[Senate Report 114-77]
[From the U.S. Government Publishing Office]
Calendar No. 142
114th Congress } { Report
SENATE
1st Session } { 114-77
_______________________________________________________________________
E-WARRANTY ACT OF 2015
__________
R E P O R T
of the
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
on
S. 1359
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
July 7, 2015.--Ordered to be printed
______
U.S. GOVERNMENT PUBLISHING OFFICE
49-010 WASHINGTON : 2015
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
one hundred fourteenth congress
first session
JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi BILL NELSON, Florida
ROY BLUNT, Missouri MARIA CANTWELL, Washington
MARCO RUBIO, Florida CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire AMY KLOBUCHAR, Minnesota
TED CRUZ, Texas RICHARD BLUMENTHAL, Connecticut
DEB FISCHER, Nebraska BRIAN SCHATZ, Hawaii
JERRY MORAN, Kansas ED MARKEY, Massachusetts
DAN SULLIVAN, Alaska CORY BOOKER, New Jersey
RON JOHNSON, Wisconsin TOM UDALL, New Mexico
DEAN HELLER, Nevada JOE MANCHIN, West Virginia
CORY GARDNER, Colorado GARY PETERS, Michigan
STEVE DAINES, Montana
David Schwietert, Staff Director
Nick Rossi, Deputy Staff Director
Rebecca Seidel, General Counsel
Kim Lipsky, Democratic Staff Director
Christopher Day, Democratic Deputy Staff Director
Clint Odom, Democratic General Counsel
Calendar No. 142
114th Congress } { Report
SENATE
1st Session } { 114-77
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E-WARRANTY ACT OF 2015
_______
July 7, 2015.--Ordered to be printed
_______
Mr. Thune, from the Committee on Commerce, Science, and Transportation,
submitted the following
R E P O R T
[To accompany S. 1359]
The Committee on Commerce, Science, and Transportation, to
which was referred the bill (S. 1359) to allow manufacturers to
meet warranty and labeling requirements for consumer products
by displaying the terms of warranties on Internet websites,
having considered the same, reports favorably thereon without
amendment and recommends that the bill do pass.
Purpose of the Bill
The purpose of S. 1359, the E-Warranty Act of 2015, is to
modernize the warranty notice rules by allowing manufacturers
to meet their warranty and applicable labeling requirements by
making warranty information available online.
Background and Needs
The Federal Trade Commission (FTC) currently enforces rules
governing the content and availability of product warranties.
While there are no requirements that manufacturers provide
warranties for their products, if manufacturers choose to
provide warranties, the Magnuson-Moss Warranty-Federal Trade
Commission Improvement Act (15 U.S.C. 2301 et seq.) (Magnuson-
Moss Warranty Act) and the FTC warranty rules require sellers
and warrantors to disclose specific terms and to make the terms
available to consumers prior to sale (see parts 701 and 702 of
title 16, Code of Federal Regulations).
The FTC adopted its Disclosure of Written Consumer Product
Warranty Terms and Conditions Rule (16 C.F.R. Part 701)
(Disclosure Rule) and Pre-Sale Availability Rule (16 C.F.R.
Part 702) in 1975. Since the 1970s, significant changes in
technology and information dissemination have occurred.
However, the FTC has not updated these provisions to reflect
modern methods of communication.
The Disclosure Rule contains specific requirements for
written warranties for consumer products costing more than $15,
including that the warranty clearly and conspicuously disclose
in a single document in simple and readily understood language,
certain information such as the identity of the party to whom
the written warranty is extended, and a clear description and
identification of the products covered by the warranty.
The Pre-Sale Availability Rule states that for consumer
products with written warranties and costing more than $15,
sellers are required to make the text of the warranties readily
available for inspection by prospective buyers. This can happen
by displaying them in close proximity to the products or
furnishing them upon request prior to sale. If sellers choose
the latter, they must also place signs reasonably calculated to
elicit the prospective buyers attention in the store or
department, advising them of the availability of the warranties
upon request. The rule further specifies that, for these
consumer products, manufacturers must provide sellers with
written warranty materials necessary for sellers to comply with
the rule's requirements.
Manufacturers may meet the Pre-Sale Availability Rule
requirements by providing the materials to the retailers in a
number of ways: providing copies of the warranties to be placed
in a binder; providing warranty stickers, tags, signs, or
posters; or printing warranties on the product's packaging.
Under the current rules, manufacturers may not satisfy the
warranty requirements by making applicable warranty information
available only online. The FTC has interpreted the Pre-Sale
Availability Rule to allow for manufacturers to provide
electronic versions of consumer product warranties at the point
of sale, written warranties that are included on CDs, DVDs, or
on the internal drives of warranted products would qualify as
being ``provided with'' or as ``accompanying'' the products, in
compliance with the Pre-Sale Availability Rule. A plain reading
of the rule contains no mention of electronic warranties
satisfying its requirements.
S. 1359, the E-Warranty Act of 2015, would modernize the
warranty notice rules by allowing manufacturers to meet
applicable warranty requirements by posting warranty
information on their websites. It also would ensure that
consumers and prospective consumers remain able to obtain
copies of warranties at the point of sale. This accommodation
would preserve the ability of consumers who do not have access
to the Internet to receive warranty information.
Summary of Provisions
The E-Warranty Act of 2015 would allow manufacturers and
sellers to satisfy applicable warranty obligations by posting
warranties online, while retaining consumers' rights to obtain
paper copies at the point of sale or by other means. The FTC
would have one year to revise its rules to be in compliance
with the provisions of the bill.
Legislative History
On May 14, 2015, Senator Fischer introduced S. 1359, the E-
Warranty Act of 2015. The bill is cosponsored by Senator
Nelson. On May 20, 2015, in an open Executive Session, the
Committee considered the bill. The Committee, by voice vote,
ordered S. 1359 to be reported favorably without amendment.
Estimated Costs
In accordance with paragraph 11(a) of rule XXVI of the
Standing Rules of the Senate and section 403 of the
Congressional Budget Act of 1974, the Committee provides the
following cost estimate, prepared by the Congressional Budget
Office:
S. 1359--E-Warranty Act of 2015
Under current law, manufacturers of consumer products must
provide written warranty information to consumers at the place
where those goods are purchased. S. 1359 would allow those
manufacturers to make such warranty information available on
the Internet and remain in compliance with the law. The bill
would require the Federal Trade Commission (FTC) to revise
rules to reflect the new notification standards.
Based on information from the FTC, CBO estimates that
implementing the rulemaking requirement in S. 1359 would not
have a significant effect on discretionary costs. Enacting S.
1359 would not affect direct spending or revenues; therefore,
pay-as-you-go procedures do not apply.
S. 1359 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would not affect the budgets of state, local, or tribal
governments.
The CBO staff contact for this estimate is Susan Willie.
The estimate was approved by Theresa Gullo, Assistant Director
for Budget Analysis.
Regulatory Impact
In accordance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee provides the
following evaluation of the regulatory impact of the
legislation, as reported:
number of persons covered
S. 1359, as reported, would not impose any new regulatory
requirements on businesses.
economic impact
Enactment of this legislation is not expected to have an
adverse impact on the Nation's economy.
privacy
S. 1359 would not have an adverse impact on the personal
privacy of individuals.
paperwork
S. 1359 would not measurably increase paperwork
requirements for most businesses.
Congressionally Directed Spending
In compliance with paragraph 4(b) of rule XLIV of the
Standing Rules of the Senate, the Committee provides that no
provisions contained in the bill, as reported, meet the
definition of congressionally directed spending items under the
rule.
Section-by-Section Analysis
Section 1. Short title
This section would establish the bill's short title as the
``E-Warranty Act of 2015.''
Section 2. Findings
This section would include findings that: (1) businesses
and consumers prefer to have the option of receiving warranty
information online; (2) modernizing warranty notification rules
enhances the United States' global competitiveness; and (3)
electronic warranties expand consumer access to information in
an environmentally-friendly way.
Section 3. Electronic display of terms of written warranty for consumer
products
This section would amend section 102(b) of the Magnuson-
Moss Warranty Act, (15 U.S.C. 2302(b)), so that a manufacturer
would have the option of meeting the warranty notification
requirements by posting its warranty information in an
accessible digital format on the manufacturer's website and by
making that warranty information available at the point of sale
upon request. Manufacturers choosing to make their warranties
available online would be required to provide consumers and
prospective consumers with information on how to obtain and
review their warranties. They could do so by indicating on the
products themselves, their packaging, or in the product
manuals, the Internet websites where the warranties can be
viewed, and the phone numbers, mailing addresses or another
reasonable non-Internet means that consumers may use to contact
manufacturers to obtain copies of the warranties. The E-
Warranty Act would not change the rules regarding the content
of the warranty information.
This section also would require the FTC to revise its rules
to comply with the requirements of the Act within 1 year of the
date of enactment. Additionally, it would give the FTC the
option of waiving the requirement of section 109(a) of the
Magnuson-Moss Warranty Act, (15 U.S.C. 2309(a)), which requires
the agency to give interested persons the opportunity for oral
presentation, if it determines that giving interested persons
that opportunity would interfere with the FTC's ability to
revise the rules in a timely manner. Interested persons would
still be permitted to submit written comments.
Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
material is printed in italic, existing law in which no change
is proposed is shown in roman):
MAGNUSON-MOSS WARRANTY--FEDERAL TRADE COMMISSION IMPROVEMENT ACT
[15 U.S.C. 2301 et seq.]
SEC. 102. RULES GOVERNING CONTENTS OF WARRANTIES.
[15 U.S.C. 2302]
* * * * * * *
(b) Availability of Terms to Consumer; Manner and Form for
Presentation and Display of Information; Duration; Extension of
Period for Written Warranty or Service Contract.--
(1)(A) The Commission shall prescribe rules requiring
that the terms of any written warranty on a consumer
product be made available to the consumer (or
prospective consumer) prior to the sale of the product
to him.
(B) The Commission may prescribe rules for
determining the manner and form in which information
with respect to any written warranty of a consumer
product shall be clearly and conspicuously presented or
displayed so as not to mislead the reasonable, average
consumer, when such information is contained in
advertising, labeling, point-of-sale material, or other
representations in writing.
(2) Nothing in this title (other than paragraph (3)
of this subsection) shall be deemed to authorize the
Commission to prescribe the duration of written
warranties given or to require that a consumer product
or any of its components be warranted.
(3) The Commission may prescribe rules for extending
the period of time a written warranty or service
contract is in effect to correspond with any period of
time in excess of a reasonable period (not less than 10
days) during which the consumer is deprived of the use
of such consumer product by reason of failure of the
product to conform with the written warranty or by
reason of the failure of the warrantor (or service
contractor) to carry out such warranty (or service
contract) within the period specified in the warranty
(or service contract).
(4)(A) Except as provided in subparagraph (B), the
rules prescribed under this subsection shall allow for
the satisfaction of all requirements concerning the
availability of terms of a written warranty on a
consumer product under this subsection by--
(i) making available such terms in an
accessible digital format on the Internet
website of the manufacturer of the consumer
product in a clear and conspicuous manner; and
(ii) providing to the consumer (or
prospective consumer) information with respect
to how to obtain and review such terms by
indicating on the product or product packaging
or in the product manual--
(I) the Internet website of the
manufacturer where such terms can be
obtained and reviewed; and
(II) the phone number of the
manufacturer, the postal mailing
address of the manufacturer, or another
reasonable non-Internet based means of
contacting the manufacturer to obtain
and review such terms.
(B) With respect to any requirement that the terms of
any written warranty on a consumer product be made
available to the consumer (or prospective consumer)
prior to sale of the product, in a case in which a
consumer product is offered for sale in a retail
location, by catalog, or through door-to-door sales,
subparagraph (A) shall only apply if the seller makes
available at the location of the sale to the consumer
purchasing the consumer product the terms of the
warranty on the consumer product before the purchase.
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