambiguous warranty provisions works to create a de facto tie in a manner recognized and prohibited under the Clean Air Acts anti-tying provision. The FTC should clarify its interpretations to more expressly indicate that indirect tying arrangements are also prohibited by the act.

The coalition also urged the FTC to implement measures to provide consumers with timely knowledge of their rights under Magnuson-Moss. A simple and non-burdensome disclosure statement, drawn from the FTCs recent Consumer Alert on Auto Warranties, and provided to consumers in automotive warranty documents, would ensure that consumers are aware of their rights under the act without imposing a burden on warrantors or service providers, the group suggested.

BP Lubricants USA, which commented separately, said it is concerned with the apparent trend in the automotive lubricant marketplace of automobile manufacturers implying or creating confusion about the required use of a branded or licensed lubricant in order to retain warranty coverage for an automobile. Statements by a manufacturer that imply or create uncertainty as to whether a certain brand of lubricant or licensed lubricant is required inevitably push many consumers towards the implicitly required lubricant rather than take a risk with their vehicle warranty.

BP noted it has observed such caution and confusion even among relatively sophisticated purchasers such as lubricant whole sale distributors and quick lube operators who have expressed uncertainty about the legal requirement to use Dexos-licensed products in GM vehicles. Such comments are often coupled with concerns about the substantially higher cost of buying licensed lubricants, BP said. The intent of the act is not served if consumers are not provided with assurance that they are not taking a gamble with warranty difficulties if they choose a lubricant other than the lubricant brands designated by manufacturers.

Valvoline parent Ashland said the FTC should view warranty statements and statements made about warranty coverage to constitute a claim requiring substantiation and to take enforcement action where no reasonable basis for such a claim exists. With motor oil performance claims, Ashland said, a reasonable basis for substantiation should require competent and reliable scientific evidence. It would be unreasonable, for example, to make a performance or engine damage claim covering all motor oils unless competent and scientific evidence demonstrates that such a claim is not only hypothetically possible, but a realistic possibility, Ashland stated. Consumers should not be misled away from functionally equivalent products to the OEMs named products under the false pretense that the OEMs product offers superior performance or is better for the engine.

API said in its comments it supported continued use of the interpretation of the Magnuson-Moss Warranty Act and that it recommends that any change recognize the benefit of the existing API engine oil licensing and certification system as a benefit to the consumer.

ILMA General Counsel Jeffrey Leiter said that based on past experience, FTC could go two ways. To the extent the commission might make any changes based on the comments, it might put out another proposal and have another round of comments. The total process could take a year, Leiter told Lube Report. Another FTC approach, outside of the context of the interpretation of Magnuson-Moss, would be to put out a consumer alert bulletin on the matter.

To view the comments submitted to FTC, visit www.ftc.gov/os/comments/warrantyrules/index.shtm