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BMW of North America, LLC; Proposed Consent Order To Aid Public Comment

American Government Special Collections Reference Desk

American Government Topics:  Mini

BMW of North America, LLC; Proposed Consent Order To Aid Public Comment

Donald S. Clark
Federal Trade Commission
March 26, 2015


[Federal Register Volume 80, Number 58 (Thursday, March 26, 2015)]
[Notices]
[Pages 16011-16013]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-06903]


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FEDERAL TRADE COMMISSION

[File No. 132 3150]


BMW of North America, LLC; Proposed Consent Order To Aid Public 
Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices. The attached Analysis to Aid Public Comment describes both 
the allegations in the draft complaint and the terms of the consent 
order--embodied in the consent agreement--that would settle these 
allegations.

DATES: Comments must be received on or before April 20, 2015.

ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/bmwnorthamericaconsent online or on 
paper, by following the instructions in the Request for Comment part of 
the SUPPLEMENTARY INFORMATION section below. Write ``BMW of North 
America, LLC--Consent Agreement; File No. 1323150'' on your comment and 
file your comment online at https://ftcpublic.commentworks.com/ftc/bmwnorthamericaconsent by following the instructions on the web-based 
form. If you prefer to file your comment on paper, write ``BMW of North 
America, LLC--Consent Agreement; File No. 1323150'' on your comment and 
on the envelope, and mail your comment to the following address: 
Federal Trade Commission, Office of the Secretary, 600 Pennsylvania 
Avenue NW., Suite CC-5610 (Annex D), Washington, DC 20580, or deliver 
your comment to the following address: Federal Trade Commission, Office 
of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, 
Suite 5610 (Annex D), Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT: Svetlana Gans, Bureau of Consumer 
Protection, (202) 326-3708, 600 Pennsylvania Avenue NW., Washington, DC 
20580.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, 
notice is hereby given that the above-captioned consent agreement 
containing consent order to cease and desist, having been filed with 
and accepted, subject to final approval, by the Commission, has been 
placed on the public record for a period of thirty (30) days. The 
following Analysis to Aid Public Comment describes the terms of the 
consent agreement, and the allegations in the complaint. An electronic 
copy of the full text of the consent agreement package can be obtained 
from the FTC Home Page (for March 19, 2015), on the World Wide Web at: 
http://www.ftc.gov/os/actions.shtm.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before April 20, 2015. 
Write ``BMW of North America, LLC--Consent Agreement; File No. 
1323150'' on your comment. Your comment--including your name and your 
state--will be placed on the public record of this proceeding, 
including, to the extent practicable, on the public Commission Web 
site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of 
discretion, the Commission tries to remove individuals' home contact 
information from comments before placing them on the Commission Web 
site.

[[Page 16012]]

    Because your comment will be made public, you are solely 
responsible for making sure that your comment does not include any 
sensitive personal information, like anyone's Social Security number, 
date of birth, driver's license number or other state identification 
number or foreign country equivalent, passport number, financial 
account number, or credit or debit card number. You are also solely 
responsible for making sure that your comment does not include any 
sensitive health information, like medical records or other 
individually identifiable health information. In addition, do not 
include any ``[t]rade secret or any commercial or financial information 
which . . . is privileged or confidential,'' as discussed in Section 
6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 
4.10(a)(2). In particular, do not include competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    If you want the Commission to give your comment confidential 
treatment, you must file it in paper form, with a request for 
confidential treatment, and you have to follow the procedure explained 
in FTC Rule 4.9(c), 16 CFR 4.9(c).\1\ Your comment will be kept 
confidential only if the FTC General Counsel, in his or her sole 
discretion, grants your request in accordance with the law and the 
public interest.
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    \1\ In particular, the written request for confidential 
treatment that accompanies the comment must include the factual and 
legal basis for the request, and must identify the specific portions 
of the comment to be withheld from the public record. See FTC Rule 
4.9(c), 16 CFR 4.9(c).
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    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/bmwnorthamericaconsent by following the instructions on the web-
based form. If this Notice appears at http://www.regulations.gov/#!home, you also may file a comment through that Web site.
    If you file your comment on paper, write ``BMW of North America, 
LLC--Consent Agreement; File No. 1323150'' on your comment and on the 
envelope, and mail your comment to the following address: Federal Trade 
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite 
CC-5610 (Annex D), Washington, DC 20580, or deliver your comment to the 
following address: Federal Trade Commission, Office of the Secretary, 
Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex 
D), Washington, DC 20024. If possible, submit your paper comment to the 
Commission by courier or overnight service.
    Visit the Commission Web site at http://www.ftc.gov to read this 
Notice and the news release describing it. The FTC Act and other laws 
that the Commission administers permit the collection of public 
comments to consider and use in this proceeding as appropriate. The 
Commission will consider all timely and responsive public comments that 
it receives on or before April 20, 2015. You can find more information, 
including routine uses permitted by the Privacy Act, in the 
Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission (``FTC'' or ``Commission'') has 
accepted, subject to final approval, a consent agreement applicable to 
BMW of North America, LLC (``respondent'').
    The proposed consent order has been placed on the public record for 
thirty (30) days for receipt of comments by interested persons. 
Comments received during this period will become part of the public 
record. After thirty (30) days, the Commission will again review the 
agreement and comments received, and will decide whether it should 
withdraw from the agreement and take appropriate action or make final 
the agreement's proposed order.
    The Respondent's MINI Division provides purchasers of new MINI 
passenger cars a Service and Warranty Information Statement (``Warranty 
Statement''). According to the FTC complaint, language in the Warranty 
Statement violates the Magnuson-Moss Warranty Act (``Warranty Act''), 
15 U.S.C. 2302(c), by conditioning warranty coverage on the consumer's 
use of genuine MINI parts and MINI dealers to perform maintenance and 
repair work.
    The FTC enforces the Warranty Act, which regulates consumer 
warranties and the procedures used to resolve warranty disputes. The 
broad purposes of the Warranty Act are (1) to improve the adequacy of 
warranty information available to consumers, and thereby facilitate 
consumer choice; (2) to prevent deception; and (3) to improve 
competition in the marketing of consumer products. Among other things, 
the Warranty Act prohibits a warrantor from conditioning a consumer 
product's warranty on the consumer's use of an article or a service 
(other than an article or a service provided without charge) which is 
identified by brand, trade, or corporate name. 15 U.S.C. 2302(c) (``the 
anti-tying provision'').
    According to the FTC complaint, in connection with the warranty for 
certain MINI models, respondent has required owners to have routine 
maintenance, such as oil changes, performed by MINI dealers and to use 
genuine MINI parts. The complaint alleges that this requirement appears 
in two places in the Warranty Statement.
    First, in order to have a warranty claim approved, owners must 
demonstrate that they obtained regular maintenance of their vehicles by 
having a MINI dealer place a stamp in the warranty booklet. See 
Complaint at ] 12. Second, the Warranty Statement states that it ``is 
not obligated to pay for repairs that include non-genuine MINI parts. . 
. .'' (emphasis added). Although respondent provides, with the purchase 
of its vehicles, a free scheduled maintenance program, many of the 
models have a three-year maintenance program, but a four-year new 
vehicle warranty. Thus, according to the complaint, there is one year 
during the warranty period in which consumers must pay for their 
maintenance and repair work while being required to use MINI dealers 
and MINI parts to retain warranty coverage.
    The proposed consent order contains provisions designed to prevent 
respondent from engaging in similar acts or practices in the future. 
Specifically, Part I prohibits respondent, in connection with the sale 
of any MINI Division good or service, from violating any provision of 
the Warranty Act, including, but not limited to, the anti-tying 
provision. Part II prohibits respondent, in connection with the sale of 
any MINI good or service, from misrepresenting that vehicles, in order 
to operate safely or maintain value, must have maintenance work 
performed by a MINI dealer. Part II also prohibits respondent from 
misrepresenting any material fact concerning any warranty or 
maintenance requirements of any MINI good or service.
    Part III requires respondent to send notices to all affected 
consumers informing them that their warranties are not conditioned on 
repair work being performed by MINI dealers or on the use of genuine 
MINI parts.
    Parts IV through VIII of the proposed order are reporting and 
compliance provisions. Part IV requires respondent to maintain, and 
make available to the Commission upon written request, copies of 
Owner's Manuals and Warranty Statements for each motor

[[Page 16013]]

vehicle sold by respondent. Part V requires dissemination of the order, 
now and in the future, to persons with responsibilities relating to the 
MINI Division and the subject matter of the order. Part VI ensures 
notification to the FTC of changes in corporate status. Part VII 
mandates that respondent submit an initial compliance report to the 
FTC, and make subsequent reports available to the FTC, upon request. 
Part VIII is a provision ``sunsetting'' the order after twenty (20) 
years, within certain exceptions.
    The purpose of this analysis is to facilitate public comment on the 
proposed order. It is not intended to constitute an official 
interpretation of the proposed order or to modify its terms in any way.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2015-06903 Filed 3-25-15; 8:45 am]
 BILLING CODE 6750-01-P

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