[Federal Register Volume 63, Number 244 (Monday, December 21, 1998)]
[Rules and Regulations]
[Pages 70333-70334]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-33705]


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FEDERAL TRADE COMMISSION

16 CFR PART 243


Guides for the Decorative Wall Paneling Industry

AGENCY: Federal Trade Commission.

ACTION: Rescission of the Guides for the Decorative Wall Paneling 
Industry.

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SUMMARY: On March 27, 1998, the Commission published a Federal Register 
notice initiating a regulatory review of the Federal Trade Commission's 
(``Commission'') Guides for the Decorative Wall Paneling Industry 
(``Decorative Wall Paneling Guides'' or ``the Guides''), 16 CFR Part 
243, under the Commission's program to review all rules and guides. The 
Commission has now completed its review and determined to rescind the 
Guides.

EFFECTIVE DATE: December 21, 1998.

ADDRESS: Requests for copies of the Federal Register notice should be 
sent to the Consumer Response Center, Room 130, Federal Trade 
Commission, 600 Pennsylvania Ave., N.W., Washington, DC 20580. The 
notice and news release announcing the rescission of the Guides are 
available on the Internet at the Commission's website, ``http://
www.ftc.gov''.

FOR FURTHER INFORMATION CONTACT: Eric Nickerson, Investigator, Federal 
Trade Commission, Denver Regional Office, 1961 Stout Street, Suite 
1523, Denver, CO 80294, telephone number (303) 844-3584, E-mail 
``[email protected]''.

SUPPLEMENTARY INFORMATION: The Decorative Wall Paneling Guides, 
promulgated by the Commission on December 15, 1971, provide guidance to 
manufacturers, retail distributors, and other suppliers (``sellers'') 
of decorative wall panels with regard to labeling, advertising, and 
promoting their products in a manner consistent with Section 5 of the 
Federal Trade Commission Act, 15 U.S.C. 45. The Guides are designed to 
protect purchasers from being misled by the appearance of a product, or 
by deceptive descriptions, depictions, designations, or representations 
in advertisements, labels, or other promotional materials.
    The Guides provide examples of deceptive and non-deceptive 
descriptions for wood and wood imitations to ensure that prospective 
purchasers are not misled by a product's appearance. For example, 
Section 243.2(a)(5) provides that ``[d]escribing a nonlumber product, 
such as particleboard, hardboard, fiberboard, flakeboard, and products 
of similar composition, as `wood' '' is a false representation. The 
Guides also suggest that sellers affirmatively disclose the composition 
and other attributes of the products being offered. Additionally, the 
Guides provide for disclosure of material facts that would be helpful 
to consumers in making purchase decisions. The Guides suggest that 
affirmative disclosures be provided in advertising and labeling when: 
(1) A wall panel's appearance could mislead purchasers as to its true 
composition; or (2) a representation is made that is susceptible of at 
least one misleading interpretation.
    The Commission has determined, as part of its oversight 
responsibilities, to review rules and industry 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 rescission. The 
Commission solicited comments on the Decorative Wall Paneling Guides in 
the Federal Register on March 27, 1998, 63 FR 14865. The Commission's 
staff also mailed copies of the notice to approximately 100 industry 
representatives to ensure that all interested parties would have an 
opportunity to comment. The comment period ended May 26, 1998.
    The Commission received one comment, from the Hardwood, Plywood & 
Veneer Association (``HPVA''). The comment supported retaining the 
Guides because ``[d]ecorative paneling still represents a significant 
sector of the interior finish products market.'' 1 The 
commenter stated that the Guides benefit sellers by ``establishing a 
common basis of understanding and fair competition.'' The commenter 
also noted, however, the existence of at least one recognized standard 
for decorative wall panels. This voluntary industry standard, the 
``American National Standard For Hardwood And Decorative Plywood'' or 
``ANSI/HPVA HP-1-1994'' (hereafter referred to as the ``ANSI 
standard''), became effective in 1994, superseding earlier versions 
published in 1983 and 1993. Both the 1983 and 1994 versions of the 
standard were the result of joint efforts of the American National 
Standards Institute, Inc., and

[[Page 70334]]

the Hardwood, Plywood & Veneer Association.2 The ``ANSI 
Canvass Method,'' in which industry members with an interest in 
hardwood and decorative plywood were contacted, was used to achieve 
consensus for the standard.3
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    \1\ HPVA, #1.
    \2\ Prior to January 1, 1993, HPVA was known as the Hardwood & 
Plywood Manufacturers Association.
    \3\ ANSI/HPVA HP-1-1994, at iv.
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    The ANSI standard sets forth detailed product quality, labeling, 
and testing requirements for a variety of wood- and veneer-finished 
products. Specifically, the ANSI/HPVA publication's abstract states, in 
part, that the ANSI Standard for Hardwood and Decorative Plywood:

    [E]stablishes nationally recognized classifications, quality 
criteria, test methods, definitions, and product marking and 
designation practices for plywood produced primarily from hardwoods. 
It is intended for voluntary use for reference in trade literature, 
catalogs, sales contracts, building codes * * * to describe the 
quality aspects of the product and the means to determine 
conformance.

While, unlike the Guides, the ANSI standard does not expressly prohibit 
sellers from misrepresenting the composition of a particular wood or 
simulated wood product, it provides detailed classifications and 
criteria for product advertising and labeling. The Commission believes 
that the ANSI voluntary industry standard indeed provides an adequate 
basis for a common understanding among industry members through its 
highly specific descriptions of the qualities and characteristics of 
hardwood and decorative plywood products.
    Industry compliance with both the Guides and the ANSI standard 
appears to be exemplary. In the 27 years since the Guides were issued, 
the Commission has not received any complaints or initiated any 
enforcement actions relating to these Guides. The existence of a strong 
industry standard and the level of compliance it commands, viewed in 
conjunction with the Commission's unfettered ability to pursue actions 
against members of this industry for engaging in unfair and deceptive 
acts and practices under section 5 of the FTC Act, 15 U.S.C. 45, 
sufficiently ensures that sellers will not mislead consumers in the 
future in the labeling, advertising, or sale of decorative wall 
paneling. If, in the future, deceptive practices prove to be a problem 
in this industry, however, the Commission may pursue enforcement 
actions as needed on a case-by-case basis.
    For the reasons explained in this notice, the Commission has 
determined to rescind the Guides because they are no longer necessary.

List of Subjects in 16 CFR Part 243

    Advertising, Forests and forest products, Labeling, Trade 
practices, Wall paneling industry.

PART 243--[REMOVED]

    The Commission, under authority of sections 5(a)(1) and 6(g) of the 
Federal Trade Commission Act, 15 U.S.C. 45(a)(1) and 46(g), amends 
Chapter I of Title 16 of the Code of Federal Regulations by removing 
part 243.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 98-33705 Filed 12-18-98; 8:45 am]
BILLING CODE 6750-01-P