Newspaper article THE JOURNAL RECORD

Exxon Reaches Settlement in Dispute over TV Advertising

Newspaper article THE JOURNAL RECORD

Exxon Reaches Settlement in Dispute over TV Advertising

Article excerpt

WASHINGTON -- Exxon Corp. has reached an unusual settlement with federal regulators in which it must run TV ads telling consumers that more-expensive, high-octane fuels aren't better for most cars than other grades of gasoline.

In a settlement with the Federal Trade Commission, the nation's largest oil company agreed to run the ads to resolve charges that it misled consumers with advertising claims that its Exxon 93 Supreme gasoline can keep engines cleaner, cut maintenance costs and improve performance.

"This is a precedent-setting solution that sends a clear message," said Jodie Bernstein, director of the FTC's Bureau of Consumer Protection. "Consumers can save money if they understand that most cars won't run longer, faster, cleaner or better on `premium' gasoline." Exxon, which had planned to fight the FTC's charges in court, doesn't admit wrongdoing in the settlement. Instead, the company called it a "win-win solution." One term of the settlement, the company said, was to establish a standard set of four tests to check the effect of gasoline on a car engine. The tests involve taking apart a vehicle's engine to check gasoline deposits on valves and fuel injectors. "This is a breakthrough," said R.L. Rich, senior vice president of Exxon U.S.A., "since no verifiable standards had previously existed." The FTC filed its complaint against Exxon in September 1996, after negotiations toward a settlement were abandoned. The suit alleged that the company's ads claiming its Exxon 93 Supreme gas "had the power to drive down maintenance costs" or "keeps your engine cleaner" were deceptive. Exxon officials have said that all levels of Exxon gas -- premium or regular -- have the same package of cleaning additives, which company research shows limits engine-deposit related problems. But by featuring the Exxon 93 Supreme gas pump and other signs in commercials, the company implied that consumers could reduce auto- maintenance costs by switching to that brand of its gas from rival brands or from lower-octane Exxon gases, the FTC said. The agreement calls for the company to run 15-second ads in 18 major metropolitan markets -- including New York City, Washington, D. …

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