Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC issues final rule amendments related to E-Warranty Act, (Sep 7, 2016)

By Linda O’Brien, J.D., LL.M.

The FTC had adopted final amendments to the rules on Disclosure of Written Consumer Product Warranty Terms and Conditions ("the Disclosure Rule") and the Pre-Sale Availability of Written Warranty Terms ("the Pre-Sale Availability Rule") to give effect to the E-Warranty Act, which allows for the use of Internet websites to disseminate warranty terms to consumers in certain circumstances, the agency has announced.

The Magnuson-Moss Warranty Act (MMWA) authorizes the Commission to prescribe rules requiring disclosure of warranty terms and requiring that the terms of any written warranty on a consumer product be made available to the prospective purchaser prior to the sale of the product.

In 1975, the FTC promulgated the Disclosure Rule and Pre-Sale Availability Rule. The Disclosure Rule provides disclosure requirements for written warranties on products that cost more than $15, specifies language for certain disclosures, and requires simple language in a single document. The Pre-Sale Availability Rule describes how warrantors and sellers must provide warranty terms before a sale. The 2015 E-Warranty Act amended the MMWA to allow warrantors to post warranty terms online, as long as they also provide a non-Internet-based method as well, and to allow certain sellers to use an electronic method to display warranty terms pre-sale.

In May 2016, the FTC sought public comment on proposed changes to the Rules. The final amendments to the Disclosure Rule define what it means for certain disclosures to appear "on the face of" a warranty posted online. Such disclosures must be placed in close proximity to the location where the text of the warranty terms begins.

The Pre-Sale Availability Rule amendments allow warrantors to display warranty terms online and provide information to consumers to obtain those terms via non-Internet means. The amendments also allow sellers to supply pre-sale warranty terms electronically or conventionally if the warrantor has chosen to display its warranty terms online.

News: ConsumerProtection FederalTradeCommissionNews