[Federal Register Volume 59, Number 36 (Wednesday, February 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-4040]
[[Page Unknown]]
[Federal Register: February 23, 1994]
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FEDERAL TRADE COMMISSION
16 CFR Part 412
Trade Regulation Rule: Discriminatory Practices in Men's and
Boys' Tailored Clothing Industry
AGENCY: Federal Trade Commission.
ACTION: Final rule; Notice of repeal of rule.
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SUMMARY: The Federal Trade Commission announces the rescission of the
rule concerning the need for a written plan to guide a seller's
promotional allowances in the men's and boys' tailored clothing
industry (hereinafter the ``Tailored Clothing Rule'' or the ``Rule'').
The Commission has reviewed the provisions of the Rule, and has
concluded that due to inconsistencies with and duplication by later-
adopted statements of policy of general application, the Tailored
Clothing Rule is no longer in the public interest and should be
repealed. This notice contains a Statement of Basis and Purpose for the
repeal of the Rule, and incorporates a regulatory analysis.
EFFECTIVE DATE: March 25, 1994.
ADDRESSES: Requests for copies of the Statement of Basis and Purpose
should be sent to the Public Reference Branch, Federal Trade
Commission, 6th Street and Pennsylvania Avenue, NW., Washington, DC
20580.
FOR FURTHER INFORMATION CONTACT:Neil W. Averitt, Esq., Office of Policy
& Evaluation, Bureau of Competition, Federal Trade Commission,
Washington, DC 20580. Telephone: (202) 326-2885.
SUPPLEMENTARY INFORMATION:
Statement of Basis and Purpose
Background
The Tailored Clothing Rule, promulgated in 1967, was intended to
clarify the way in which the Robinson-Patman Act, 15 U.S.C. 13, applies
to that industry. Section 2(d) and (e) of the Act require that
promotional allowances and services be made available to competing
sellers on proportionately equal terms. The Rule established a
presumption that allowances in the tailored clothing industry that were
not provided in accordance with a written plan were not available on
proportionately equal terms.
The year after the Rule was promulgated, the Supreme Court decided
the case of FTC v. Fred Meyer, Inc., 390 U.S. 341 (1968). In that
option the Court suggested that the Commission might wish to expand on
earlier guidance and issue detailed guidelines to promotional
allowances under sections 2(d) and (e). The Commission accepted this
invitation the following year by publishing the so-called ``Fred Meyer
Guides.'' See 16 CFR part 240. These set out general standards for
promotional allowances, applicable to all industries. The Fred Meyer
Guides suggest that sellers ``would be well advised'' to put complex
plans in writing, but they do not penalize the failure to have a
written plan. The Fred Meyer Guides have been revised as needed to keep
them current, most recently in 1990.
With the Fred Meyer Guides in place, the Commission was concerned
that the earlier, industry-specific Rule was unnecessary, and that its
different substantive provisions could be a source of potential
confusion. In July of 1993 the Commission therefore requested public
comment on a proposal to repeal the Tailored Clothing Rule. No comments
were received in response to this request.
The Rulemaking Record
The rulemaking record in this proceeding consists of the Notice of
Proposed Rulemaking and Request for Comment dated July 2, 1993 (58 FR
35907), and a memorandum from the Office of the Secretary reporting
that no comments were received in response to that request. In
addition, the Commission takes notice of published court and agency
decisions, and of the existence and provisions of the Fred Meyer
Guides.
Analysis of the Rulemaking Record
The rulemaking record indicated that the Tailored Clothing Rule no
longer appears to be useful or justified. Since the Rule was
promulgated, it does not appear that the agency has ever relied on the
Rule in a law enforcement matter, or that any litigant has ever made
use of it in a reported private action. Moreover, no industry members
responded to the Notice of Proposed Rulemaking to urge retention of the
Rule.
Repeal would also resolve the inconsistency between the Rule and
the Fred Meyer Guides. The Fred Meyer Guides encourage but do not
require sellers to have a written plan for promotional allowances.\1\
The Robinson-Patman Act also does not require sellers to have a written
plan. The Tailored Clothing Rule, on the other hand, states that
promotional payments ``will be presumed not to have been made available
on proportionately equal terms'' unless they are made available under a
written plan.\2\
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\1\See 16 CFR 240.8 (``If there are many competing customers to
be considered or if the plan is complex, the seller would be well
advised to put the plan in writing.'')
\2\16 CFR 412.6.
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Although this dichotomy creates no inconsistent legal obligations,
there is a significant policy discrepancy in that the tailored clothing
industry is treated differently from other industries. Since the
Commission's post-enactment experience has not confirmed the relevance
or utility of treating this industry differently, this is an additional
reason for repeal of the Rule.
Final Regulatory Analysis
The following discussion constitutes the Commission's Final
Regulatory Analysis of the proposed repeal of the Rule, as called for
by the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., and by section
22 of the Federal Trade Commission Act, 15 U.S.C. 57b-3.
A description of the reasons why action is being considered and the
objectives of and legal basis for the repeal of the Rule have been
explained in prior parts of this Statement of Basis and Purpose.
Repeal of the Rule would appear to have little or no effect on
small business. Because it does not appear that the Rule is currently
relied upon, its repeal should not have significant effects on business
in general, and therefore should not have any significant effects on
small businesses in particular.
The Tailored Clothing Rule contains no information collection or
recordkeeping requirements as defined by the Paperwork Reduction Act,
44 U.S.C. 3501-18. Repeal of the Rule would remove any other compliance
requirements that are associated with the Rule, such as the costs
associated with becoming familiar with its provisions.
The only significant alternative to repeal of the Rule is to take
no action and preserve the Rule in its present form. Due to the
subsequent publication of the Fred Meyer Guides, however, the Rule no
longer serves a meaningful purpose. Under these circumstances,
retaining the Rule would run counter to the goal of achieving
efficiencies by repealing rules that are no longer useful.
The benefits of repealing this Rule include removal of an
unnecessary provision from the Code of Federal Regulations, the
increased efficiency of law enforcement when uniform standards are
applicable, and the increased respect for the law that may be
anticipated when regulations are current and relevant.
The Commission believes that the above benefits are sufficient to
support its determination to rescind this Rule.
List of Subjects in 16 CFR Part 412
Advertising, Clothing, Promotional allowances, Trade practices,
Unfair methods of competition.
PART 412--[REMOVED]
Accordingly, under the authority of 15 U.S.C. 41 et seq. and 15
U.S.C. 13, title 16, chapter I, of the Code of Federal Regulations is
amended by removing part 412.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 94-4040 Filed 2-22-94; 8:45 am]
BILLING CODE 6750-01-M