Self-driving car ads worry consumers

In commercials for the 2017 Mercedes E-class, a narrator tells of "Prometheus," a self-driving Mercedes 30 years in the making that's ready to change the world. The car's occupants face each other and interact while the car drives itself.

"We believe that an autonomous driving future, one that makes the world safe for all of us, is a dream worth pursuing - and one we can deliver today," declares one commercial that highlights the car's Drive Pilot feature. Tiny print at the bottom of the screen clarifies that the vehicle cannot drive itself.

The commercials prompted three consumer advocacy groups to urge the Federal Trade Commission to investigate whether Mercedes Benz's marketing of its 2017 E-class sedan misleads consumers by overstating the car's autonomous capabilities.

The letter was signed by leaders of Consumer Reports, the Center for Auto Safety and the Consumer Federation of America, and by Joan Claybrook - former administrator of the National Highway Traffic Safety Administration.

The consumer groups claim such advertising is likely to cause consumers to erroneously believe that the car is fully self-driving, and creates a false sense of security that the driver can just start the car and forget about driving.

In response to the recent complaints, Mercedes Benz immediately pulled the advertising campaigns.

A Mercedes-Benz spokeswoman said it was not the company's intent to cause confusion between driver-assist systems and the future promise of autonomous vehicles, noting "one leads to the other but they are not the same."

"The systems used in the new E-Class are clearly identified as 'driver assistance systems' which we have spent the better part of two decades developing in pursuit of an accident-free future," the spokeswoman said. "'The Future,' featuring the F015 concept car, is intended to draw the connection between that vision and the innovations that are in today's Mercedes-Benz models."

Driverless cars and connected cars are in various stages of testing and have not hit the market but already face escalated scrutiny, public fear and anxiety, federal and state regulation, and infrastructure challenges not yet ready to accept the introduction of such advanced technology. Proposed government legislation seeks to expand the authority of the FTC by protecting consumers from what many perceive as a "rush" to roll out autonomous vehicles and connected cars by car manufacturers.

Tesla in particular drew increased scrutiny to its self-driving tech after a couple of recent accidents (one fatal) while its Autopilot feature was engaged.

As mass production of these vehicles become a reality, it is logical to expect additional government regulation will be proposed to cover industry-wide advertising practices and definitions that would work across various vehicle makers and technologies.

Unlike the new privacy and data security legal issues presented by autonomous vehicles and connected car technology, the advertising of advanced automotive product technology is currently held to basic and longstanding advertising rules - including the rule that requires product claims to be truthful (demonstrations, tests, experiments must be substantiated). This means if an advertisement claims a product will perform in a certain way, the ad must be a truthful representation of what the product can actually do. However, recent advertisements on the attributes of advanced product technology have left the door open for challenges by consumer advocacy groups and scrutiny by the FTC.

As recent as 2014, the FTC charged Nissan and its ad agency (TBWA Worldwide) with violating the same section of the FTC Act. The 30-second TV ad for the Nissan Frontier pickup truck depicted an unaltered truck pushing a stranded dune buggy up a steep sand dune - a feat the Nissan Frontier truck is actually incapable of performing. The truck and dune buggy were towed up the hill using cables and the camera phone type of YouTube filming added to the realistic nature of the commercial. The fleeting small print disclaimer stating, "Fictionalization. Do not attempt," was insufficient to meet the FTC's "clear and conspicuous" standard and undo the damage caused by the deceptively altered demonstration of the Nissan Frontier.

The history of the FTC's efforts to protect consumers from deceptive advertising draws a firm line in the sand - advertisers are prohibited from misrepresenting key attributes in product demonstrations, tests or experiments. When a visual ad conveys it's an actual demonstration of what the product can do (particularly an objective product attribute), companies must consider their obligations to substantiate product claims.

The FTC's commitment to protecting consumers in the marketplace is reflected in a long history of administrative actions against car manufacturers and dealerships for improper advertising practices. In 2014, the FTC announced 'Operation Steer Clear' - a nationwide sweep cracking down on the improper sale, financing and leasing of motor vehicles by dealerships.

In 2015, automakers set a record of 51.26 million recalled vehicles in the United States, continuing an unprecedented government crackdown on safety lapses. As a result of historic recall numbers, the FTC took a closer look at used car advertising. The investigation resulted in charges against GM, Jim Koons Management Company and Lithia Motors Inc. over allegations that each claimed that the vehicles for sale had been rigorously inspected (including "certified pre-owned vehicles"), that they were safe, and that they would be sold with a guarantee, warranty or certification - when in fact some of the used cars were subject to unrepaired and open safety recalls, which the ads failed to disclose.

The noteworthy trend is the FTC will continue to subject auto industry advertisers to existing advertising rules and apply them to advanced automotive technology.

The "rule of thumb" is: stick to the truth. Even if special guidelines or regulations for advanced automotive technology are eventually implemented, these exceptions are unlikely to deviate from existing advertising rules. The entire automotive industry must remember that an advertisement misleading a significant minority of reasonable consumers constitutes a deceptive practice under the FTC Act.

Christian Scali and Melanie Joo are attorneys with The Scali Law Firm of Los Angeles.