[Federal Register Volume 87, Number 127 (Tuesday, July 5, 2022)]
[Notices]
[Pages 39833-39835]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-14178]


=======================================================================
-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION

[File No. 212 3140]


Harley-Davidson Motor Company Group, LLC; Analysis of Proposed 
Consent Order To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement; request for comment.

-----------------------------------------------------------------------

SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices. The attached Analysis of Proposed Consent Order to Aid 
Public Comment describes both the allegations in the draft complaint 
and the terms of the consent order--embodied in the consent agreement--
that would settle these allegations.

DATES: Comments must be received on or before August 4, 2022.

[[Page 39834]]


ADDRESSES: Interested parties may file comments online or on paper by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Please write ``Harley-Davidson 
Motor Company Group, LLC; File No. 212 3140'' on your comment and file 
your comment online at https://www.regulations.gov by following the 
instructions on the web-based form. If you prefer to file your comment 
on paper, mail your comment to the following address: Federal Trade 
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite 
CC-5610 (Annex D), Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Melissa Dickey (202-326-2662), Bureau 
of Consumer Protection, Federal Trade Commission, 600 Pennsylvania 
Avenue NW, Washington, DC 20580.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, 
notice is hereby given that the above-captioned consent agreement 
containing a consent order to cease and desist, having been filed with 
and accepted, subject to final approval, by the Commission, has been 
placed on the public record for a period of thirty (30) days. The 
following Analysis to Aid Public Comment describes the terms of the 
consent agreement and the allegations in the complaint. An electronic 
copy of the full text of the consent agreement package can be obtained 
at https://www.ftc.gov/news-events/commission-actions.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before August 4, 2022. 
Write ``Harley-Davidson Motor Company Group, LLC; File No. 212 3140'' 
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 https://www.regulations.gov website.
    Because of heightened security screening, postal mail addressed to 
the Commission will be subject to delay. We strongly encourage you to 
submit your comments online through the https://www.regulations.gov 
website.
    If you prefer to file your comment on paper, write ``Harley-
Davidson Motor Company Group, LLC; File No. 212 3140'' 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 D), Washington, DC 20580.
    Because your comment will be placed on the publicly accessible 
website at https://www.regulations.gov, you are solely responsible for 
making sure your comment does not include any sensitive or confidential 
information. In particular, your comment should not include sensitive 
personal information, such as your or anyone else'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 your comment does not include 
sensitive health information, such as medical records or other 
individually identifiable health information. In addition, your comment 
should not include any ``trade secret or any commercial or financial 
information which . . . is privileged or confidential''--as provided by 
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)--including competitively sensitive information such 
as costs, sales statistics, inventories, formulas, patterns, devices, 
manufacturing processes, or customer names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c). 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). Your comment will be kept 
confidential only if the General Counsel grants your request in 
accordance with the law and the public interest. Once your comment has 
been posted on the https://www.regulations.gov website--as legally 
required by FTC Rule 4.9(b)--we cannot redact or remove your comment 
from that website, unless you submit a confidentiality request that 
meets the requirements for such treatment under FTC Rule 4.9(c), and 
the General Counsel grants that request.
    Visit the FTC website at http://www.ftc.gov to read this document 
and the news release describing the proposed settlement. The FTC Act 
and other laws 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 4, 2022. For information on the 
Commission's privacy policy, including routine uses permitted by the 
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission (the ``Commission'') has accepted, 
subject to final approval, an agreement containing a consent order from 
Harley-Davidson Motor Company Group, LLC (``Respondent'' or ``Harley-
Davidson'').
    The proposed consent order (``Proposed Order'') has been placed on 
the public record for thirty (30) days for receipt of comments by 
interested persons. Comments received during this period will become 
part of the public record. After thirty (30) days, the Commission will 
again review the agreement, along with any comments received, and will 
decide whether it should withdraw from the agreement and take 
appropriate action or make final the Proposed Order.
    This matter involves the warranty that Harley-Davidson offers to 
purchasers of its motorcycles. According to the Commission's complaint, 
Harley-Davidson's warranty is conditioned on purchasers using 
authorized Harley-Davidson parts and accessories; otherwise, the 
warranty is void. In addition, the complaint alleges that Harley-
Davidson's warranty does not contain a clear explanation of all 
material terms; instead, the warranty informs purchasers that they must 
ask a Harley-Davidson dealer to get a full explanation of what is 
covered by the warranty, and what is not.
    Based on the foregoing, the Commission alleges that Respondent 
violated the Magnuson-Moss Warranty Act and regulations promulgated 
thereunder, including the Rule Governing Disclosure of Written Consumer 
Product Warranty Terms and Conditions, and engaged in deceptive acts or 
practices in violation of Section 5(a) of the FTC Act.
    The Proposed Order contains injunctive provisions addressing the 
alleged deceptive conduct. Section I prohibits Respondent from (1) 
expressly or implicitly conditioning a warranty on a consumer's use of 
any article or service which is identified by brand, trade, or 
corporate name, unless the article or service is offered for free or 
the Commission has issued a waiver to the company, or from otherwise 
violating the Warranty Act or the Rules promulgated thereunder; and (2) 
failing to disclose all warranty terms in a single document that uses 
simple and readily

[[Page 39835]]

understood terms to describe the warranty to consumers. Section I 
permits Respondent to not modify its existing calendar year 2022 
warranty documents, provided that Respondent provides all purchasers of 
its calendar year 2022 motorcycles with a copy of the updated warranty 
and a customer notice and requires its authorized dealers to maintain 
copies of these records.
    Section II prohibits Respondent from representing to consumers, 
expressly or by implication, (a) that its warranties will be void if 
they use third-party parts or services or if they modify or alter the 
product without authorization, or (b) as a condition of warranty 
coverage or in the written warranty, that consumers should only use 
branded parts or have their product repaired, altered or serviced by 
authorized service providers. Respondent will be permitted to exclude 
from its warranty coverage (1) damages caused by the use of 
unauthorized parts or services, the use of its vehicles for racing or 
competitions or the installation of parts designed for unauthorized 
uses of the vehicle, such as trailer hitches, and (2) all functional 
defects of powertrain components for any Harley-Davidson motorcycle 
registered in the United States if the vehicle was tuned using a tuning 
product not covered by a California Air and Resources Board Executive 
Order or that was otherwise approved by the Environmental Protection 
Agency, or if Harley-Davidson or any authorized Harley-Davidson dealer 
has any information to show that the vehicle was tuned using a tuning 
product not covered by a California Air and Resources Board Executive 
Order or that was otherwise approved by the Environmental Protection 
Agency.
    Section II also requires Respondent to include language in the 
warranty that affirmatively notifies consumers of their rights to use 
third-party services and parts under the Magnuson-Moss Warranty Act and 
enjoins Respondent from misrepresenting any material facts to consumers 
about the warranty.
    Sections III and IV require Respondent to inform its customers and 
authorized dealers and service providers that its warranty has been 
updated, and that the updated warranty is not conditioned on the use of 
authorized parts or services. Respondent must clearly and conspicuously 
post and keep on its website the notice and its updated warranty terms, 
and it must submit reports regarding its notification program. Sections 
V through VII of the Proposed Order are reporting and compliance 
provisions, which include recordkeeping requirements and provisions 
requiring Respondent to provide information or documents necessary for 
the Commission to monitor compliance with the Proposed Order. Section 
IX states that the Proposed Order will remain in effect for twenty (20) 
years, with certain exceptions.
    The purpose of this analysis is to aid public comment on the 
Proposed Order. It is not intended to constitute an official 
interpretation of the complaint or Proposed Order, or to modify in any 
way the Proposed Order's terms.

    By direction of the Commission.
April J. Tabor,
Secretary.

Statement of Chair Lina M. Khan Joined by Commissioner Rebecca Kelly 
Slaughter

    Today the Commission announced actions settling charges that 
Harley-Davidson, LLC and MWE Investments, LLC (``Westinghouse'') have 
engaged in unlawful repair restrictions. As stated in the complaints, 
the Commission charged Harley-Davidson, which manufactures motorcycles 
and related equipment, and Westinghouse, which makes and sells outdoor 
generators and related products, with unlawfully conditioning their 
warranties on the use of authorized parts in violation of both the 
Magnuson-Moss Warranty Act and the FTC Act. The Commission also alleged 
that Harley-Davidson failed to provide a clear description of warranty 
terms in a single document, a violation of the Disclosure Rule.
    The consent orders obtained in these matters bar both manufacturers 
from continuing the unlawful tying of their warranties to the use of 
authorized service or parts and prohibit them from misrepresenting any 
material facts about the warranty. Importantly, the firms are also 
required to note clearly and conspicuously in public statements that 
using third-party parts or repair services will not void the warranty. 
They must also provide customers with clear notice alerting them of the 
change.
    In July 2021, the Commission unanimously adopted a policy statement 
that committed the agency to prioritizing enforcement actions tackling 
unlawful repair restrictions.\1\ Today's enforcement actions--the first 
addressing unlawful repair restrictions since we adopted the policy 
statement--mark an important step forward, demonstrating our commitment 
to vigorously protecting Americans' right to repair. We are grateful to 
the Bureau of Consumer Protection staff for their excellent work 
driving this effort forward.
---------------------------------------------------------------------------

    \1\ Press Release, Fed. Trade Comm'n, FTC to Ramp Up Law 
Enforcement Against Illegal Repair Restrictions (July 21, 2021), 
https://www.ftc.gov/news-events/news/press-releases/2021/07/ftc-ramp-law-enforcement-against-illegalrepair-restrictions. This policy 
statement followed a July 2019 workshop that the FTC held on 
unlawful repair restrictions and a May 2021 report documenting the 
types of repair restrictions that firms frequently impose and the 
various arguments criticizing and defending them. See Nixing the 
Fix: A Workshop on Repair Restrictions, Fed. Trade Comm'n (July 16, 
2019), https://www.ftc.gov/news-events/events/2019/07/nixing-fix-workshop-repairrestrictions; Press Release, Fed. Trad Comm'n, FTC 
Report to Congress Examines Anti-Competitive Repair Restrictions, 
Recommends Ways to Expand Consumers' Repair Options (May 6, 2021), 
https://www.ftc.gov/newsevents/news/press-releases/2021/05/ftc-report-congress-examines-anti-competitive-repair-restrictions-recommendsways-expand-consumers.
---------------------------------------------------------------------------

    Illegal repair restrictions can significantly raise costs for 
consumers, stifle innovation, close off business opportunity for 
independent repair shops, create unnecessary electronic waste, delay 
timely repairs, and undermine resiliency--harms that can have an 
outsized impact on low-income communities in particular.\2\ It is 
critical that unlawful repair restrictions continue to be a key area of 
focus for the Commission and that we continue to use all of our tools 
and authorities to root out these illegal practices.
---------------------------------------------------------------------------

    \2\ Remarks of Chair Lina M. Khan Regarding the Proposed Policy 
Statement on Right to Repair, at 1 (July 21, 2021), https://www.ftc.gov/legal-library/browse/cases-proceedings/public-statements/remarks-chair-lina-m-khanregarding-proposed-policy-statement-right-repair; Fed. Trade Comm'n, Nixing The Fix: An FTC 
Report To Congress On Repair Restrictions, at 4-5, 9-15 (2021).

[FR Doc. 2022-14178 Filed 7-1-22; 8:45 am]
BILLING CODE 6750-01-P