Last week, the FTC brought and settled enforcement actions against two manufacturing companies for allegedly limiting customers’ right to repair purchased products under unlawful warranty terms. The FTC alleged that the two companies, Harley-Davidson Motor Company Group, LLC (a motorcycle manufacturer) and MWE Investments, LLC (a Westinghouse outdoor generator maker), acted illegally when using voidable warranties that required customers to use manufacturer-supplied parts and service instead of allowing customers to use independent dealers to either supply parts or perform repairs. In the settlements, the FTC ordered both companies to remove these warranty terms, admit to customers what they did, and ensure fair competition between dealers and independent third parties providing repair services and parts.

According to the FTC’s complaints against Harley-Davidson and MWE Investments, the companies’ unlawful warranty terms violated the Magnuson-Moss Warranty Act for conditioning warranty coverage on using the companies’ respective parts or services without either seeking the FTC’s waiver or providing the parts or services free of charge under the warranty. The FTC also alleged the manufacturers acted deceptively in failing to disclose these conditions properly. The FTC alleged that Harley-Davidson also violated the FTC’s Rule Governing Disclosure of Written Consumer Warranty Terms and Conditions (“Disclosure Rule”) when it failed to provide a single document containing the warranty terms, so customers would need to contact authorized dealers to understand the full terms of their warranties.

Continue Reading Repair Your Warranty Terms: FTC Takes Action Against Unlawful Repair Restrictions

The Magnuson-Moss Warranty Act (MMWA), is one of many vehicles that plaintiffs use to bring lawsuits over warranty claims.  It is a federal statute that governs warranties on consumer products.  The Federal Trade Commission has enacted regulations governing the disclosure of written consumer product warranty claims.

Just this month, the Federal Trade Commission completed a review of its Interpretations, Rules and Guides under the MMWA.  One of the revisions that the FTC made was to clarify that under the MMWA, warranty language that implies to a consumer that warranty coverage is conditioned on the use of select parts or service is deceptive.  The FTC wrote that “[g]enerally, the MMWA prohibits warrantors from conditioning warranties on the consumer’s use of a replacement product or repair service identified by brand or name, unless the article or service is provided without charge to the consumer or the warrantor has received a waiver.” 
Continue Reading FTC’s New Guidance on Implied Tying Claims Under the Magnuson-Moss Warranty Act