Agency Complaint Challenges Exxon's Lower Maintenance Cost Claims
The Federal Trade Commission today charged that Exxon Corporation has misled consumers by making unsubstantiated advertising claims for Exxon gasoline. The ads allegedly claimed that switching to Exxon gasolines generally -- or to Exxon 93 Supreme specifically -- will make engines cleaner and significantly reduce auto maintenance costs. According to the FTC, Exxon failed to substantiate these claims. If the agency's charges are upheld after a trial before an administrative law judge, the company could be required to have scientific support for future claims about its gasolines' benefits.
The case announced today is the latest in a series of cases challenging deceptive advertising claims for high octane fuel. Amoco Oil Company, Sun Company, and Unocal Corporation have previously settled FTC charges in connection with superiority claims for their high octane gasolines.
Exxon, the largest oil company in the United States, does business in more than 100 countries worldwide and had revenues of $124 billion in 1995. It is based in Irving, Texas.
"In this case, consumers may be paying as much as twenty cents a gallon more for premium gasoline, because of claims that it will make engines cleaner and cheaper to maintain," said Jodie Bernstein, Director of the FTC Bureau of Consumer Protection. “But we believe these claims are unsubstantiated. Federal regulations require that all gasolines at all octane levels contain sufficient detergent additives to keep engines clean. In these times of high gasoline prices, spending more money for high octane fuel that your car doesn't need is just a way of picking your own pocket. In short, unless your engine is knocking, why buy a higher octane at a higher price than your car owner's manual recommends?"
According to the FTC complaint detailing the charges in this case, Exxon aired television and radio ads that promoted Exxon gasolines, including Exxon 93 Supreme. The ads included statements such "Exxon gasoline keeps your engine cleaner...So it can help drive down maintenance costs," and "Exxon 93 Supreme...with the power to drive down maintenance costs. Gas that can save you money. For more reliable performance."
Through this advertising, the FTC complaint alleges, Exxon represented that consumers can reduce significantly their automobile maintenance costs by:
- switching to Exxon from other gasoline brands; and
- switching to Exxon 93 Supreme from lower octane Exxon gasolines.
In fact, Exxon did not have a reasonable basis for these claims, according to the FTC.
Under the order the FTC is seeking, Exxon would be required to have scientific substantiation for these claims and any other engine performance, power, acceleration, or cleaning claims it makes for any gasoline in the future.
The Commission vote to issue the complaint was 4-0, with Commissioner Roscoe B. Starek, III, recused.
NOTE: The Commission issues a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The issuance of a complaint is not a finding or ruling that the respondent has violated the law. The complaint marks the beginning of a proceeding in which the allegations will be ruled upon after a formal hearing.
Copies of the complaint and a free FTC brochure, “Penny Wise or Pump Fuelish,” are available from the FTC’s Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC’s World Wide Web site at: http://www.ftc.gov
(FTC File No. 932 3022)
Claudia Bourne Farrell
Office of Public Affairs
Bureau of Consumer Protection
202-326-3153 or 202-326-3158