[Federal Register Volume 65, Number 45 (Tuesday, March 7, 2000)]
[Proposed Rules]
[Pages 11944-11947]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-5506]


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

FEDERAL TRADE COMMISSION

16 CFR Part 307


Request for Comments Concerning Regulations Implementing the 
Comprehensive Smokeless Tobacco Health Education Act of 1986

AGENCY: Federal Trade Commission.

ACTION: Request for public comments.

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

SUMMARY: The Federal Trade Commission (the ``Commission'') is

[[Page 11945]]

requesting public comment on its regulations (``smokeless tobacco 
regulations'' or ``the regulations'') implementing the Comprehensive 
Smokeless Tobacco Health Education Act of 1986 (``Smokeless Tobacco 
Act''). The regulations set forth the manner in which smokeless tobacco 
manufacturers, importers, and packagers must display and rotate the 
three health warnings mandated by the Smokeless Tobacco Act. As part of 
its systematic review of all current Commission regulations and guides, 
the Commission is requesting comments about the overall costs and 
benefits of the regulations and their overall regulatory and economic 
impact. The Commission is also requesting comment on whether the 
regulations adequately implement the format and display requirements of 
the Smokeless Tobacco Act and for comment on several other issues 
relating to specific provisions of the regulations. All interested 
parties are hereby given notice of the opportunity to submit written 
data, views and arguments concerning the rule.

DATES: Comments must be submitted on or before April 24, 2000.

ADDRESSES: Written comments should be identified as ``16 CFR Part 307'' 
and sent to the Secretary, Federal Trade Commission, Room H-159, 600 
Pennsylvania Avenue, N.W., Washington DC 20680. The Commission requests 
that the original comment be filed with five copies, if feasible. The 
Commission also requests, if possible, that the comments be submitted 
in electronic form on a computer disc. (Programs based on DOS or 
Windows are preferred. Files from other operating system should be 
submitted in ASCII test format.) The disc label should identify the 
commenter's name and the name and version of the word processing 
program used to create the document.
    Alternatively, the Commission will accept comments submitted to the 
following E-Mail address: ``[email protected]''.
    All comments will be placed on the public record and will be 
available for public inspection in accordance with the Freedom of 
Information Act, 5 U.S.C. Sec. 552, and the Commission's Rules of 
Practice, 16 CFR 4.11, during normal business days from 8:30 a.m. to 
5:00 p.m., at the Public Reference Room, Room H-130, Federal Trade 
Commission, 600 Pennsylvania Avenue, NW, Washington DC 20580. In 
addition, comment will be placed on the Internet at the FTC web site: 
http://www.ftc.gov.

FOR FURTHER INFORMATION CONTACT: Rosemary Rosso (202) 326-3076, 
Division of Advertising Practices, Bureau of Consumer Protection, 
Federal Trade Commission, Washington, DC 20580, E-Mail (for questions 
or information only): [email protected].

SUPPLEMENTARY INFORMATION: The current request for comments on the 
smokeless tobacco regulations is part of the Commission's regulatory 
review program, which has been implemented to review regulations and 
guides periodically. The regulatory review program seeks information 
about the costs and benefits of the Commission's rules and guides and 
their regulatory and economic impact. The information obtained will 
assist the Commission in identifying rules and guides that warrant 
modification or rescission.
    Simultaneous with the regulatory review, the Commission is also 
seeking public comments on whether the regulations adequately implement 
the format and display requirements of the Smokeless Tobacco Act and 
for comment on several other issues relating to specific provisions of 
the regulations.

A. Background Information

    The Smokeless Tobacco Act was promulgated by Congress on February 
27, 1986. The Act requires manufacturers, importers and packagers of 
smokeless tobacco products to display on a rotating basis one of the 
following healthy warning labels on product packages and in most 
advertisements:

WARNING: THIS PRODUCT MAY CAUSE MOUTH CANCER
WARNING: THIS PRODUCT MAY CAUSE GUM DISEASE AND TOOTH LOSS
WARNING: THIS PRODUCT IS NOT A SAFE ALTERNATIVE TO CIGARETTES

For packaging, the Act directs that these health warnings appear in a 
conspicuous and prominent place on the package and in a conspicuous 
format that is in conspicuous and legible type in contrast with all 
other printed material. For advertising, the Act directs that the 
warnings be displayed in a circle-and-arrow format in a conspicuous and 
prominent place and in conspicuous, legible type in contrast to all 
other printed materials.
    The Act also directs the Commission to issue implementing 
regulations governing the format and display of the statutory health 
warnings on packaging and in most advertising for smokeless tobacco 
products.
    On November 4, 1986, the Commission promulgated regulations 
specifying requirements as to the size, color, typeface, placement and 
rotation of those warnings, 51 FR 40015. For the most part, these 
provisions are set out as safe harbor provisions that state formats or 
displays that will be deemed to be in conformance with the Smokeless 
Tobacco Act rather than in terms of displays or formats that are 
required to conform. The Commission's regulations require 
manufacturers, importers and packagers to submit to the Commission for 
approval their plans for complying with the requirements for the 
display and periodic rotation of the three warnings.
    The Commission amended its smokeless tobacco regulations on March 
20, 1991, 56 FR 11662.\1\ The 1991 amendments added a requirement for 
display of the warnings on ``utilitarian items,'' that is items other 
than smokeless tobacco that are sold or given to consumers for their 
personal use that display the name, logo, or selling message of any 
smokeless tobacco product.\2\
---------------------------------------------------------------------------

    \1\ The sections of the regulations that deal with technical 
requirements for rotation of the warnings also were amended several 
times, including on January 15, 1993, 58 FR 4874, and on August 30, 
1996, 61 FR 45886.
    In addition, the Commission currently has pending a rulemaking 
to determine whether it should amend its regulations to require 
rotational health warnings on sponsored racing vehicles and other 
event-related objects that display the brand name, logo or selling 
message of smokeless tobacco products. That rulemaking is on hold 
while Commission staff evaluate regulatory and industry changes that 
have taken place since this proceeding commenced.
    \2\ The regulations as originally promulgated by the Commission 
contained an exemption for utilitarian items. Subsequent litigation 
required the Commission to delete the exemption. Public Citizen v. 
FTC, 688 F. Supp. 667 (D.D.C. 1988), aff'd, 869 F.2d (D.C. Cir. 
1989).
---------------------------------------------------------------------------

B. Issues for Comment

    The Commission is currently conducting a periodic review of the 
smokeless tobacco regulations as part of its periodic review of all 
current Commission rules and guides. Accordingly, the Commission is 
requesting comments about the overall costs and benefits of the 
regulations and their overall regulatory and economic impact.
    In addition, the Commission is seeking public comment on the 
adequacy of the smokeless tobacco regulations in implementing the 
format and display provisions of the Smokeless Tobacco Act.

1. Effectiveness of the Warning Requirements

    For labels, the regulations currently require that the warnings be 
displayed in a conspicuous and prominent place on the label and provide 
examples of

[[Page 11946]]

places on the label of different types of smokeless tobacco packages 
that will be deemed to be conspicuous and prominent. For advertising, 
the regulations currently require that the statutorily mandated circle-
and-arrow warnings be in conspicuous and legible type in contrast with 
all other printed material and must appear in all capital letters in a 
circle-and-arrow format. The regulations provide examples of display 
formats that will be deemed to conform to these requirements.
    The Commission is interested in public comment on the effectiveness 
of the existing regulations in meeting the statutory format and display 
requirements. In particular, the Commission would like to receive 
comment on any consumer research, studies or other data bearing on the 
effectiveness of the warning requirements.

2. Enforceability of the Warning Requirements

    Many of the substantive provisions of the regulations are stated in 
terms of safe harbors, or displays that will be deemed to be in 
conformance with the Smokeless Tobacco Act, rather than as specific 
mandatory requirements. The Commission is seeking public comment on 
whether this safe harbor approach is sufficiently enforceable. In 
particular, the Commission is interested in public comment as to 
whether the safe harbor approach should be abandoned and if so, the 
costs and benefits of changing to an alternative approach.

3. Smokeless Tobacco Dispensers

    Under the regulations as currently drafted, rectangular dispensers 
of individual packages of smokeless tobacco can display the label 
warning on any side of its packaging, provided that the dispenser can 
be sold in its entirety and the warning is the only printed or graphic 
matter on the side of the package where it appears. 16 CFR 307.6(a). It 
has recently come to the Commission's attention that this provision is 
being used to justify placement of the label warning on the back of 
dispensers commonly used as displays for the retail sale of individual 
packages of smokeless tobacco products. In this location, the warnings 
are not visible to the viewing public.
    Accordingly, the Commission is seeking comment as to whether this 
provision of the Regulations should be revised to provide that any 
dispenser of individual smokeless tobacco packages that can be used as 
a retail display carry the label warning on its principal display 
panel.

4. Can Rolls

    Section 307.6(b) of the regulations currently provides that can 
rolls wrapped for sale as a single unit display a warning in 12-point 
type if the warnings on the individual cans in the roll are not 
completely visible. The warnings on the individual cans typically would 
be in 7\1/2\ point type under the current regulations. One manufacturer 
has taken the position that the larger 12-point type requirement does 
not apply to can rolls consisting of only two cans. The Commission is 
interested in public comment on whether this provision should be 
amended to make it clear that the provision for a larger warning 
applies to any can roll consisting of two or more cans that are wrapped 
for sale as one unit if the warnings on the individual cans are not 
completely visible.

C. Request for Comments

    At this time, the Commission is seeking comment on various aspects 
of the smokeless tobacco regulations in conjunction with its regulatory 
review. Without limiting the scope of issues it is seeking comment on, 
the Commission is particularly interested in receiving comments on the 
questions that follow. Where commenters advocate changes to the 
regulations, please be specific in describing suggested changes. With 
respect to suggested changes to the regulations, please describe any 
potential costs and benefits such changes might have on industry and 
consumers. The Commission would also be interested in commenters 
providing any consumer research, studies or data that exist on issues 
raised in the questions.
    1. Is there a continuing need for the regulations as currently 
promulgated?
    (a) Since the regulations were issued, have changes in technology, 
industry structure or economic conditions affected the need for or 
effectiveness of the regulations?
    (b) Do the regulations include provisions that are unnecessary?
    (c) What are the aggregate costs or benefits of the regulations?
    (d) Have the costs or benefits of the regulations dissipated over 
time?
    2. What effect, if any, have the regulations had on smokeless 
tobacco purchasers, potential purchasers or the general public?
    (a) What benefits have the regulations provided to smokeless 
tobacco purchasers, potential purchasers or the general public?
    (b) What economic or other costs have the regulations imposed on 
smokeless tobacco purchasers, potential purchasers or the general 
public?
    (c) What changes, if any, should be made to the regulations to 
increase the benefits to smokeless tobacco purchasers, potential 
purchasers or the general public?
    (d) How would these changes affect the compliance costs the 
regulations impose on industry?
    3. What impact, if any, have the regulations had on firms that must 
comply with it?
    (a) What economic or other costs have the regulations imposed on 
industry or individual firms?
    (b) What benefits have the regulations provided to the industry or 
to individual firms?
    (c) What changes, if any, should be made to the regulations to 
minimize any burden or cost imposed on industry or individual firms?
    (d) How would the changes affect the benefits provided by the 
regulations to smokeless tobacco purchasers, potential purchasers, the 
general public or industry?
    4. Do the regulations overlap or conflict with any federal, state 
or local laws or regulations?
    5. What significant burdens or costs, including costs of 
compliance, have the regulations imposed on small firms subject to 
their requirements?
    (a) How do these burdens or costs differ from those imposed on 
larger firms subject to the regulations' requirements?
    (b) What changes, if any, should be made to the regulations to 
reduce the burdens or costs imposed on small firms?
    (c) How would these changes affect the benefits of the regulations?
    (d) Would such changes adversely affect the competitive position of 
larger firms?

Section 307.6  Requirements for Disclosure on the Label

    6. If the regulations are retained, are the size, color, typeface, 
or placement requirements sufficiently conspicuous and prominent within 
the meaning of section 3(b)(1) of the Smokeless Tobacco Act, 15 USC 
4402(b)(1)? What evidence is there to show that the existing label 
disclosure requirements are or are not conspicuous or prominent or 
otherwise effective or ineffective?

Sections 307.7, 307.8 and 307.9  Requirements for Disclosure in 
Advertising

    7. If the regulations are retained, are the size, color, typeface, 
or placement requirements sufficiently conspicuous and prominent within 
the meaning of section 3(b)(2) of the Smokeless Tobacco Act, 15 USC 
4402(b)(2)? What evidence

[[Page 11947]]

is there to show that the existing advertising disclosure requirements 
are or are not conspicuous or prominent or otherwise effective or 
ineffective?

Enforceability of the Regulations

    8. Many of the substantive provisions of the regulations are stated 
in terms of safe harbors, or displays that will be deemed to be in 
conformance with the Smokeless Tobacco Act, rather than as specific 
mandatory requirements. Are the regulations in this form sufficiently 
enforceable? Does this make it more difficult to prove that displays 
that do not conform to the safe harbors are not sufficiently 
conspicuous to conform to the requirements of the Smokeless Tobacco 
Act? Should the safe harbor approach be abandoned?

Smokeless Tobacco Dispensers

    9. Should the regulations be revised to provide that any dispenser 
of individual smokeless tobacco packages that can be used as a retail 
display carry the advertising warning on its principal display panel?

Can Rolls

    10. Should the regulations be amended to provide that a can roll of 
individual smokeless tobacco packages can consist of as few as two 
cans?
    11. Are there any other provisions of the regulations that need to 
be amended? If so, which provisions require change and how should they 
be changed?
    12. What is the likely effect of any changes in the regulations 
suggested in response to questions 6 through 11 on costs, 
profitability, competitiveness, or employment in small business 
entities?
    13. The Smokeless Tobacco Act requires that smokeless tobacco 
companies submit plans to the Commission specifying the method they 
will use to rotate, display, and distribute the required health 
warnings on their packaging and advertising. Making changes suggested 
in the regulations in response to questions 6 through 11 may require 
the smokeless tobacco companies to amend their plans for the display 
and rotation of the warning statements. What paperwork or other burdens 
would be imposed by any changes suggested in response to questions 6 
through 11?

List of Subjects in 16 CFR Part 307

    Health warnings, Smokeless tobacco, Trade practices.

    Authority: 15 U.S.C. 1401-1410.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 00-5506 Filed 3-6-00; 8:45 am]
BILLING CODE 6750-01-M