[Federal Register Volume 59, Number 211 (Wednesday, November 2, 1994)]
[Rules and Regulations]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-27012]


[[Page Unknown]]

[Federal Register: November 2, 1994]


=======================================================================
-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION

16 CFR Part 410

 

Deceptive Advertising as to Sizes of Viewable Pictures Shown by 
Television Receiving Sets

AGENCY: Federal Trade Commission.

ACTION: Notice of final, non-substantive amendments.

-----------------------------------------------------------------------

SUMMARY: The Federal Trade Commission (``Commission'') is issuing 
final, non-substantive amendments to its Rule on Deceptive Advertising 
as to Sizes of Viewable Pictures Shown by Television Receiving Sets, 
known as the Picture Tube Rule. The Commission solicited comments on 
the Rule as part of the agency's periodic review of rules and guides. 
Having considered all of the issues raised during the comment period, 
the Commission is amending the Rule. These amendments add the metric 
equivalents for measurements stated in inches in the examples used in 
the Rule, and clarify some of the illustrations.

EFFECTIVE DATE: The effective date of these non-substantive amendments 
will be December 2, 1994.

ADDRESSES: Requests for copies of the regulations and the notice of 
final, non-substantive amendments should be sent to Public Reference 
Branch, room 130, Federal Trade Commission, 6th & Pennsylvania Ave. 
NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:
Phillip Priesman, Attorney, Division of Advertising Practices, Federal 
Trade Commission, 6th & Pennsylvania Ave. NW., Washington, DC 20580, 
(202) 326-2484.

SUPPLEMENTARY INFORMATION:

I. Introduction

    The Commission has determined, as part of its oversight 
responsibilities, to review rules and guides periodically. These 
reviews seek information about the costs and benefits of the 
Commission's rules and guides and their regulatory and economic impact. 
The information obtained assists the Commission in identifying rules 
and guides that warrant modification or recision. On April 19, 1993, 
the Commission published in the Federal Register a request for public 
comments on its Trade Regulation Rule on Deceptive Advertising as to 
Sizes of Viewable Pictures Shown by Television Receiving Sets, 16 CFR 
part 410 (``The Picture Tube Rule'' or ``The Rule'').
    This Rule, like the other trade regulation rules issued by the 
Commission, ``define[s] with specificity acts or practices which are 
unfair or deceptive acts or practices in or affecting commerce. Such 
rules may include requirements prescribed for the purpose of preventing 
such acts or practices. A violation of a rule shall constitute an 
unfair or deceptive act or practice in violation of section 5(a)(1) of 
(the Federal Trade Commission Act), unless the Commission otherwise 
expressly provides in its rule.'' 16 CFR 1.8. The Commission may 
initiate a trade regulation rule proceeding ``upon its own initiative 
or pursuant to written petition filed with the Secretary by any 
interested person stating reasonable grounds therefor,'' 16 CFR 1.9.

II. The Regulation

    The Picture Tube Rule sets forth the appropriate means for 
disclosing the method by which the dimensions of television screens are 
measured, when the measurement is included in any advertisement or 
promotional material for the television set. Under the Rule, the method 
used to measure the size of a television screen must be clearly and 
conspicuously disclosed in close proximity to the size designation. 
However, the Rule provides a safe harbor for measurements based on the 
horizontal dimensions, which may be given without disclosing that the 
dimensions were measured horizontally. The Rule notes that the 
measurement must not take into account any curvature of the tube. 
Further, disclosing the method of measurement in a footnote rather than 
in the body of the ad does not constitute a disclosure in close 
proximity to the size designation.
    The Rule includes examples of both proper and improper 
representations of size descriptions. Previously, these examples were 
expressed in terms of inches. Under Executive Order 12770 of July 25, 
1991 (56 FR 35801), and the Metric Conversion Act, as amended by the 
Omnibus Trade and Competitiveness Act, (15 U.S.C. 205) all federal 
agencies are required to use the SI metric system of measurement in all 
procurements, grants and other business-related activities (which 
include rulemakings), except to the extent that such use is impractical 
or is likely to cause significant inefficiencies or loss of markets to 
United States firms. To comply with these provisions, the examples in 
the Rule have been altered to include the metric equivalent in 
parentheses beside the English measurements. Thus, the measurements in 
the examples have been revised to read: 15 inches (38.10 cm); 19 inches 
(48.26 cm); 20 inches (50.80 cm); 21 inches (53.34 cm); and 262 square 
inches (1,690.32 sq. cm). This is a technical amendment to an 
illustrative example in the Rule rather than a substantive amendment to 
the Rule. It is not intended to create any new requirement under the 
Rule to use metric measurements or to use them in any particular 
fashion (for example, in hundredths of centimeters). A new note has 
been added to the Rule providing that the metric measurements are 
included for information purposes only, and are not required to be 
included in any of the disclosures.
    The Commission received five comments, four of which supported 
retaining the Rule in its current form or with minor modifications, and 
one which supported repeal of the Rule. Most of the comments indicated 
that the Rule continues to provide a benefit to the industry and 
consumers, while imposing no significant costs on the industry 
members.\1\ The one comment opposing the regulation maintained that it 
imposed an unreasonable burden on the Federal Trade Commission in 
administering and enforcing the regulation.\2\ In the Federal Register 
notice, the Commission requested public comments on the following 
questions:

    \1\Comments of the Consumer Electronics Group of the Electronic 
Industries Association (Electronic Industries Association) at 2-3; 
Zenith Electronics Corporation (Zenith) at 1-2; Chuck Cooper at 1.
    \2\Comment of the American Association of Advertising Agencies, 
Inc. (AAAA) at 1.

    (1) Has this trade regulation rule had a significant impact 
(cost or benefit) on entities subject to its requirements?
    (2) Is there a continuing need for this rule?
    (3) What burdens does adherence with this rule place on entities 
subject to its requirements?
    (4) What changes should be made to this rule to minimize the 
economic effect on such entities?
    (5) Does this rule overlap or conflict with other federal, 
state, or local government laws or regulations?
    (6) Have technology or economic conditions changed since this 
rule was issued, and, if so, what effect do these changes have on 
the rule?

    The public comments on these six issues are discussed below.

1. Has This Trade Regulation Rule Had A Significant Impact (Cost or 
Benefit) on Entities Subject to Its Requirements?

    The majority of the comments indicated that the Picture Tube Rule 
has provided significant benefits to the public and the consumer 
electronics industry, and imposed very little costs on entities subject 
to the Rule's requirements. One comment noted that the Rule did impose 
economic costs on television manufacturers in 1966 when the Rule was 
first promulgated.\3\ At that time, manufacturers had to prepare and 
produce new advertising and promotional materials to comply with the 
Rule. Further, the United States was, and is to this day, the only 
country that requires screen measurements to be limited to the viewable 
picture area.\4\ After the initial modifications, however, the Rule 
does not appear to have imposed any further burdens on the industry. 
One manufacturer noted that the Rule has had ``virtually no cost 
impact'' on the company.\5\

    \3\Comment of Electronic Industries Association at 2.
    \4\The Commission is aware of an effort by the Canadian 
government to adopt similar provisions concerning televisions 
advertised for sale in Canada. Further, the Canadian television 
industry is considering adopting a voluntary standard that would 
provide for measurement of only the viewable area.
    \5\Comment of Zenith at 1.
    It appears that the Rule has also provided significant benefits. 
The comments indicated that by establishing a uniform system of 
measurement, the Rule enabled consumers to compare various products 
from different manufacturers.\6\ One comment concluded, ``the rule and 
industry standard have virtually eliminated the possibility of consumer 
deception regarding television screen size.''\7\ The Rule's uniform 
system of measurement has also served the consumer electronics 
industry. A television manufacturer indicated that the rule has 
provided a significant benefit to the company and the industry, and 
created ``a legal framework in which a standard industry practice of 
planar, diagonal-dimension measurement of the viewable screen area has 
emerged.''\8\ After reviewing these comments, the Commission believes 
the Rule has provided a clear public benefit, as well as a service to 
the industry, while imposing minimal costs on the industry.

    \6\Comments of Chuck Cooper at 1; Electronic Industries 
Association at 2; Zenith at 1.
    \7\Comment of Zenith at 1.
    \8\Comment of Zenith at 1.
---------------------------------------------------------------------------

2. Is There A Continuing Need for This Rule?

    Just as the comments generally maintain that the Rule has provided 
significant benefits, most of the comments also support retaining the 
Rule. A trade association maintained that the Rule is still needed to 
ensure the consistency in screen measurements that is relied upon by 
both consumers and industry members.\9\ One manufacturer expressed 
concern that if the Federal Trade Commission repealed the Rule, then 
other manufacturers would return to using deceptive measurements in 
their advertisements.\10\ Based upon these comments, the Commission 
finds that there is a continuing need for the Picture Tube Rule.

    \9\Comment of Electronic Industries Association at 3.
    \10\Comment of Zenith at 1.
---------------------------------------------------------------------------

3. What Burdens Does Adherence With This Rule Place on Entities Subject 
to Its Requirements?

    As noted above, while the Picture Tube may have imposed a burden on 
advertisers and manufacturers when it was first promulgated, it appears 
that the Rule does not impose any current significant burden on any 
entities subject to the Rule. A trade association noted that the 
industry has incorporated the regulation's requirements into common 
business practice, and thus, the Rule is no longer a burden on industry 
members.\11\ A manufacturer also indicated that the Rule ``places 
virtually no burden whatsoever on entities subject to it.''\12\ One 
comment, however, suggested that the Rule did impose a burden on the 
Federal Trade Commission through administration and enforcement of the 
Rule.\13\ The Commission has found that enforcing the Rule has entailed 
relatively little administrative burden on the agency, given the 
industry's general compliance with the Rule. Further, in seeking public 
comment, the Commission was soliciting information concerning the 
burden on other entities rather than the agency itself.

    \11\Comment of Electronic Industries Association at 3.
    \12\Comment of Zenith at 2.
    \13\Comment of AAAA at 1.
---------------------------------------------------------------------------

4. What Changes Should Be Made to This Rule to Minimize the Economic 
Effect on Such Entities?

    Although most of the comments supported preserving the Picture Tube 
Rule, a few comments from industry members suggested changes to the 
Rule. The Electronic Industries Association urged the Commission to 
eliminate the horizontal dimension as the default measurement.\14\ 
Currently, the advertised dimensions must reflect the horizontal 
measurement unless the alternative method of measurement is clearly and 
conspicuously disclosed in close proximity to the size designation. 
According to the Association, however, the prevailing practice within 
the industry is to use the diagonal plane to measure the screen, and 
this is the measurement that is most familiar to consumers. Thus, the 
comment urges the Commission to amend the Rule to reflect current 
industry practice. A manufacturer, however, recommended that the 
Commission retain the existing provision concerning the disclosure of 
the method of measurement, suggesting that methods of measuring picture 
tubes are still not likely to be instinctively understood by 
consumers.\15\

    \14\Comment of the Electronic Industries Association at 3.
    \15\Comment of Zenith at 1-2.
    When the Commission initially promulgated the Picture Tube Rule in 
1966, most television manufacturers measured the dimensions of their 
sets diagonally, just as they do today. Thus, the horizontal dimension 
was not chosen to be the default setting based on a belief that it was 
the industry norm. Rather, the Commission found that almost all 
rectangular objects, such as blankets and rugs, were measured 
horizontally and vertically. Television screens were the only 
rectangular-shaped commodities that were measured diagonally. Thus, the 
Commission reasoned, if a rectangular screen was measured in the usual 
manner for similarly-shaped objects, then no disclosure of the method 
of measurement was necessary.\16\ Moreover, the television industry has 
adopted the Rule's disclosure requirements as part of its routine 
business practice. Reversing the provision, to require a disclosure 
when a measurement other than the diagonal dimension is used, will 
provide no tangible benefit, and may cause confusion in the industry 
and among consumers. Finally, as one television manufacturer noted in 
its comment, identifying the method of measurement is useful to 
consumers because many would not instinctively understand the diagonal 
measurement.\17\ Thus, the Commission sees no reason to revise the 
Rule's disclosure requirements at this time.

    \16\31 FR 3342 (March 3, 1966).
    \17\Comment of Zenith at 1-2.
---------------------------------------------------------------------------

    Another comment suggested amending Note 2 of the Rule to provide 
that a disclosure in a footnote or asterisk would constitute a 
disclosure in ``close connection and conjunction'' to the measurement, 
as required by the Rule.\18\ However, footnotes or other fine-print 
disclosures separated from the body of an advertisement may not be 
adequate to qualify statements in the text.\19\ Thus, the Commission 
has declined to amend the Rule to allow the disclosure of the method of 
measurement in a footnote or asterisk.

    \18\Comment of Zenith at 3.
    \19\See FTC's Deception Statement, 103 F.T.C. 110, 180 (1983). 
See also Thompson Medical Co., 104 F.T.C. 648, 797-98 (1984), aff'd, 
791 F.2d 189 (D.C. Cir. 1986), cert. denied, 488 U.S. 955 (1988); 
Standard Oil Co. of California, 84 F.T.C. 1401, 1471 (1974), aff'd 
as modified, 577 F.2d 653 (9th Cir. 1978).
---------------------------------------------------------------------------

    One comment urged the Commission to add an additional Note to the 
text of the Rule providing that advertisers need not identify the 
method of measurement every time an advertisement indicates a 
television's dimensions, as long as the method is disclosed in close 
connection to the most prominent indication of screen size in the given 
advertisement.\20\ The Commission does not believe there is a 
sufficient basis to justify this amendment. Many advertisements for 
televisions promote multiple television sets of different sizes, and a 
single disclosure of the method of measurement may not be noticed by 
consumers. The commenter provided no evidence that multiple disclosures 
were burdensome. Under the Rule, advertisers can comply simply by 
stating ``X inches'' for picture tubes measured horizontally, or ``X 
inches diagonal'' for diagonal measurements. Further, almost all of the 
comments the Commission received indicated that the current provisions 
of the Picture Tube Rule are not a burden to manufacturers or 
advertisers. Thus, the Commission has decided not to adopt the proposed 
Note, or otherwise provide exceptions to the requirement that the 
method of measurement accompany each measurement other than a 
horizontal description.

    \20\Comment of Zenith at 3.
---------------------------------------------------------------------------

    In 1972, the staff of the Federal Trade Commission issued an 
opinion letter to the Consumer Electronics Group of the Electronic 
Industries Association concerning various methods of disclosing the 
method of measurement used for television screens.\21\ In the letter, 
staff approved a number of proposed disclosures, including ``20 inch 
diagonal.'' One comment maintained that the staff opinion letter 
approving the use ``20 inch diagonal'' is inconsistent with the Rule 
listing the disclosure ``21 inch diagonal set'' as inappropriate.\22\ 
The examples in the Rule apply to a television screen measuring 19 
inches horizontally, 15 inches vertically, and 20 inches diagonally. 
Thus, the example states that the disclosure ``21 inch diagonal set'' 
is inappropriate not because of the description of the method of 
measurement, but because the 21 inch measurement is not accurate for 
the set used in the example. The disclosure approved in the opinion 
letter used the correct 20 inch measurement. While the current Rule 
would permit ``20 inch diagonal,'' that phrase is not included in the 
list of permitted disclosures. While this list is intended to be 
illustrative rather than exhaustive, the Commission has decided to 
include this disclosure in the examples provided to remove any 
uncertainly that may exist.

    \21\Letter from Carthon A. Aldhizer, Attorney, Division of Rules 
and Guides, Federal Trade Commission, to Mr. Jack Wyman, Staff Vice 
President, Consumer Electronics Group of the Electronic Industries 
Association (Feb. 2, 1972).
    \22\Comment of Zenith at 3.
    One comment suggested adding language to the text of the Rule that 
introduces the examples of improper disclosures to provide that these 
examples are only improper absent disclosures elsewhere in the 
advertisement that clearly indicate the method of measurement utilized 
to obtain the given dimensions.\23\ The Commission would be concerned 
that combining improper and proper disclosures in the same 
advertisement could engender consumer confusion or deception. Thus, the 
Commission has determined not to amend the Rule as suggested by this 
comment.

    \23\Comment of Zenith at 3-4.
---------------------------------------------------------------------------

    One of the examples identified in the Rule as being unacceptable is 
``21 inch over-all diagonal--262 square inch picture.'' One comment 
suggested deleting the second half of the example that refers to square 
inch measurements, so as to permit such measurements for wide-screen 
televisions.\24\ While the Commission has no information on the 
likelihood of manufacturers of wide-screen televisions using square 
inch dimensions rather than the more traditional forms of measurement, 
the Rule does not prohibit measurements based on square inches. Rather, 
the example cited above is intended only to convey that the term, 
``overall'' is inappropriate, regardless of whether it is accompanied 
by the square inch dimensions of the viewable picture screen. To avoid 
confusion and to emphasize the phrase that causes concern, the 
Commission has determined to modify the example ``21 inch over-all 
diagonal--262 square inch picture'' in the list of unacceptable 
disclosures to read ``21 inch over-all diagonal.''

    \24\Comment of Zenith at 4.
---------------------------------------------------------------------------

5. Does This Rule Overlap or Conflict With Other Federal, State, or 
Local Government Laws or Regulations?

    None of the commenters were aware of any law or regulation that 
conflicted or overlapped with the Picture Tube Rule.

6. Have Technology or Economic Conditions Changed Since This Rule Was 
Issued, and, If So, What Effect Do These Changes Have on the Rule?

    The Picture Tube Rule was first promulgated in 1966. Since then, 
both technology and economic conditions have changed significantly. A 
much greater percentage of households owns one or more televisions. 
Television sets have become more complex and offer an array of 
features. The television industry itself has expanded considerably, 
with the advent of cable and satellite television, and the introduction 
of interactive television combined with personal computers and 
telecommunications. However, none of these changes require any 
modification of the Picture Tube Rule.
    The technological change with the closest nexus to the Picture Tube 
Rule is the introduction of high definition television (HDTV), and the 
new, wider screens used to display these enhanced digital pictures. 
Most television screens today have horizontal/vertical dimensions in a 
5:3 proportion, or aspect ratio, but the screens for the HDTV have a 
16:9 aspect ratio.\25\ The new ratio, however, does not necessitate any 
changes to the Rule, because the existing provisions can easily be 
applied to the new screens. HDTVs may be advertised as ``46 inch 
diagonal'' sets. Most consumers are familiar with this type of 
measurement for televisions, and will be able to use this measurement 
to compare different brands of HDTVs, as well as between high 
definition and more traditional screens. TV Digest, a trade industry 
publication, has suggested adding a ``W'' (for wide-screen) to the 
diagonal measure of the new 16:9 television screens.\26\ Nothing in the 
existing Rule would prohibit this designation. However, the Commission 
does not believe the designation is necessary to avoid consumer 
deception or confusion because the ``46 inch diagonal'' or any other 
measurement allowed under the Rule should provide consumers with 
adequate information as to the size of the HDTV. Consequently, no 
additional designation such as ``W'' is required under the Rule for 
wide-screen televisions.

    \25\Comments of Electronic Industries Association at 2-3; Zenith 
at 4-5.
    \26\Comment of Zenith at 5.
---------------------------------------------------------------------------

    One commenter suggested that the Picture Tube Rule be expanded to 
encompass video display terminals for computer monitors. He indicated 
that he had purchased a monitor advertised as measuring 14 inches, but 
discovered that the actual dimensions of the viewable area were 13 
inches.\27\ Currently, the Rule is limited to ``television receiving 
sets'' and does not encompass computer monitors. The Commission is 
considering measurement problems with regard to computer monitors, but 
has determined not to initiate a rulemaking proceeding to amend the 
Picture Tube Rule at this time. Rather, the Commission is reviewing the 
extent of problems in this area, and is exploring other possible 
options for addressing such problems.

    \27\Comment of Chuck Cooper at 1.
---------------------------------------------------------------------------

III. Effective Date

    These non-substantive amendments to the Rule will become effective 
thirty days after publication in the Federal Register.

List of Subjects in 16 CFR Part 410

    Advertising, Picture tubes, Television sets, Trade practices.

    Accordingly, part 410 of 16 CFR is amended as follows:
PART 410--DECEPTIVE ADVERTISING AS TO SIZES OF VIEWABLE PICTURES 
SHOWN BY TELEVISION RECEIVING SETS

    1. The authority citation for part 410 continues to read as 
follows:

    Authority: 38 Stat. 717 as amended, 15 U.S.C. 41-58.

    2. Section 410.1 is amended by revising the examples for Note 2, 
and by adding Note 3 to read as follows:


Sec. 410.1  The rule.

* * * * *
    Note 2: * * *

    Examples of proper size descriptions when a television receiving 
set shows a 20-inch picture measured diagonally, a 19-inch picture 
measured horizontally, a 15-inch picture measured vertically, and a 
picture area of 262 square inches include:

``20 inch (50.80 cm) picture measured diagonally'' or
``20 inch (50.80 cm) diagonal''
``19 inch  x  15 inch (48.26 cm  x  38.10 cm) picture'' or
``19 inch (48.26 cm) picture'' or
``19 inch (48.26 cm)'' or
``262 square inch (1,690.32 cm. sq.) picture.''

    Examples of improper size descriptions of a television set showing 
a picture of the size described above include:

``21 inch (53.34 cm) set'' or
``21 inch (53.34 cm) diagonal set'' or
``21 inch (53.34 cm) over-all diagonal'' or

    ``Brand Name 21.''

    Note 3: The numbers in parentheses reflect the metric equivalent 
of the English measurements. They are provided for information 
purposes only, and are not required to be included in the 
disclosures.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 94-27012 Filed 11-1-94; 8:45 am]
BILLING CODE 6750-01-M