[Federal Register Volume 76, Number 160 (Thursday, August 18, 2011)]
[Proposed Rules]
[Pages 51308-51310]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-21020]


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

FEDERAL TRADE COMMISSION

16 CFR Part 424


Retail Food Store Advertising and Marketing Practices Rule

AGENCY: Federal Trade Commission (``FTC'' or ``Commission'').

ACTION: Advance notice of proposed rulemaking; request for public 
comment.

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

SUMMARY: As part of the Commission's systematic review of all current 
FTC rules and guides, the Commission requests public comment on the 
overall costs, benefits, necessity, and regulatory and economic impact 
of the FTC's rule for ``Retail Food Store Advertising and Marketing 
Practices'' (``Unavailability Rule'' or ``Rule'').

DATES: Comments must be received on or before October 19, 2011.

ADDRESSES: Interested parties may file a comment online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``16 CFR Part 424--
Retail Food Store Advertising Rule, Project No. P104203'' on your 
comment, and file your comment online at https://ftcpublic.commentworks.com/ftc/unavailabilityruleanpr, by following the 
instructions on the web-based form. If you prefer to file your comment 
on paper, mail or deliver your comment to the following address: 
Federal Trade Commission, Office of the Secretary, Room H-113 (Annex 
N), 600 Pennsylvania Avenue, NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Jock Chung, (202) 326-2984, Attorney, 
Division of Enforcement, Bureau of Consumer Protection, Federal Trade 
Commission, 600 Pennsylvania Avenue, NW., Washington, DC 20580.

SUPPLEMENTARY INFORMATION:

I. Background

    The Unavailability Rule states that it is an unfair or deceptive 
act or practice for ``retail food stores'' to advertise ``food, grocery 
products or other merchandise'' at a stated price if those stores do 
not have the advertised products in stock and readily available to 
consumers during the effective period of the advertisement. The 
original Rule, promulgated in 1971,\1\ permitted food retailers to 
defend against a charge of failure to have items available by 
maintaining records showing that the advertised items were timely 
ordered and delivered in quantities sufficient to meet reasonably 
anticipated demand.\2\
---------------------------------------------------------------------------

    \1\ Federal Trade Commission: Retail Food Store Advertising and 
Marketing Practices: Statement of Basis and Purpose: The Rule, 36 FR 
8777 (May 13, 1971). The Rule became effective on July 12, 1971.
    \2\ Id. at 8781.
---------------------------------------------------------------------------

    In 1989, after a comment period and public hearings, the Commission 
concluded that the costs of complying with the original Rule exceeded 
the benefits to consumers and amended the Rule.\3\ The Rule now 
provides that even if stores do not have the advertised products in 
stock and readily available during the effective period of their 
advertisement, they comply with the Rule if ``the advertisement clearly 
and adequately discloses that supplies of the advertised products are 
limited or the advertised products are available only at some 
outlets.'' \4\ In addition, the amendment provides that it would not be 
a rule violation if: (1) The store ordered the advertised products in 
adequate time for delivery in quantities

[[Page 51309]]

sufficient to meet reasonably anticipated demand; (2) the store offers 
a ``raincheck'' for the advertised products; (3) the store offers a 
comparable product at the advertised price or at a comparable price 
reduction; or (4) the store offers other compensation at least equal to 
the advertised value.\5\ The Commission stated that the amended Rule 
``will not significantly reduce consumer protection because injury 
caused by such instances of unexpected unavailability * * * will be 
substantially mitigated by the amended Rule's requirement that 
consumers be offered rainchecks or comparable substitute items.'' \6\
---------------------------------------------------------------------------

    \3\ Federal Trade Commission: Amendment to Trade Regulation Rule 
Concerning Retail Food Store Advertising and Marketing Practices, 54 
FR 35456 (Aug. 28, 1989).
    \4\ Id. at 35467.
    \5\ Id. at 35467-35468.
    \6\ Id. at 35457. Although the majority of the Commission voted 
to amend the Rule, Commissioner Calvani dissented, stating that 
``existing market forces adequately police unavailability, and * * * 
therefore, no Federal Trade Commission rule is necessary, amended or 
otherwise.'' Id. at 35468. Conversely, Commissioner Strenio 
dissented, stating that there was ``insufficient evidence * * * to 
conclude that these changes will result in net consumer benefits;'' 
thus, he could not support these amendments. Id.
---------------------------------------------------------------------------

II. Regulatory Review Program

    The Commission reviews its rules and guides periodically. These 
reviews seek information about the costs and benefits of the rules and 
guides as well as their regulatory and economic impact. These reviews 
assist the Commission in identifying rules and guides that warrant 
modification or rescission. Therefore, the Commission now solicits 
comments on, among other things, the economic impact of, and the 
continuing need for, the Unavailability Rule; the benefits of the Rule 
to consumers purchasing products at retail food stores; and the burdens 
the Rule places on firms subject to its requirements.

III. Request for Comments

    The Commission solicits comments on the following specific 
questions related to the Unavailability Rule:
    (1) Is there a continuing need for the Rule? Why or why not?
    (2) What benefits has the Rule provided to consumers, or what 
significant costs has the Rule imposed on consumers? Provide any 
evidence that supports your position.
    (3) What modifications, if any, should the Commission make to the 
Rule to increase its benefits or reduce its costs to consumers?
    (a) Provide any evidence that supports your proposed modifications.
    (b) How would these modifications affect the costs and benefits of 
the Rule for consumers?
    (c) How would these modifications affect the costs and benefits of 
the Rule for businesses, particularly small businesses?
    (4) What impact has the Rule had on the flow of truthful 
information to consumers and on the flow of deceptive information to 
consumers? Provide any evidence that supports your position.
    (5) What benefits, if any, has the Rule provided to businesses, or 
what significant costs, including costs of compliance, has the Rule 
imposed on businesses, particularly small businesses? Provide any 
evidence that supports your position.
    (6) What modifications, if any, should be made to the Rule to 
increase its benefits or reduce its costs to businesses, particularly 
small businesses?
    (a) Provide any evidence that supports your proposed modifications.
    (b) How would these modifications affect the costs and benefits of 
the Rule for consumers?
    (c) How would these modifications affect the costs and benefits of 
the Rule for businesses, particularly small businesses?
    (7) Provide any evidence concerning the degree of industry 
compliance with the Rule. Does this evidence indicate that the Rule 
should be modified? If so, why, and how? If not, why not?
    (8) Provide any evidence concerning whether any of the Rule's 
provisions are no longer necessary. Explain why these provisions are 
unnecessary.
    (9) What potentially unfair or deceptive practices, not covered by 
the Rule, concerning price advertising of products by retail food 
stores are occurring in the marketplace?
    (a) Provide any evidence, such as empirical data, consumer 
perception studies, or consumer complaints, that demonstrates the 
extent of such practices.
    (b) Provide any evidence that demonstrates whether such practices 
cause consumer injury.
    (c) With reference to such practices, should the Rule be modified? 
If so, why, and how? If not, why not?
    (10) Should the Commission broaden the Rule to include stores not 
currently covered, such as drugstores, department stores, electronics 
retailers, etc.? Provide any evidence that supports your position.
    (11) What modifications, if any, should be made to the Rule to 
account for current or impending changes in technology or economic 
conditions?
    (a) Provide any evidence that supports your position.
    (b) How would these modifications affect the costs and benefits of 
the Rule for consumers and businesses, particularly small businesses?
    (12) Does the Rule overlap or conflict with other federal, state, 
or local laws or regulations? If so, how?
    (a) Provide any evidence that supports your position.
    (b) With reference to the asserted conflicts, should the Rule be 
modified? If so, why, and how? If not, why not?
    (c) Provide any evidence concerning whether the Rule has assisted 
in promoting national consistency with respect to the advertising by 
retail food stores of products for sale at a stated price.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before October 19, 
2011. Write ``16 CFR Part 424--Retail Food Store Advertising Rule, 
Project No. P104203'' on your comment. Your comment--including your 
name and your state--will be placed on the public record of this 
proceeding, including, to the extent practicable, on the public 
Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a 
matter of discretion, the Commission tries to remove individuals' home 
contact information from comments before placing them on the Commission 
Web site.
    Because your comment will be made public, you are solely 
responsible for making sure that your comment doesn't include any 
sensitive personal information, such as anyone's Social Security 
number, date of birth, driver's license number or other state 
identification number or foreign country equivalent, passport number, 
financial account number, or credit or debit card number. You are also 
solely responsible for making sure that your comment doesn't include 
any sensitive health information, like medical records or other 
individually identifiable health information. In addition, don't 
include any ``[t]rade secret or any commercial or financial information 
which is obtained from any person and which is privileged or 
confidential,'' as provided in Section 6(f) of the FTC Act, 15 U.S.C. 
46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). In particular, don't 
include competitively sensitive information such as costs, sales 
statistics, inventories, formulas, patterns, devices, manufacturing 
processes, or customer names.
    If you want the Commission to give your comment confidential 
treatment, you must file it in paper form, with a request for 
confidential treatment, and you have to follow the procedure explained 
in FTC Rule 4.9(c), 16 CFR

[[Page 51310]]

4.9(c).\7\ Your comment will be kept confidential only if the FTC 
General Counsel, in his or her sole discretion, grants your request in 
accordance with the law and the public interest.
---------------------------------------------------------------------------

    \7\ In particular, the written request for confidential 
treatment that accompanies the comment must include the factual and 
legal basis for the request, and must identify the specific portions 
of the comment to be withheld from the public record. See FTC Rule 
4.9(c), 16 CFR 4.9(c).
---------------------------------------------------------------------------

    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/unavailabilityruleanpr, by following the instructions on the Web-
based form. If this Notice appears at http://www.regulations.gov/#!home, you also may file a comment through that Web site.
    If you file your comment on paper, write ``16 CFR Part 424--Retail 
Food Store Advertising Rule, Project No. P104203'' on your comment and 
on the envelope, and mail or deliver it to the following address: 
Federal Trade Commission, Office of the Secretary, Room H-113 (Annex 
N), 600 Pennsylvania Avenue, NW., Washington, DC 20580. If possible, 
submit your paper comment to the Commission by courier or overnight 
service.
    Visit the Commission Web site at http://www.ftc.gov to read this 
Notice and the news release describing it. The FTC Act and other laws 
that 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 on or before October 19, 2011. You can find more 
information, including routine uses permitted by the Privacy Act, in 
the Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

List of Subjects in 16 CFR Part 424

    Advertising, Foods, Trade practices.

    Authority: 15 U.S.C. 41-58.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2011-21020 Filed 8-17-11; 8:45 am]
BILLING CODE 6750-01-P