[Federal Register Volume 73, Number 38 (Tuesday, February 26, 2008)]
[Proposed Rules]
[Pages 10190-10199]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-3594]


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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 on a proposed amendment to the 
platinum section of the Guides for the Jewelry, Precious Metals, and 
Pewter Industries.

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SUMMARY: The Commission is seeking comments on a proposed amendment to 
the platinum section of the FTC's Guides for the Jewelry, Precious 
Metals, and Pewter Industries, 16 CFR part 23. The amendment provides 
guidance on how to mark or describe non-deceptively products containing 
at least 500 parts per thousand, but less than 850 parts per thousand, 
pure platinum and no other platinum group metals. The Commission is 
also seeking comment on whether the Guides for the Jewelry, Precious 
Metals, and Pewter Industries should be revised to provide guidance on 
how to mark or describe platinum-clad, filled, plated, or overlay 
products.

DATES: Written comments must be received on or before May 27, 2008.

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 and on the envelope, and 
should be mailed or delivered, with two copies, to the following 
address: Federal Trade Commission/Office of the Secretary, Room 135-H 
(Annex E), 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. If 
the comment contains any material for which confidential treatment is 
requested, it must be filed in paper (rather than electronic) form, and 
the first page of the document must be clearly labeled 
``Confidential.''\1\ The FTC is requesting that any comment filed in 
paper form be sent by courier or overnight service, if possible, 
because U.S. postal mail in the Washington area, and at the Commission, 
is subject to delay due to heightened security precautions.
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    \1\ Commission Rule 4.2(d), 16 CFR 4.2 (d). 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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    Because U.S. postal mail is subject to delay due to heightened 
security measures, please consider submitting your comments in 
electronic form. Comments filed in electronic form (except comments 
containing any confidential material) should be submitted by clicking 
on the following: https://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 https://secure.commentworks.com/ftc-jewelry. If this

[[Page 10191]]

Notice appears at http://www.regulations.gov, you may also 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. The Commission will consider all timely and responsive 
public comments that it receives, whether filed in paper or electronic 
form. Comments 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: Robin Rosen Spector, Attorney, (202) 
326-3740, or Janice Podoll Frankle, Attorney, (202) 326-3022, Division 
of Enforcement, Bureau of Consumer Protection, Federal Trade 
Commission, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580.

SUPPLEMENTARY INFORMATION:

I. Introduction

    The Guides for the Jewelry, Precious Metals, and Pewter Industries 
(``Jewelry Guides'' or ``Guides'') address claims made about precious 
metals, diamonds, gemstones, and pearl products. 16 CFR part 23. The 
Jewelry Guides provide guidance on how to avoid making deceptive claims 
and, for certain products, discuss when disclosures should be made to 
avoid unfair or deceptive trade practices. The Commission is seeking 
public comment on Section 23.7 of the Jewelry Guides, which addresses 
claims for platinum products.
    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. 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.
    Platinum products marketed as ``platinum'' typically contain at 
least 85% pure platinum or contain at least 50% pure platinum in 
combination with other platinum group metals (``PGM'') that total 95% 
PGM.\2\ During the last few years, some manufacturers have marketed 
products as ``platinum'' that contain more than 50%, but less than 85%, 
pure platinum, and no other PGM.\3\ In a Federal Register notice 
published July 6, 2005 (``2005 FRN''),\4\ the Commission sought comment 
on whether it should revise the platinum section of the Jewelry Guides 
to address such products. The comment period closed October 12, 2005.
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    \2\ The Platinum Group Metals include platinum, iridium, 
palladium, ruthenium, rhodium, and osmium.
    \3\ We are aware that some companies are selling similar 
products but marketing them under names other than ``platinum.''
    \4\ 70 FR 38834 (July 6, 2005).
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II. Background

    The platinum section of the Jewelry Guides contains a general 
statement regarding the deceptive use of the term ``platinum'' (and 
other PGM) and provides specific examples of misleading and non-
violative uses of the term ``platinum.''\5\ Specifically, 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.'' 16 CFR 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 Commission 
revised this section as part of a comprehensive review of all of the 
provisions of the Guides.
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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 thereof, 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 the following four examples of markings and 
descriptions that are not considered unfair or deceptive:
    (1) The following abbreviations for each of the PGM may be used for 
quality marks on articles . . . [section lists the two-letter and four-
letter abbreviations for the PGM].
    (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.,'' 
``850Pt.,'' or ``850Plat.''
    (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.,'' 
``550Pt.350Pd.50Ir.,'' or ``550Plat.350Pall.50Irid.''
16 CFR 23.7(c).
    On December 15, 2004, Karat Platinum, a jewelry manufacturer, 
requested an opinion from the FTC staff regarding the application of 
the Jewelry Guides to a product called ``Karat Platinum'' consisting of 
585 parts per thousand (``ppt'') pure platinum and 415 ppt copper and 
cobalt (non-precious metals).\6\ The request stated that the company's 
reading of the Guides indicated that the platinum section did not 
prohibit marking or describing the product as ``Platinum'' and that the 
Guides did 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.
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    \6\ 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 www.ftc.gov/os/statutes/jewelry/letters/karatplatinum002.pdf, respectively.
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    The staff posted this request on the FTC's website on December 17, 
2004 and invited the industry to provide comments by January 5, 
2005.\7\ The staff

[[Page 10192]]

received sixteen comments from jewelry trade associations and 
retailers.\8\
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    \7\ The staff later extended the comment period until January 
10, 2005.
    \8\ 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, Stanley Jewelers Gemologist, Davidson & Licht, 
Henne Jewelers, Johnson Matthey, and MJ Christensen submitted 
comments.
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    On February 2, 2005, the staff responded to the request for an 
opinion stating:
 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 Sec.  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 Sec.  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 Karat 
Platinum alloy would be subject to Section 23.1 of the Guides, which 
contains a general statement on deception, as well as Section 5 of the 
FTC Act.\9\
    The letter stated that the staff considered ``this alloy to be 
sufficiently different in composition from products consisting of 
platinum and other PGM to require clear and conspicuous disclosure of 
the differences.'' The staff letter also stated that it did not appear 
``that simple stamping of the jewelry's content (e.g., 585 Plat., 0 
PGM) would be sufficient to alert consumers to the differences between 
the Karat Platinum alloy and platinum products containing other PGM.''
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    \9\ 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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    Because of the public interest in this issue, on July 6, 2005, the 
Commission issued a Federal Register notice soliciting public comment 
regarding whether it should revise the Guides to address products 
composed of at least 500 ppt, but less than 850 ppt, pure platinum and 
no other PGM. The Commission received comments through the extended 
October 12, 2005 deadline.\10\
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    \10\ 70 FR 57807 (October 4, 2005).
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    Additionally, the notice stated that the staff had 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 overlay products. Other sections of 
the Guides, however, address gold and silver-plated jewelry 
products.\11\ These sections generally advise that the plating must be 
of a sufficient thickness to ensure reasonable durability. The 2005 
FRN, therefore, also sought comment regarding whether the Guides should 
provide guidance on how to mark or describe non-deceptively platinum-
clad, filled, coated, or overlay jewelry products. The Commission 
received several comments with regard to this issue stating that there 
is a need for guidance for platinum-coated or plated products with 
respect to the thickness of the coating and the purity of the 
platinum.\12\ Because these comments did not propose specific guidance, 
this Federal Register notice is seeking such guidance with regard to 
platinum-clad, filled, coated, and overlay jewelry products.
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    \11\See 16 CFR 23.4 and 23.6 (addressing gold-plated, gold-
filled, gold-overlay, gold-electroplated, and silver-plated jewelry 
products).
    \12\ The Jewelers Vigilance Committee, Platinum Guild 
International, and a jeweler manufacturer (Sasha Primak) state that 
there is a need for specific guidance regarding the thickness of the 
coating or plate and the purity of the platinum employed to cover 
the base metal.
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III. Response to June 2005 Notice Seeking Comment on the Platinum 
Section of the Jewelry Guides

A. Summary of Comments

    The FTC received 62 comments in response to the 2005 FRN. The FRN 
requested comments on two main issues--first, should the platinum 
section of the Guides be amended to address jewelry products containing 
at least 500 ppt, but less than 850 ppt, pure platinum and no other PGM 
(``platinum/base metal alloy''); second, if guidance is appropriate, 
what should the guidance provide. With regard to the first issue, the 
majority of the comments recommend that the Commission revise the 
Guides to include guidance regarding appropriate markings or 
descriptions for platinum/base metal alloy jewelry products. A joint 
comment from several jewelry trade associations\13\ (hereinafter 
``JVC'') states that ``[i]ndustry members universally believe that the 
Guides should be revised to address products that contain 500-850 ppt 
pure platinum and no other PGM. Since products employing this alloy 
(and others) have become available, clarity in marking and description 
standards for these products is needed.''\14\ Similarly, a comment from 
Platinum Guild International (``PGI'') recommends that ``the FTC amend 
the Platinum Guides and provide for an unambiguous and transparent 
standard.''\15\ The majority of the comments from jewelry retailers 
support the JVC and PGI recommendations.\16\
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    \13\ The associations include: Jewelers Vigilance Committee, 
Manufacturing Jewelers and Suppliers of America, Jewelers of 
America, and American Gem Society.
    \14\ JVC comment at 3.
    \15\ PGI comment at 24.
    \16\ The following comments recommend that the Commission revise 
the Guides to include guidance regarding products contain 500 ppt, 
but less than 850 ppt, pure platinum and no other PGM: Kwiat; Albert 
Malky, Inc.; John A. Green (Lux Bond & Green); Loyd Stanley (Stanley 
Jewelers Gemologist); JCK Publishing; Traditional Jewelers; Cathy 
Carmendy, Inc.; Joan Mansbach (Mansbach Creative); M. Fabrikant & 
Sons; Renee Moskowitz (Harper's Bazaar); Nessi Erkmenaoglu (Harper's 
Bazaar); Stephen Walker (Walker Metalsmiths, Inc.); Lieberfarb, 
Inc.; Gemstones, Etc.; Saturn Jewels; Kaiser Time, Inc.; Coge Design 
Group; Day's Jewelers; Stuller, Inc.; Harvey Rovinsky (Bernie 
Robbins Fine Jewelry); JCM Designs, Inc., d/b/a Judith Conway; 
Joseph Barnard (Bernie Robbins Fine Jewelry); Jeff Cooper, Inc.; 
Alexander Primak Jewelry, Inc.; Hearts on Fire Co.; Kirk Kara; Vogue 
Magazine; Allan Freilich (Freilich Jewelers, Inc.); Cede 
Schmuckdesign GmbH; Representative Henry A. Waxman (writing on 
behalf of Martin Katz, Ltd.); Grando, Inc.; Susan Eisen (Susan Eisen 
Fine Jewelry and Watches); Zoltan David (Zoltan David Precious Metal 
Art); and Brian Guymon.
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    Karat Platinum's comment takes a contrary position. Karat Platinum 
asserts that the Commission does not need to amend the Guides because 
the existing guidance in the platinum section, combined with the staff 
opinion letter issued in February 2005,\17\ adequately inform marketers 
how to mark or describe such products.
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    \17\See supra note 6.
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    With regard to the second issue, commenters disagree about the 
guidance the Commission should provide for the marketing of platinum/
base metal alloy jewelry. The JVC and PGI comments argue that the 
Commission should revise the Guides to prohibit marketers from marking 
or describing platinum/base metal alloy jewelry as ``platinum'' 
entirely.\18\ JVC and PGI assert that

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platinum is not like gold, which requires mixing with an alloy to make 
it more durable for jewelry.\19\ Platinum jewelry, JVC and PGI explain, 
has always been produced as nearly pure or combined with other PGM. JVC 
and PGI state that alloys with non-PGM do not share the same 
characteristics as pure platinum or platinum alloyed with PGM.\20\ 
These comments assert that disclosure of the differences between the 
two types of alloys would be complicated and highly technical and 
likely engender significant consumer confusion and deception.\21\
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    \18\ JVC comment at 4; PGI comment at 26. The following 
additional comments support this recommendation: Kwiat; Albert 
Malky, Inc.; John A. Green (Lux Bond & Green); C.F. Kisner, Inc.; 
Loyd Stanley (Stanley Jewelers Gemologist); JCK Publishing; Dana 
Sergenian; Traditional Jewelers; Cathy Carmendy, Inc.; Joan Mansbach 
(Mansbach Creative); M. Fabrikant & Sons; Renee Moskowitz (Harper's 
Bazaar); Nessi Erkmenaoglu (Harper's Bazaar); Robert Rowe (Lucky 
Magazine); Lieberfard, Inc.; Richard Krementz Gemstones; Saturn 
Jewels; Kaiser Time, Inc.; Hank Siegel (Hamilton Company); Vittorio 
Bassan (Stuart Moore, Ltd.); Coge Design Group; Day's Jewelers; 
Stuller, Inc.; Harvey Rovinsky (Bernie Robbins Fine Jewelry); JCM 
Designs, Inc., d/b/a Judith Conway; Joseph Barnard (Bernie Robbins 
Fine Jewelry); Jeff Cooper, Inc.; Alexander Primak Jewelry, Inc.; 
Hearts on Fire Co.; Kirk Kara; Vogue Magazine; Allan Freilick 
(Freilich Jewelers, Inc.); Cede Schmuckdesign GmbH; Representative 
Henry A. Waxman (writing on behalf of Martin Katz, Ltd.); Grando, 
Inc.; Susan Eisen (Susan Eisen Fine Jewelry and Watches); Zoltan 
David (Zoltan David Precious Metal Art); Techform Advanced Casting 
Technology; Douglas Liebman (Douglas M. Liebman, Inc.); Brian 
Guymon; and Wayne Schenk.
    \19\ JVC comment at 4; PGI comment at 16.
    \20\ JVC comment at 7-8; PGI comment at 17-19.
    \21\ JVC comment at 7; PGI comment at 15.
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    As its primary support, PGI commissioned a study from Thomas J. 
Maronick, titled ``Platinum Awareness Study: An Empirical Analysis of 
Consumers' Perceptions of Platinum as an Option in Engagement Ring 
Settings'' (``Maronick study''). The Maronick study polled 332 
consumers, aged 21 through 34, who expect to become engaged in the next 
12 months. PGI also submitted a 2003 marketing survey conducted by Hall 
& Partners (``Hall & Partners study'') that consisted of 600 online 
interviews of women (ages 18-34) and men (ages 25-34). Additionally, 
PGI submitted two tests evaluating platinum/base metal alloys. The 
first test, by Hoover & Strong, compared a product that contained 59.2% 
platinum, 36.59% copper, 3.9% cobalt and trace amounts of gold, silver, 
and nickel to three products, one containing 950 ppt pure platinum, one 
containing 950 ppt palladium, and one containing 14 karat white gold. 
The second test, by Daniel Ballard of Precious Metals West, evaluated 
the properties of three different 585 ppt pure platinum/base metal 
alloys. It does not appear that the PGI tests evaluated a product 
identical in composition to the Karat Platinum platinum/base metal 
alloy.
    The Maronick study concludes that consumers expect a high level of 
purity in a product marked ``platinum.'' The majority of consumers 
surveyed stated that they would expect a ring labeled ``platinum'' to 
contain 80% or more pure platinum.\22\ The Maronick study also reports 
that if a ring has 40% or more non-PGM, over a third of the consumers 
surveyed would not expect the ring to be called ``platinum.''\23\ If 
the ring does not have all of the properties of pure platinum, more 
than 50% percent of consumers polled would not expect it to be called 
``platinum.''\24\ The study further reports that even if a platinum 
product with 40% base metals shared all the properties of pure platinum 
products, 29% of consumers would not expect the product to be called 
``platinum.''\25\
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    \22\ PGI Comment, Attachment A, at Table 3.
    \23\Id., Table 7.
    \24\Id., Table 11.
    \25\Id., Table 8.
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    In addition, according to the study, 88% of consumers polled felt 
it was at least somewhat important to know the properties of a product 
before purchase (two-thirds of these consumers felt it was very 
important).\26\ The study further concludes that the properties 
typically associated with platinum are important to most consumers' 
purchasing decisions. Specifically, between 60% and 90% of consumers 
polled responded that it was important to know a jewelry product's 
weight (76.2%) and whether the product is durable (93%), scratch and 
tarnish resistant (89.8% and 90.5%, respectively), able to be resized 
(82.2%), and hypoallergenic (64.4%).\27\
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    \26\Id., Table 12.
    \27\Id., Table 13.
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    To further support its position, PGI refers to the Hall & Partners 
survey, which reported that the majority of consumers polled associate 
rarity, strength, and purity with platinum jewelry.\28\ These consumers 
also view platinum as superior to other metals.\29\
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    \28\ PGI Comment, Attachment B, at 16, 28.
    \29\Id. at 15, 25.
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    The PGI and JVC comments assert that, because consumers understand 
platinum jewelry to be a pure or nearly pure product, marking products 
with lower amounts of pure platinum and no other PGM as ``platinum'' is 
deceptive.\30\ JVC and PGI explain that consumers believe that using 
the word ``platinum'' conveys that the product is pure and contains the 
qualities consumers expect from traditional platinum jewelry.
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    \30\ JVC comment at 7-8; PGI comment at 17-19.
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    The PGI and JVC comments also assert that consumers do not 
understand numeric jewelry markings listing metal content, such as 
585Pt/0PGM or 585Pt./415 Co.Cu., or the karat systems used for gold 
markings.\31\ The Maronick study asked consumers whether they knew what 
585 plat; 0 pgm meant and only 5.2% responded yes.\32\ Of that 5.2%, 
however, only two consumers (less than 1% of the total consumers 
surveyed) correctly described the marking. The Maronick study also 
probed whether consumers understood a platinum/base metal alloy 
marking, ``585 plat; 415 CO/CU.'' Only 7.5% stated they knew what this 
marking meant, but only 6.9% of those consumers actually understood 
that the marking described the proportion of platinum and other metals 
in the jewelry product.\33\ Similarly, with respect to gold markings, 
the Maronick study reports that although 82.2% of respondents indicated 
they knew what 14 karat gold meant, only 16% of those respondents 
accurately indicated that it meant 58-59% gold.\34\
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    \31\ PGI comment, Attachment A, Table 14. JVC notes that 
consumers are not experts in the Periodic Table of Elements and 
likely would not even know that ``Co'' is the abbreviation for 
copper. JVC comment at 7.
    \32\ PGI comment, Attachment A, at 25.
    \33\Id. at 26.
    \34\Id. at 24.
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    In addition, the PGI product testing shows that certain platinum/
base metal alloys are inferior to platinum/other PGM alloys in terms of 
wear and oxidation resistance, weight loss, and ability to withstand a 
welding/soldering procedure for sizing.\35\ The testing further shows 
that the platinum/base metal alloys in these tests may not be 
hypoallergenic.\36\ It is not clear from the testing PGI submitted that 
all platinum jewelry products with less than 850 ppt pure platinum 
alloyed with base metals would yield the same test results. These tests 
evaluated products with 58.5-59.2% pure platinum. The record does not 
address whether products that contain a higher percentage of platinum, 
or the same percentage of platinum alloyed with different base metals, 
would produce different test results.
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    \35\ PGI comment, Attachment C.
    \36\ PGI comment, Attachment D.
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    Based on their tests, JVC and PGI assert that, to avoid deception, 
marketers would need to disclose how platinum/base metal alloy jewelry 
products differ from traditional platinum jewelry in durability, 
strength, hypoallergenic properties, weight, purity, scratch 
resistance, tarnishability, and ability of jewelers to repair or resize 
the product. PGI and JVC, however, contend that appropriate and 
prominent disclosures addressing such extensive information are not 
feasible at the retail level.\37\ Accordingly, JVC and PGI assert

[[Page 10194]]

that given consumers' perceptions of platinum jewelry, consumer 
confusion regarding jewelry markings, and their testing data, the 
appropriate course to avoid deception is to amend the Guides to state 
that products that do not contain at least 50% platinum and a 
combination of at least 950 ppt pure platinum and other PGM cannot be 
marked or described ``platinum.''\38\
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    \37\ PGI contends that the Hall & Partners study supports this 
assertion. That study showed that only 25-30% of those people 
surveyed responded that sales people explained the differences 
between the different metals (gold, white gold, and platinum), and 
only 22-24% of consumers surveyed believed that sales people helped 
them to understand the differences. PGI comment, Attachment B.
    \38\ JVC comment at 4; PGI comment at 26.
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    JVC and PGI further submit that state laws in California, New York, 
New Jersey, Illinois, and Wisconsin do not permit platinum/base metal 
alloy jewelry products to be marked or described as ``platinum.'' These 
state laws are based on historical Department of Commerce Voluntary 
Product Standards (``VPS''). JVC explains that the five state statutes 
require products to contain 950 ppt pure platinum (with solder) or 985 
ppt (without solder) to be marked or marketed as ``platinum'' without 
qualification.\39\ These statutes permit qualified platinum markings 
for products with at least 500 ppt pure platinum and 950 ppt total 
PGM.\40\
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    \39\ PGI comment at 3, 9 & n.33; JVC comment at 2 & n.2. Both 
PGI and JVC cite Cal. Bus. & Prof. Code Sec. Sec.  22120-22132; Ill. 
Comp. Stat. Sec. Sec.  395/0.01-395/0.11 (Platinum Sales Act); N.J. 
Stat. Sec.  51:6 (Platinum and Alloys); N.Y. Gen. Bus. Sec. Sec.  
230-238 (Platinum Stamping); Wis. Stat. Sec.  134.33 (Platinum 
Stamping).
    \40\ The statutes require that marketers must disclose the 
product composition indicating the number in ppt of each metal to 
qualify the platinum marking. See Cal. Bus. & Prof. Code Sec. Sec.  
22120-22132; Ill. Comp. Stat. Sec. Sec.  395/0.01-395/0.11 (Platinum 
Sales Act); N.J. Stat. Sec.  51:6 (Platinum and Alloys); N.Y. Gen. 
Bus. Sec. Sec.  230-238 (Platinum Stamping); Wis. Stat. Sec.  134.33 
(Platinum Stamping).
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    Finally, JVC and PGI state that the International Standards 
Organization (``ISO'') standard for platinum markings also precludes 
marking or describing products as platinum unless they contain at least 
850 ppt pure platinum.\41\ JVC and PGI contend, that because many 
countries have adopted ISO standards, platinum/base metal alloy jewelry 
generally could not be marked as ``platinum'' if sold abroad.\42\
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    \41\ JVC comment at 8 & n.4; PGI comment at 20 (both citing ISO 
9202:1991(E), ``Jewellery - Fineness of precious metal alloys''). 
PGI explained that the ISO standard provides for three values in ppt 
for platinum jewelry: 950, 900, and 850. Id.
    \42\ JVC comment at 8; PGI comment at 20.
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    Karat Platinum disagrees with JVC's and PGI's positions on 
virtually every point. First, Karat Platinum states, that if the 
Commission determines that revising the Guides is appropriate, the 
revised Guides should simply codify the language in the February 2005 
staff opinion letter. Karat Platinum further asserts that its platinum/
base metal alloy does share almost all of the same qualities as 
traditional platinum products.\43\ It submitted testing of its alloy 
showing that it is superior to traditional platinum products in terms 
of strength, hardness, and casting ability, and that its ability to 
resist corrosion is equivalent to other platinum products. The only 
attribute of potential difference, according to Karat Platinum's study, 
is density--its platinum/base metal alloy is less dense.\44\ Karat 
Platinum's test did not evaluate whether its alloy is hypoallergenic.
---------------------------------------------------------------------------

    \43\Karat Platinum comment at 2.
    \44\Id. at 3 and Exhibit A.
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    Karat Platinum further explains that, consistent with the FTC 
staff's advice, it will disclose its product's full composition, which 
will give consumers complete information about the content of the 
product and promote it as a ``new product.''\45\ Karat Platinum did not 
submit any consumer survey evidence evaluating how consumers interpret 
its proposed marketing. It asserts, however, that consumers will 
understand that its product contains less platinum than traditional 
platinum jewelry because the description will put consumers on notice 
about the amount of platinum in the product and the ``new'' 
representations will alert consumers that it is different.\46\ Karat 
Platinum asserts that consumers do understand karat markings. Karat 
Platinum argues that consumers know that gold has different levels of 
purity and is alloyed with different metals, and will similarly 
understand that platinum jewelry is not pure and is alloyed with 
different metals.\47\
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    \45\Id. at 4.
    \46\Id. at 5.
    \47\Id. at 6-7.
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    Prohibiting marketers from using the word ``platinum'' because a 
product contains less than 85% platinum and no other PGM will not 
benefit consumers, according to Karat Platinum. This prohibition, Karat 
Platinum contends, will deprive consumers of truthful and accurate 
information about the product and the opportunity to own more 
affordable, high quality platinum jewelry.\48\
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    \48\Id. at 1.
---------------------------------------------------------------------------

B. Analysis of the Comments

    The record supports the following conclusions: (1) a substantial 
number of consumers believe products marked or described as 
``platinum'' are pure and possess certain desirable qualities; (2) a 
substantial number of consumers generally would not expect platinum/
base metal alloy jewelry to be marked or described ``platinum''; (3) 
many consumers do not fully understand numeric jewelry markings and 
chemical symbols and may find them confusing; (4) testing data in the 
record suggests that some platinum/base metal alloys do not possess all 
of the qualities of higher purity platinum jewelry that consumers 
expect; and (5) the consumer perception and product testing data 
support revising the Guides to address the marketing of platinum/base 
metal alloys, as explained below.
1. Consumer Perceptions Regarding the Use of the Term ``Platinum''
    The survey evidence PGI submitted, particularly the Maronick study, 
provides insight into consumer perceptions regarding the use of the 
term ``platinum'' to describe jewelry. The Maronick study presents 
evidence that many consumers understand that products marked or 
described as ``platinum'' are pure or nearly pure and that certain 
qualities or attributes typically associated with platinum are 
important to a substantial number of consumers. These qualities or 
attributes include the product's weight, durability, scratch and 
tarnish resistance, and whether it is hypoallergenic and can be 
resized.
2. Consumer Expectations Regarding Products Described as ``Platinum''
    The Maronick study further found that a majority of consumers would 
not expect platinum/base metal alloys containing more than 40% base 
metal to be called ``platinum,'' particularly if they do not possess 
the qualities and attributes present in higher purity platinum or 
platinum/other PGM products, such as those containing at least 850 ppt 
pure platinum, or at least 500 ppt pure platinum and at least 950 ppt 
PGM. These findings indicate that many consumers have high expectations 
regarding products described as platinum, and draw the conclusion that 
such products possess certain qualities or attributes that make them 
superior to products consisting of other metals (e.g., superior 
strength, durability, and resistance to scratching and tarnishing).
3. Consumer Understanding of Numeric Jewelry Markings
    The Maronick study also provides evidence that many consumers do 
not fully understand numeric jewelry markings, particularly those using 
chemical symbols, such as 585 Pt./415 Co.Cu. The Maronick study, 
however, does not address what consumers take away from these numeric 
and symbolic markings for platinum jewelry products. The study asked 
consumers: ``Do you

[[Page 10195]]

know what `585plat, 415 CO/CU' means?'' If consumers said no, the study 
did not ask follow up questions probing their actual understanding.\49\ 
While consumers clearly could not identify the metals represented by 
the markings, it is not clear whether they understood that the product 
contained platinum and two other metals or that it contained a lower 
percentage of platinum than products without the markings. In a 
potentially analogous situation, the Maronick study showed that, even 
though many consumers cannot define the term ``14 karat gold'' 
accurately, the term does convey important information. Specifically, 
consumers understand that ``14 karat'' represents the amount of gold in 
the product, and that 18 karat gold jewelry contains more gold than 14 
karat gold jewelry.\50\
---------------------------------------------------------------------------

    \49\ PGI Comment, Attachment A, at 42.
    \50\Id. at 24.
---------------------------------------------------------------------------

    While numerical and chemical markings may provide some useful 
information to consumers, the record indicates that even using full 
names and no chemical abbreviations to disclose the composition of 
platinum/base metal alloys may be inadequate. Specifically, the 
Maronick study shows that many consumers expect products described as 
platinum to have certain qualities and attributes, even if they consist 
in part of non-platinum group metals. Disclosure using full chemical 
names, therefore, might not provide adequate notice that the product 
may differ from products containing at least 850 ppt pure platinum, or 
at least 500 ppt pure platinum and at least 950 ppt PGM, with respect 
to one or more qualities or attributes important to consumers.
4. Testing Data of Platinum/Base Metal Alloys
    It is, therefore, important to determine whether platinum/base 
metal alloys have the same properties as products containing at least 
850 ppt pure platinum, or at least 500 ppt pure platinum and at least 
950 ppt PGM. The record provides a useful, albeit inconclusive, answer. 
Specifically, the record suggests that at least some platinum/base 
metal alloys do not possess all of the qualities of products containing 
at least 850 ppt pure platinum, or at least 500 ppt pure platinum and 
at least 950 ppt PGM. On one hand, PGI's testing indicates that certain 
platinum/base metal alloys are inferior to higher purity platinum 
jewelry in terms of wear and oxidation resistance, as well as weight 
loss, and that they cannot be resized using certain procedures.\51\ On 
the other hand, Karat Platinum's testing suggests that its alloy is 
superior or equivalent to higher purity platinum jewelry in several 
respects. Karat Platinum's testing, however, showed that its alloy is 
less dense than higher purity platinum jewelry, and it did not test 
whether the alloy is hypoallergenic.
---------------------------------------------------------------------------

    \51\ PGI did not test Karat Platinum's alloy.
---------------------------------------------------------------------------

    Accordingly, the record is incomplete regarding the extent to which 
platinum/base metal alloys differ from higher purity platinum or 
platinum/other PGM jewelry with respect to those qualities material to 
consumers' purchasing decisions. The record is also incomplete 
regarding the extent to which the qualities and attributes of jewelry 
differ depending on the percentage of platinum and the type and 
percentage of base metal in the jewelry. The record does indicate, 
however, that at least some platinum/base metal alloys likely do not 
have all, or substantially all, of the qualities or attributes that 
consumers view as important in purer platinum products, such as those 
containing at least 850 ppt pure platinum, or at least 500 ppt pure 
platinum and at least 950 ppt PGM.
5. The Record Supports Amending the Platinum Section of the Guides
    The record on consumer perception and the product testing described 
above supports amending the Guides to address the marketing of 
platinum/base metal alloys. In particular, the record supports revising 
the Guides to state that marketers may describe platinum/base metal 
alloys as platinum, provided they adequately qualify the claim.
    The platinum section of the FTC's Jewelry Guides currently provides 
that the unqualified use of the word ``platinum'' is deceptive for 
products that do not contain 950 ppt or more pure platinum. It also 
provides guidance on how marketers may qualify the word to describe 
certain products containing less than 950 ppt pure platinum. The 
Guides, however, do not address claims for products containing at least 
500 ppt pure platinum alloyed with base metals. The JVC, PGI, and 
numerous retailers recommend that the FTC amend the platinum section of 
the Guides to state that even the qualified use of the word 
``platinum'' to describe these products would deceive consumers.\52\ 
Based on the current record, however, the Commission cannot conclude 
that the properly qualified use of the word platinum to describe every 
platinum/base metal alloy would materially mislead consumers. 
Accordingly, we do not propose to amend the Guides in this manner.
---------------------------------------------------------------------------

    \52\ JVC and PGI acknowledge that a qualified use of the word 
``platinum'' could, in theory, address consumer confusion or 
deception stemming from the use of the term ``platinum'' to describe 
platinum/base metal alloys. Yet, JVC and PGI assert that it would be 
impracticable and likely ineffective to make the lengthy, detailed 
disclosures that they believe would be needed to prevent deception.
---------------------------------------------------------------------------

    The weight of the evidence leads us to conclude that there is a 
high probability of consumer deception if marketers describe platinum/
base metal alloys as ``platinum'' qualified only with a disclosure of 
the product's metal content using numbers and chemical 
abbreviations.\53\ As discussed above, the record indicates that many 
consumers have pre-existing beliefs about the qualities of products 
marked or described as ``platinum,'' and at least some platinum/base 
metal alloys may not meet their expectations. The record also provides 
evidence that numeric markings and chemical abbreviations confuse many 
consumers. Thus, describing a platinum/base metal alloy as platinum and 
disclosing its metal content using numbers and chemical abbreviations 
would most likely fail to inform many consumers that the product 
differs from traditional platinum products with respect to the 
product's purity as well as the qualities and attributes important to 
consumers. The record, therefore, demonstrates that marketers selling 
platinum/base metal alloys should disclose more detailed information to 
prevent deception.
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    \53\ Karat Platinum's suggestion that it will also market the 
product as ``new,'' which, it contends, conveys that the product 
differs from traditional platinum products and should prompt 
consumers to seek information about the product, is, at best, a 
temporary solution. Karat Platinum presumably will not market this 
product as ``new'' forever. In any event, a mere representation that 
a product is new would not disclose how it differs from products 
containing a higher percentage of platinum.
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    To address potential consumer confusion regarding numbers and 
chemical abbreviations, the Commission proposes amending the Guides to 
state that marketers of platinum/base metal alloys described as 
platinum should expressly disclose that the product contains platinum 
and other non-platinum group metals and also separately disclose the 
product's full composition, by name and not abbreviation, and the 
percentage of each other metal in the product.\54\ By

[[Page 10196]]

disclosing the composition of the jewelry in this manner, marketers 
would alert consumers to the presence of particular metals and help 
prevent deception regarding the purity of products described as 
platinum.
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    \54\ This disclosure provides for the use of percentages rather 
than ppt because the survey evidence revealed that ppt markings, 
like numbers and chemical abbreviations, confuse consumers. The 
other provisions of the platinum section of the Guides provide for 
compositional disclosures using ppt. As discussed below, the 
proposed amendment would allow for the physical stamping of 
platinum/base metal alloy jewelry using ppt and chemical 
abbreviations. It is only the full composition disclosure that will 
differ in that it provides for the use of percentages.
---------------------------------------------------------------------------

    For the reasons noted above, a full name composition disclosure 
should alleviate the confusion regarding a platinum/base metal alloy 
product's purity but would not necessarily alleviate all confusion 
regarding the product's other properties. The record demonstrates that 
use of the word ``platinum,'' even in conjunction with a compositional 
disclosure, conveys important quality information to consumers (i.e., 
that the product possesses qualities typically associated with 
platinum). As such, the record indicates a need for additional 
disclosure to prevent deception. Therefore, the proposed Guides state 
that marketers should expressly disclose that a platinum/base metal 
alloy product may not have all the properties that consumers associate 
with higher purity platinum/other PGM products.
    The record does not address whether the term Karat Platinum or 
other qualifying moniker, either in conjunction with a compositional 
disclosure or without one, might imply that the product either differs 
in some respects from other products containing platinum or is 
comparable to other such products in material respects. Thus, we do not 
have a basis to conclude that use of the term Karat Platinum or other 
qualifying moniker will sufficiently alert consumers to the potential 
differences between platinum/base metal alloy jewelry products and 
higher purity platinum/other PGM products with respect to the 
properties material to consumers.
    As noted earlier, the record does not include sufficient evidence 
for the Commission to identify which platinum/base metal alloys differ 
from products containing at least 850 ppt pure platinum, or at least 
500 ppt pure platinum and at least 950 ppt PGM, and with respect to 
which attributes. Some platinum/base metal alloys, however, may be 
equivalent to products containing at least 850 ppt pure platinum, or at 
least 500 ppt pure platinum and at least 950 ppt PGM, with respect to 
some, or all, of the attributes important to consumers depending upon 
the percentage of platinum and both the percentages and types of base 
metals. For this reason, the proposed amendment provides that a 
marketer need not disclose that its product may not have the same 
attributes or properties as products containing at least 850 ppt pure 
platinum, or at least 500 ppt pure platinum and at least 950 ppt PGM, 
if the marketer has competent and reliable scientific evidence that, 
with respect to all attributes or properties material to consumers 
(e.g., the product's durability, hypoallergenicity, resistance to 
tarnishing and scratching, and the ability to resize or repair the 
product), such product is equivalent to products containing at least 
850 ppt pure platinum, or at least 500 ppt pure platinum and at least 
950 ppt PGM.

C. Harmonization with State Law and International Standards

    The record includes evidence that laws in at least five states and 
an ISO standard that some countries have adopted do not permit 
platinum/base metal alloy products to be marked or described as 
``platinum.'' Thus, JVC and PGI contend that, if the FTC issues 
guidance allowing such products to be marked as ``platinum,'' our 
Guides will conflict with state law and international standards. 
Although the Commission generally prefers to harmonize its guidance 
with state and international laws and standards, Commission Guides must 
be based upon the Section 5 deception or unfairness standard.\55\
---------------------------------------------------------------------------

    \55\ The Trade Agreements Act of 1979 states that no federal 
agency ``may engage in standards-related activity that creates 
unnecessary obstacles to the foreign commerce of the United States 
and that federal agencies must, in developing standards take into 
consideration international standards and shall, if appropriate, 
base the standards on international standards.'' 19 U.S.C. Sec.  
2532(2)(A). The term ``standard'' in the Act includes guidelines 
that are not mandatory, such as the Jewelry Guides. The Act 
provides, however, that ``the prevention of deceptive practices'' is 
an area where basing a standard on an international standard ``may 
not be appropriate.'' Id. at Sec.  2532(2)(B)(i)(II).
---------------------------------------------------------------------------

    The state laws and the ISO standard discussed above are not based 
upon a deception or unfairness standard. As explained above, the state 
laws that JVC and PGI cite are based upon VPS that the Department of 
Commerce promulgated 75 years ago.\56\ VPS are developed through 
general consensus among affected parties.\57\ Similarly, ISO standards 
are technical industry standards developed through a consensus-building 
process.\58\ Accordingly, although harmonization with state laws and 
international standards is typically favored, where, as here, our 
analysis of consumer perception data reveals that there is insufficient 
evidence that a particular claim (i.e., a qualified platinum 
representation) is deceptive, the Commission cannot promulgate a guide 
stating that marketers should not make the representation solely to 
achieve harmony.
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    \56\ 61 FR 27185 n.99 (May 30, 1996) (explaining that the 
Commerce standards were promulgated in 1933).
    \57\See 15 C.F.R. Part 10.3 (setting forth the procedures for 
the development of VPS). The states'statutes adopted the VPS 
verbatim many years ago (e.g., California in 1941; New York in 1965; 
Wisconsin in 1979). Even if the states conducted an independent 
deception analysis when they adopted these standards, it is likely 
that consumer perception regarding platinum representations and the 
marketplace has changed over time. Indeed, it does not appear that 
any platinum/base metal alloy jewelry products marketed as platinum 
existed when the states adopted these standards. In addition, these 
state statutes already conflict with the current platinum Guides. 
The Commission revised the Guides in 1997 to harmonize the treatment 
of platinum products containing 850, 900, or 950 ppt pure platinum 
with the ISO standard and to simplify the Commission's guidance for 
products containing less than 850 ppt, but more than 500 ppt, pure 
platinum and 950 ppt PGM. The state statutes mirror the FTC's pre-
1997 Guides for these categories of platinum products. For example, 
the state statutes provide that products containing at least 750 
ppt, but less than 950 ppt pure platinum (with solder; 985 ppt 
without solder) and 950 ppt PGM, may be marked platinum provided the 
name or abbreviation of the other PGM that predominates precedes the 
word platinum (e.g., Irid-Plat.). See, e.g., N.Y. Gen. Bus. Law 
Sec.  234(b). Consistent with the ISO standard, the current Guides 
provide that products containing 850 ppt or more pure platinum may 
be ``platinum'' provided the name or abbreviation is preceded with 
the amount in ppt of the platinum in the product. For products 
containing at least 750 ppt, but less than 850 ppt, pure platinum 
and 950 ppt other PGM, the Guides provide that marketers should 
disclose both the amount in ppt of pure platinum in the product and 
other PGM. 16 C.F.R. Sec. Sec.  23.7(c)(3-4).
    \58\See www.iso.org/iso/standards_development/process_and_procedures/ how_are_standards_ developed.htm (explaining that ISO 
standards are developed through a consensus-building phase that 
takes into account the views of manufacturers, vendors and users, 
consumer groups, testing laboratories, engineering professionals, 
and research organizations).
---------------------------------------------------------------------------

IV. Proposed Amendment to Platinum Section of the Jewelry Guides

A. Proposed Amendment

    Based on the analysis above, the Commission seeks comment on a 
proposed amendment to Section 23.7(b) of the Jewelry Guides. The 
proposed amendment would allow marketers to physically mark or stamp 
platinum/base metal alloy jewelry with a standard platinum jewelry 
marking that lists the product's chemical composition (e.g., 585 Pt./
415 Co.Cu.), but also states that when making any other representation 
that the product contains platinum they should disclose additional 
information. This proposed amendment states that, to avoid misleading 
consumers, marketers should clearly and conspicuously disclose, 
immediately following the name or description of the product: (i) that 
the product contains platinum and

[[Page 10197]]

other non-platinum group metals;\59\ (ii) the product's full 
composition, by name and not abbreviation, and the percentage of each 
metal;\60\ and (iii) that the product may not have the same attributes 
or properties as products containing at least 850 ppt pure platinum, or 
at least 500 ppt pure platinum and at least 950 ppt PGM.\61\
---------------------------------------------------------------------------

    \59\ The proposed Guide provides for this disclosure for 
products that contain at least 500 parts per thousand, but less than 
850 parts per thousand, pure Platinum, and do not contain at least 
950 parts per thousand PGM. As such the provision applies to 
platinum/base metal alloys but would also apply to a product that 
contains platinum, base metals, and other platinum group metals--
e.g., 58.5% Platinum, 35% Copper/Cobalt, 10% Iridium. The second 
disclosure, providing for a full name compositional disclosure, 
would inform consumers of the presence of the other platinum group 
metals in the product. Nothing in the Guide, however, would prohibit 
marketers from also truthfully disclosing in this first disclosure 
that the product contains other platinum group metals (e.g., this 
product contains platinum, other platinum group metals and other 
non-platinum group metals).
    \60\ The proposed Guide provides that when using percentages to 
qualify platinum representations, marketers should convert the 
amount in parts per thousand to a percentage that is accurate to the 
first decimal place (e.g., 58.5% Platinum, 41.5% Copper/Cobalt).
    \61\ By making the second of these disclosures, a marketer would 
not satisfy the requirements of the first disclosure. Specifically, 
a consumer who received the composition disclosure would only 
understand that the alloy contained non-platinum group metals if he 
or she knew which metals comprised that group. The record, however, 
while not specifically addressing this issue, tends to demonstrate 
that many consumers do not have a clear understanding of metal 
alloys. Therefore, the first and second disclosures are necessary.
---------------------------------------------------------------------------

    As noted above, the record indicates that a substantial percentage 
of consumers believe products described as ``platinum'' are pure. The 
first proposed disclosure will inform consumers directly that the 
product is not pure. In addition, by stating that marketers should 
include the full name, not the abbreviation, of each metal, the second 
disclosure will alleviate consumer confusion regarding numerical, 
abbreviated descriptions of jewelry content. The third proposed 
disclosure is designed to avert deception regarding quality information 
conveyed by the term platinum that the record demonstrates likely will 
not be addressed by a content disclosure alone.
    However, because some platinum/base alloy products may possess all 
the attributes or qualities of platinum jewelry that are important to 
consumers, the proposed amendment contains an additional provision. 
That provision provides that a marketer does not need to make this 
third disclosure if the marketer has competent and reliable scientific 
evidence that, with respect to all attributes or properties material to 
consumers (e.g., the product's durability, hypoallergenicity, 
resistance to tarnishing and scratching, and the ability to resize or 
repair the product), such product is equivalent to products containing 
at least 850 ppt pure platinum, or at least 500 ppt pure platinum and 
at least 950 ppt PGM.
    The proposed amendment does not contain a definitive listing of the 
attributes or properties material to consumers, nor does it specify the 
type of scientific substantiation necessary to avoid making the 
disclosure. Because the attributes or properties material to consumers 
and the nature of the substantiation may change over time, the 
Commission believes that flexible guidance is appropriate and that 
members of the jewelry industry are well-positioned to comply with such 
guidance. The Commission seeks comment on whether such guidance is 
sufficiently precise for marketers to avoid deceiving consumers 
regarding platinum/base metal alloys.

B. Text of the Proposed Amendment

    The Commission proposes adding Section 23.7(b)(4) to the Jewelry 
Guides as an additional example of markings or descriptions of platinum 
that may be misleading.
    The text of the proposed amendment of Section 23.7(b)(4) is as 
follows:
    (4) Use of the word ``Platinum,'' or any abbreviation accompanied 
by a number or percentage indicating the parts per thousand of pure 
Platinum contained in the product, to describe all or part of an 
industry product that contains at least 500 parts per thousand, but 
less than 850 parts per thousand, pure Platinum, and does not contain 
at least 950 parts per thousand PGM (for example, ``585 Plat.'') 
without a clear and conspicuous disclosure, immediately following the 
name or description of such product:
 (i) that the product contains Platinum and other non-platinum group 
metals;
 (ii) the full composition of the product (by name and not 
abbreviation) and percentage of each metal; and
 (iii) that the product may not have the same attributes or properties 
as products containing at least 850 parts per thousand pure Platinum, 
or at least 500 parts per thousand pure Platinum and at least 950 parts 
per thousand PGM.
    Provided, however, that the marketer need not make disclosure 
23.7(b)(4)(iii), above, if the marketer has competent and reliable 
scientific evidence that, with respect to all attributes or properties 
material to consumers (e.g., the product's durability, 
hypoallergenicity, resistance to tarnishing and scratching, and the 
ability to resize or repair the product), such product is equivalent to 
products containing at least 850 parts per thousand pure Platinum, or 
at least 500 parts per thousand pure Platinum and at least 950 parts 
per thousand PGM.
    Provided, further, a product that contains at least 500 parts per 
thousand, but less than 850 parts per thousand, pure Platinum, and does 
not contain at least 950 parts per thousand PGM, may be marked or 
stamped accurately, with a quality marking on the article, using parts 
per thousand and standard chemical abbreviations (e.g., 585 Pt., 415 
Co.Cu.).
Note to Sec.  23.7(b)(4): When using percentages to qualify platinum 
representations, marketers should convert the amount in parts per 
thousand to a percentage that is accurate to the first decimal place 
(e.g., 58.5% Platinum, 41.5% Copper/Cobalt).

V. Request for Public Comment

    The Commission seeks public comment on a proposed amendment to the 
platinum section of the Jewelry Guides that provides guidance on how to 
mark or describe non-deceptively products that contain at least 500 
ppt, but less than 850 ppt, pure platinum, and that do not contain at 
least 950 parts per thousand PGM. In addition, the Commission seeks 
public comment on whether it should revise the Guides to provide 
guidance on how to mark or describe platinum-clad, filled, plated, or 
overlay products.\62\
---------------------------------------------------------------------------

    \62\See 16 CFR 23.4 and 23.6 (addressing gold-plated, gold-
filled, gold-overlay, gold-electroplated, and silver-plated jewelry 
products).
---------------------------------------------------------------------------

    The Commission requests written responses to any or all of the 
following questions. The Commission requests that responses be as 
specific as possible, including a reference to the question being 
answered, and a reference to empirical data or other evidence wherever 
available and appropriate.
1. Should the Commission amend the platinum section of the Jewelry 
Guides by adopting the proposed amendment?
    a. If so, why? Please provide any evidence that supports your 
answer.
    b. If not, why not? Please provide any evidence that supports your 
answer.
2. Should the Commission revise the language in the proposed amendment 
to provide for additional disclosures to ensure that consumers are not 
misled, for example, by including additional, more detailed disclosures 
regarding how products that contain at least 500 ppt, but less than 850 
ppt, pure platinum, and that do not contain at least 950 parts per 
thousand PGM, differ from

[[Page 10198]]

traditional platinum products\63\ in terms of purity and rarity?
---------------------------------------------------------------------------

    \63\ ``Traditional Platinum Products'' referred to in these 
questions means products containing at least 850 ppt pure platinum, 
or at least 500 ppt pure platinum and at least 950 ppt total PGM.
---------------------------------------------------------------------------

    a. If so, how and why?
    b. What evidence supports making your proposed revision(s)? Please 
provide this evidence and explain why any such revision is necessary to 
ensure that consumers are not misled.
    c. If not, why not? Please provide any evidence that supports your 
answer.
3. Should the Commission revise the language in the proposed amendment 
to state that the disclosures should be physically attached to the 
jewelry product?
    a. If so, how and why?
    b. What evidence supports making your proposed revision(s)? Please 
provide this evidence and explain why any such revision is necessary to 
ensure that consumers are not misled.
    c. If not, why not? Please provide any evidence that supports your 
answer.
4. Should the Commission revise the language in the proposed amendment 
to provide that marketers need only make the third disclosure that the 
platinum/base metal alloy may not have the same attributes or 
properties as traditional platinum products, if they represent 
expressly or by implication that such product has one or more of the 
same attributes or properties as traditional platinum products (i.e., a 
triggered disclosure)?
    a. If so, how and why?
    b. What evidence supports making your proposed revision(s)? Please 
provide this evidence and explain why any such revision is necessary to 
ensure that consumers are not misled.
    c. Is there any evidence indicating that the disclosure of the 
product's full composition will sufficiently alert consumers to the 
differences between platinum/base metal alloys and traditional platinum 
products containing a higher percentage of platinum or other PGM? If 
so, please provide this evidence.
    d. If not, why not? Please provide any evidence that supports your 
answer.
5. Is there a specific word or phrase that could be used to describe 
products that contain at least 500 ppt, but less than 850 ppt, pure 
platinum, and that do not contain at least 950 parts per thousand PGM, 
that would adequately convey that such products differ from traditional 
platinum products?
    a. If so, please identify such word or phrase and provide evidence 
demonstrating that it adequately conveys the differences between the 
products.
    b. Would the term ``platinum alloy,'' if used to describe products 
that contain at least 500 ppt, but less than 850 ppt, pure platinum, 
and that do not contain at least 950 parts per thousand PGM, adequately 
convey that such products differ from traditional platinum products? 
Please provide any evidence that supports your answer.
    c. Should the Commission revise the language in the proposed 
amendment to address the use of such a specific word or phrase to 
describe products that contain at least 500 ppt, but less than 850 ppt, 
pure platinum, and that do not contain at least 950 parts per thousand 
PGM?
    (1) If so, how and why?
    (2) What evidence supports making your proposed revision(s)? Please 
provide this evidence and explain why such language adequately conveys 
the differences between the products.
    (3) If not, why not? Please provide any evidence that supports your 
answer.
    6. What, if any, additional disclosures are necessary to explain 
that a product that contains at least 500 ppt, but less than 850 ppt, 
pure platinum, and that does not contain at least 950 parts per 
thousand PGM, may not have the same attributes as traditional platinum 
products?
    a. Should the Commission revise the language in the proposed 
amendment to require any such additional disclosures? How and why?
    b. What evidence supports making your proposed revision(s)? Please 
provide this evidence.
    c. If such disclosures are necessary, please explain the manner and 
form in which marketers should make them to ensure that they are clear 
and conspicuous to consumers.
7. The proposed amendment provides that marketers disclose the full 
composition of the platinum/base metal alloy using full, unabbreviated 
names and the percentage of each metal. Other provisions in the 
platinum sections of the Jewelry Guides provide for compositional 
disclosures using parts per thousand. Will the use of percentages for 
this disclosure confuse consumers?
    a. If so, please provide any evidence that supports your answer.
    b. If evidence does indicate that percentage disclosures will 
confuse consumers because the other platinum sections use parts per 
thousand, is there other evidence that indicates that the benefits of a 
percentage disclosure will outweigh the confusion?
    c. If not, why not? Please provide any evidence that supports your 
answer.
8. What evidence, not submitted in response to the Commission's earlier 
request for comment, indicates what specific properties are important 
to consumers when purchasing a product marked or described as 
``platinum''? If there is such evidence, please provide this evidence.
9. Is there evidence indicating the meaning consumers take from 
qualified platinum markings using abbreviations and chemical symbols 
(e.g., 585 Pt., 415 Co.Cu.)? If so, please provide this evidence.
10. Is there evidence indicating the meaning consumers take from 
qualified platinum markings using full-name compositional disclosures 
(e.g., 58.5% Platinum, 41.5% Copper/Cobalt)? If so, please provide this 
evidence.
11. Is there evidence indicating whether consumers think that products 
that contain at least 500 ppt, but less than 850 ppt, pure platinum, 
and that do not contain at least 950 parts per thousand PGM, share the 
qualities, such as durability, luster, density, scratch and tarnish 
resistance, ability to resize or repair, and hypoallergenicity, that 
are associated with traditional platinum products? If so, please 
provide this evidence.
12. Is there evidence indicating what qualities consumers associate 
with non-platinum PGM products (products made with platinum group 
metals other than platinum, e.g., palladium, iridium), such as 
durability, luster, density, scratch and tarnish resistance, ability to 
resize and repair, and hypoallergenicity, that are associated with 
traditional platinum products? If so, please provide this evidence.
13. What constitutes ``competent and reliable scientific evidence'' to 
substantiate representations regarding the qualities material to 
consumers, such as the durability, luster, density, scratch and tarnish 
resistance, ability to resize and repair, and hypoallergenicity of 
traditional platinum products and products that contain at least 500 
ppt, but less than 850 ppt, pure platinum, and that do not contain at 
least 950 parts per thousand PGM? Please provide any evidence that 
supports your answer.
14. Describe in detail the scientific tests used to determine or 
substantiate representations regarding the qualities material to 
consumers, such as the durability, luster, density, scratch and tarnish 
resistance, ability to resize and repair, and hypoallergenicity, of 
traditional platinum products and products that contain at least 500 
ppt, but less than 850 ppt, pure platinum, and that do not contain at 
least 950 parts per thousand PGM. Please provide any evidence that 
supports your answer.
15. Describe in detail any differences between alloys that contain at 
least 500

[[Page 10199]]

ppt, but less than 850 ppt, pure platinum, and that do not contain at 
least 950 parts per thousand PGM, and traditional platinum products in 
terms of the qualities material to consumers, such as durability, 
luster, density, scratch and tarnish resistance, ability to resize and 
repair, and hypoallergenicity. Please explain the basis for your answer 
and provide evidence that supports your answer.
16. Is there evidence indicating what the terms ``Karat Platinum,'' 
``Platifina,'' ``Platinum V,'' and ``Platinum 5'' mean to consumers? If 
so, please provide this evidence.
17. Do consumers associate the terms ``Karat Platinum,'' ``Platifina,'' 
``Platinum V,'' and ``Platinum 5'' with the qualities, such as 
durability, luster, density, scratch and tarnish resistance, ability to 
resize and repair, and hypoallergenicity, that are associated with 
traditional platinum products? If so, please provide any evidence that 
supports your answer.
18. Is there evidence indicating what the phrase ``other non-platinum 
group metals'' means to consumers? If so, please provide this evidence.
19. Should the Commission amend the platinum section of the Jewelry 
Guides to address other products that contain platinum, such as 
platinum-clad, filled, plated, coated, or overlay products, that are 
not currently addressed in the section?
    a. If so, how and why?
    b. What evidence supports making your proposed revision(s)? Please 
provide this evidence and explain why any such revision is necessary to 
ensure that consumers are not misled including specific guidance as to 
the recommended thickness of the filling, plating, or overlay of such 
platinum products.
    c. If not, why not?

VI. Communications by Outside Parties to Commissioners or Their 
Advisors

    Written communications and summaries or transcripts of oral 
communications respecting the merits of this proceeding from any 
outside party to any Commissioner or Commissioner's advisor will be 
placed on the public record. See 16 CFR 1.26(b)(4).
    All comments should be filed as prescribed in the ADDRESSES section 
above, and must be received on or before May 27, 2008.
    By direction of the Commission.

Donald S. Clark
Secretary
[FR Doc. E8-3594 Filed 2-25-08: 8:45 am]
BILLING CODE 6750-01-S