[Federal Register Volume 81, Number 108 (Monday, June 6, 2016)]
[Proposed Rules]
[Pages 36216-36228]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[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%).
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    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.
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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.
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    \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).
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    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