FTC 2014 Amendments to Used Auto Parts Guides

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Explore:  Automotive Industry FTC

The Federal Trade Commission announced amendments, on July 8, 2014, to its Used Auto Parts Guides, intended to prevent unfair or deceptive marketing of used motor vehicle parts and assemblies containing used parts. The FTC’s amended Guides will become effective on August 22, 2014, and complement disclosure requirements in place in at least some states.

In light of FTC’s authority to investigate and challenge — under Section 5 of the Federal Trade Commission Act, 15 U.S.C. 45 — conduct it finds unfair or deceptive, it is important for parties engaged in the “manufacture, sale, distribution, marketing and advertising (including advertising in electronic format, such as the Internet) of parts that are not new, and assemblies containing such parts,” to understand the disclosure requirements of the Guides.

FTC first promulgated rules regarding used auto parts in December 1962. FTC’s Used Auto Parts Guides, issued in 1979, deem certain practices to be unfair or deceptive including, among other practices:

  • Misrepresenting industry products as new or misrepresenting the amount of use of an industry product;
  • Misrepresenting the identity of anyone who worked on an industry product after it was removed from the original vehicle; and
  • Misrepresenting the condition of an industry product or the amount of work done to it after its removal from the original vehicle.

In connection with FTC’s recent review of its Used Auto Parts Guides, FTC sought public comments in 2012 as to whether these Guides were still necessary, whether changes were required, and what effects changes in technology and economic conditions might have had on the requirements of the guides. Following its review of these public comments, the FTC voted this week to retain and revise the Guides.

Among the recent changes and additions to the Guides adopted by the FTC are:

  • The use of the term “remanufactured,” like the term “factory rebuilt,” should be used only if the product was rebuilt “in a factory generally engaged in the rebuilding” of industry parts.
  • Tires have been added as a covered “industry product.”
  • The Guides’ list of examples of “industry products” has been updated, with some new examples added and some current examples removed. FTC cautions, however, in its commentary that “[n]o substantive change is intended by removing an item from the list.”

While these changes and additions are not momentous, the fact the FTC decided to maintain the Guides demonstrates FTC’s view that the Guides remain a necessary tool to address unfair or deceptive marketing of used motor vehicle parts and assemblies containing used parts.

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Topics:  Automotive Industry, FTC

Published In: Antitrust & Trade Regulation Updates, General Business Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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