Opinion 09-3

1 Specifically, I am responding to the August 25 letter on behalf of the Automotive
Aftermarket Industry Association (“AAIA”), the letters of September 8 and October 26 on behalf
of the Automotive Oil Change Association (“AOCA”), our meeting on October 26, and your
most recent letter on December 9 on behalf of AAIA, AOCA, and the Tire Industry
Association/Service Station Dealers of America, collectively. Copies of American Honda’s
position statements provided as part of these letters are attached hereto.
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UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580
Bureau of Consumer Protection
Division of Marketing Practices
December 21, 2010
Aaron M. Lowe
Vice President, Government Affairs
Automotive Aftermarket Industry Association
7101 Wisconsin Ave., Suite 1300
Bethesda, MD 20814
Patricia Wirth
President
Automotive Oil Change Association
1701 N Greenville Ave., Suite 404
Richardson, TX 75081
Paul Fiore
Executive Vice President
Tire Industry Association
Service Station Dealers of America
1532 Pinter Ridge Place Suite G
Bowie, Maryland 20716
Dear Mr. Lowe, Ms. Wirth, and Mr. Fiore:
I am responding to concerns your organizations have raised regarding position statements
issued by American Honda addressing warranties on parts that are not purchased from an
“authorized” Honda or Acura dealer and subsequent repair costs associated with failures due to
the use of such parts.1 As we mentioned, we take very seriously the concerns you raised and
appreciate you bringing these issues to our attention. We are addressing your concerns as an
informal request for a staff advisory opinion. The opinions and conclusions expressed in the
following discussion are those of Commission staff only and are not attributable to, nor binding
on, the Commission itself or any individual Commissioner.

2 16 C.F.R. 700.10(c).
3 Id. (emphasis added).
4 American Honda Position Statement Issued August 20, 2010 (emphasis added).
5 Honda 2010 Warranty Booklet (Provided to FTC Staff), at 8 (stating that warranty does
not cover failures caused by installing accessories not authorized by Honda) (emphasis added).
6 Id. at 36.
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The Honda Position Statements and Alleged Tying Violations
Your interpretation of American Honda’s position statements is that these statements
violate the Magnuson-Moss Warranty Act’s (“Magnuson-Moss” or “Act”) prohibition on tie-in
sales. As you know, Section 102(c) of the Act prohibits warrantors from conditioning warranty
coverage on the consumer’s using, in connection with the warranted product, an article or
service identified by brand, trade, or corporate name, unless the warrantor provides that article or
service without charge. In other words, warrantors may not claim that a warranty is void simply
because a consumer has used an unauthorized or aftermarket part. In the same vein, no
warrantor may condition continued warranty coverage on a consumer using only a named or
authorized service station or dealership for their automobile maintenance. Simply stated, “[a]
warrantor cannot, as a matter of law, avoid liability under a written warranty where a defect is
unrelated to the use by a consumer of ‘unauthorized’ articles or service.”2
However, warrantors are permitted to exclude liability for damage or defects caused by
the use of unauthorized parts. The FTC’s Interpretations under Magnuson-Moss explain:
Although “[n]o warrantor may condition the continued validity of a warranty on the use of only
authorized repair service and/or authorized replacement parts for non-warranty service and
maintenance . . .[t]his does not preclude a warrantor from expressly excluding liability for
defects or damage caused by such “unauthorized” articles or service; nor does it preclude the
warrantor from denying liability where the warrantor can demonstrate that the defect or damage
was so caused.” 3
While we appreciate your view to the contrary, we interpret the American Honda position
statements to state that American Honda will not deny warranty coverage for the mere use of an
unauthorized part, but rather for damage or defects caused by those parts. Indeed, in the position
statements, American Honda states that it “will not be responsible for any subsequent repair
costs associated with vehicle or part failures caused by the use of parts other than [Honda/Acura]
Genuine parts purchased from an authorized US [Honda/Acura] dealer.” 4 The terms of the
underlying warranty contain similar provisions.5 In addition, we note that Honda’s warranty
terms specifically provide that “service at the dealer is not mandatory for continued warranty
coverage.” 6
Therefore, based solely on Commission staff’s review of the position statements and the
underlying warranty terms, American Honda does not appear to be in violation of the Act’s tying

7 See 16 C.F.R. 700.10(c) (warrantor is not precluded from denying liability where “the
warrantor can demonstrate” the cause of damage or defect) (emphasis added).
8 See http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt192.shtm.
9 See 75 Fed. Reg. 12,715 (Mar. 17, 2010).
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prohibition. We would welcome any information that American Honda operates inconsistent
with its position statements or warranty terms and represents to consumers that their warranty is
void simply because of the use of unauthorized parts or services. Moreover, should American
Honda, or any other warrantor, attempt to deny warranty coverage by claiming that an
unauthorized part caused the damage or defect for which the consumer seeks warranty service,
the burden will be on the warrantor to demonstrate that it was the unauthorized part that caused
that damage or defect.7
The Honda Position Statements and Perceived Misconceptions
You also raised concerns that Honda’s position statements could be perceived as
misleading, and that there is a common misunderstanding by consumers regarding their warranty
rights. Specifically, you contend that consumers are often misinformed about whether they can
use aftermarket parts or independent service stations without impacting their warranty coverage.
To address perceived confusion in this area and better inform consumers of their
warranty rights under the law, the FTC has issued new consumer education that specifically
addresses this issue. This new consumer alert, entitled “Auto Warranties, Routine Maintenance,
and Repairs: Is Using the Dealer a Must?,” explains in plain terms that it is “illegal for
manufacturers or dealers to claim that your warranty is void or to deny coverage under your
warranty simply because someone other than the dealer did the work.”8 The education piece also
addresses the use of aftermarket parts, and sends a similar message: that it is “illegal for
companies to void your warranty or deny coverage under the warranty simply because you used
an aftermarket part.” Additionally, the new education piece encourages consumers to file a
complaint with the FTC should they feel that a dealer denied their warranty claim unfairly. We
encourage your organizations to link to this consumer education and to promote it broadly.
Finally, we want to inform you that, in 2011, the FTC will engage in a regulatory review
of the rules and guides issued under Magnuson-Moss. 9 Of the rules to be reviewed is 16 C.F.R.
Part 700, the FTC’s Interpretations of certain provisions of Magnuson-Moss, including the tie-in
sales prohibition. Periodic review of the agency’s regulations is an important opportunity to
assess the effectiveness, costs, and benefits of the rules and guides that the agency issues, and to
provide the public and associations such as yours with an opportunity to comment on them. We
hope you will weigh in on the upcoming rule review proceedings, as may be appropriate.
The opinions and conclusions expressed in the foregoing discussion are those of
Commission staff only and are not attributable to, nor binding on, the Commission itself
or any individual Commissioner. The Commission reserves the right to take such further action
as the public interest may require. Further, the staff will not be precluded from recommending

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to the Commission an appropriate action should other facts subsequently come to our attention.
We hope this discussion is helpful to you. Please continue to contact the Commission
whenever we may be of service.
Very truly yours,
Lois C. Greisman
Associate Director