Amoco Oil Company has agreed to settle Federal Trade Commission charges that its "Crystal Clear Amoco Ultimate" advertising campaign included unsubstantiated claims that Amoco premium gasoline, because it is refined more than competitors' brands and is clear in color, delivers superior engine performance and environmental benefits. Under the proposed settlement, Amoco Oil has agreed not to make any performance or environmental benefit claim for any of its gasolines without first having scientific evidence to back it up.
Amoco Oil Company, a subsidiary of Amoco Corporation, is based in Chicago, Illinois, and is responsible for Amoco gasoline advertising. Amoco Corporation is one of the largest gasoline manufacturers in the United States, with total sales in 1994 exceeding $30 billion. Amoco gasoline is sold in more than 25 states, and Amoco ranks second in sales volume among U.S. gasoline marketers.
In announcing the case, FTC Bureau of Consumer Protection Director Jodie Bernstein said: "Many oil companies try to promote the performance benefits of their gasolines in making car engines run better, cleaner, longer, or with more power. Such claims must be supported by solid evidence.
"The FTC is especially concerned about claims that higher octane premium and midgrade gasolines offer benefits not provided by regular gasolines," Bernstein said. "Consumers are wasting money at the gas pump if they're buying higher octane than their cars need. Consumers may want to check their owner's manual for the recommended octane level and buy the lowest level their cars can use without knocking or pinging. Most consumers will not obtain more or better power, performance, engine cleaning, or mileage by using a high-octane gasoline."
Bernstein added that the FTC remains concerned that unsupported claims for high octane gasolines may be widespread in the industry, noting that this is the third case in recent years addressing such claims. She said that the Commission staff will continue to monitor such claims closely and to recommend law enforcement actions as necessary.
The FTC complaint detailing the allegations in the case against Amoco Oil cites ads from the "Crystal Clear" campaign for Amoco's premium gasoline, Amoco Ultimate. One of the challenged "Crystal Clear" ads visually contrasts the dark color of other premium gasolines with Amoco Ultimate's clear color, while the announcer states:
"What's clear? Crystal clear Amoco Ultimate. What isn't? All other premium gasolines. What's clear? Amoco Ultimate is the only premium refined an extra step to remove harmful impurities... What's clear? Why we do it? For unsurpassed performance and a cleaner environment."
The FTC complaint alleges that Amoco Oil failed to have adequate substantiation for its claims that:
Amoco has signed a proposed consent agreement to settle these charges, and the agreement is being announced today for public comment. Under the proposed settlement, Amoco would be required to have competent and reliable scientific substantiation for any claim it makes about the environmental benefits, engine performance, power, acceleration or engine cleaning ability of any gasoline it sells, including the claims listed above.
The settlement also contains various reporting provisions that would assist the FTC in monitoring Amoco's compliance.
The Commission vote to announce the proposed consent agreement for public comment was 4-0, with Commissioner Roscoe B. Starek, III, recused.
The consent agreement will be published in the Federal Register shortly and will be subject to public comment for 60 days, after which the Commission will determine whether to make it final and binding. Comments should be sent to FTC, Office of the Secretary, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580.
NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $10,000.
A free FTC brochure for consumers titled "Octane Ratings" offers advice on buying gasoline. Copies of the brochure, and the complaint, proposed consent agreement, and an analysis of the agreement to assist the public in commenting on this case 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 happens, call the FTC's NewsPhone at 202-326-2710. FTC news releases and other documents also are available on the Internet at the FTC's World Wide Web Site at http://www.ftc.gov
(FTC File No. 932 3011)