[Federal Register Volume 60, Number 158 (Wednesday, August 16, 1995)]
[Notices]
[Pages 42569-42574]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-20144]



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FEDERAL TRADE COMMISSION


Policy Statement Regarding Duration of Competition and Consumer 
Protection Orders

AGENCY: Federal Trade Commission.

ACTION: Notice of policy statement.

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SUMMARY: This notice describes the Federal Trade Commission's Policy 
Statement regarding the duration of future and existing administrative 
cease and desist orders as well as federal district court orders in 
competition and consumer protection matters. Under this Policy 
Statement, the Commission will ordinarily terminate (``sunset'') future 
competition and consumer protection administrative orders automatically 
after twenty years, unless the Commission or the Department of Justice 
has filed a complaint (with or without an accompanying consent decree) 
in federal court to enforce such order pursuant to Section 5(1) of the 
Federal Trade Commission Act (``FTCA)''. This policy will not extend to 
federal court orders. The Commission also intends to terminate each 
existing administrative order twenty years after it was issued, unless 
the Commission or the Department of Justice has filed a complaint (with 
or without an accompanying consent decree) in federal court to enforce 
such order pursuant to Section 5(1) of the FTCA during the twenty years 
preceding the adoption of the Policy Statement, or unless such a 
complaint is filed after the adoption of the Policy Statement and 
within twenty years after the order's issuance. The Commission intends 
to implement its new policy with respect to existing administrative 
orders through rulemaking.

[[Page 42570]]

    In adopting this Policy Statement, the Commission considered 
comments filed in response to the Commission's ``Policy Statement With 
Request for Public Comment Regarding Duration of Competition Orders and 
Request for Public Comment Regarding Duration of Consumer Protection 
Orders,'' published in the Federal Register on September 1, 1994. 59 
Fed. Reg. 45286. This new Policy Statement will supersede the Policy 
Statement Regarding Duration of Competition Orders adopted on July 22, 
1994. In addition, the Commission is publishing and seeking comment on 
a Notice of Proposed Rulemaking to implement its policy with respect to 
existing administrative orders. The Commission is also soliciting 
comment regarding this Policy Statement.

DATES: Comments must be received on or before September 15, 1995.

ADDRESSES: Written comments should be directed to: FTC/Office of the 
Secretary, Room 159, 6th St. & Pa. Ave. N.W., Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT:
Donald S. Clark, Secretary, Federal Trade Commission, (202) 326-2514; 
Roberta Baruch, Deputy Assistant Director for Compliance, Bureau of 
Competition, (202) 326-2861; or Justin Dingfelder, Assistant Director 
for Enforcement, Bureau of Consumer Protection, (202) 326-3017.

SUPPLEMENTARY INFORMATION: The Commission adopted its existing policy 
regarding the duration of competition orders on July 22, 1994. Under 
that policy, the Commission presumes that core provisions in future 
competition administrative orders and federal court orders should 
ordinarily terminate automatically after twenty years.\1\ The 
Commission also presumes that all supplemental provisions in future 
competition orders should sunset after no more than ten years.\2\ In 
addition, in the context of petitions to reopen and vacate existing 
competition administrative orders, the Commission applies a rebuttable 
presumption that the public interest warrants terminating orders that 
have been in force for more than twenty years. The notice announcing 
this policy also requested public comment on whether consumer 
protection orders also should be sunsetted.

    \1\ Core provisions prohibit practices that would be unlawful 
whether used by parties subject to the order at issue or by other 
similarly situated persons or entities.
    \2\ Supplemental provisions are intended to prevent a respondent 
or defendant from repeating a law violation or to mitigate the 
effects of prior illegal conduct. Such provisions either prohibit or 
restrict conduct that would be lawful if engaged in by parties not 
subject to the order at issue or impose an affirmative obligation 
not otherwise required by law.
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    The Commission received 23 comments in response to its invitation. 
The commenters expressed nearly unanimous support for the Commission's 
current policy of terminating competition orders. However, most of the 
commenters recommended that the Commission amend the policy statement 
by shortening the sunset period for new competition orders and by 
terminating existing orders automatically rather than applying a 
presumption in favor of termination in response to petitions to reopen.
    Of the 23 commenters, 19 supported adopting a sunset policy for 
both future and existing consumer protection orders, three opposed it, 
and one did not address the issue. The three commenters opposing 
sunsetting consumer protection orders were the FTC-Working Group of the 
National Association of Attorneys General (``NAAG''), the American 
Association of Retired Persons (``AARP''), and the Center for Science 
in the Public Interest (``CSPI'').
    The three commenters who opposed sunsetting consumer protection 
orders argued that such action is unnecessary because consumer 
protection orders merely require respondents to refrain from unfair or 
deceptive behavior that is unlawful under any circumstances, without 
respect to changes in market, organizational, or other conditions. AARP 
asserted that the absence of Commission action in a particular area 
does not necessarily indicate that the practices proscribed by earlier 
orders in that area have ceased to be illegal. CSPI asserted that the 
reopening process serves as an effective procedure for relief for 
companies and individuals that find themselves subject to outdated 
orders. The FTC-NAAG Working Group suggested that the requirements of 
complying with Commission orders might have the potential to reduce 
company costs by heightening the sensitivity of company personnel to 
consumer protection law issues, thus reducing the likelihood of having 
to defend against allegations regarding future violations.
    The commenters who favored sunsetting consumer protection orders 
advanced considerations that are essentially the same as those that the 
Commission considered in deciding to sunset competition orders. In 
their view, changes in legal and market circumstances over time reduce 
the need to maintain orders to deter recidivism, and make continued 
existence of these orders burdensome and anti-competitive. Several 
commenters asserted that the enforcement options available to the 
Commission for deterring violations of law have expanded significantly 
over the years, making it unnecessary to rely on perpetual order 
restrictions. Finally, some commenters recommended automatically 
terminating consumer protection orders after ten years, while others 
recommended automatically terminating them after twenty years and 
applying a presumption for terminating these orders after ten years in 
response to a petition to reopen.
    On the basis of the comments received and other considerations, the 
Commission has concluded that the existing policy regarding the 
duration of competition orders should be revised in three key respects. 
First, the new Policy Statement explicitly sets forth a circumstance in 
which future competition orders would endure more than twenty years. 
Whereas the existing policy states that core provisions in future 
orders ``ordinarily'' will sunset in twenty years, the new Policy 
Statement provides that core provision in future competition 
administrative orders will ordinarily sunset in twenty years, unless 
either the Commission or the Department of Justice has filed a 
complaint (with or without an accompanying consent decree) in federal 
court to enforce such order pursuant to Section 5(1) of the FTCA.\3\

    \3\ The filing of such a complaint will not affect the duration 
of the order if the complaint is dismissed or the court rules that 
the respondent did not violate any provision of the order and the 
dismissal or ruling is either upheld on appeal or not appealed.
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    Second, the new Policy Statement sets forth the Commission's 
intention to dispense with the petitioning process to sunset existing 
competition orders and instead sunset such orders through rulemaking. 
The rule, proposed elsewhere in the Federal Register, would 
automatically sunset each existing administrative order twenty years 
after it was issued, unless the Commission or the Department of Justice 
has filed a compliant (with or without an accompanying consent decree) 
in federal court to enforce such order pursuant to Section 5(1) of the 
FTCA during the twenty years preceding the adoption of the Policy 
Statement, or unless such a compliant is filed after the adoption of 
the Policy Statement and within twenty years after the order's 
issuance. Third, the new Policy Statement will not apply to Federal 
court orders.
    The Commission's present policy regarding the duration of consumer 

[[Page 42571]]
    protection administrative orders and federal court orders is that core 
provisions and some type of supplemental provisions continue in effect 
indefinitely and that certain other types of supplemental provisions 
terminate after a specified period of time, usually five or ten years. 
On the basis of comments received and other considerations, the 
Commission has concluded that consumer protection administration 
orders, like competition administration orders, ordinarily fulfill 
their remedial purposes within twenty years. Accordingly, the 
Commission will presume that core provisions and supplemental 
provisions that would otherwise be perpetual in future consumer 
protection administrative orders should terminate (or ``sunset'') 
automatically within twenty years after the order's issuance, unless 
either the Commission or the Department of Justice has filed a 
compliant (with or without an accompanying consent decree) in federal 
court to enforce such order pursuant to Section 5(1) of the FTCA. This 
will not affect the current practice of terminating certain 
supplemental provisions earlier than twenty years (e.g., provisions 
requiring distribution of the order). The Commission intends to 
implement its new policy with respect to existing orders through 
rulemaking. The Commission's new policy with respect to future 
administrative orders will be effective immediately.
    However, the Commission has determined that it will not extend the 
policy of sunsetting consumer protection orders to federal court orders 
at this time. As discussed in the Policy Statement, many consumer 
protection federal court orders (e.g., fraud orders entered under 
section 13(B) of the FTCA) pose significantly different considerations 
than either competition or consumer protection administrative orders. 
In addition, the Commission has significantly less experience on which 
to conclude that such orders serve their purpose after twenty years. 
For example, most section 13(b) fraud orders first originated in the 
1980s.

Statement of Policy with Respect to Duration of Competition and 
Consumer Protection Orders

    This statement describes the policies that the Commission has 
adopted with respect to the duration of competition and consumer 
protection administrative orders and federal court orders. This new 
Policy Statement supersedes the Policy Statement Regarding Duration of 
Competition Orders adopted on July 22, 1994.

Competition Administrative Orders

    The injunctive provisions in competition administrative orders may 
proscribe future violations of statutory prohibitions--and secure 
adherence to statutory requirements--including the prohibition of 
unfair methods of competition embodied in section 5 of the FTCA, 15 
U.S.C. 45, and the prohibitions and requirements embodied in sections 
2, 3, 7, 7A, and 8 of the Clayton Act, 15 U.S.C. 13, 14, 18, 18a, and 
19.\4\

    \4\ Competition administrative orders may include types of 
relief that are not addressed in this statement because they have no 
further effect once the actions they require have been taken. For 
example, some orders require divestitures, revisions to bylaws, or 
publication of the administrative compliant and order.
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    As a matter of law, the remedial provisions of Commission orders 
must bear a reasonable relationship to the unlawful practices found to 
exist, and must be sufficiently clear and precise to be easily 
understood by the respondents or defendants.\5\ Particular order 
provisions may prohibit both the specific illegal practices alleged in 
the associated complaint and ``like and related'' practices.\6\

    \5\ See, e.g., FTC v. Colgate-Palmolive Co., 380 U.S. 374, 392-
95 (1965); FTC v. National Lead Co., 352 U.S. 419, 428-30 (1957); 
FTC v. Ruberoid Co., 343 U.S. 470, 473 (1952); FTC v. Cement Inst., 
333 U.S. 683, 726 (1948); Jacob Siegel Co. v. FTC, 327 U.S. 608, 
611-13 (1946).
    \6\ See FTC v. Mandel Bros., Inc., 359 U.S. 385, 393 (1959); 
Consumers Products of America, Inc. v. FTC, 400 F.2d 930 (3d Cir. 
1968), cert. denied, 393 U.S. 1088 (1969); Nirsk Indus. v. FTC., 278 
F.2d 337, 343 (7th Cir.), cert denied, 364 U.S. 883 (1960). For 
example, in FTC v. Colgate-Palmolive Co., 380 U.S. 374, 395 (1965), 
the Supreme Court reviewed a Commission order that prohibited a 
particular advertising practice not only for the product at issue in 
the case, but also for any other product. The Court sustained the 
scope of the order provision, stating that
    [t]he Commission is not limited to prohibiting the illegal 
practice in the precise form in which it is found to have existed in 
the past. Having been caught violating the Act, respondents `must 
expect some fencing in.'
    Id. at 395, quoting FTC v. National Lead Co., 352 U.S. at 431, 
and FTC v. Ruberoid Co., 343 U.S. at 473.
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    Where such a provision has been included in an order, the 
Commission may prevail in a subsequent enforcement proceeding simply by 
establishing that the respondent or defendant did not comply with the 
terms of the provision, without having to also establish that the 
conduct prohibited by the provision is illegal, or that the conduct 
required is reasonably related to the prevention of illegal practices.
Future Orders

    The Commission announced its current policy of sunsetting 
competition orders on September 1, 1994. 59 Fed. Reg. 45,286 (1994). 
Under that policy, core provisions of future competition orders are 
ordinarly sunsetted at twenty years, and supplemental provisions are 
sunsetted at up to 10 years.
    After reviewing the comments and considering other available 
information, the Commission continues to believe that core provisions 
of competition administrative orders should ordinarily sunset after 
twenty years and that supplemental provisions should sunset after up to 
ten years.\7\ None of the comments supplied information that the 
Commission had not already considered in choosing ordinarily to sunset 
core provisions in competition orders after twenty years and 
supplemental provisions after up to ten years. Therefore, the 
Commission is not changing the sunset periods for core or supplemental 
provisions in future competition orders.

    \7\ Only in an exceptional case will the Commission adopt a 
sunset period longer or shorter than twenty years for core 
provisions. The Commission does not intend to change, in general, 
the expirtation periods of particular types of supplemental 
provisions that, as a matter of policy, have been set to expire by 
their own terms after periods of up to ten years.
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    However, the Commission has determined that the duration of future 
orders should be extended in instances where a complaint has been filed 
in federal court pursuant to section 5(1) of the FTCA, 15 U.S.C. 45(1), 
while the order remains in force, alleging a violation of such order. 
The twenty year sunset period will start anew on the date of the 
complaint is filed in federal court. However, the filing of such a 
complaint will not affect the duration of any supplemental order 
provision that terminates before twenty years. In addition, the filing 
of such a complaint will not affect the duration of the order's 
application to any respondent that is not named as a defendant in such 
complaint.\8\ Furthermore, the filing of 

[[Page 42572]]
such complaint will not affect the duration of the order if the 
complaint is dismissed or if a court rules that the defendant did not 
violate any provision of the order, and the dismissal or ruling is 
either not appealed or upheld on appeal.

    \8\ To implement this policy, new Commission administrative 
orders will include a provision similar to the following:
    This order will terminate twenty years from the date of its 
issuance, or twenty years from the most recent date that the United 
States or the Federal Trade Commission files a complaint (with or 
without an accompaning 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 paragraph in this order that terminates in less than 
twenty 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 paragraph.
    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 paragraph as though the complaint was never 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.
    A five year statute of limitations applies to civil penalty 
actions filed in federal court pursuant to section 5(1) of the FTCA. 
See 28 U.S.C. 2462. Therefore, it is conceivable that the government 
could file a complaint up to five years after an order has 
terminated challenging violations that occurred while the order was 
in force. Under the Policy Statement, the filing of a complaint 
after the order has terminated will not affect the duration of the 
order.
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    The filing of a complaint (with or without an accompanying consent 
decree) under section 5(1) of the FTCA indicates that the Commission 
had reason to believe the order was violated. This finding undermines 
the ordinary presumption that there is no need for further order 
coverage with respect to that respondent beyond twenty years.\9\

    \9\ The Commission retains the discretion to change the duration 
of an order pursuant to 16 CFR 2.51 or 3.72. Unless an order 
modification expressly changes the duration of an order, such 
modification will not affect the duration of the order as determined 
by this Policy Statement. Nothing in this Policy Statement will 
affect the Commission's standards for reopening and modifying or 
vacating orders pursuant to 15 U.S.C. 45(b) or 16 CFR 2.51.
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Existing Orders

    Under existing policy, respondents under competition administrative 
orders twenty years old may have their orders sunsetted through the 
order modification process, absent recidivist conduct or extraordinary 
circumstances.\10\ Many commenters recommended that the Commission 
modify its policy with respect to the duration of existing 
administrative orders that have remained in force for twenty or more 
years. They recommended that the Commission terminate such orders 
automatically without engaging in a case-by-case review of each order 
through the petitioning process.

    \10\ The Commission states as follows in its 1994 Policy 
Statement regarding the duration of competition orders:
    If, however, public comments, the Commission's experience 
enforcing the order, an ongoing antitrust investigation of the 
petitioner or the industry in which the petitioner competes at the 
Commission or the Department of Justice, or other readily available 
information raised substantial concerns about whether the public 
interest warrants retaining the order, such further review will be 
conducted as necessary to determine whether the public interest is 
best served by setting aside the order, modifying it, or retaining 
it as written. The Commission anticipates that, absent extraordinary 
circumstances, the basis for rebutting the presumption will be 
information that the petitioner has engaged in recidivist conduct.
    Id. at 45,286-87 (emphasis added).
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    The Commission has concluded that these recommendations have merit. 
The new Policy defines in bright-line fashion the principal 
circumstances in which extended order coverage is required (the filing 
of an order enforcement action). The cost of the Commission retraining 
added discretion as to whether it should retain older orders, thereby 
requiring a case-by-case analysis with respect to each petition, likely 
exceeds the benefits of retaining older orders in extraordinary 
circumstances. By adopting a policy that does not require the 
Commission to exercise discretion with respect to individual orders, 
the Commission will conserve scarce resources and ensure equitable 
treatment of similarly situated respondents now subject to 
administrative orders.
    The new Policy Statement sets forth the Commission's intention to 
dispense with the petitioning process to sunset existing competition 
orders and instead sunset such orders through rulemaking. The proposed 
rule, published elsewhere in the Federal Register, would automatically 
sunset each existing administrative order twenty years after it was 
issued, unless the Commission or the Department of Justice has filed a 
complaint (with or without an accompanying consent decree) in federal 
court to enforce such order pursuant to Section 5(1) of the FTCA during 
the twenty years preceding the adoption of the Policy Statement, or 
unless such a complaint is filed after the adoption of the Policy 
Statement and within twenty years after the order's issuance. Under the 
proposed rule, existing orders that do not terminate twenty years after 
they are issued due to the filing of a section 5(1) complaint would 
terminate twenty years after the filing of the most recent complaint to 
enforce the order. However, the filing of such a complaint would not 
affect the order's duration unless the order is in force on the date 
the complaint is filed.\11\ In addition, the filing of such a complaint 
will not affect the duration of the order's application to any 
respondent that is not named as a defendant in the complaint. The 
filing of such a complaint will only extent the duration of those order 
provisions not set to expire by their own terms. For example, a 
reporting requirement in an existing order that terminates ten years 
after the order's issuance will not be extended by the filing of such a 
complaint, even if the section 5(1) complaint is filed within that 
first ten years after the order's issuance. In addition, the filing of 
such a complaint will not affect the duration of the order if the 
complaint is dismissed or the 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.

    \11\ As discussed in fn. 8, supra, a five year statute of 
limitations applies to civil penalty actions filed under section 
5(1) of the FTCA.
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    The Commission intends to implement this policy with respect to 
existing administrative orders through rulemaking rather than through 
adjudication.\12\ The proposed rulemaking contemplates that respondents 
will receive notice through the rulemaking process and will not receive 
individual notice that their orders have been terminated. Until this 
rulemaking is completed, the Commission will leave in place its current 
policy regarding the duration of existing competition administrative 
orders.

    \12\ The Commission has the discretion to regulate parties 
through issuance of a rule of general applicability as opposed to 
adjudication of individual cases. SEC v. Chenery Corp., 332 U.S. 194 
(1947); Heckler v. Ringer, 446 U.S. 602, 617, (1984); Nat'l Small 
Shipments Traffic Conf., Inc. v. ICC, 725 F. 2d 1442, 1447 (D.C. 
Cir. 1984). This is so even if the rule may effectively limit or 
terminate rights or obligations in a specific case. United States v. 
Storer Broadcasting Co., 351 U.S. 192, 205 (1956). An agency may 
properly rely upon rulemaking to resolve certain classes of issues 
that the agency might otherwise adjudicate on an individual basis. 
Heckler v. Campbell, 461 U.S. 458, 467 (1982). As the court 
explained:
    [E]ven where an agency's enabling statute expressly requires it 
to hold a hearing, the agency may rely on its rulemaking authority 
to determine issues that do not require case-by-case consideration. 
* * * A contrary holding would require the agency continually to 
relitigate in a single rulemaking proceeding.
    Id. Under the Policy Statement, the Commission does not propose 
to exercise any discretion regarding the termination of existing 
orders. To apply the proposed criteria for terminating existing 
orders to any particular order, one need only ascertain a few facts, 
all of which are easily ascertained and present no issues of fact 
requiring case-by-case examination.
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Consumer protection administrative orders

    Like competition orders, consumer protection orders perform several 
functions. First, they may proscribe future violations of statutory 
prohibitions--and secure adherence to statutory requirements--including 
the prohibition of unfair and deceptive acts or practices embodied in 
Section 5 of the FTCA, and the prohibitions and requirements embodied 
in other statutes intended to protect consumers, such as the Fair 
Credit Reporting Act, 15 U.S.C. 1681, the Truth-in-Lending Act, 15 

[[Page 42573]]
U.S.C. 1601-1667, and the Wool Products Labeling Act, 15 U.S.C. 68. 
Second, orders may require those subject to them to keep records, 
distribute the order, or file reports with the Commission to facilitate 
Commission efforts to monitor or enforce compliance with the order.
    Under the Commission's existing practice, Commission order 
provisions that prohibit or require particular types of conduct to 
prevent ``unfair or deceptive acts or practices'' have different 
durations depending on their type. Core provisions prohibit practices 
that would be unlawful whether engaged in by parties subject to the 
order at issue or by other similarly situated persons or entities. 
Under current policy, core provisions in consumer protection orders 
typically continue in force indefinitely, and a respondent bears the 
burden of establishing (in the context of a petition to reopen) that 
such a provision should be modified or set aside.
    All other provisions in consumer protection orders may be 
categorized as supplemental provisions,\13\ which are intended to 
prevent a respondent or defendant from repeating a law violation or to 
mitigate the effects of prior illegal conduct. Under existing policy, 
some supplemental provisions in consumer protection orders terminate 
automatically after different prescribed periods. For example, some 
advertising disclosure, order distribution, and reporting requirements 
expire in five or ten years.

    \13\ The Commission may also impose or seek types of relief in 
administrative orders that are not addressed in this statement 
because they have no further effect once the actions they require 
have been taken. For example, some orders require the payment of 
redress to consumers, the payment of disgorgement to the United 
States Treasury, or the dissemination of corrective advertising for 
a limited time.
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Future Orders

    The Commission has concluded that there also is reason to sunset 
consumer protection orders. As commenters noted, many older orders 
contain supplemental relief that could become over-regulatory over time 
or impose requirements that the Commission would not adopt under 
current practice. There also are costs to perpetual core provisions in 
consumer protection orders. Basic prohibitions against misrepresenting 
or failing to have substantiation still require interpretation and may 
induce some companies to be more cautious than their competitions 
within the range of permissible advertising practices. Over time, 
changes in management or corporate culture may no longer warrant this 
extra caution and result in competitive imbalances.\14\

    \14\ Although it is true, as some comments point out, that 
respondents subject to orders containing over-regulatory provisions 
can petition the Commission to reopen and vacate such orders, the 
filing of petitions entails costs for both respondents and the 
Commission.
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    At the same time, it can be argued that consumer protection orders 
should remain in effect for a longer period than competition orders. A 
principal rationale for sunsetting competition orders was that even the 
core relief in such orders may become outdated or inhibit pro-
competitive conduct if, due to changes in market conditions, the 
prohibited conduct no longer unreasonably restrains competition.\15\ A 
number of commenters noted that consumer protection orders, by 
contrast, contain core prohibitions that remain valid regardless of 
marketing conditions (e.g., ``cease misrepresenting'').\16\ Although 
supplemental relief in consumer protection orders may share some 
attributes of supplemental relief in competition order,\17\ it often 
does not share the added problem of the related core relief becoming 
invalid due to changed market conditions.

    \15\ This is not true of those competition orders based on per 
se violations, such as price-fixing. However, a much larger 
proportion of consumer protection orders are based on core concepts 
that remain valid despite changes in market conditions.
    \16\ See comments of NAAG, AARP, and CSPI.
    \17\ Supplemental relief in consumer protection orders tends to 
be more detailed in its prohibitions than core relief, and thus more 
potentially burdensome. However, that is equally true of 
supplemental relief in competition orders.
    Thus, the Commission reasonably also could have decided that the 
core and supplemental relief in consumer protection orders should 
remain in effect longer than that in competition orders (e.g., thirty 
years for core and twenty years for supplemental). However, the 
distinctions between supplemental and core provisions in consumer 
protection orders are not always clearly delineated, suggesting the 
need for a uniform sunset period. For example, a provision may bar a 
deceptive claim as deceptive, unless the claim is followed by a 
disclosure. It could be argued that such ``triggering'' provisions have 
both a core relief component to them (barring a claim as deceptive) and 
a supplemental relief aspect to them (requiring a disclosure if the 
claim is made). There may be disagreements over whether to characterize 
such disclosures as supplemental or core relief if the policy were to 
distinguish between the two, leading to anomalous results.
    This resulting ambiguity regarding the characterization of 
particular provisions in consumer protection orders could undermine the 
clarity of Commission orders, raising respondents' cost of compliance 
and negotiating settlements and Commission costs in ensuring the 
enforceability of its orders. By contrast, as a general matter, 
competition orders differentiate between core and fencing-in and 
supplemental relief. Consequently, the Commission has determined that 
it is appropriate to differentiate between consumer protection and 
competition orders in this respect by ordinarily sunsetting both core 
and supplemental relief in consumer protection administrative orders 
after twenty years.\18\

    \18\ Only in an exceptional case will the Commission adopt a 
sunset period longer or shorter than twenty years for core 
provisions The Commission does not intend to change, in general, the 
expiration periods of particular types of supplemental provisions 
that, as a matter of policy, have been set to expire by their own 
terms after periods of up to ten years such as: (1) Administrative 
boilerplate (e.g., recordkeeping, order distribution, and reporting 
requirements); and (2) some types of disclosure requirements (e.g., 
informercial disclosures that sunset after ten years; See TV Inc., 
Docket No. C-3296 (1990)).
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Existing Orders

    The Commission has determined that the new policy for terminating 
existing competition administrative orders described above will also 
apply to consumer protection administrative orders.\19\

    \19\ The termination under the policy Statement of an order 
issued in connection with a determination by the Commission that the 
respondent had engaged in an unfair or deceptive practice would not 
affect the ability of the Commission to recover a civil penalty 
based on that determination pursuant to Section 5(m)(1)(B) of the 
FTCA, 15 U.S.C. 45(n)(1)(B).
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Competition and Consumer Protection Federal Court Orders

    This new policy shall not apply to either competition or consumer 
protection federal court orders. The Commission has determined not to 
do so for several reasons. Many consumer protection federal court 
orders obtained since the early 1980s pursuant to Section 13(b) of the 
FTCA address particularly egregious conduct such as hard core fraud. 
Given that none of these orders have been in force for twenty years, 
the Commission lacks sufficient information to determine whether their 
remedial purposes will be served within twenty years.\20\ Therefore, 
the Commission has determined, at least of now, not to sunset the core 
provisions 

[[Page 42574]]
and some supplemental provisions in these orders.

    \20\ The Commission notes that it does not have the power to 
unilaterally sunset federal court orders. Every federal court order 
must be entered by federal court to become effective. In order to 
sunset an existing federal court order, one or more parties thereto 
would have to file a motion with the court seeking termination of 
the order.
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    In addition, many consumer protection federal court orders simply 
prohibit violations of Commission trade regulation rules (e.g., 
Disclosure Requirements and Prohibitions Concerning Franchising and 
Business Opportunity Ventures, 16 CFR 436) or statutes otehr than the 
FTCA enforced by the Commission (e.g., Equal Credit Opportunity Act, 15 
U.S.C. 1691). The core provisions in such orders are presumptively 
valid beyond twenty years in that they require adherence to regulations 
and statutes that are already binding on the defendants as well as 
their competitors. Moreover, many of these order do not contain 
supplemental provisions other than those that, as a matter of 
Commission policy, normally terminate after up to ten years. Therefore, 
there is no compelling reason to sunset such orders.
    Finally, most competition and some consumer protection federal 
court orders simply prohibit violations of Commission administrative 
orders. These federal court orders will cease to have any effect once 
the underlying administrative orders are terminated pursuant to this 
Policy Statement. Therefore, there is no compelling reason to sunset 
these federal court orders.

    By direction of the Commission.

    Issued: August 7, 1995
Donald S. Clark,
Secretary.

Concurring Statement of Commissioner Mary L. Azcuenaga Concerning 
Revised Statement of Policy On Duration of Commission Orders

August 1995.
    The Commission today has approved a revised statement issued in 
July, 1994, that applied only perspectively and did not apply to 
consumer protection orders. In 1994, when the Commission issued its 
statement, I wrote separately to say that the Commission should 
apply a sunset policy to all its administrative orders, both 
consumer protection and competition orders and existing and future 
orders. I also expressed the view that the Commission need not issue 
individual orders modifying or vacating existing orders but easily 
could accomplish the same goal through publication of an appropriate 
notice in the Federla Register. I am gratified that today's 
statement is fully consistent with myv laws of a year ago and now, I 
am pleased to join the Commission in its current decision.

[FR Doc. 95-20144 Filed 8-15-95; 8:45 am]
BILLING CODE 6750-01-M