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Federal Register / Vol. 79, No.

134 / Monday, July 14, 2014 / Rules and Regulations 40623

Chicago, IL, Chicago Midway Intl, RNAV Harrisburg, PA, Capital City, RNAV (GPS) range of parts and assemblies of parts
(GPS) Z RWY 13C, Orig-D RWY 8, Amdt 1 previously used on vehicles
Chicago, IL, Chicago Midway Intl, RNAV Allendale, SC, Allendale County, VOR–A, (collectively, industry products or
(GPS) Z RWY 22L, Orig-A Amdt 6
Chicago, IL, Chicago Midway Intl, RNAV Nashville, TN, Nashville Intl, RNAV (GPS) Y
products). Industry products range from
(GPS) Z RWY 31C, Amdt 4 RWY 2C, Amdt 1B mechanical or body parts removed from
Chicago, IL, Chicago Midway Intl, RNAV Blackstone, VA, Allen C Perkinson a salvaged vehicle and put on a working
(RNP) Y RWY 4R, Orig-A Blackstone AAF, NDB–A, Amdt 12 vehicle without modification of any
Chicago, IL, Chicago Midway Intl, RNAV Richmond, VA, Richmond Intl, RNAV (GPS) kind to parts that, after removal from the
(RNP) Y RWY 13C, Amdt 2A Z RWY 2, Amdt 1A original vehicle, undergo substantial
Chicago, IL, Chicago Midway Intl, RNAV Richmond, VA, Richmond Intl, RNAV (GPS) disassembly, rebuilding, inspection,
(RNP) Y RWY 22L, Amdt 1 Z RWY 16, Amdt 1A and, in some instances, upgrading from
Chicago, IL, Chicago Midway Intl, RNAV Richmond, VA, Richmond Intl, RNAV (GPS)
(RNP) Y RWY 31C, Orig-A their original condition, before being
Z RWY 20, Amdt 2
Gaithersburg, MD, Montgomery County Richmond, VA, Richmond Intl, RNAV (GPS)
returned to service. The availability of
Airpark, NDB RWY 14, Amdt 2A, Z RWY 34, Amdt 1A these parts means vehicles stay in
CANCELED Richmond, VA, Richmond Intl, RNAV (RNP) service longer and for a lower price than
Greenville, ME, Greenville, Takeoff Y RWY 2, Orig if consumers had to rely only on new
Minimums and Obstacle DP, Amdt 3 Richmond, VA, Richmond Intl, RNAV (RNP) parts from the manufacturer. One
Kalispell, MT, Glacier Park Intl, VOR/DME Y RWY 16, Orig commenter asserted that without rebuilt
RWY 30, Amdt 10A Richmond, VA, Richmond Intl, RNAV (RNP)
Statesville, NC, Statesville Rgnl, ILS OR or remanufactured parts, 25% of the
Y RWY 20, Orig vehicles currently on the road, and a
LOC/DME Z RWY 28, Amdt 1 Richmond, VA, Richmond Intl, RNAV (RNP)
Statesville, NC, Statesville Rgnl, RNAV (GPS) higher percentage of off-road vehicles
Y RWY 34, Orig
RWY 10, Amdt 1 West Dover, VT, Mount Snow, NDB RWY 1,
(e.g., construction and farm equipment)
Statesville, NC, Statesville Rgnl, RNAV (GPS) Amdt 1, CANCELED would be out of service.1 Savings to
RWY 28, Amdt 3 consumers from using rebuilt or
Statesville, NC, Statesville Rgnl, VOR/DME Effective 21 AUGUST 2014 remanufactured parts range from 20–
RWY 10, Amdt 9 Graford, TX, Possum Kingdom, RNAV (GPS)
Teterboro, NJ, Teterboro, RNAV (GPS) Y
50%.2
RWY 2, Orig-B The Guides for the Rebuilt,
RWY 19, Orig Graford, TX, Possum Kingdom, RNAV (GPS)
Teterboro, NJ, Teterboro, RNAV (RNP) Z Reconditioned and Other Used
RWY 20, Orig-B
RWY 19, Orig-D Automobile Parts Industry (Used Auto
Lago Vista, TX, Lago Vista TX—Rusty Allen,
New York, NY, John F. Kennedy Intl, RNAV Parts Guides or Guides) provide advice
RNAV (GPS) RWY 15, Orig-A
(GPS) X RWY 31L, Amdt 1B, CANCELED to industry members on how they can
New York, NY, John F. Kennedy Intl, RNAV [FR Doc. 2014–15915 Filed 7–11–14; 8:45 am]
avoid engaging in unfair or deceptive
(GPS) Y RWY 31L, Amdt 2 BILLING CODE 4910–13–P practices that violate Section 5 of the
New York, NY, John F. Kennedy Intl, RNAV
(GPS) Y RWY 31R, Amdt 2 Federal Trade Commission Act, 15
New York, NY, John F. Kennedy Intl, RNAV U.S.C. 45.3 The Guides deem certain
(RNP) Z RWY 31L, Amdt 1 FEDERAL TRADE COMMISSION practices to be unfair or deceptive,
New York, NY, John F. Kennedy Intl, RNAV including the following:
(RNP) Z RWY 31R, Amdt 1 16 CFR Part 20 1. Misrepresenting industry products
New York, NY, La Guardia, RNAV (RNP) Z as new or misrepresenting the amount
RWY 4, Amdt 1 Guides for the Rebuilt, Reconditioned
and Other Used Automobile Parts of use of an industry product;
Oklahoma City, OK, Will Rogers World, ILS
OR LOC RWY 17L, Amdt 3 Industry 2. Misrepresenting the identity of
Oklahoma City, OK, Will Rogers World, ILS anyone who worked on an industry
OR LOC RWY 17R, Amdt 12 AGENCY: Federal Trade Commission product after it was removed from the
Oklahoma City, OK, Will Rogers World, ILS (FTC or Commission). original vehicle;
OR LOC/DME RWY 35L, Amdt 2 ACTION: Final Revisions to Guides. 3. Misrepresenting the condition of an
Oklahoma City, OK, Will Rogers World, ILS industry product or the amount of work
OR LOC/DME RWY 35R, ILS RWY 35R (SA SUMMARY: The Commission has done to it after its removal from the
CAT I), ILS RWY 35R (CAT II), Amdt 10 completed its review of the Guides for original vehicle.
Oklahoma City, OK, Will Rogers World, the Rebuilt, Reconditioned and Other
RNAV (GPS) RWY 13, Amdt 3 Used Automobile Parts Industry (Used II. Regulatory Review of the Guides
Oklahoma City, OK, Will Rogers World, Auto Parts Guides or Guides) and has
RNAV (GPS) Y RWY 17L, Amdt 3 As part of its continuing program to
determined to revise and retain the review its rules and guides, the
Oklahoma City, OK, Will Rogers World,
RNAV (GPS) Y RWY 17R, Amdt 4 Guides. Commission published a notice in the
Oklahoma City, OK, Will Rogers World, DATES: This action is effective as of Federal Register on May 21, 2012,
RNAV (GPS) Y RWY 35L, Amdt 4 August 22, 2014. seeking written comments about the
Oklahoma City, OK, Will Rogers World, Used Auto Parts Guides, including their
ADDRESSES: The document is available
RNAV (GPS) Y RWY 35R, Amdt 3 costs, benefits, and scope.4 Twelve
Oklahoma City, OK, Will Rogers World, on the Internet at the Commission’s Web
RNAV (RNP) Z RWY 17L, Amdt 3 site, www.ftc.gov.
1 Automotive Parts Remanufacturers Association
Oklahoma City, OK, Will Rogers World, FOR FURTHER INFORMATION CONTACT:
RNAV (RNP) Z RWY 17R, Amdt 1 (APRA), p. 1.
Jonathan L. Kessler, Federal Trade 2 Id., p. 1; Motor & Equipment Manufacturers
Oklahoma City, OK, Will Rogers World, Commission, 1111 Superior Avenue,
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Association (MEMA), pp 1–2 (MEMA submitted


RNAV (RNP) Z RWY 35L, Amdt 1 Suite 200, Cleveland, Ohio 44114, (216) comments on behalf of its affiliated organization,
Oklahoma City, OK, Will Rogers World,
263–3436, jkessler@ftc.gov. Motor & Equipment Remanufacturers Association.)
RNAV (RNP) Z RWY 35R, Amdt 2 3 The final revised guides contain a new
Oklahoma City, OK, Will Rogers World, SUPPLEMENTARY INFORMATION:
paragraph (b) in section 20.0 describing the purpose
Takeoff Minimums and Obstacle DP, I. Introduction and status of the guides, which is consistent with
Amdt 2 the Commission’s long standing treatment of its
Harrisburg, PA, Capital City, ILS OR LOC The market for previously used industry guides. See 16 CFR 1.5.
RWY 8, Amdt 12 automobile parts encompasses a broad 4 77 FR 29922 (May 21, 2012).

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40624 Federal Register / Vol. 79, No. 134 / Monday, July 14, 2014 / Rules and Regulations

comments were received.5 Five of the commenters expressly made their its removal from the original vehicle.11
commenters expressed support for the support for the Guides contingent on the Industry products come in a broad range
Guides because of the benefits they Commission accepting their suggested of conditions. The current Guides define
provide for consumers and/or the changes.8 The two remaining the terms ‘‘rebuilt,’’ ‘‘remanufactured,’’
marketplace and suggested no specific commenters were not clear about their and ‘‘factory rebuilt,’’ 12 but they also
changes.6 Three commenters support for the Guides.9 mention, ‘‘used,’’ ‘‘secondhand,’’
recommended changes but also The Commission has determined to ‘‘repaired,’’ ‘‘reconditioned,’’ and
expressed support for the Guides.7 Two retain and revise the Guides. The ‘‘relined’’ as examples of ‘‘appropriate
comments show a continuing need for descriptive terms’’ for industry products
5 The commenters consisted of (a) six trade
the Guides for the benefits they provide, while leaving these terms undefined.13
associations: American Insurance Association including both protections for Commenters suggested a rough
(AIA), Automotive Parts Remanufacturers
Association, Automotive Recyclers Association consumers and clarity for industry hierarchy of industry products, with
(ARA), Electric Rebuilders Association, Global members.10 Further, the Guides do not ‘‘rebuilt’’ and ‘‘remanufactured’’
Automakers, and Motor & Equipment appear to impose substantial costs; none describing products receiving the most
Manufacturers Association; (b) three consumer of the commenters stated that reworking and ‘‘used’’ or ‘‘salvaged’’ the
organizations: American Automobile Association
(AAA), Consumers Union, and RetireSafe; (c) two compliance with the Guides is least.14
businesses: Bryner Chevrolet (Bryner) and United burdensome. On balance, it appears that The Commission recognizes that it is
Auto Supply; and (d) one individual, Andrew the benefits of the Guides outweigh possible consumers might benefit from
Stilnovic. additional specificity in the meaning of
their costs. Therefore, the record
The Commission has decided to accept and terms used to refer to industry products,
consider the delayed submission of the AIA. This supports retaining them. In addition, as
entity contacted the agency on August 14, 2012, set forth below, the record supports but based on the record, with one
eleven days after the August 3, 2012, close of the certain changes to the Guides. The exception, it has determined not to
comment period, stating that it had tried to submit Commission has considered numerous change the way industry products are
its comments online and thought it had done so described. With the exception of
successfully, but that its submission did not appear other changes proposed by commenters
on the Commission’s Web site with the other and concluded not to adopt them. MEMA, the commenters on this topic
comments. The Commission notes that the The remainder of this Section II failed to identify what terms the Guides
document the AIA submitted on August 14 is dated summarizes the record and explains the should define or to propose definitions
August 3, 2012, and accepts the AIA’s explanation for those terms. Moreover, overall, the
that it thought it had submitted the comments on Commission’s decisions as to specific
time. items. commenters supported the Guides and
The Commission declines to accept a secondary believed they have been effective. In
submission from MEMA after the close of the A. Terms Used To Describe Industry light of this support and the lack of
comment period on August 3, 2012. On August 28, Products comments suggesting specific
2012, MEMA sent a letter to then-Commission
Chairman Leibowitz, along with proposed revisions Several commenters suggested that definitions, the Commission believes
to the Guides that would implement the suggestions the Commission modify the Guides to the record supports only the one change
in its original comment. MEMA did not explain its define additional terms used to describe described below, concerning the term
failure to include these materials in its original ‘‘remanufactured.’’
submission, which was timely. Thus, the
industry products. These commenters
Commission declines to accept the August 28 believed such definitions would further MEMA argued specifically that the
submission. inform consumers as to the amount of Guides should be amended so as to
6 AIA, p. 1 (‘‘[T]he current Guides provide a level
work done on an industry product after differentiate ‘‘remanufactured’’ from
of consistency for the repair and insurance ‘‘rebuilt’’; the Guides now treat these
industries . . . We do not believe there are any terms as equivalent. MEMA asserted,
changes needed at this time.’’); Consumers Union, those terms. Therefore, except for a few
p. 1 (The Guides provide ‘‘a basic and necessary modifications suggested later in this letter, the without providing supporting data or
protection for consumers,’’ and are still needed ‘‘to Association believes that the Guides should be other evidence, that including
protect consumers from deceptive practices and retained in their current form.’’); Stilnovic (‘‘These remanufactured products in the same
maintain high standards in the used car industry.’’); guides are most definitely needed in this
industry.’’). category as products sold with little or
Electric Rebuilders Association, pp. 1–2 (The
Guides ‘‘provide clear and readily understandable 8 ARA, p. 1 (‘‘ARA’s continued support of the no reworking confuses consumers.
rules for the marketing of used parts and the steps publication of the Guides is only possible if MEMA also argued that its definition of
which must be taken before a used part can be sold amended.’’); MEMA, p. 1 (‘‘[T]he Guides are remanufactured comports with how
as rebuilt or remanufactured.’’); Global Automakers, outdated and outmoded because they suggest that
remanufactured automotive products and various
international trade agreements use the
p. 1 (‘‘The Guides provide important safeguards for
consumers and should be retained.’’ The terms used used automotive products are largely equivalent word.15
to describe automobile parts (original equipment . . . .’’), p. 5 (‘‘We urge the FTC not to finalize the MEMA proposed applying the term
manufacturer, aftermarket, rebuilt, remanufactured, Guides in the current format, . . . . [T]he ‘‘remanufactured’’ only to industry
salvaged, used) can be very confusing and without Commission should overhaul the Guides to reflect products ‘‘produced using a
the Guides ‘‘consumers may not have the this ongoing evolution of the remanufacturing
information they need to make informed purchase industry.’’).
11 See APRA, p. 2 (the Guides need to distinguish
decisions.’’); RetireSafe, p. 1 (The Guides ‘‘are well- 9 Bryner (‘‘THANK YOU for addressing this issue

crafted to protect consumers,’’ and the FTC should . . . . The main concern I have with used parts is between a part on which no work has been done
‘‘avoid imposing any new regulatory burdens that safety.’’) (emphasis in original); United Auto and a part on which some work has been done but
may lead to additional costs being passed along to Supply (‘‘[I]t has been my experience that in MOST not enough to qualify as ‘‘rebuilt’’ or
consumers.’’). cases, commonly sold rebuilt/remanufactured/used ‘‘remanufactured’’); Bryner, p. 1 (parts from a
7 AAA, p. 1 (‘‘AAA believes that the current FTC aftermarket parts are clearly labeled and described salvage yard should be labeled as such; ‘‘recycled’’
correctly to the purchaser . . . . It has also been my implies some work on a previously used part);
guidelines are extremely important to ensure that
experience that the marketplace quickly punishes MEMA, pp 3–4 (specify that ‘‘remanufactured’’
vehicle equipment information is accurately
anyone selling sub-standard parts of any kind, new, parts are neither new nor used); but see, AAA, p.
identified and labeled to avoid any confusion by
1 (the current guides are important to ensure
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consumers and automotive service and repair rebuilt, remanufactured, or used. I think there is a
need for careful regulation, but there exists a risk accurate identification and labeling of parts); AIA,
technicians. Overall, AAA endorses the
if those regulations are hard to comply with . . . . p. 1 (the current terms are appropriate and not in
Commission’s Used Auto Parts Guides and believes
It is my view that this problem is very well need of changing).
they should be retained.’’); APRA, p. 2 (‘‘The 12 16 CFR 20.3.
Association believes that the Guides are an regulated by the marketplace. I am unaware of any
13 16 CFR 20.1(b).
important tool to ensure that previously used motor major problems with mislabeled or misleading auto
parts other than counterfeit parts which is another 14 APRA, pp. 2, 5; Global Automakers, p. 1;
vehicle parts are properly identified and that parts
labeled as ‘rebuilt’ or ‘remanufactured’ have issue.’’). MEMA, pp. 3–4; and Bryner.
received reconditioning appropriate to the use of 10 See generally supra, note 6. 15 MEMA, pp. 2–3.

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Federal Register / Vol. 79, No. 134 / Monday, July 14, 2014 / Rules and Regulations 40625

standardized industrial process by record does not identify any costs or providing ‘‘clear and conspicuous’’
which previously sold, worn or non- confusion resulting from definitions in disclosures.
functional products are returned to the Guides not matching those in One commenter responded on this
same-as-new, or better, condition and international trade agreements. point. The APRA suggested that the
performance.’’ 16 The standardized MEMA’s comments, however, Guides return to the language from
process, according to MEMA, is done in provided evidence that ‘‘remanufacture’’ before their 2002 revisions. Before these
a factory and requires ‘‘technical involves a process performed in a revisions, the Guides not only gave
specifications, including engineering, factory setting in a way that ‘‘rebuilt’’ examples of terms to describe industry
quality, and testing standards to yield does not.21 The Commission has, products,24 but also defined
fully warranted products.’’ 17 The therefore, decided to change § 20.3 to ‘‘conspicuous.’’ Conspicuous
process incorporates upgrades and delete ‘‘remanufacture’’ from subsection disclosures were:
corrects defects identified since the (a) and add it to subsection (b). Whereas of such size or color contrast and so placed
product first went on a vehicle.18 the Guides currently impose the same as to be readily noticeable to purchasers or
MEMA urged the Commission ‘‘not to requirements on use of the terms prospective purchasers reading advertising,
finalize the Guides in the current ‘‘remanufactured’’ and ‘‘rebuilt,’’ the sales promotional literature, or invoices
format, which does not properly revised Guides provide the same containing same, or reading any
recognize the significant advancements requirements for the use of the terms representation as to content on the container
made by the U.S. remanufacturing in which an industry product is packed, or
‘‘remanufactured’’ and ‘‘factory rebuilt.’’ inspecting an industry product before
industry over the past 30 years.’’ 19
The Commission declines to adopt B. Disclosures installation, or with a minimum of
MEMA’s proposed definition of disassembly after installation.25
The May 2012 Federal Register
‘‘remanufactured,’’ but, as discussed The APRA provided no data or other
Notice posed two questions about the
below, is revising the Guides to provide evidence on this point, but it believes
disclosures required by the Guides: (1)
that the term ‘‘remanufactured,’’ like the that the pre-2002 language was ‘‘clearer
should the Guides define ‘‘clear and
term ‘‘factory rebuilt,’’ should be used and provided industry participants with
conspicuous,’’ and (2) should the
only if the product was rebuilt ‘‘in a a better understanding of how the
Guides specify when an installer of an
factory generally engaged in the quality of the part and the identity of
industry product must disclose the use
rebuilding’’ of industry products. The the producer of the part had to be
of that product to the consumer.
Commission declines to adopt MEMA’s identified.’’ 26
proposed definition of 1. Clear and Conspicuous The Commission has decided not to
‘‘remanufactured’’ because the change the current language regarding
Commission does not have a basis to The Guides provide that ‘‘clear and
clear and conspicuous. The current
believe that MEMA’s specific proposal conspicuous’’ disclosure that the
Guides afford businesses flexibility in
will necessarily improve consumers’ product is used or contains used parts
complying with the Guide’s disclosure
understanding of the difference between should be made when industry products
provisions and avoid a definition that is
remanufactured products and other are advertised or sold. These disclosures
too narrow to apply to the myriad
industry products.20 In addition, the should appear in advertisements and
situations in which a disclosure may be
promotional literature, on invoices, on
needed. Moreover, the record does not
packaging, and on the product itself.
16 Id., (emphasis in original). indicate that sellers of industry products
17 Id., p. 3 (emphasis in original). The current Guides suggest some
are having difficulty understanding or
18 MEMA distinguishes ‘‘remanufactured’’ from descriptive terms to describe a product’s
applying the current language.27
‘‘rebuilt’’ parts. According to MEMA, an individual condition—‘‘used,’’ ‘‘secondhand,’’
can rebuild a part without following the same Therefore, the Commission has decided
‘‘repaired,’’ ‘‘remanufactured,’’
procedure every time, and any specific rebuilt part not to change this section of the Guides.
may contain a high percentage of the components ‘‘reconditioned,’’ ‘‘rebuilt,’’ and
it originally contained. As we understand it, ‘‘relined’’ 22—and allow codes to 2. Timing of Disclosures
MEMA’s definition of remanufacturing involves describe the products on invoices
complete disassembly of an industry product into Three commenters addressed the
components. An assembly line starts with one
between different sellers.23 Beyond timing of disclosures to consumers,
component, and as the line advances additional these statements, however, the Guides responding to the Federal Register
components are added, some new, some, perhaps, do not prescribe specific methods for Notice’s request for input on whether
used. At the end of the line the remanufactured part
is complete. Each remanufactured part, however, the Guides should be changed to specify
may contain few, if any components that were certification seal that can be affixed to the part and/ when an installer of an industry product
or box and used in advertising and other
together originally, and assembly of each
promotional materials by participating companies.’’
must disclose the use of the product to
remanufactured part follows the same procedure.
The remanufacturing process incorporates any Id. a consumer.28
upgrades, and corrects any defects identified, since 21 MEMA, pp. 2–3. This distinction is also The AAA suggested that verbal
the part was made originally, changes that, supported by reference to prevailing disclosure of an industry product be
according to MEMA, may not occur in a part that understandings of the terms. For example, required when an installer seeks verbal
is ‘‘factory rebuilt,’’ as that term is defined in the Webster’s Third New International Dictionary
Guides. See 16 CFR 20.3. defines ‘‘manufacture’’ both as a noun (‘‘the process authorization to proceed with a repair.
19 MEMA, p. 5. or operation of making wares or other material The AAA also suggested that signs in
20 Moreover, assuming, without deciding, that products by hand or by machinery esp. when the installer’s facility should state that
industry products meeting MEMA’s definition of carried on systematically with division of labor’’) industry products may be used and that
‘‘remanufactured’’ are superior to ‘‘rebuilt,’’ and as a verb (‘‘to produce according to an
‘‘factory rebuilt,’’ or other industry products, organized plan and with division of labor’’).
24 16 CFR 20.1(b)(1) (2000).
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adopting MEMA’s proposed definition is not Webster’s Third New International Dictionary 1378
25 16 CFR 20.1(b)(2) (2000).
necessary to communicate this difference. Indeed, (2002). ‘‘Rebuilt,’’ by contrast involves extensive
repairs, reconstruction, restoration to a previous 26 APRA, p. 9.
MEMA noted that it is developing ‘‘a certification
program that will let consumers and commercial state, or remodeling, but does not indicate a 27 In certain circumstances, the Guides do provide

customers know that remanufactured parts from systematic process. See id. at 1893. more information about the placement and
22 ‘‘Recycled’’ may also be used if its usage conspicuousness of disclosures. See 16 CFR 20.2(b).
MERA are truly remanufactured.’’ MEMA, p. 4
(MERA stands for Motor & Equipment complies with the Guides for the Use of 28 The Guides would apply if the installer also

Remanufacturers Association, an affiliate of Environmental Marketing Claims, 16 CFR 260.7(e). manufactures, sells, distributes, markets, or
MEMA.) The program would include ‘‘a process 23 16 CFR 20.1(b) (2013). advertises the industry product.

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40626 Federal Register / Vol. 79, No. 134 / Monday, July 14, 2014 / Rules and Regulations

use of an industry product be disclosed C. Coverage of the Guides has been changed to remove the last
on the consumer’s invoice. The AAA The May 2012 Federal Register sentence, which contains the exclusion,
further recommended that engines, Notice requested comments on whether and to add tires to the example list of
transmissions, and other assemblies tires should be covered by the Guides industry products.
represented to have ‘‘low mileage’’ be and whether the existing list of vehicles 2. Vehicles Whose Parts Are Covered by
accompanied by documentation of their to which the Guides applied was the Guides
conditions, such as pictures and Carfax sufficient or whether off-road vehicles
reports.29 The current Used Auto Parts Guides
such as all-terrain vehicles, construction
apply to parts ‘‘designed for use in
The APRA asserted that the Guides vehicles, and dune buggies should be
automobiles, trucks, motorcycles,
complement laws in some states that covered.32 Several commenters
tractors, or similar self-propelled
require mechanics to disclose the use of discussed one or more of these topics, vehicles.’’ 37 The Commission requested
industry products and that without the although with little analysis or data to
comments on whether this list
Guides such disclosures would be support their positions. The
adequately described the vehicles to
‘‘more difficult and less effective.’’ 30 Commission has decided to add tires to
which the Guides should apply. The
The APRA, however, also asserts that the Guides, but not to change the
APRA, the only commenter on this
disclosures by installers should be description of vehicles whose parts are
issue, advocated expressly including
regulated by state or local agencies.31 covered by the Guides.
off-road vehicles in the Guides because
Mr. Stilnovic suggested that car 1. Tires the benefits of industry products are the
dealers provide consumers interested in same for owners of these vehicles as for
The current Used Auto Parts Guides
used cars with a pamphlet alerting the owners of on-road vehicles and
expressly state that they do not apply to
consumers to the Guides and disclosing compliance by businesses would be
tires because tires are covered by a
any industry products in the vehicle the easy. The APRA, however, did not
separate guide.33 When the Used Auto
consumer is considering. identify existing buyer deception or
Parts Guides were last reviewed, tires
seller confusion from the existing
None of these commenters provided were covered by the Tire Advertising
language.
data or other evidence to support their and Labeling Guides, which have since
The Commission has decided not to
positions or indicate the extent of the been rescinded.34 The rescission
change the language in the Guides that
problems they address, and the announcement stated that changes in
describes the vehicles covered. From the
Commission has determined not to technology and tire marketing had made
single comment, the Commission cannot
modify the Guides without such most of those guides obsolete and that
determine that a need for change exists
information. The AAA’s suggestions on intervening regulations by the National
or that any change would not have
disclosure have intuitive appeal. The Highway Traffic Safety Administration
adverse effects that a more thorough
existing record, however, does not already required disclosure of
record would reveal. Although it
contain specific evidence of a problem information consumers were likely to
declines to amend the Guides in this
with the timing of disclosures, nor does want when purchasing tires; the few
regard, the Commission notes it has the
the Commission possess other evidence remaining provisions of the tire guides
authority to pursue sellers who deceive
of such a problem. The Commission will did not warrant keeping them as a
buyers of any product about that
monitor developments in this area and separate regulation. The rescission
product’s previous use or reworking.
revise the Guides if evidence of announcement noted that used and
Section 5’s broad prohibition against
problems with the timing of disclosures retreaded tires are seldom found in the
unfair and deceptive acts or practices
about industry products arises. consumer market but account for as
continues to apply in these situations,
much as 60% of the large truck market.
Mr. Stilnovic’s suggestion of a regardless of whether the products are
The rescission announcement also
pamphlet disclosure given in covered by the Guides.
noted that the failure to disclose that a
connection with used cars would tire was used or retreaded would likely D. Education
impose burdens on dealers, with constitute deception in violation of
uncertain benefits for consumers. The The May 21, 2012, Federal Register
Section 5 of the FTC Act.35 Notice asked if there is a need to
disclosure would inform consumers of The Commission believes the Used educate consumers or businesses about
the Guides, but such generic Auto Parts Guides should now apply to the Guides. Several commenters
information may well be of little value tires. The risk of overlap or responded that there is such a need, and
at the time, when the consumer’s focus contradiction between the Guides and the AAA offered to collaborate with the
is on the purchase of the vehicle, not on the tire guides no longer exists, and
a specific part. In addition, requiring a continuing to exclude tires from the so consumers know what they are getting). The
dealer to disclose any industry products Used Auto Parts Guides could be Commission declines to adopt ARA’s inspection
in a vehicle could require the dealer to interpreted to mean that sellers need not and evaluation requirements because the purpose of
disclose information it does not have, disclose when tires are used or the Guides is to provide notice to consumers, not
to establish quality standards.
such as in situations when the dealer retreaded. The Commission notes that The third commenter on this topic urged
buys the vehicle at auction. For these two of the three commenters on this continued exclusion of tires because the terms used
reasons, the Commission has chosen not topic support having the Guides apply in the Guides to describe industry products have
to adopt this suggestion. to tires.36 Therefore, § 20.0 of the Guides not been applied to used tires or ‘‘mean something
different when applied to tires,’’ creating the
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32 77
potential for confusion. APRA, p. 13. The
29 AAA, p. 2. Carfax is a private company that, FR 29922, 29923–29924 (May 21, 2012). Commission does not believe the likelihood of
33 16
CFR 20.0.
for a fee, provides title and insurance reports on confusion outweighs the benefits of ensuring that
specific vehicles, including any insurance claims 34 69 FR 56932 (September 23, 2004).
used tires are sold in a non-deceptive manner.
for repairs. The claims history may alert a 35 69 FR at 56933. Sellers of used tires are not required to use any of
prospective purchaser of the car to check carefully 36 ARA, p. 7 (include tires in the Guides, but the terms mentioned in the Guides and may
for latent problems. require ‘‘a visual appearance inspection and tread continue to use terms they have used in the past
30 APRA, p.5. as long as the use is not deceptive.
depth evaluation to determine whether a tire should
31 Id., pp. 9–10. be resold’’); Stilnovic (include tires in the Guides 37 16 CFR 20.0.

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Federal Register / Vol. 79, No. 134 / Monday, July 14, 2014 / Rules and Regulations 40627

Commission on educational efforts.38 2. American Parts Remanufacturers FTC Act through non-compliance with
Similarly, the APRA encouraged the Association the Guides.
FTC to promote the Guides on its Web b. The APRA also suggested that the
site, through private organizations, and The APRA’s comments included two Guides require original trademarks to be
consumer brochures.39 suggestions not covered above. left on a rebuilt or remanufactured
The ARA urged the FTC to educate a. The APRA believes that most industry product. It argues that such
consumers about the potential biases of industry products of American origin information would give the consumer
manufacturers promoting original comply with the Guides but that and/or installer greater assurance that
parts.40 MEMA requested that the products from foreign sources do not. the product was right for the consumer’s
Commission educate the public on the The APRA suggested that the vehicle.
quality and benefits of remanufactured Commission (1) state explicitly in the The Commission declines to adopt
products and to support MEMA’s Guides that they apply to foreign this suggestion. The current Guides and
‘‘Manufactured Again’’ certification products; (2) work to increase awareness law allow original markings to be left on
program.41 Mr. Stilnovic urged of the Guides among importers of a part if (1) the part is properly
education regarding the potential industry products; (3) educate disclosed as an industry product and (2)
presence of industry products in used Immigration and Customs Enforcement the reworker is identified (if the
cars. He also suggested that the about the Guides; and (4) monitor reworker is different from the original
Commission provide data showing how compliance with the Guides by manufacturer).46 There is no need for
long industry products lasted versus importers. The APRA provided no the Guides to require a reworker to
new products, so consumers could make indication of the scope of the alleged retain trademarks of the original
more informed decisions. imported-part problem or explanation of manufacturer. If a reworker believes
No change to the Guides is needed for why any Guide noncompliance that is leaving these marks on the part provides
the Commission to augment its occurring cannot be addressed through a marketplace benefit, it can do so, and
educational efforts on this issue, and enforcement actions under Section 5 of consumers and installers can choose
accordingly, no change has been made whether to purchase from those
the FTC Act.44
on this topic. The Commission will reworkers. A reworker who believes it
continue to look for opportunities to The Commission has determined that benefits from removing original
educate consumers about the benefits it is not necessary to amend the Guides markings (in favor, for example, of
and drawbacks of industry products and as the APRA suggests. The Guides promoting its own brand as a rebuilder),
to educate businesses about their currently apply to the ‘‘manufacture, can adopt that practice, and consumers
obligations when selling such products. sale, distribution, marketing, and and installers can choose based on their
advertising’’ of industry products, and own preferences.
E. Other Comments the Guides currently prohibit providing
Commenters mentioned other topics, the means or instrumentality to others 3. Automotive Recyclers Association
not discussed above. to violate the law. The Commission has The ARA suggested three other
jurisdiction over entities conducting amendments to the Guides, stating that
1. American Automobile Association
business in the United States regardless its support for the Guides was
The AAA suggests that ten additional of the country of origin of the original contingent on its proposed changes.
items be added to the forty-seven new product or of the reconstructed or a. The ARA requested that the
examples in the current Guides of parts otherwise used product. Therefore, as Commission prosecute car
that might be sold as industry the Commission has explained manufacturers and dealers who run ads
products.42 The Commission believes previously, the Guides currently cover promoting new repair parts. The ARA
the examples should be up-to-date, but foreign rebuilders and importers of used argues that such ads unfairly or
stresses that the Guides provide auto parts who distribute or sell used deceptively imply that industry
examples of industry products, and not auto parts in the United States.45 products, including recycled original-
an exhaustive list. Accordingly, the Accordingly, a change in the Guides is equipment body parts, are not as good
revised Guides include some of the not necessary for them to apply to as new parts. The ARA believes such
parts suggested by the AAA, but other importers. In addition, a change in the ads ‘‘cause consumers to doubt the
parts were removed to yield a shorter Guides is unnecessary to expand viability of recycled parts and cause
list of examples overall. No substantive education efforts for businesses and consumers needlessly to annually spend
change is intended by removing an item other government agencies or to billions of dollars. FTC should use these
from the list. The revised list includes investigate possible violations of the guides to help ensure that such
tires.43 anticompetitive practices cease.’’ 47 The
38 AAA,
pinion steering units, rotors, starter drives, ads the ARA provided, however, are in
p. 2. speedometers, solenoids, smog pumps, starters,
39 APRA, p. 12.
trade publications and promote the
stators, throttle body injectors, torque convertors
40 ARA, p. 2. [sic], transmissions, turbo chargers, voltage benefits of new manufacturer parts.
41 MEMA, pp. 2, 4. regulators, windshield wiper motors, and water Such general statements to a
42 AAA, p. 1; see 16 CFR 20.0. pumps.’’ 16 CFR 20.0. sophisticated audience have little
43 The current Guides list the following items as The revised Guides list the following items as likelihood of being broadly problematic.
examples of parts that can be industry products: examples of parts that can be industry products:
‘‘airbags, alternators and generators, anti-lock brake
While the Commission would evaluate
‘‘anti-lock brake systems, air conditioners,
alternators, armatures, air brakes, brake cylinders, systems, brake cylinders, carburetors, catalytic claims of deception on a case-by-case
basis, it concludes that no changes to
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ball bearings, brake shoes, heavy duty vacuum converters, differentials, engines, fuel injectors,
brakes, calipers, carburetors, cruise controls, hybrid drive systems and hybrid batteries, the Guides are necessary to address
cylinder heads, clutches, crankshafts, constant navigation and audio systems, power steering
pumps, power window motors, rack and pinion
ARA’s concerns. The Commission could
velocity joints, differentials, drive shafts,
distributors, electronic control modules, engines, units, starters, steering gears, superchargers and take action against deceptive
fan clutches, fuel injectors, fuel pumps, front wheel turbochargers, tires, transmissions and transaxles,
drive axles, generators, master cylinders, oil pumps, and water pumps.’’ See infra, text of revised § 20.0. 46 16 CFR 20.2; Champion Spark Plug Co., v.
44 15 U.S.C. 45. Sanders, 331 U.S. 125 (1947).
power brake units, power steering gears, power
steering pumps, power window motors, rack and 45 67 FR 9919, 9921 (March 5, 2002). 47 ARA, p. 2.

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40628 Federal Register / Vol. 79, No. 134 / Monday, July 14, 2014 / Rules and Regulations

advertising, by car manufacturers or jurisdiction of the National Highway the addition of tires. Finally, the section
others, without changing the Guides. Traffic Safety Administration rather has been edited for style and clarity,
b. The ARA believes the Guides than the FTC.51 with no substantive change intended by
should require car manufacturers to these edits.
provide information on parts recycling III. Section by Section Discussion of the
Changes Paragraph (b) of revised § 20.0 is a
in materials given to the consumer new provision, describing the purpose
when the car is purchased as new. In response to the comments received
and status of the Guides, which are
According to the ARA, European Union and the Commission’s own analysis,
consistent with the Commission’s long-
directives promote recycling and require several changes have been made to the
standing treatment of industry guides.
vehicle manufacturers to provide current Guides. This part discusses the
information on the ‘‘dismantling, changes to each section of the Guides. C. Section 20.1 Deception Generally
storage and testing’’ of components A. Title Some of the language has been
when an item is no longer useful.48
The title has not been changed, other amended to improve readability. In
Similarly, the ARA wants the
than to add a comma after addition, the order of the list of
Commission to recognize private
‘‘reconditioned,’’ for stylistic purposes. appropriate descriptive terms has been
standards setting organizations for
No substantive change is intended. changed to approximate the amount of
recycled ‘‘green’’ parts and to state in
reworking that some industry members
the Guides that use of industry products B. Section 20.0 Scope and Purpose of believe the terms indicate.55 No
is a form of recycling.49 the Guides
The Commission has decided not to substantive change is intended by any of
This section has undergone a number these modifications.
make these changes. Historically, the
of changes, including the creation of
Guides have neither promoted nor D. Section 20.2 Deception as to the
two paragraphs. Paragraph (a) contains
discouraged the use of industry Identity of a Rebuilder, Remanufacturer,
the existing § 20.0 with some revisions.
products but have instead sought to First, the description of items to which Reconditioner, Reliner or Other
ensure that consumers have accurate the Guides apply (industry products) is Reworker
information from which to make a changed from ‘‘used parts and
choice. The Commission sees no reason Section 20.2, including the title, has
assemblies containing used parts’’ to been changed to add ‘‘other reworker’’
to deviate from this position. ‘‘parts that are not new, and assemblies
c. The ARA requests that the to those to whom this section applies.
containing such parts.’’ This change is The persons and processes mentioned
Commission require online parts sellers
intended to remove the circularity in the in this section relate to some ways of
to be licensed in the states in which
existing definition, in which ‘‘used’’ changing a part after its removal from a
they sell.50 The Commission declines to was part of the definition of ‘‘used.’’ The
make this change. The purpose of the vehicle—‘‘rebuild,’’ ‘‘remanufacture,’’
change also avoids potential confusion ‘‘recondition,’’ and ‘‘reline’’—but other
Guides is to assist industry members in over the scope of industry products.
avoiding unfair or deceptive acts or terms could also apply, including
‘‘Used’’ sometimes refers to a part to ‘‘overhaul,’’ ‘‘retread,’’ ‘‘repair,’’ and
practices in the advertising and sale of which little has been done between its
industry products, such as ‘‘refurbish.’’ Adding ‘‘other reworker’’
removal from one car and installation clarifies that, regardless of what is done
misrepresentations regarding the on another, with other terms applying to
condition of products. The Commission to the part, the identity of the person
products receiving more reworking.52 doing it cannot be misrepresented, and
declines to recommend licensing The change clarifies that ‘‘industry
requirements for online sellers and has may have to be disclosed. This section
product’’ has a broad meaning that also contains stylistic changes designed
no authority to enforce state licensing includes all parts that are not new, even
laws. to improve readability without changing
parts that have been substantially the section’s substance.
4. Bryner Chevrolet reworked.53
Section 20.0(a) of the revised Guides E. Section 20.3 Misrepresentation of
Bryner Chevrolet took no explicit differs from § 20.0 of the existing Guides the Terms ‘‘Rebuilt,’’ ‘‘Factory Rebuilt,’’
position on the Guides. Rather, it argued in other ways. The last sentence and ‘‘Remanufactured,’’ etc.
that safety-related industry products following parenthetical, which exclude
from a salvage yard—suspension, tires from the Guides, have been The parenthetical at the end of § 20.3,
steering, and brake parts—are inherently removed and tires have been added to referring to § 20.2, has been removed as
dangerous and should not be used, even the sample list of industry products.54 unnecessary. No substantive change is
though insurance companies prepare In addition, the sample list of industry intended. The word ‘‘remanufactured’’
estimates that include these unsafe products has been shortened and has been removed from subsection (a) of
parts. Bryner’s comment fails to explain updated, but no substantive change is this section and added to subsection (b).
what changes to the Guides, if any, are intended by these changes other than As discussed earlier, this change results
needed to address its concerns. in the same requirements applying to
The Commission has decided that 51 See 49 CFR 1.94(b).(stating that the National the terms ‘‘remanufactured’’ and
Bryner’s comment warrants no changes Highway Traffic Safety Administration is ‘‘factory rebuilt.’’ 56
to the Guides. The comment contains no responsible for ‘‘establishing and enforcing safety
data or other evidence with which the standards and regulations,’’ conducting research List of Subjects in 16 CFR Part 20
related to motor vehicle safety, and investigating
Commission can weigh the threat to safety-related defects in motor vehicles and motor Advertising, Consumer protection,
consumer safety against the benefits of
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vehicle equipment). Motor vehicles, Trade practices.


access to less expensive parts. Even if 52 See supra, note 13 and related text.

the data existed, the safety of vehicles 53 The change does not create any new category For the reasons stated above, the
and their parts fits better within the of industry product. MEMA’s comment described Federal Trade Commission revises 16
remanufactured products as ‘‘Not New, Not Used.’’ CFR Part 20 to read as follows:
MEMA, p. 2, but the use of ‘‘not new’’ in the revised
48 Id., p. 2. Guides is broader than MEMA’s meaning of
49 Id., p. 6. remanufactured. 55 See supra, note 13 and related text.
50 Id., p. 5. 54 See supra, Section II.C.1. 56 See supra, text following note 18.

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Federal Register / Vol. 79, No. 134 / Monday, July 14, 2014 / Rules and Regulations 40629

PART 20—GUIDES FOR THE REBUILT, without disclosing, clearly and than the manufacturer identified:
RECONDITIONED, AND OTHER USED conspicuously, in advertising, in ‘‘Rebuilt by other than XYZ Motors.’’
AUTOMOBILE PARTS INDUSTRY promotional literature, on invoices, and (4) Disclosure that the industry
on the product’s packaging that the item product was rebuilt for the identified
Sec. is an industry product. Additionally, it manufacturer: ‘‘Rebuilt for XYZ
20.0 Scope and purpose of the guides.
is unfair or deceptive to offer for sale or Motors.’’
20.1 Deception generally.
20.2 Deception as to identity of a rebuilder, to sell any industry product that appears
§ 20.3 Misrepresentation of the terms
remanufacturer, reconditioner, reliner, or new or unused without disclosing on
‘‘rebuilt,’’ ‘‘factory rebuilt,’’
other reworker. the product itself that it is an industry ‘‘remanufactured,’’ etc.
20.3 Misrepresentation of the terms product, using appropriate descriptive
‘‘rebuilt,’’ ‘‘factory rebuilt,’’ (a) It is unfair or deceptive to use the
terms with sufficient permanency to
‘‘remanufactured,’’ etc. word ‘‘Rebuilt,’’ or any word of similar
remain visible for a reasonable time
import, to describe an industry product
Authority: 15 U.S.C. 41–58. after installation. Examples of
which, since it was last subjected to any
appropriate descriptive terms include,
§ 20.0 Scope and purpose of the guides. use, has not been dismantled and
but are not limited to ‘‘Used,’’
(a) The Guides in this part apply to reconstructed as necessary, all of its
‘‘Secondhand,’’ ‘‘Repaired,’’ ‘‘Relined,’’
the manufacture, sale, distribution, internal and external parts cleaned and
‘‘Reconditioned,’’ ‘‘Rebuilt,’’ or
marketing and advertising (including made rust and corrosion free, all
‘‘Remanufactured.’’ If the term
advertising in electronic format, such as impaired, defective or substantially
‘‘recycled’’ is used, it should be used in
on the Internet) of parts that are not worn parts restored to a sound
a manner consistent with the
new, and assemblies containing such condition or replaced with new, rebuilt
requirements for that term set forth in
parts, that were designed for use in (in accord with the provisions of this
the Guides for the Use of Environmental
automobiles, trucks, motorcycles, paragraph) or unimpaired used parts, all
Marketing Claims, 16 CFR 260.7(e). On
tractors, or similar self-propelled missing parts replaced with new, rebuilt
invoices to the trade only, the disclosure
vehicles, regardless of whether such or unimpaired used parts, and such
may be by use of any number, mark, or
parts or assemblies have been cleaned, rewinding or machining and other
other symbol that is clearly understood
repaired, reconstructed, or reworked in operations performed as are necessary to
by industry members as meaning that
any other way (industry product or put the industry product in sound
the part so marked on the invoices is not
product). Industry products include, but working condition.
new.
are not limited to, airbags, alternators (c) It is unfair or deceptive to place (b) It is unfair or deceptive to
and generators, anti-lock brake systems, any means or instrumentality in the represent an industry product as
brake cylinders, carburetors, catalytic hands of others so that they may ‘‘Remanufactured’’ or ‘‘Factory Rebuilt’’
converters, differentials, engines, fuel mislead consumers as to the previous unless the product was rebuilt as
injectors, hybrid drive systems and use of industry products. described in paragraph (a) of this
hybrid batteries, navigation and audio section at a factory generally engaged in
systems, power steering pumps, power § 20.2 Deception as to the identity of a the rebuilding of such products.
window motors, rack and pinion units, rebuilder, remanufacturer, reconditioner, By direction of the Commission.
starters, steering gears, superchargers reliner, or other reworker.
Donald S. Clark,
and turbochargers, tires, transmissions (a) It is unfair or deceptive to
Secretary.
and transaxles, and water pumps. misrepresent the identity of the
[FR Doc. 2014–16339 Filed 7–11–14; 8:45 am]
(b) These guides set forth the Federal rebuilder, remanufacturer,
reconditioner, reliner or other reworker BILLING CODE 6750–01–P
Trade Commission’s current views
about the manufacture, sale, of an industry product.
distribution, and advertising of industry (b) If the identity of the original
products. The guides help businesses manufacturer of an industry product, or DEPARTMENT OF STATE
avoid making claims that are unfair or the identity of the manufacturer for
which the product was originally made, 22 CFR Part 96
deceptive under Section 5 of the FTC
Act, 15 U.S.C. 45. They do not confer is revealed and the product was rebuilt, [Public Notice 8792]
any rights on any person and do not remanufactured, reconditioned, relined,
RIN 1400–AD45
operate to bind the FTC or the public. or otherwise reworked by someone else,
The Commission, however, can take it is unfair or deceptive to fail to Adoptions: Regulatory Change To
action under the FTC Act if a business disclose such fact wherever the original Clarify the Application of the
makes a claim inconsistent with the manufacturer is identified in advertising Accreditation Requirement and
guides. In any such enforcement action, or promotional literature concerning the Standards in Cases Covered by the
the Commission must prove that the industry product, on the container in Intercountry Adoption Universal
challenged act or practice is unfair or which the product is packed, and on the Accreditation Act
deceptive in violation of Section 5 of the product itself, in close conjunction
FTC Act. with, and of the same permanency and AGENCY:Department of State.
conspicuousness as, the disclosure that Interim final rule; request for
ACTION:
§ 20.1 Deception generally. the product is not new. Examples of comments.
(a) It is unfair or deceptive to such disclosures include:
represent, directly or by implication, (1) Disclosure of the identity of the SUMMARY: This rule amends the
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that any industry product is new or rebuilder: ‘‘Rebuilt by John Doe Co.’’ Department of State (Department) rule
unused when such is not the fact, or to (2) Disclosure that the industry on the accreditation and approval of
misrepresent the current condition, or product was rebuilt by an independent adoption service providers in
extent of previous use, reconstruction, rebuilder: ‘‘Rebuilt by an Independent intercountry adoptions. The revisions
or repair of any industry product. Rebuilder.’’ reflect the requirement of the
(b) It is unfair or deceptive to offer for (3) Disclosure that the industry Intercountry Adoption Universal
sale or sell any industry product product was rebuilt by someone other Accreditation Act of 2012 (UAA) that

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