[Federal Register Volume 70, Number 128 (Wednesday, July 6, 2005)]
[Proposed Rules]
[Pages 38834-38837]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-13285]


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FEDERAL TRADE COMMISSION

16 CFR Part 23


Guides for the Jewelry, Precious Metals, and Pewter Industries

AGENCY: Federal Trade Commission (FTC or Commission).

ACTION: Request for public comment.

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SUMMARY: The Commission is seeking comment on whether the platinum 
section of the FTC's Guides for the Jewelry, Precious Metals, and 
Pewter Industries, 16 CFR part 23, should be amended to provide 
guidance on how to mark or describe non-deceptively products containing 
between 500 and 850 parts per thousand pure platinum and no other 
platinum group metals.

DATES: Written comments must be received on or before September 28, 
2005.

ADDRESSES: Interested parties are invited to submit written comments. 
Comments should refer to ``Jewelry Guides, Matter No. G711001'' to 
facilitate the organization of comments. A comment filed in paper form 
should include this reference both in the text

[[Page 38835]]

and on the envelope, and should be mailed or delivered, with two 
complete copies, to the following address: Federal Trade Commission/
Office of the Secretary, Room 135-H (Annex Y), 600 Pennsylvania Avenue, 
NW., Washington, DC 20580. Because paper mail in the Washington area 
and at the Agency is subject to delay, please consider submitting your 
comments in electronic form, as prescribed below. Comments containing 
confidential material, however, must be filed in paper form, must be 
clearly labeled ``Confidential,'' and must comply with Commission Rule 
4.9(c). 16 CFR 4.9(c) (2004).\1\
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    \1\ The comment must be accompanied by an explicit request for 
confidential treatment, including the factual and legal basis for 
the request, and must identify the specific portions of the comment 
to be withheld from the public record. The request will be granted 
or denied by the Commission's General Counsel, consistent with 
applicable law and the public interest. See Commission Rule 4.9(c), 
16 CFR 4.9(c).
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    Comments filed in electronic form should be submitted by clicking 
on the following: http://secure.commentworks.com/ftc-jewelry and 
following the instructions on the web-based form. To ensure that the 
Commission considers an electronic comment, you must file it on the 
web-based form at the http://secure.commentworks.com/ftc-jewelry. You 
also may visit http://www.regulations.gov to read this request for 
comment, and may file an electronic comment through that website. The 
Commission will consider all comments that regulations.gov forwards to 
it.
    The FTC Act and other laws the Commission administers permit the 
collection of public comments to consider and use in this proceeding as 
appropriate. All timely and responsive public comments, whether filed 
in paper or electronic form, will be considered by the Commission, and 
will be available to the public on the FTC website, to the extent 
practicable, at http://www.ftc.gov. As a matter of discretion, the FTC 
makes every effort to remove home contact information for individuals 
from the public comments it receives before placing those comments on 
the FTC website. More information, including routine uses permitted by 
the Privacy Act, may be found in the FTC's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

FOR FURTHER INFORMATION CONTACT: Neil Blickman, Attorney, Division of 
Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 
600 Pennsylvania Avenue, NW., Washington, DC 20580, (202) 326-3038.

SUPPLEMENTARY INFORMATION:

I. Introduction

    The Guides for the Jewelry, Precious Metals, and Pewter Industries 
(``Jewelry Guides'' or ``Guides''), 16 CFR part 23, address claims made 
about precious metals, diamonds, gemstones and pearl products. The 
Jewelry Guides provide guidance as to when claims about jewelry 
products may be deceptive and, for certain products, discuss when 
disclosures should be made to avoid unfair or deceptive trade 
practices. The Guides also provide examples of markings or descriptions 
that the Commission would not consider unfair or deceptive. The 
Commission is seeking public comment on Section 23.7 of the Guides, 
which addresses claims for products made of platinum.
    Industry guides are administrative interpretations of the 
application of Section 5 of the FTC Act, 15 U.S.C. 45(a). The 
Commission issues industry guides to provide guidance for the public to 
conform with legal requirements. Guides provide the basis for voluntary 
and simultaneous abandonment of unlawful practices by members of 
industry. 16 CFR part 17. Failure to follow industry guides may result 
in corrective action under Section 5 of the FTC Act. In any such 
enforcement action, the Commission must prove that the act or practice 
at issue is unfair or deceptive.
    Recently, several jewelry manufacturers informed Commission staff 
that they were seeking to market products that contain platinum, but 
differ in composition from traditional platinum products. Platinum 
products that have been marketed thus far typically contain over 85% 
pure platinum or contain a combination of pure platinum and platinum 
group metals (PGM) that total 95% PGM.\2\ Some manufacturers propose to 
market products containing more than 50% but less than 85% pure 
platinum and no other PGM.\3\ Subsequently, the staff responded to a 
request for a staff opinion regarding the application of the platinum 
section of the Guides to the marketing of a product containing 585 
parts per thousand (ppt) pure platinum and no other PGM. The FTC staff 
opinion letter concludes that the Guides do not specifically address 
the marketing of such an alloy.\4\ The letter also stated that the 
staff would recommend that the Commission publish a Federal Register 
Notice soliciting comments on whether the platinum section of the 
Jewelry Guides should be revised to address how to market non-
deceptively products containing 500-850 ppt pure platinum and no other 
PGM.
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    \2\ The Platinum Group Metals include platinum, iridium, 
palladium, ruthenium, rhodium and osmium.
    \3\ The staff also is aware that other companies are selling 
similar products but marketing them under names other than 
``platinum.''
    \4\ The request for a staff opinion and the staff's response to 
that request can be found at www.ftc.gov/os/statutes/jewelry/letters/karatplatinum.pdf and http://www.ftc.gov/os/statutes/jewelry/letters/karatplatinum002.pdf respectively.
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II. Background

    The platinum section of the Jewelry Guides contains a general 
prohibition against the deceptive use of the term ``platinum'' and 
specific examples where the Commission would consider use of the term 
``platinum'' unfair or deceptive.\5\ Section 7(a) of the Jewelry Guides 
states that it is ``unfair or deceptive to use the words `platinum,' 
`iridium,' `palladium,' `ruthenium,' `rhodium,' and `osmium,' or any 
abbreviation to mark or describe all or part of an industry product if 
such marking or description misrepresents the product's true 
composition.'' \6\ 16 CFR part 23.7(a).
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    \5\ On April 8, 1997 (62 FR 16669), the Commission published the 
current platinum section of the Jewelry Guides. The section was 
revised as part of a comprehensive review of all of the provisions 
of the Guides.
    \6\ This section also lists the Platinum Group Metals.
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    Section 7(b) provides examples of markings or descriptions for 
products containing platinum that may be misleading:

    (1) Use of the word ``Platinum'' or any abbreviation, without 
qualification, to describe all or part of any industry product that 
is not composed throughout of 950 parts per thousand pure Platinum.
    (2) Use of the word ``Platinum'' or any abbreviation accompanied 
by a number indicating the parts per thousand of pure Platinum 
contained in the product without mention of the number of parts per 
thousand of other PGM contained in the product, to describe all or 
part of an industry product that is not composed throughout of at 
least 850 parts per thousand pure platinum, for example, 
``600Plat.''
    (3) Use of the word ``Platinum'' or any abbreviation therefor, 
to mark or describe any product that is not composed throughout of 
at least 500 parts per thousand pure Platinum.

16 CFR 23.7(b).
    Section 7(c) includes four examples of markings and descriptions 
that are not considered deceptive. The first example lists the four and 
two-letter abbreviations for the PGM that would not be considered 
unfair or deceptive. The remaining three examples provide examples of 
descriptions for certain platinum products:


[[Page 38836]]


    (2) An industry product consisting of at least 950 parts per 
thousand pure platinum may be marked or described as ``Platinum.''
    (3) An industry product consisting of 850 parts per thousand 
pure Platinum, 900 parts per thousand pure Platinum or 950 parts per 
thousand pure Platinum may be marked ``Platinum'' provided that the 
Platinum marking is preceded by a number indicating the amount in 
parts per thousand of pure Platinum * * * Thus, the following 
markings may be used: ``950Pt.,'' ``950Plat.,'' ``900Pt.,'' 
``900Plat.,'' ``850Plat.,'' or ``850Pt.''
    (4) An industry product consisting of at least 950 parts per 
thousand PGM, and of at least 500 parts per thousand pure Platinum, 
may be marked ``Platinum,'' provided that the mark of each PGM 
constituent is preceded by a number indicating the amount in parts 
per thousand of each PGM, as for example, ``600Pt.350Ir.,'' 
``600Plat.350Irid.'' or ``550Pt.350Pd.50Ir.'' or 
``550Plat.350Pall.50Irid.''

16 CFR 23.7(c).
    Last year the staff received letters stating that several jewelry 
manufacturers were seeking to market products containing between 500 
and 850 ppt pure platinum and no other PGM. On December 15, 2004, one 
manufacturer requested an opinion from the FTC staff regarding the 
application of the Jewelry Guides to a product that consists of 585 ppt 
pure platinum and 415 ppt non-precious metals. The request stated that 
the manufacturer's reading of the Guides indicated that the platinum 
section did not prohibit marking or describing the product as 
``Platinum'' and that the Guides do not address how to mark or describe 
an alloy with this composition other than to require that any 
representation be truthful and not misrepresent the product's 
composition.
    The staff posted this request on the FTC's website on December 17, 
2004 to seek industry input. The staff notified several major jewelry 
trade associations that the request had been posted and invited the 
industry to provide comments by January 5, 2005, which the staff later 
extended until January 10, 2005. The staff received sixteen comments 
from jewelry trade associations and retailers.\7\
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    \7\ Comments were received from the Jewelers Vigilance 
Committee, Platinum Guild International, Manufacturing Jewelers & 
Suppliers of America, American Gem Society, Jewelers of America, 
Sonny's On Fillmore, Kwiat, Inc., Cornell's Jewelers, Michael 
Bondanza, Inc., PMI, Traditional Jewelers, Standley Jewelers 
Gemologist, Davidson & Licht, Henne Jewelers, Johnson Matthey, MJ 
Christensen.
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    On February 2, 2005, the staff responded to the request for an 
opinion. The staff letter stated:

    The Guides provide that, in order for a product to be marked or 
described as ``platinum,'' the product must contain a minimum of 500 
ppt pure platinum. 16 CFR 23.7(b)(3). In addition, the Guides 
provide that, if a product contains 500 ppt pure platinum but less 
than 850 ppt pure platinum, the marketer must disclose the amount in 
ppt of the remaining PGM in the product. 16 CFR 23.7(b)(2).
    In our opinion, a literal reading of the Guides indicates that 
they do not address the marketing of the Karat Platinum alloy, 
except to the extent that they require a minimum of 500 ppt pure 
platinum. The provisions of Section 23.7 that address misuse of the 
word ``platinum'' do not discuss how to mark or describe an alloy 
that contains over 500 ppt pure platinum but no other PGM.

    The staff letter further explained that the marketing of the alloy 
would be subject to Section 23.1 of the Guides, which contains a 
general prohibition on deception, as well as Section 5 of the FTC 
Act.\8\ The letter opined that the staff considers the alloy to be 
sufficiently different in composition from products consisting of 
platinum combined with other PGM as to require clear and conspicuous 
disclosure of the differences. The staff noted that it did not appear 
that simple stamping of the jewelry's content (e.g., 585Plat., 0PGM) 
would be sufficient to alert consumers to the differences between the 
alloy and platinum products containing other PGM.
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    \8\ Section 5 of the FTC Act prohibits deceptive acts or 
practices, in or affecting commerce. 15 U.S.C. 45(a).
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    The staff letter provides general, but not specific, guidance for 
marketers seeking to mark or describe products that contain 50-85% pure 
platinum but no other PGM. Because of the public interest in this 
issue, the Commission is soliciting public comment as to whether the 
Guides should be revised to address specifically how to mark or 
describe such products.
    Comments submitted previously stated that platinum alloys with no 
other PGM may present special issues that may require marketers to 
provide additional information. For example, commenters stated that it 
is unclear whether such products would possess certain qualities 
typically associated with traditional platinum products, such as being 
hypoallergenic. In addition, commenters questioned whether the presence 
of non-precious metals in the product might present unique issues in 
conjunction with jewelry repairs and other procedures, such as re-
sizing. For instance, commenters asked whether a product with high 
copper content might require a bench jeweler to use atmosphere control 
equipment to avoid damaging the product. Accordingly, the Commission is 
soliciting public comment on whether the Guides should be amended to 
address products composed of 500-850 ppt pure platinum and no other 
PGM.
    Staff also has received some inquiries regarding the application of 
the platinum section of the Guides to the marketing of platinum-clad or 
platinum-coated jewelry products. The platinum section of the Guides 
currently does not address platinum-clad, filled, plated or platinum-
overlay products. Other sections of the Guides, however, address gold 
and silver-plated jewelry products.\9\ These sections basically advise 
that the plating must be of a sufficient thickness to ensure reasonable 
durability. The Commission also seeks comment as to whether the Guides 
should provide guidance as to how to mark or describe non-deceptively 
products such as platinum-clad, filled, coated or platinum-overlay 
jewelry products.
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    \9\ See 16 CFR 23.4 and 23.6 (addressing gold-plated, gold-
filled, gold-overlay, gold-electroplated and silver-plated jewelry 
products).
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III. Request for Public Comment

    The Commission seeks public comment on whether the Jewelry Guides 
should be amended to discuss specifically how products that contain 
between 500 and 850 ppt pure platinum and no other PGM should be marked 
or described. In addition, the Commission seeks public comment on 
whether the Guides should be revised to provide guidance on how to mark 
or describe platinum-clad, filled, plated or platinum-overlay products. 
The Commission is particularly interested in comments addressing the 
following questions:
    1. Should the platinum section of the Jewelry Guides be amended to 
address with particularity products that contain 500-850 ppt pure 
platinum and no other PGM?
    2. Is there empirical evidence on what consumers generally expect 
in terms of performance or other objective qualities when purchasing a 
product marked or described as ``platinum''? What does that data show?
    3. Are products containing 500-850 ppt pure platinum and no other 
PGM currently being marketed, and if so, how? Is there empirical 
evidence, e.g., copy testing or other research, as to how consumers 
interpret the disclosures or marketing materials, or proposed 
disclosures and marketing materials, accompanying such products?
    4. For products containing 500-850 ppt pure platinum and no other 
PGM what, if any, additional information, in addition to disclosure of 
the product

[[Page 38837]]

composition, may be necessary to prevent deception under Section 5 of 
the FTC Act? How do these disclosures compare to disclosures already 
required for other jewelry products, for example, gold?
    5. Are there significant differences between the 500-850 ppt pure 
platinum alloys with no PGMs and other platinum products in terms of 
durability, scratch resistance, tarnish, hypoallergenicity, ability to 
hold settings, or similar qualities? What evidence is there on these 
issues?
    6. How would a product containing 500 ppt pure platinum and no 
other PGM be marked if it were being sold outside the United States? Is 
there an international standard that addresses a product with this 
composition?
    7. Should the platinum section of the Jewelry Guides be amended to 
address other products that contain platinum, such as platinum-clad, 
platinum-filled, platinum-plated, platinum-coated or platinum overlay 
products, that are not currently addressed in the section? If so, why? 
What guidance is needed to ensure that consumers are not misled about 
the composition of such products and their performance, durability, 
value and special care requirements, if any? Are such products 
currently being marketed, and if so, how? How are such products marked 
if they are sold outside the United States? Are there any international 
standards that address such products?
    All comments should be filed as prescribed in the ADDRESSES section 
above, and must be received on or before September 28, 2005.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 05-13285 Filed 7-5-05; 8:45 am]
BILLING CODE 6750-01-U