[Federal Register Volume 63, Number 138 (Monday, July 20, 1998)]
[Rules and Regulations]
[Pages 38743-38746]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-19212]


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FEDERAL TRADE COMMISSION

16 CFR Part 305


Rule Concerning Disclosures Regarding Energy Consumption and 
Water Use of Certain Home Appliances and Other Products Required Under 
the Energy Policy and Conservation Act (``Appliance Labeling Rule'')

AGENCY: Federal Trade Commission.

ACTION: Final rule.

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SUMMARY: The Federal Trade Commission (``Commission'') amends the 
package labeling requirements for lamp products under the Commission's 
Appliance Labeling Rule (``Rule'') in response to a petition from Osram 
Sylvania, Ltd. (``Petitioner''). The Petitioner requests that it be 
allowed to distribute to consumers, through retailers, lamp products 
without individual packaging or labeling, where the bulk shipping 
cartons include the disclosures currently required by the Rule and 
where retailers display the lamp products for sale to consumers in the 
bulk shipping cartons. The interpretative amendment the Commission 
adopts clarifies that manufacturers and private labelers of lamp 
products that are not packaged for individual retail sale may meet the 
labeling disclosure requirements of the Rule by making the disclosures 
on labeling on the bulk shipping carton, where the bulk shipping carton 
is used to display the lamps for retail sale.

EFFECTIVE DATE: July 20, 1998.

FOR FURTHER INFORMATION CONTACT: Kent C. Howerton, Attorney, Federal 
Trade Commission, Bureau of Consumer Protection, Division of 
Enforcement, Sixth St. and Pennsylvania Ave., NW, Room S-4302, 
Washington, D.C. 20580, (202) 326-3013 (voice), (202) 326-3259 (fax).

SUPPLEMENTARY INFORMATION:

I. Introduction

    Petitioner, Osram Sylvania, Ltd., a manufacturer of lamp products, 
requests the Commission's authorization to market certain general 
service non-reflector incandescent light bulbs in bulk-pack shipping 
cartons that are labeled with the disclosures required by the Rule, 
instead of packaging and labeling the light bulbs for individual retail 
sale to consumers, where the light bulbs will be displayed for retail 
sale in the bulk-pack shipping cartons, under specific, limited 
conditions. The Petitioner's request, the Commission's analysis, and 
the interpretative amendment to the Rule adopted by the Commission are 
described below.

II. Overview of Rule's Labeling Requirements

    On May 13, 1994, the Commission promulgated labeling requirements 
for various types of light bulbs and other lamp products as amendments 
to the Appliance Labeling Rule 1 in response to amendments 
the Energy Policy Act of 1992 (``EPACT'') 2 made to the 
Energy Policy and Conservation Act (``EPCA'').3 As amended, 
EPCA directed the Commission to prescribe rules requiring that the 
labeling of specific lamp products indicate conspicuously on the 
packaging of the lamps, in a manner prescribed by the Commission, such 
information as the Commission deemed necessary to enable consumers ``to 
select the most energy efficient lamps which meet their requirements.'' 
Congress gave the Commission the discretion to determine what specific 
disclosures were necessary, and where and how they should be made. The 
covered lamp products include: general service fluorescent lamps, 
general service (both non-reflector and reflector) incandescent lamps, 
and medium screw base compact fluorescent lamps.
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    \1\ Final rule [and Statement of Basis and Purpose] (``SBP''), 
59 FR 25176 (1994) (codified at 16 CFR Part 305 (1997)). The lamp 
labeling requirements became effective May 15, 1995.
    \2\ Pub. L. No. 102-486, 106 Stat. 2776, 2817-2832 (Oct. 24, 
1992) (codified at 42 U.S.C. 6201, 6291-6309).
    \3\ 42 U.S.C. 6291 et seq.
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    To provide consumers with the information they need to select the 
most energy efficient lamps that meet their requirements, the 
Commission adopted labeling provisions, under section 305.11(e)(1)(i) 
of the Rule, 16 CFR 305.11(e)(1)(i), that require that the principal 
display panel on package labels of general service incandescent light 
bulbs (both non-reflector and reflector) and medium screw base compact 
fluorescent lamps disclose clearly and conspicuously light output (in 
lumens), energy used (in watts), and life (in hours).4 The 
labeling provisions also mandate that the principal display panel 
disclose the number of lamps included in the package (if more than 
one), and the design voltage of each lamp included in the package (if 
other than 120 volts). For multi-filament incandescent light bulbs, 
section 305.11(e)(1)(vii), 16 CFR 305.11(e)(1)(vii), requires that the 
principal display panel disclose clearly and conspicuously the bulb's 
light output and energy used at each of the bulb's levels of light 
output, and the bulb's life measured on the basis of the filament that 
fails first. Section 305.11(e)(1)(ii), 16 CFR 305.11(e)(1)(ii), 
specifies how the disclosures must appear on the label.
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    \4\ Section 305.11(e)(1)(iii), 16 CFR 305.11(e)(1)(iii), 
requires that the light output, wattage and life disclosures for 
general service incandescent lamps and medium base compact 
fluorescent lamps be measured at 120 volts, regardless of the lamp's 
design voltage. If a lamp's design voltage is 125 volts or 130 
volts, section 305.11(e)(1)(iii) requires that the disclosures each 
be followed by the phrase ``at 120 volts.'' It allows manufacturers 
and private labelers of 125 or 130 design voltage lamps to add 
disclosures of light output, wattage, and life at the lamp's design 
voltage if those disclosures are each followed by the phrase ``at 
(125/130) volts,'' and if all panels of the package that contain a 
claimed light output, wattage, or life clearly and conspicuously 
identify the lamp as ``(125 volt/130 volt).'' If the disclosures on 
the principal display panel of the package are for operation at 125 
or 130 volts, and if the disclosures at 120 volts are made on a 
separate panel, the principal display panel must clearly and 
conspicuously disclose the following statement: ``This product is 
designed for (125/130) volts. When used on the normal line voltage 
of 120 volts, the light output and energy efficiency are noticeably 
reduced. See (side/back) panel for 120 volt ratings.''
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    Labels for incandescent spot lights, flood lights, and down lights 
and for general service fluorescent lamps must include a capital letter 
``E'' printed within a circle and followed by an asterisk referring to 
a specific statement that the encircled ``E'' means the lamp meets 
federal minimum efficiency standards. The encircled ``E'' must be 
disclosed clearly and conspicuously in color-contrasting ink, and in a 
typeface at least as large as either the manufacturer's name or logo or 
another logo disclosed on the label, whichever is larger. If the 
required statement is not disclosed on the principal display panel, the 
asterisk must be followed by the statement: ``*See [Back, Top, Side]

[[Page 38744]]

panel for details.'' 16 CFR 305.11(e)(2)-(2)(i).5
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    \5\ Manufacturers and private labelers that do not individually 
package, or put labels on, their general service fluorescent lamp 
products may meet the labeling disclosure requirements by 
permanently marking the lamp clearly and conspicuously with the 
encircled ``E.'' See SBP, 59 FR at 25198.
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    Section 305.11(e)(1)(vi), 16 CFR 305.11(e)(1)(vi), requires that 
the principal display panel for each of these lamp products also 
clearly and conspicuously disclose the following Advisory Disclosure:

    To save energy costs, find the bulbs with the (beam spread and) 
light output you need, then choose the one with the lowest 
watts.6
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    \6\ The reference to beam spread is required only on labels of 
incandescent spot lights, flood lights, and down lights.
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    Section 305.11(e)(4), 16 CFR 305.11(e)(4), requires that cartons in 
which lamp products covered by the Rule are shipped in the United 
States or imported into the United States disclose clearly and 
conspicuously: ``These lamps comply with Federal energy labeling 
requirements.''
    Last, section 305.4(a)(1), 16 CFR 305.4(a)(1), prohibits 
manufacturers and private labelers from distributing covered lamp 
products that are not labeled in accordance with the Rule's 
requirements; and section 305.4(a)(2), 16 CFR 305.4(a)(2), prohibits 
retailers and others from removing the labels or rendering them 
illegible.

III. Osram Sylvania's Petition

    The Petitioner requests the Commission's authorization to market 
single-wattage 40, 60, 75, and 100 watt general service non-reflector 
incandescent light bulbs in bulk-pack shipping cartons that are labeled 
with the disclosures required by the Rule, instead of packaging and 
labeling the light bulbs for individual retail sale to consumers, where 
the light bulbs will be displayed for retail sale in the bulk-pack 
shipping cartons. In connection with its request, the Petitioner 
proposes the following conditions:

     Individual light bulbs would be etched with brand name 
identification, voltage, and wattage (which the Petitioner describes 
as current industry practice).
     Outer cartons would display the labeling disclosures 
that the Rule requires on the principal display panel of product 
packages. The Petitioner states, for example, that the cartons could 
be printed so that the required disclosures of light output, energy 
used, and life for all four wattages occupy a large area on every 
side of the outer carton to ensure that the required disclosures are 
visible no matter how the cartons are mixed or displayed.
     The authorization for these bulk-pack shipments would 
be limited to general service non-reflector incandescent light bulbs 
with a design voltage of 120 volts.
     The authorization would be limited to unusual or rare 
events such as ``store openings'' or ``manager specials.''

IV. Analysis and Amendment

    Except for general service fluorescent lamp products (which were 
being distributed for retail sale to consumers in bulk packaging), 
7 at the time of the original rulemaking proceeding all 
other light bulbs and other lamp products under discussion were being 
sold in individual retail-sale packages containing one or more lamps. 
As a result, the discussion of labeling requirements assumed that 
covered light bulbs and other lamp products would be packaged and 
labeled in retail-sale packaging units. The Rule, however, does not 
define the terms ``label,'' ``principal display panel,'' or 
``package,'' as they are used in the Rule, and, except for general 
service fluorescent lamps, the Rule does not specify how manufacturers 
and private labelers of lamp products sold to consumers without retail-
sale packaging must make the required labeling disclosures.
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    \7\ The Rule already authorizes the use of an alternative to 
disclosures on individual package labeling for general service 
fluorescent lamps. See note 5, supra.
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    In considering the Petition, the Commission has determined that 
making the disclosures required by the Rule on the labels of the bulk 
shipping carton, where the bulk shipping carton is used to display the 
lamps for retail sale (``bulk shipping/retail display carton''), is 
acceptable. Making the required labeling disclosures on these bulk 
shipping/retail display cartons satisfies the statutory mandate that 
package labeling disclose ``such information as the Commission deems 
necessary to enable consumers to select the most energy efficient lamps 
which meet their requirements,'' and it is consistent with the Rule's 
labeling requirements. Where the bulk shipping/retail display carton is 
used to display these lamps for retail sale, labeling the carton with 
the required disclosures will ensure that: (1) The disclosures are made 
prior to purchase; (2) the disclosures enable consumers to select the 
most energy efficient lamps that meet their requirements; and (3) the 
disclosures are made in a manner and form that allow consumers to 
compare competing lamp products in making their purchase selections. 
For purposes of making the required labeling disclosures, therefore, 
the Commission interprets the terms ``label,'' ``principal display 
panel,'' and ``package'' in the Rule to include the shipping carton/
retail display carton for lamp products that are not packaged for 
individual retail sale.
    The Petitioner requested a limited, conditional authorization to 
make the required disclosures on bulk shipping cartons only for single-
wattage, general service non-reflector incandescent light bulbs with a 
design voltage of 120 volts. The Commission, however, has determined 
that labeling the bulk shipping/retail display carton for lamp products 
that are not packaged for individual retail sale, under the 
circumstances described above, will provide consumers with the 
prepurchase information required by the Rule. This alternative to 
individual, retail-sale package labeling, therefore, is acceptable for 
all general service fluorescent lamps, medium screw base compact 
fluorescent lamps, and general service (both non-reflector and 
reflector) incandescent light bulbs covered by the Rule.
    The Petitioner also suggested that certain conditions might be 
necessary to ensure that the labeling on the bulk shipping/retail 
display carton meets the requirements of the Rule. The Commission has 
determined that it is not necessary to impose the following conditions 
that were suggested by the Petitioner:

     Marking individual lamps--Some kind of marking or other 
identification on each individual bulb or tube enables consumers to 
select the specific bulb or tube they desire from the bulk carton. 
Marking or otherwise identifying each lamp with wattage and voltage 
is especially important for incandescent light bulbs because it is 
unsafe to use an incandescent light bulb with a higher wattage than 
the rating of the fixture in which it is used. 8 
Manufacturers and private labelers, however, currently voluntarily 
mark incandescent light bulbs and other types of lamp products with 
wattage and design voltage information so that consumers can use 
them safely. The Commission believes that the marketplace provides 
incentives for manufacturers and private labelers to continue 
marking this information on lamp products, so it is unnecessary for 
the Commission to require such marking on lamp products marketed 
through bulk shipping/retail display cartons. 9
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    \8\ SBP, 59 FR at 25185.
    \9\ See Repeal of rule [Statement of Basis and Purpose for 
repeal of the Light Bulb Rule, 16 CFR Part 409], 61 FR 33308, at 
33311-12 (1996). In comments supporting the repeal of the Light Bulb 
Rule, which had required product marking, General Electric Co. 
stated that manufacturers would continue marking individual light 
bulbs with wattage and design voltage as a sound business practice 
that reduces liability and gives consumers important information, 
and the National Electrical Manufacturers Association stated that an 
international safety standard issued by the International 
Electrotechnical Commission requires marking wattage and voltage on 
general service incandescent light bulbs.

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[[Page 38745]]

     Making disclosures on all sides of the carton--When 
lamps that are not packaged for individual retail sale are 
distributed to retailers in these bulk shipping/retail display 
cartons, the bulk shipping/retail display cartons will constitute 
the required labeling. The Rule already prohibits retailers from 
removing the required labels or rendering them illegible. Retailers, 
therefore, will be required to display these bulk-packaged lamp 
products for retail sale to consumers in the bulk shipping/retail 
display carton with the required labeling disclosures visible to 
consumers at the point of retail sale. It is unnecessary, therefore, 
for the Commission to require that the disclosures be made on 
labeling on multiple sides of the bulk shipping/retail display 
carton. Of course, manufacturers may choose to make the disclosures 
on all sides of the carton to facilitate display by the retailer.
     Limiting use to unusual or rare sales events--Because 
labeling on the bulk shipping/retail display cartons will contain 
the disclosures required by the Rule (to provide consumers with 
prepurchase information they need) and the cartons must be displayed 
at the point of retail sale with the required disclosures clearly 
visible to consumers prior to purchase, it is unnecessary to limit 
use of this labeling approach to unusual or rare sales events.

    For the reasons explained above, the Commission adopts an 
interpretative amendment to the Rule to clarify that manufacturers and 
private labelers of all types of covered lamp products may meet the 
Rule's labeling disclosure requirements by making the required 
disclosures on the bulk shipping carton, where the lamps are not 
packaged or labeled for individual retail sale and where the lamps are 
displayed for retail sale in the bulk shipping/retail display carton. 
10 The Rule continues to require that individual retail-sale 
packages of lamps be labeled with the disclosures required by the Rule, 
regardless of whether they are packaged in bulk shipping/retail display 
cartons that also contain the required labeling disclosures.
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    \10\ As they currently must do under the Rule, manufacturers and 
private labelers also will have to disclose, clearly and 
conspicuously, on all cartons in which the lamps are shipped in the 
United States or imported into the United States, that: ``These 
lamps comply with Federal energy labeling requirements.''
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V. Exemption From Notice and Comment Requirements

    The amendment the Commission adopts today interprets and clarifies 
the Rule by stating that, for any covered lamp product that is not 
packaged and labeled for individual retail sale, manufacturers and 
private labelers may meet the labeling requirements of the Rule by 
making the required disclosures on the labels of the bulk shipping/
retail display carton, where the bulk shipping/retail display carton is 
used to display the lamps for retail sale. The information that will be 
provided to consumers, and the time at which it will be provided to 
them, is the same as that currently required by the Rule. This 
interpretative amendment does not create any new obligations, but only 
clarifies how the Commission interprets the terms ``principal display 
panel,'' ``label,'' and ``package'' for lamp products that are shipped 
in bulk shipping/retail display cartons without individual retail-sale 
packaging, where the lamps are displayed for retail sale in the bulk 
shipping/retail display cartons. 11 For these reasons, the 
Commission has determined that the amendment constitutes an 
interpretative rule, for which notice and public comment are not 
required under section 553(b)(A) of the Administrative Procedure Act 
(``APA''), 5 U.S.C. 553(b)(A). The amendment is effective today. 
Because the amendment is merely an interpretative rule, section 
553(d)(2) of the APA, 5 U.S.C. 553(d)(2), which requires publication or 
service of a substantive rule not less than 30 days before its 
effective date, does not apply.
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    \11\ The interpretations of the terms ``principal display 
panel,'' ``label,'' and ``package'' in this Rule, are consistent 
with the requirements of, and the definitions of these terms in, the 
Fair Packaging and Labeling Act (``FPLA''), 15 U.S.C. 1541 et seq., 
and in the Commission's Regulations under section 4 of the FPLA, 16 
CFR Part 500.
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VI. Regulatory Flexibility Act

    Because this amendment is an interpretative rule that is not 
covered by the notice and comment provisions of section 553(b) of the 
APA, the Regulatory Flexibility Act (``RFA''), 5 U.S.C. 601 et seq., 
does not apply. Nevertheless, the Commission has considered the 
potential effect of the amendment on small entities. The Rule requires 
that manufacturers and other lamp product sellers: (1) disclose 
specific information in labels and catalogs; (2) submit annual reports 
to the Commission for certain lamp products; 12 and (3) 
substantiate the required disclosures and maintain records of that 
substantiating data. In promulgating these disclosure requirements, the 
Commission certified that the lamp labeling requirements in the 
Appliance Labeling Rule would not have ``a significant economic impact 
on a substantial number of small entities.'' The interpretative 
amendment adopted today does not impose any new obligations on sellers, 
large or small. The Commission has concluded that the impact of the 
amendment on small businesses as well as other entities within the 
affected industry, if any, will be minimal. Accordingly, this notice 
does not contain a regulatory analysis under section 604 of the RFA, 5 
U.S.C. 604.
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    \12\ These reporting requirements currently have been stayed by 
the Commission.
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VII. Paperwork Reduction Act

    The Paperwork Reduction Act (``PRA''), 44 U.S.C. 3501 et seq., 
requires government agencies, before promulgating rules or other 
regulations that require ``collections of information'' (i.e., 
recordkeeping, reporting, or third-party disclosure requirements), to 
obtain approval from the Office of Management and Budget (``OMB''), 44 
U.S.C. 3502. The Commission currently has OMB clearance for the Rule's 
information collection requirements (OMB No. 3084-0069). This 
interpretative amendment does not create any new information collection 
requirements.

List of Subjects in 16 CFR Part 305

    Advertising, Consumer protection, Energy conservation, Household 
appliances, Labeling, Lamp products, Penalties, Reporting and 
recordkeeping requirements.

    Authority: 42 U.S.C. 6294.

Text of Amendments

    In consideration of the foregoing, the Commission amends title 16, 
chapter I, subchapter C of the Code of Federal Regulations, as follows:

PART 305--RULE CONCERNING DISCLOSURES REGARDING ENERGY CONSUMPTION 
AND WATER USE OF CERTAIN HOME APPLIANCE AND OTHER PRODUCTS REQUIRED 
UNDER THE ENERGY POLICY AND CONSERVATION ACT (``APPLIANCE LABELING 
RULE'')

    1. The authority for part 305 continues to read as follows:

    Authority: 42 U.S.C. 6294.

Sec. 305.11  [Amended]

    2. Section 305.11(e) is amended by revising paragraph (e)(2), 
redesignating paragraphs (e)(3) and (e)(4) as paragraphs (e)(4) and 
(e)(5), and adding a new paragraph (e)(3) to read as follows:
* * * * *
    (e) * * *
    (2) Any covered product that is a general service fluorescent lamp 
or an incandescent reflector lamp shall be labeled clearly and 
conspicuously with a capital letter ``E'' printed within a circle and 
followed by an asterisk. The

[[Page 38746]]

label shall also clearly and conspicuously disclose, either in close 
proximity to that asterisk or elsewhere on the label, the following 
statement:

    *[The encircled ``E''] means this bulb meets Federal minimum 
efficiency standards.

    (i) If the statement is not disclosed on the principal display 
panel, the asterisk shall be followed by the following statement:

    See [Back,Top, Side] panel for details.

    (ii) For purposes of this paragraph (e), the encircled capital 
letter ``E'' shall be clearly and conspicuously disclosed in color-
contrasting ink on the label of any covered product that is a general 
service fluorescent lamp and will be deemed ``conspicuous,'' in terms 
of size, if it appears in typeface at least as large as either the 
manufacturer's name or logo or another logo disclosed on the label, 
such as the ``UL'' or ``ETL'' logos, whichever is larger.
    (3)(i) A manufacturer or private labeler who distributes general 
service fluorescent lamps, compact fluorescent lamps, or general 
service incandescent lamps (including incandescent reflector lamps) 
without labels attached to the lamps or without labels on individual 
retail-sale packaging for one or more lamps may meet the disclosure 
requirements of paragraphs (e)(1) and (e)(2) of this section by making 
the required disclosures, in the manner and form required by those 
paragraphs, on the bulk shipping cartons that are to be used to display 
the lamps for retail sale.
    (ii) Instead of labeling any covered product that is a general 
service fluorescent lamp with the encircled ``E'' and with the 
statement described in paragraph (e)(2) of this section, a manufacturer 
or private labeler who would not otherwise put a label on such a lamp 
may meet the disclosure requirements of that paragraph by permanently 
marking the lamp clearly and conspicuously with the encircled ``E''.
* * * * *
    By direction of the Commission, Commissioner Thompson 
dissenting.
Donald S. Clark,
Secretary.
[FR Doc. 98-19212 Filed 7-17-98; 8:45 am]
BILLING CODE 6750-01-P