Opinion 08-1

UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580
Division of Marketing Practices
May 5, 2008
Matthew K. Cordis, Esq.
Clarke Silvergate & Campbell, P.A.
799 Brickell Plaza, Suite 900
Miami, FL 33131
Dear Mr. Cordis:
This letter responds to your request of March 3, 2008 seeking an advisory opinion from
staff of the Federal Trade Commission (the “Commission” or “FTC”) regarding the application
of the Magnuson-Moss Warranty Act (“the Act”), 15 U.S.C. § 2301, et seq., to a 1300
horsepower diesel engine that your client imports and distributes. Your client also coordinates
services of those engines in the United States.
You request guidance on whether this engine would be a “consumer product” under the
Act. 15 U.S.C. § 2301(1). Based on your letter’s description of the engine and relevant sales
and industry data included in your letter, FTC staff’s opinion is that the engine in question would
not be a “consumer product” for purposes of the Act.
The Act requires companies that offer written warranties on the consumer products they
manufacture or sell to provide consumers with detailed information about warranty coverage.
For example, the Act and the regulations the FTC adopted under the Act require that the key
terms of warranty coverage be disclosed in a single document, 16 C.F.R. Part 701, and that the
document be available at the point of purchase for consumers to review before purchasing a
warranted consumer product, 16 C.F.R. Part 702.
The Act defines a “consumer product” as “any tangible personal property which is
distributed in commerce and which is normally used for personal, family, or household purposes
(including any such property intended to be attached to or installed in any real property without
regard to whether it is so attached or installed).” 15 U.S.C. § 2301(1). The Commission has
promulgated an interpretive rule that clarifies that “a product is a ‘consumer product’ if the use
of that type of product [for personal, family, or household purposes] is not uncommon.” 16
C.F.R § 700.1(a).
The product you describe in your letter is a 1300 horsepower diesel engine commonly
incorporated into industrial or commercial products such as cranes, buses, farm equipment,
locomotives, mining equipment, and commercial vessels. According to the sales data you
provide, the engine’s manufacturer sold just 2% of these engines to manufacturers for
incorporation into marine pleasure craft, and less than .01% directly to individuals for similar
use. Although the FTC’s interpretative rule states that “[t]he percentage of sales . . . is not
determinative,” 16 C.F.R. § 700.1(a), sales information is relevant in determining a product’s

Mr. Matthew K. Cordis
May 5, 2008
Page 2
1The industry data you provide also supports this conclusion. You indicate that in 2003,
over 88% of all diesel engines with horsepower greater than 500 were incorporated into
industrial vessels, equipment and machinery, as compared to approximately 12% that were
incorporated into large motor yachts. As you note, it is likely that a significant percentage of
these motor yachts are used solely for commercial purposes. Therefore, it appears uncommon
for a 1300 horsepower diesel engine to be used for “personal, family, or household purposes.”
normal use, and whether that use is for personal, family, or household purposes such that it falls
within the Act’s coverage. The sales data you provide suggests that this engine is not one for
which the normal use is for personal, family, or household purposes. Therefore, based on the
purposes of the Act and the data you provided, we agree that this engine is not a “consumer
product” under the Act.1
The opinions expressed in the foregoing discussion and the basis for this conclusion are
those of Commission staff only and are not attributable to, nor binding on, the Commission itself
or any individual Commissioner. I hope this discussion is helpful to you. If you have any
further questions, please do not hesitate to contact me at (202) 326-2505.
Sincerely,
Allyson Himelfarb
Investigator/Magnuson-Moss
Program Coordinator