[Federal Register Volume 79, Number 47 (Tuesday, March 11, 2014)]
[Rules and Regulations]
[Pages 13539-13540]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-05266]


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FEDERAL TRADE COMMISSION

16 CFR Part 1


Adjustments to Civil Penalty Amounts

AGENCY: Federal Trade Commission.

ACTION: Final rule amendments.

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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') is 
increasing certain civil penalty amounts within its jurisdiction, as 
required by law. These adjustments reflect inflation since the penalty 
amounts were last adjusted.

DATES: Effective April 10, 2014.

FOR FURTHER INFORMATION CONTACT: Kenny A. Wright, Attorney, Office of 
the General Counsel, FTC, 600 Pennsylvania Avenue NW, Washington, DC 
20580, (202) 326-2907, [email protected].

SUPPLEMENTARY INFORMATION: Commission Rule 1.98 sets forth civil 
penalty amounts for violations of certain laws enforced by the 
Commission.\1\ The Commission is increasing many of these amounts to 
account for inflation, as required by the Federal Civil Penalties 
Inflation Adjustment Act of 1990 (``FCPIAA''),\2\ as amended by the 
Debt Collection Improvement Act of 1996.\3\ The following adjusted 
amounts will take effect on April 10, 2014:
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    \1\ 16 CFR 1.98.
    \2\ 28 U.S.C. 2461 note.
    \3\ Public Law 104-134, section 31001(s)(1), 110 Stat. 1321-373.
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     Section 11(l) of the Clayton Act, 15 U.S.C. 21(l) 
(violations of cease and desist orders issued under Clayton Act section 
11(b))--$8,500;
     Section 10 of the FTC Act, 15 U.S.C. 50 (failure to file 
reports required by FTC Act)--$210;
     Section 5 of the Webb-Pomerene (Export Trade) Act, 15 
U.S.C. 65 (failure to file required business information with the 
Commission)--$210;
     Section 6(b) of the Wool Products Labeling Act, 15 U.SC. 
68d(b) (failure to maintain proper records of fiber content)--$210;
     Section 3(e) of the Fur Products Labeling Act, 15 U.S.C. 
69a(e) (failure to maintain records)--$210;
     Section 8(d)(2) of the Fur Products Labeling Act, 15 
U.S.C. 69f(d)(2) (failure to maintain records)--$210;
     Section 333(a) of the Energy Policy and Conservation Act, 
42 U.S.C. 6303(a) (FTC enforcement of knowing violations)--$210;
     Section 525(a) of the Energy Policy and Conservation Act, 
42 U.S.C. 6395(a) (recycled oil labeling violations)--$8,500;
     Section 1115(a) of the Medicare Prescription Drug 
Improvement and Modernization Act of 2003, Public Law 108-173, 21 
U.S.C. 355 note (failure to comply with filing requirements)--$12,100; 
and
     Section 814(a) of the Energy Independence and Security Act 
of 2007, 42 U.S.C. 17304 (violations of prohibitions on market 
manipulation and provision of false information to federal agencies)--
$1,100,000
    The FCPIAA's rounding rules do not permit adjustment of the other 
civil penalties listed in Rule 1.98 at this time.\4\
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    \4\ 28 U.S.C. 2461 note (5)(a).
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Calculation of Inflation Adjustments

    The FCPIAA directs federal agencies to adjust civil monetary 
penalties under their jurisdiction for inflation at least once every 
four years pursuant to a statutory ``cost-of-living adjustment.'' \5\ 
The cost of living adjustment is defined as the percentage by which the 
U.S. Department of Labor's Consumer Price Index for all-urban consumers 
(``CPI-U'') for the month of June for the year preceding the adjustment 
exceeds the CPI-U for the month of June for the year in which the 
amount of the penalty was last set or adjusted pursuant to law.\6\ 
Agencies do not have discretion over whether to adjust a maximum civil 
penalty at least once every four years, or the method used to determine 
the adjustment.
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    \5\ Id.
    \6\ 28 U.S.C. 2461 note (3), (5)(b).
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    The Commission previously adjusted its civil penalty amounts in 
1996, 2004, and 2009.\7\ No adjustments were warranted in 2000 due to 
the FCPIAA's rounding rules.\8\
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    \7\ See 61 FR 54,548 (Oct. 21, 1996); 69 FR 76,611 (Dec. 22, 
2004); 74 FR 857 (Jan. 9, 2009).
    \8\ See 65 FR 69,665 (Nov. 20, 2000).
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    In 2009, the Commission adjusted civil penalties under Clayton Act 
sections 7A(g)(1) and 11(l), FTC Act sections 5(l) and 5(m)(1)(A)-(B), 
sections 525(a) and (b) of the Energy Policy and Conservation Act 
(``EPCA''), and section 621(a)(2) of the Fair Credit Reporting Act 
(``FCRA''). See 74 FR 857 (Jan. 9, 2009). For these civil penalties, 
the relevant inflation period is between June 2009 and June 2013. 
Within that timeframe, the CPI-U has increased from 215.693 to 233.504, 
or 8.3%. This increase triggers a statutory adjustment from $7,500 to 
$8,500 for civil penalties under Clayton Act section 11(l) and EPCA 
section 525(a).
    At this time, the statute's rounding rules do not authorize the FTC 
to increase the amounts of the other civil penalties previously 
adjusted in 2009. The FCPIAA contains specific rules for rounding each 
increase based on the size of the penalty.\9\ Increases in civil 
penalties of greater than $10,000 and less than or equal to $100,000 
must be in $5,000 increments, and the increase in the CPI between June 
2009 and June 2013 was not high enough to round up any adjustment to 
$5,000. Thus, the statute does not permit adjustments for civil 
penalties under Clayton Act sections 7A(g)(1), FTC Act sections 5(l) 
and 5(m)(1)(A)-(B), and EPCA section 525(b). Likewise, increases in 
civil penalties of greater than $1,000 and less than or equal to 
$10,000 must be in increments of $1,000, and the increase in the CPI 
was not high enough to warrant an adjustment for civil penalties under 
FCRA section 621(a)(2).
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    \9\ 28 U.S.C. 2461 note (5)(a)(1)-(6).
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    The other civil penalties in Rule 1.98 did not qualify for 
adjustment in 2009.\10\ These additional penalties were last adjusted 
in 1996.\11\ Thus, the relevant inflation period is between June 1996 
and June 2013. Within that time frame, the CPI-U has increased from 
156.7 to 233.504 for a total percentage increase of 49.0%. Applying 
this percentage increase results in an adjustment from $110 to $210 for 
civil penalties under the following statutory provisions: FTC Act 
section 10, Webb-Pomerene (Export Trade) Act section 5, Wool Products 
Labeling Act section 6(b), Fur Products Labeling Act sections 3(e) and 
8(d)(2), and EPCA section 333(a).
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    \10\ 74 FR at 858.
    \11\ The Commission reviewed these civil penalties for potential 
adjustments in 2000 and 2004, but determined that no adjustments 
inflation were warranted at that time. See 65 FR at 69665; 69 FR at 
76612. In 2004, only the civil penalties under section 11(l) of the 
Clayton Act and sections 525(a)-(b) of EPCA were adjusted for 
inflation, 69 FR at 76612. These penalties were subsequently 
adjusted for inflation again in 2009, along with the others 
identified above. 74 FR at 858.
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    The FTC is increasing the civil penalty amount under section 
1115(a) of the Medicare Prescription Drug Improvement and Modernization 
Act of 2003 (``MMA'') for the first time.\12\ From June 2003 to June 
2013, the CPI-U has increased from 183.7 to 233.504, a 27.1% increase. 
Because the FCPIAA imposes a ten percent cap on initial civil penalty 
adjustments, the

[[Page 13540]]

Commission is adjusting this penalty from $11,000 to $12,100.\13\
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    \12\ In 2004 and 2009, the Commission reviewed the penalties 
under Section 1115(a) of the MMA but determined that no adjustments 
were warranted by inflation at that time. 69 FR at 76612; 74 FR at 
858.
    \13\ 28 U.S.C.2461 note (citing Pub. L. 104-134, section 
31001(s)(2), 110 Stat. 1321, 1373 (1996)).
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    In addition, the FTC is adjusting civil penalties under section 
814(a) of the Energy Independence and Security Act of 2007 (``EISA'') 
\14\ The CPI-U has increased from 208.352 in June 2007 to 233.504 in 
June 2013, or 12.1%. Applying this percentage increase and the FCPIAA's 
ten percent cap on initial adjustments, this penalty will increase from 
$1,000,000 to $1,100,000.
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    \14\ The Commission determined in 2009 that its civil penalty 
authority under EISA was too recent to warrant adjustment for 
inflation. 74 FR at 858.
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    To reflect these adjustments, the FTC is amending Commission Rule 
1.98 by modifying paragraphs (b) and (f)-(l), adding new paragraphs 
(n)-(o), and redesignating current paragraph (n) as paragraph (p). 
These changes take effect on April 10, 2014.

Procedural Requirements

    Under the Administrative Procedure Act (``APA''), a final rule may 
be issued without public notice and comment if an agency finds good 
cause that notice and comment are impractical, unnecessary, or contrary 
to the public interest. 5 U.S.C. 553(b)(3)(B). Because the Commission 
must adjust its civil penalties according to a statutory formula, the 
Commission finds that good cause exists to forego public notice and 
comment under the APA. Id. Because these adjustments are mandated by 
statute and do not involve the exercise of Commission discretion or any 
policy judgments, public notice and comment is unnecessary. For this 
reason, the requirements of the Regulatory Flexibility Act (``RFA'') 
also do not apply.\15\ Finally, this rule does not contain any 
collection of information requirements as defined by the Paperwork 
Reduction Act of 1995 as amended. 44 U.S.C. 3501 et seq.
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    \15\ A regulatory flexibility analysis under the RFA is required 
only when an agency must publish a notice of proposed rulemaking for 
comment. See 5 U.S.C. 603.
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List of Subjects for 16 CFR Part 1

    Administrative practice and procedure, Penalties, Trade practices.

    For the reasons set forth in the preamble, the Federal Trade 
Commission amends Title 16, chapter I, subchapter A, of the Code of 
Federal Regulations, as follows:

PART 1--GENERAL PROCEDURES

Subpart L--[Amended]

0
1. The authority citation for subpart L continues to read as follows:

    Authority:  28 U.S.C. 2461 note.


0
2. Revise Sec.  1.98 to read as follows:


Sec.  1.98  Adjustment of civil monetary penalty amounts.

    This section makes inflation adjustments in the dollar amounts of 
civil monetary penalties provided by law within the Commission's 
jurisdiction. The following civil penalty amounts apply to violations 
occurring after April 10, 2014.
    (a) Section 7A(g)(1) of the Clayton Act, 15 U.S.C. 18a(g)(1)--
$16,000;
    (b) Section 11(l) of the Clayton Act, 15 U.S.C. 21(l)--$8,500;
    (c) Section 5(l) of the FTC Act, 15 U.S.C. 45(l)--$16,000;
    (d) Section 5(m)(1)(A) of the FTC Act, 15 U.S.C. 45(m)(1)(A)--
$16,000;
    (e) Section 5(m)(1)(B) of the FTC Act, 15 U.S.C. 45(m)(1)(B)--
$16,000;
    (f) Section 10 of the FTC Act, 15 U.S.C. 50--$210;
    (g) Section 5 of the Webb-Pomerene (Export Trade) Act, 15 U.S.C. 
65--$210;
    (h) Section 6(b) of the Wool Products Labeling Act, 15 U.SC. 
68d(b)--$210;
    (i) Section 3(e) of the Fur Products Labeling Act, 15 U.S.C. 
69a(e)--$210;
    (j) Section 8(d)(2) of the Fur Products Labeling Act, 15 U.S.C. 
69f(d)(2)--$210;
    (k) Section 333(a) of the Energy Policy and Conservation Act, 42 
U.S.C. 6303(a)--$210;
    (l) Sections 525(a) and (b) of the Energy Policy and Conservation 
Act, 42 U.S.C. 6395(a) and (b), respectively--$8,500 and $16,000, 
respectively;
    (m) Section 621(a)(2) of the Fair Credit Reporting Act, 15 U.S.C. 
1681s(a)(2)--$3,500;
    (n) Section 1115(a) of the Medicare Prescription Drug Improvement 
and Modernization Act of 2003, Public Law 108-173, 21 U.S.C. 355 note--
$12,100;
    (o) Section 814(a) of the Energy Independence and Security Act of 
2007, 42 U.S.C. 17304--$1,100,000; and
    (p) Civil monetary penalties authorized by reference to the Federal 
Trade Commission Act under any other provision of law within the 
jurisdiction of the Commission--refer to the amounts set forth in 
paragraphs (c), (d), (e) and (f) of this section, as applicable.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2014-05266 Filed 3-10-14; 8:45 am]
BILLING CODE 6750-01-P