9723034

UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION

In the Matter of

MOTOR UP CORPORATION, INC. and MOTOR UP AMERICA, INC., corporations, and KYLE BURNS, individually and as an officer of the corporations.

DOCKET NO. 9291

COMPLAINT

The Federal Trade Commission, having reason to believe that Motor Up Corporation, Inc. and Motor Up America, Inc., corporations, and Kyle Burns, individually and as an officer of Motor Up Corporation, Inc. ("respondents"), have violated the provisions of the Federal Trade Commission Act, and it appearing to the Commission that this proceeding is in the public interest, alleges:

1. Respondent Motor Up Corporation, Inc. is a Pennsylvania corporation with its principal office or place of business at 1530 Chestnut Street, Philadelphia, Pennsylvania 19102.

2. Respondent Motor Up America, Inc. is a Pennsylvania corporation with its principal office or place of business at 759 Federal Highway, Suite 312, Stuart, Florida 34994. Motor Up America, Inc. is a wholly owned subsidiary of Motor Up Corporation, Inc.

3. Respondent Kyle Burns is president of Motor Up Corporation, Inc. Individually or in concert with others, he formulates, directs, or controls the policies, acts, or practices of the corporate respondents, including the acts or practices alleged in this complaint. His principal office or place of business is the same as that of Motor Up Corporation.

4. Respondents have advertised, labeled, offered for sale, sold and distributed products to the public, including Motor Up No Oil Change Engine Treatment Concentrate ("Motor Up"), a motor oil additive.

5. The acts and practices of respondents alleged in this complaint have been in or affecting commerce, as "commerce" is defined in Section 4 of the Federal Trade Commission Act.

6. Respondents have disseminated or have caused to be disseminated advertisements for Motor Up, including but not necessarily limited to the attached Exhibits A through D. These advertisements contain the following statements, demonstrations, and other visual depictions:

A. A program-length television advertisement for Motor Up, entitled "Motor Up" (Exhibit A):

(1) Host: "COMPARED TO A LEADING MOTOR OIL, MOTOR UP HAS ELEVEN TIMES THE ANTI-WEAR AGENTS, AND ARE YOU READY FOR THIS, SEVENTY TIMES MORE EXTREME PRESSURE AGENTS WHICH DRAMATICALLY REDUCE WEAR AND TEAR UNDER SEVERE CONDITIONS." (p.5)

(2) "Settling/Adherence" Demonstration

Host: "WATCH WHAT HAPPENS WHEN WE ADD MOTOR UP!"

[Host pours Motor Up into transparent container filled with water and at the bottom of which lies a metal plate. Motor Up settles to the bottom of the container. Host removes the metal plate. Some of the product adheres to the plate.]

"IT ACTUALLY PENETRATES THE WATER. WHILE THE OTHERS ARE STILL FLOATING THERE ON THE SURFACE... TAKE A LOOK AT THIS ... HA, MOTOR UP NOT ONLY PENETRATES THROUGH THE WATER TO THE METAL, LOOK RIGHT HERE! IT'S PHYSICALLY BONDED ITSELF TO THE METAL EVEN THROUGH THE WATER...

IT'S THIS SLIPPERY BARRIER THAT PROTECTS YOUR ENGINE PARTS FROM CORROSION DAMAGE. NO WATER CAN GET TO THE METAL SO NO CORROSION DAMAGE CAN OCCUR.

AND IT'S THIS SAME BARRIER THAT PROTECTS YOUR ENGINE DURING COLD STARTS WHEN IT SITS OVER NIGHT AND ALL THE OIL DRAINS OFF THE PARTS..." (p. 6)

(3) Host: "WE WANTED SCIENTIFIC PROOF THAT MOTOR UP REDUCES WEAR AND TEAR ON ENGINE PARTS... IN FACT, ONE STUDY HAS SHOWN THAT MOTOR UP REDUCES WEAR AND TEAR IN YOUR ENGINE BY UP TO FIFTY PERCENT ...." (p. 9)

(4) Host: "MOTOR UP REDUCES WEAR AND TEAR ON YOUR ENGINE. PROLONGING ITS LIFE.. YOU'RE ACTUALLY ADDING MILES TO THE LIFE OF YOUR CAR...

ONE TREATMENT, ONE TIME, WILL STAY IN YOUR ENGINE, EVEN BETWEEN OIL CHANGES BECAUSE MOTOR UP BONDS TO THE METAL INSIDE ... IT WONT (SIC) DRAIN OUT" (p. 9)

(5) Announcer: "MOTOR UP . . . REDUCE[s] WEAR AND TEAR ON ENGINE PARTS, PROTECT[s] DURING COLD START UPS AND MUCH MORE." (p. 16, repeated at pp. 24-25)

(6) Announcer: "ONE TREATMENT ... ONE TIME PROTECTS YOUR ENGINE FOR UP TO 50,000 MILES ... GUARANTEED! (p. 16)

(7) "Disaster Strikes: Lost Oil Pan and Oil" Demonstration

Announcer: "YOU'LL WITNESS UNBELIEVABLE HOME VIDEO TO PROVE THAT MOTOR UP CAN HELP PREVENT BREAKDOWNS." (p. 2)

Host: "IT'S ACTUAL HOME VIDEO THAT WAS SHOT FOR THE PRODUCERS AND WRITERS TO PREPARE FOR THIS PROGRAM. HOWEVER, IT BEST ILLUSTRATES HOW MOTOR UP CAN PROTECT YOU IF DISASTER STRIKES." (p. 19)

[A car raised up on a hydraulic car lift is in an automotive garage. The oil is drained from the car and the oil pan is removed. The car is started and allowed to run. Water is then sprayed on the exposed engine parts from beneath, and the engine continues to run.]

Participant: "LOOK AT THIS... THE ENGINE HAS NO OIL AND THESE GUYS CAN'T EVEN GET MOTOR UP OFF THE ENGINE PARTS BY SPRAYING IT WITH WATER... THIS ENGINE SHOULD HAVE BROKEN DOWN LONG AGO.... BUT IT'S STILL RUNNING AFTER TREATING IT WITH MOTOR UP." (p. 20)

Participant: "GIVE IT ANOTHER BLAST OF WATER! IT DOESN'T GET MUCH WORSE THAN THAT ... I'D SAY THAT, THAT MOTOR UP IS CLINGING TO THE ENGINE! UNBELIEVABLE!" (p. 21)

(8) Host: "I'VE TOLD YOU HOW IT PREVENTS CORROSION IN YOUR ENGINE . . . ." (p. 29)

(9) Announcer: "YOU'VE HEARD FROM THE LEADING PROFESSIONAL'S (SIC) HOW MOTOR UP . . . REDUCES WEAR AND TEAR ON ENGINE PARTS. PROTECTS DURING COLD START UPS! AND MUCH MORE." (p. 30)

(10) Announcer: "UNLIKE OTHER ENGINE TREATMENTS, YOU JUST POUR MOTOR UP IN ANYTIME, AND IT WON'T DRAIN OUT. EVEN AFTER AN OIL CHANGE." (p. 31)

B. Motor Up Bottle Labeling (Exhibit B):

(1) UNIQUE CHEMISTRY EXTENDS ENGINE LIFE

(2) Gives your vehicle's engine deep penetrating protection against friction, wear and damage.

(3) Won't wear off or drain out when you change oil.

C. Brochure sent to retail distributors (Exhibit C):

(1) MotorUp Cuts Adhesive Wear As Much As 90.17%.

(2) MotorUp Prolongs Engine Life.

(3) MotorUp Protects Against Wear Even Without Oil.

D. Motor Up Web site on the Internet (Exhibit D):

(1) Prolongs Engine Life.

(2) MotorUp . . . won't drain out even when you change the oil.

(3) Scientific Proof. Extensive product testing in the U.S. and Europe shows that MotorUp reduces friction and wear by as much as 50%.

(4) Ideal for newer eingines (sic) too! Keep your car running great and protect it from power-robbing wear and tear - the leading cause of engine repairs.

7. Through the means described in Paragraph 6, respondents have represented, expressly or by implication, that:

A. Compared to motor oil alone, Motor Up:

(1) Reduces engine wear;

(2) Reduces engine wear by up to 50 percent;

(3) Reduces adhesive engine wear by up to 90.17 percent;

(4) Reduces engine wear during cold starts;

(5) Provides more protection against engine wear in cold temperatures;

(6) Extends the duration of engine life; and

(7) Helps prevent engine breakdowns; and

B. Motor Up:

(1) Prevents corrosion in engines;

(2) Will not drain out from the engine even when the oil is changed;

(3) Protects engines for up to 50,000 miles; and

(4) Protects against engine wear even without motor oil.

8. Through the means described in Paragraph 6, respondents have represented, expressly or by implication, that at the time they made the representations set forth in Paragraph 7, respondents possessed and relied upon a reasonable basis that substantiated such representations.

9. In truth and in fact, at the time they made the representations set forth in Paragraph 7, respondents did not possess and rely upon a reasonable basis that substantiated such representations. Therefore, the representation set forth in Paragraph 8 was, and is, false or misleading.

10. Through the means described in Paragraph 6, respondents have represented, expressly or by implication, that tests prove that, compared to motor oil alone, Motor Up reduces engine wear by up to 50 percent.

11. In truth and in fact, tests do not prove that, compared to motor oil alone, Motor Up reduces engine wear by up to 50 percent. Therefore, the representation set forth in Paragraph 10 was, and is, false or misleading.

12. Through the means described in Paragraph 6, respondents have represented, expressly or by implication, that:

A. The "settling/adherence" demonstration referred to in Paragraph 6, Subsection A.(2), proves, demonstrates or confirms that Motor Up prevents corrosion in engines; and

 

B. The "disaster strikes" demonstration referred to in Paragraph 6, Subsection A.(7), proves, demonstrates or confirms that, compared to motor oil alone, Motor Up reduces engine wear and helps prevent engine breakdowns.

13. In truth and in fact:

A. The "settling/adherence" demonstration referred to in Paragraph 6, Subsection A.(2), does not prove, demonstrate or confirm that Motor Up prevents corrosion in engines; and

 

B. The "disaster strikes" demonstration referred to in Paragraph 6, Subsection A.(7), does not prove, demonstrate or confirm that, compared to motor oil alone, Motor Up reduces engine wear and helps prevent engine breakdowns.

Therefore, the representations set forth in Paragraph 12 were, and are, false or misleading.

1. The acts and practices of respondents as alleged in this complaint constitute unfair or deceptive acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act.

NOTICE

Notice is hereby given to each of the respondents hereinbefore named that the eleventh day of May, 1999, at 10:00 o'clock A.M., or such later date as determined by an Administrative Law Judge of the Federal Trade Commission, is hereby fixed as the time and the Federal Trade Commission, 600 Pennsylvania Avenue, N.W., Washington, D.C. as the place when and where a hearing will be had before an Administrative Law Judge of the Federal Trade Commission, on the charges set forth in this complaint, at which time and place you will have the right under said Act to appear and show cause why an order should not be entered requiring you to cease and desist from the violations of law charged in the complaint.

You are notified that the opportunity is afforded you to file with the Commission an answer to this complaint on or before the twentieth (20th) day after service of it upon you. An answer in which the allegations of the complaint are contested shall contain a concise statement of the facts constituting each ground of defense; and specific admission, denial, or explanation of each fact alleged in the complaint or, if you are without knowledge thereof, a statement to that effect. Allegations of the complaint not thus answered shall be deemed to have been admitted.

If you elect not to contest the allegations of fact set forth in the complaint, the answer shall consist of a statement that you admit all of the material allegations to be true. Such an answer shall constitute a waiver of hearings as to the facts alleged in the complaint, and together with the complaint will provide a record basis on which the Administrative Law Judge shall file an initial decision containing an appropriate order disposing of the proceeding. In such answer you may, however, reserve the right to submit proposed findings and conclusions and the right to appeal the initial decision to the Commission under Section 3.52 of the Commission's Rules of Practice for Adjudicative Proceedings.

Failure to answer within the time above provided shall be deemed to constitute a waiver of your right to appear and contest the allegations of the complaint and shall authorize the Administrative Law Judge, without further notice to you, to find the facts to be as alleged in the complaint and to enter an initial decision containing such findings, appropriate conclusions and order.

The following is the form of order which the Commission has reason to believe should issue if the facts are found to be as alleged in the complaint. If, however, the Commission should conclude from the record facts developed in any adjudicative proceedings in this matter that the proposed order provisions as to Motor Up Corporation, Inc. and Motor Up America, Inc., corporations, and Kyle Burns, individually and as an officer of Motor Up Corporation, Inc., might be inadequate to fully protect the consuming public, the Commission may order such other relief as it finds necessary or appropriate.

Moreover, the Commission has reason to believe that, if the facts are found as alleged in the complaint, it may be necessary and appropriate for the Commission to seek relief to redress injury to consumers, or other persons, partnerships or corporations, in the form of restitution and refunds for past, present, and future consumers and such other types of relief as are set forth in § 19(b) of the Federal Trade Commission Act. The Commission will determine whether to apply to a court for such relief on the basis of the adjudicative proceedings in this matter and such other factors as are relevant to consider the necessity and appropriateness of such action.

ORDER

DEFINITIONS

For purposes of this order, the following definitions shall apply:

1. "Motor Up" shall mean Motor Up No Oil Change Engine Treatment Concentrate.

2. "Competent and reliable scientific evidence" shall mean tests, analyses, research, studies, or other evidence based on the expertise of professionals in the relevant area, that has been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results.

3. Unless otherwise specified, "respondents" shall mean Motor Up Corporation, Inc. and Motor Up America, Inc., corporations, their successors and assigns and their officers; Kyle Burns, individually and as an officer of Motor Up Corporation, Inc.; and each of the above's agents, representatives, and employees.

4. "Commerce" shall mean as defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. § 44.

I.

IT IS ORDERED that respondents, directly or through any corporation, subsidiary, division, or other device, in connection with the labeling, advertising, promotion, offering for sale, sale, or distribution of Motor Up or any other product for use in a motor vehicle, in or affecting commerce, shall not make any representation, in any manner, expressly or by implication:

A. that, compared to motor oil alone, use of such product:

(1) Reduces engine wear;

(2) Reduces engine wear up to 50 percent or by any other quantity;

(3) Reduces adhesive engine wear by up to 90.17 percent or by any other quantity;

(4) Reduces engine wear during cold starts;

(5) Provides more protection against engine wear in cold temperatures;

(6) Extends the duration of engine life; or

(7) Helps prevent engine breakdowns; or

B. that such product:

(1) Prevents corrosion in engines;

(2) Will not drain out from the engine even when the oil is changed;

(3) Protects engines for up to 50,000 miles; or

(4) Protects against engine wear even without motor oil; or

C. regarding the performance, benefits, efficacy, attributes, or use of such product,

unless, at the time the representation is made, respondents possess and rely upon competent and reliable evidence, which when appropriate must be competent and reliable scientific evidence, that substantiates the representation.

II.

IT IS FURTHER ORDERED that respondents, directly or through any corporation, subsidiary, division, or other device, in connection with the labeling, advertising, promotion, offering for sale, sale, or distribution of Motor Up or any other product for use in a motor vehicle, in or affecting commerce, shall not misrepresent, in any manner, expressly or by implication, the existence, contents, validity, results, conclusions, or interpretations of any test or study.

III.

IT IS FURTHER ORDERED that respondents, in connection with the manufacturing, advertising, labeling, packaging, offering for sale, sale, or distribution of Motor Up or any other product, in or affecting commerce, shall not misrepresent, in any manner, expressly or by implication, that any demonstration, picture, experiment, illustration or test proves, demonstrates or confirms any material quality, feature or merit of such product, or the superiority or comparability of the product in a material respect relative to any other product.

IV.

IT IS FURTHER ORDERED that respondents Motor Up Corporation, Inc. and Motor Up America, Inc., and their successors and assigns, and respondent Kyle Burns shall, for five (5) years after the last date of dissemination of any representation covered by this order, maintain and upon request make available to the Federal Trade Commission for inspection and copying:

A. All advertisements and promotional materials containing the representation;

 

B. All materials that were relied upon in disseminating the representation; and

 

C. All tests, reports, studies, surveys, demonstrations, or other evidence in their possession or control that contradict, qualify, or call into question the representation, or the basis relied upon for the representation, including complaints and other communications with consumers or with governmental or consumer protection organizations.

V.

IT IS FURTHER ORDERED that respondents Motor Up Corporation, Inc. and Motor Up America, Inc., and their successors and assigns, and respondent Kyle Burns shall deliver a copy of this order to all current and future principals, officers, directors, and managers, and to all current and future employees, agents, and representatives having responsibilities with respect to the subject matter of this order, and shall secure from each such person a signed and dated statement acknowledging receipt of the order. Respondents shall deliver this order to current personnel within thirty (30) days after the date of service of this order, and to future personnel within thirty (30) days after the person assumes such position or responsibilities.

VI.

IT IS FURTHER ORDERED that respondents Motor Up Corporation, Inc. and Motor Up America, Inc., and their successors and assigns, shall notify the Commission at least thirty (30) days prior to any change in the corporation(s) that may affect compliance obligations arising under this order, including but not limited to a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor corporation; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this order; the proposed filing of a bankruptcy petition; or a change in the corporate name or address. Provided, however, that, with respect to any proposed change in the corporation about which respondents learn less than thirty (30) days prior to the date such action is to take place, respondents shall notify the Commission as soon as is practicable after obtaining such knowledge. All notices required by this Part shall be sent by certified mail to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580.

VII.

IT IS FURTHER ORDERED that respondent Kyle Burns, for a period of ten (10) years after the date of issuance of this order, shall notify the Commission of the discontinuance of his current business or employment, or of his affiliation with any new business or employment. The notice shall include respondent's new business address and telephone number and a description of the nature of the business or employment and his duties and responsibilities. All notices required by this Part shall be sent by certified mail to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580.

VIII.

IT IS FURTHER ORDERED that respondents Motor Up Corporation, Inc. and Motor Up America, Inc., and their successors and assigns, and respondent Kyle Burns shall, within sixty (60) days after the date of service of this order, and at such other times as the Federal Trade Commission may require, file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with this order.

IX.

This order will terminate twenty (20) years from the date of its issuance, or twenty (20) years from the most recent date that the United States or the Federal Trade Commission files a complaint (with or without an accompanying consent decree) in federal court alleging any violation of the order, whichever comes later; provided, however, that the filing of such a complaint will not affect the duration of:

A. Any Part in this order that terminates in less than twenty (20) years;

 

B. This order's application to any respondent that is not named as a defendant in such complaint; and

 

C. This order if such complaint is filed after the order has terminated pursuant to this Part.

Provided, further, that if such complaint is dismissed or a federal court rules that the respondent did not violate any provision of the order, and the dismissal or ruling is either not appealed or upheld on appeal, then the order will terminate according to this Part as though the complaint had never been filed, except that the order will not terminate between the date such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal.

IN WITNESS WHEREOF, the Federal Trade Commission has caused its complaint to be signed by its Secretary and its official seal to be hereto affixed at Washington, D.C. this eighth day of April, 1999.

By the Commission.

SEAL

Donald S. Clark
Secretary