Antitrust Law Daily Wrap Up, TOP STORY: Congress approves E-Warranty Act, allowing online warranty disclosures, (Sep 9, 2015)

By Jeffrey May, J.D.

Manufacturers may soon have the option of fulfilling some of their warranty notice obligations for consumer products by posting the information online. Just back from the summer recess, the U.S. House of Representatives late Tuesday passed the E-Warranty Act of 2015 (S. 1359). It is likely that the President will sign off on the bi-partisan measure, which clarifies manufacturer’s warranty obligations, in the coming days.

The legislation will require the FTC to update its rules that govern the content and availability of product warranties. The Magnuson-Moss Warranty-Federal Trade Commission Improvement Act and the FTC's warranty rules require sellers and warrantors to disclose specific terms and to make the terms available to consumers prior to sale. The bill is intended to update these obligations in light of modern methods of communication.

Under the legislation, manufacturers that make their warranties available online must provide consumers and prospective consumers with information on how to obtain and review their warranties. That information should appear on the products themselves, their packaging, or in the product manuals. Protections will remain in place for consumers who do not have access to the Internet. Manufacturers must provide consumers and potential consumers with the phone numbers, mailing addresses, or another reasonable non-Internet means that consumers may use to contact manufacturers to obtain copies of the warranties.

The bill was sponsored by U.S. Senators Deb Fischer (R-Neb.) and Bill Nelson (D-Fla.). It passed the Senate on July 9. An identical House bill (H.R. 3154) was introduced by Markwayne Mullin (R-Okla.) on July 22.

Upcoming FTC rule proceedings. The FTC has one year from enactment to “prescribe rules for determining the manner and form in which information with respect to any written warranty of a consumer product shall be clearly and conspicuously presented or displayed so as not to mislead the reasonable, average consumer.” The law would allow the FTC to waive a requirement under the Magnuson-Moss Act that provides interested persons the opportunity for oral presentation, if the agency decides that providing such an opportunity would interfere with timely rule revisions. Interested persons will still be permitted to submit written comments.

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