[Federal Register Volume 83, Number 195 (Tuesday, October 9, 2018)]
[Rules and Regulations]
[Pages 50484-50487]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-21803]


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FEDERAL TRADE COMMISSION

16 CFR Part 410


Deceptive Advertising as to Sizes of Viewable Pictures Shown by 
Television Receiving Sets

AGENCY: Federal Trade Commission.

ACTION: Final rule.

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SUMMARY: The Federal Trade Commission (``Commission'') has completed 
its regulatory review of its Trade Regulation Rule Concerning the 
Deceptive Advertising as to Sizes of Viewable Pictures Shown by 
Television Receiving Sets (``Picture Tube Rule'' or ``Rule''), as part 
of its systematic review of all current Commission regulations and 
guides. Pursuant to that review, the Commission now determines that the 
Rule is no longer necessary to prevent deceptive claims regarding the 
size of television screens and to encourage uniformity and accuracy in 
their marketing. The Commission, therefore, repeals the Rule.

DATES: This rule is effective January 7, 2019.

ADDRESSES: Relevant portions of the record of this proceeding, 
including this document, are available at https://www.ftc.gov.

FOR FURTHER INFORMATION CONTACT: John Andrew Singer, Attorney, (202) 
326-3234, Division of Enforcement, Bureau of Consumer Protection, 
Federal Trade Commission, 600 Pennsylvania Avenue NW, CC-9528, 
Washington, DC 20580.

SUPPLEMENTARY INFORMATION: 

I. Background

    The Commission promulgated the Picture Tube Rule in 1966 \1\ to 
prevent deceptive claims regarding the size of television screens and 
to encourage uniformity and accuracy in marketing. When the Commission 
adopted the Rule, it expressed concern about consumer confusion 
regarding whether a television's advertised screen dimension 
represented the actual viewable area of a convex-curved cathode ray 
tube (CRT) or included the viewable area of the picture tube plus non-
viewable portions of the tube, such

[[Page 50485]]

as those behind a casing. In addition, the Commission concluded that 
most consumers perceived the sizes of rectangular shaped objects, like 
television screens, in terms of their length or width, not their 
diagonal dimension.\2\
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    \1\ 31 FR 3342 (Mar. 3, 1966).
    \2\ Id. at 3342-43.
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    Based on these concerns, the Rule sets forth the means to non-
deceptively advertise the dimensions of television screens.\3\ Thus, 
marketers must base any representation of screen size on the horizontal 
dimension of the actual, viewable picture area unless they disclose the 
alternative method of measurement (such as the diagonal dimension) 
clearly, conspicuously, and in close connection and conjunction to the 
size designation.\4\ The Rule also directs marketers to base the 
measurement on a single plane, without taking into account any screen 
curvature,\5\ and includes examples of both proper and improper size 
representations.\6\
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    \3\ 16 CFR 410.1.
    \4\ Id.
    \5\ Id., Note 1.
    \6\ Id., Note 2.
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II. Regulatory Review

    The Commission reviews its rules and guides periodically to seek 
information about their costs and benefits, regulatory and economic 
impact, and general effectiveness in protecting consumers and helping 
industry avoid deceptive claims. These reviews assist the Commission in 
identifying rules and guides that warrant modification or repeal. The 
Commission last reviewed the Rule in 2006, leaving it unchanged.\7\
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    \7\ 71 FR 34247 (June 14, 2006).
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A. 2017 Advance Notice of Proposed Rulemaking (ANPR)

    In its 2017 ANPR initiating the current Rule review, the Commission 
solicited comment on, among other things: The economic impact of and 
the continuing need for the Rule; the Rule's benefits to consumers; and 
the burdens it places on industry, including small businesses.\8\
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    \8\ 82 FR 29256 (June 28, 2017).
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    The Commission further solicited comment regarding how consumers 
understand dimension claims for television screens, including: Whether 
consumers understand the stated dimensions; whether the dimensions are 
limited to the screen's viewable portion; and whether the dimensions 
are based on a single-plane measurement that does not include curvature 
in the screen. The Commission also solicited input on whether advances 
in broadcasting and television technology, such as the introduction of 
curved screen display panels and changing aspect ratios (e.g., from the 
traditional 4:3 to 16:9), create a need to modify the Rule. Finally, 
the Commission requested comment regarding whether the Rule should 
address viewable screen size measurement reporting tolerances and 
rounding.\9\
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    \9\ Id. at 29257-58.
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    The Commission received two comments in response, both urging the 
Commission to repeal the Rule.\10\ Both commenters characterized the 
Rule as an unnecessary relic from when televisions used curved CRTs. 
For example, the Consumer Technology Association (CTA), a trade 
association representing the U.S. consumer technology industry, 
commented that televisions with fully viewable, single plane, flat 
screens have become ubiquitous, and that the use of the diagonal 
measurement to represent screen size, both for televisions and for 
products with viewing screens not within the scope of the Rule, has 
become standard.\11\
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    \10\ The comments are located at: https://www.ftc.gov/policy/public-comments/2017/07/initiative-707. Jonathan Applebaum (#3) and 
Consumer Technology Association (``CTA'') (#4) submitted comments. 
CTA's comment to the ANPR is cited herein as ``CTA-I.''
    \11\ 83 FR 17117, 17118 (Apr. 18, 2018).
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    Commission staff observations confirmed that virtually all 
televisions in the marketplace have flat screens. Moreover, staff 
observed that marketers uniformly advertise the diagonal screen 
measurement for televisions, as well as for devices with screens not 
subject to the Rule, such as computer monitors, tablets, and 
cellphones.\12\
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    \12\ Id. at 17118.
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B. 2018 Notice of Proposed Rulemaking (NPR)

    Based upon the comments to the ANPR and staff's observations, the 
Commission's 2018 NPR proposed repealing the Rule.\13\ In the NPR, the 
Commission observed that the record suggested that the Rule has not 
kept up with changes in the marketplace. The Commission noted that 
there have been substantial changes in television screen technology 
since the Rule's adoption, particularly in the past decade. In 1966, 
television screens had CRTs,\14\ portions of which did not provide a 
viewable image.\15\ Today, virtually all televisions have flat screens 
where the viewable image covers the entire surface.\16\ Consequently, a 
television screen's viewing area is easy to ascertain and, therefore, 
claims regarding viewing area are not likely to deceive consumers.\17\ 
The Commission also stated that mandatory screen measurements appear to 
no longer be necessary to prevent consumer deception because the 
industry standard for representing screen size is a screen's diagonal 
dimension.\18\ Finally, the Commission concluded that the record lacked 
evidence of deception supporting retaining the Rule. In response to the 
ANPR, the Commission received no comments advocating for the Rule's 
retention or submitting information indicating that manufacturers are 
making deceptive screen size claims.
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    \13\ Id. at 17118-19.
    \14\ CTA-I at 4.
    \15\ Id.
    \16\ Id. at 5; 83 FR at 17119.
    \17\ See, e.g., 60 FR 65529 (Dec. 20, 1995) (Commission repealed 
Binocular Rule, former 16 CFR part 402, finding technological 
improvements rendered it obsolete).
    \18\ 83 FR at 17119.
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    Accordingly, in its 2018 NPR, the Commission preliminarily 
concluded that the Rule is outdated and no longer necessary to protect 
consumers and stated that, ``[n]othing in the record suggests that 
repealing the Rule would likely result in any consumer deception.'' 
\19\ It also sought further comment on the costs, benefits, and market 
effects of repealing the Rule, and particularly the cost on small 
businesses.\20\
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    \19\ Id.
    \20\ Id. at 17119-20.
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III. Issues Raised by Commenters to the 2018 NPR

    The Commission received four comments in response to the NPR.\21\ 
CTA reiterated that the Commission should repeal the Rule. Three 
individual consumers argued the Commission should retain the Rule, but 
did so without submitting any evidence to support their position.
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    \21\ These comments are located at: https://www.ftc.gov/policy/public-comments/2018/03/initiative-744. John Stover (#2), Georgianne 
Giese (#3), Frank Muenzer (#4), and CTA (#5) submitted comments. 
CTA's comment to the NPR is cited herein as ``CTA-II.''
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    In support of repeal, CTA repeated its contention that the state of 
technology for televisions--flat screens extending to virtually the end 
of any casing--make it unlikely that any manufacturer would use any 
measurement other the diagonal dimension of the screen to represent its 
size.\22\ CTA reiterated that even manufacturers of consumer products 
with screens not subject to the Rule, such as monitors, smartphones and 
tablets, uniformly use the diagonal measurement to represent screen 
size.\23\ Consequently, CTA stated that keeping the Rule would not 
provide any

[[Page 50486]]

meaningful benefit to consumers because market forces will continue to 
make a screen's diagonal measurement the industry standard for 
televisions.\24\ CTA also noted that the Commission has not brought an 
enforcement action to compel compliance with the Rule in the more than 
50 years since its adoption.\25\ Repealing the Rule, according to CTA, 
would not create any significant costs for manufacturers since they 
already use the diagonal screen measurement, and there is nothing to 
suggest that this would change after repeal.\26\
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    \22\ CTA-II at 4-5.
    \23\ Id. at 5.
    \24\ Id. at 5-6.
    \25\ Id. at 6.
    \26\ Id. at 7.
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    CTA also asserted that the Commission previously repealed trade 
regulation rules under similar circumstances, including when rules 
became obsolete due to changing technology; \27\ decades had passed 
without any enforcement actions; \28\ and any problems with deception 
arising after a rule repeal could be addressed on a case-by-case basis 
in the absence of an industry-wide rule.\29\
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    \27\ Id. at 7-8 (citing Commission's 1995 repeal of the 
Binocular Rule).
    \28\ Id. (citing Commission's 1996 repeal of Games of Chance 
Rule).
    \29\ Id. (citing Commission's 1996 repeal of Leather Belt Rule).
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    Finally, CTA requested that, in addition to repealing the Rule, the 
Commission affirmatively declare that all ``state regulations akin to 
the Rule--including interpretations of state laws prohibiting unfair or 
deceptive acts or practices--are in conflict with federal policy and 
are therefore preempted.'' \30\ CTA contended that a decision by the 
Commission not to regulate television screen measurement by repealing 
the Rule creates a federal policy that no entity may regulate 
television screen measurement. Therefore, according to CTA, the 
Commission's decision not to regulate an issue has the identical 
preemptive effect as the issuance of an affirmative regulation on an 
issue.\31\
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    \30\ Id. at 11.
    \31\ Id. at 10.
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    Three individual consumers urged the Commission to retain the Rule 
unchanged. John Stover stated the Rule should remain in effect because 
its retention ``does no harm.'' Georgianne Giese commented the Rule 
should remain in effect because, ``if it ain't broke, don't fix it,'' 
and because the Rule standardizes television screen measurement. 
Finally, Frank Muenzer stated that the proposed repeal of the Rule 
``appears to be a politically motivated completely unnecessary removal 
of a useful regulation.'' \32\
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    \32\ See n. 21, supra.
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IV. Basis for Repealing the Rule

    Section 18 of the FTC Act, 15 U.S.C. 57a, authorizes the Commission 
to promulgate, amend, and repeal trade regulation rules that define 
with specificity acts or practices that are unfair or deceptive in or 
affecting commerce within the meaning of section 5(a)(1) of the FTC 
Act, 15 U.S.C. 45(a)(1). The Commission regularly reviews its rules to 
ensure they are up-to-date, effective, and not overly burdensome, and 
has repealed a number of trade regulation rules after finding they were 
no longer necessary to protect consumers.\33\
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    \33\ See, e.g., 16 CFR part 419 (games of chance) (61 FR 68143 
(Dec. 27, 1996) (rule outdated; violations largely non-existent; and 
rule has adverse business impact); 16 CFR part 406 (used lubricating 
oil) (61 FR 55095 (Oct. 24, 1996)) (rule no longer necessary, and 
repeal will eliminate unnecessary duplication); 16 CFR part 405 
(leather content of waist belts) (61 FR 25560 (May 22, 1996)) (rule 
unnecessary and duplicative; rule's objective can be addressed 
through guidance and case-by-case enforcement); and 16 CFR part 402 
(binoculars) (60 FR 65529 (Dec. 20, 1995)) (technological 
improvements render rule obsolete). These prior rule repeals 
demonstrate that the Commission has a long-standing practice of 
repealing certain trade regulation rules when, as here, they are no 
longer necessary to prevent consumer deception.
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    The additional comments received in response to the NPR affirm the 
Commission's preliminary conclusion \34\ that current conditions 
support repealing the Rule. As explained in detail below, the record 
indicates that: (1) The Rule has not kept up with changes in the 
marketplace; (2) mandatory screen measurement instructions are no 
longer necessary to prevent consumer deception; and (3) manufacturers 
are not making deceptive screen size claims. Therefore, based on the 
record, the Commission now repeals the Rule.
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    \34\ 83 FR at 17119.
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    First, the record indicates that the Rule has not kept up with 
changes in the marketplace. Specifically, as both CTA's comments and 
Commission staff's observations confirm, virtually all televisions now 
have flat screens where the viewable image covers the entire 
surface.\35\ Moreover, these televisions are surrounded by thin bezels, 
not casings or console walls, which do not obscure any of the screens. 
Thus, in contrast to technology at the time the Commission promulgated 
the Rule, there currently is no ambiguity regarding a television 
screen's viewing area. Screen size claims, therefore, no longer are 
fertile ground for widespread deceptive claims.
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    \35\ CTA-I at 4-5; CTA-II at 4-5; 83 FR at 17118.
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    Second, to the extent lack of uniformity in screen size 
measurements (i.e., diagonal vs. horizontal) increases the chances of 
deception, the Rule is not now necessary to create that uniformity. 
CTA's comments confirm staff's observation that, although the Rule 
mandates a single plane horizontal measurement of a television screen's 
viewable portion as the default measurement,\36\ the industry 
universally measures television screen sizes using the diagonal 
dimension.\37\ The record further demonstrates that manufacturers 
universally use a screen's diagonal dimension to represent sizes for 
screens contained in the many consumer devices outside the scope of the 
Rule.\38\ The ubiquity of the diagonal dimension indicates that 
consumers expect to compare screens' diagonal dimensions when 
purchasing televisions. Thus, the market has created the uniformity the 
Rule originally sought.
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    \36\ 31 FR 3342, 3343 (Mar. 3, 1966) (former 16 CFR 4.103(b)); 
16 CFR 410.1. Manufacturers may use an alternative method of 
measurement if they disclose this method clearly, conspicuously, and 
in close connection and conjunction to the size designation. 16 CFR 
410.1.
    \37\ CTA-I at 5-6; CTA-II at 5-6; 83 FR at 17118.
    \38\ CTA-II at 5-6; 83 FR at 17118.
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    Finally, the record lacks evidence of any deception in the 
marketplace that supports a continuing need for the Rule. No commenter 
submitted information indicating that manufacturers are making 
deceptive screen size claims. Additionally, the Commission has received 
no complaints about manufacturers making such claims over the past 5 
years.\39\
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    \39\ The Commission retains complaint data for five years. The 
data reported above is based on a search of Consumer Sentinel 
conducted on July 18, 2018.
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    Accordingly, the Commission concludes that the Rule is no longer 
necessary to protect consumers from deceptive representations of screen 
size or to encourage uniformity and accuracy in marketing televisions. 
Nothing in the record suggests that repealing the Rule would likely 
result in any consumer deception. Therefore, any minimal costs 
associated with the Rule for businesses now outweigh any benefits to 
consumers.\40\ The Commission can address any deceptive marketing on a 
case-by-case basis through enforcement actions brought under Section 
5(a) of the FTC Act, 15 U.S.C. 45(a), rather than by imposing an 
industry-wide trade regulation rule.\41\
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    \40\ See CTA-I at 7-8; CTA-II at 7.
    \41\ 15 U.S.C. 45(a). See CTA-I at 3 and CTA-II at 7-8. See 
also, e.g., 61 FR 25560, 25560-61 (May 22, 1996) (in repealing 
Leather Content in Waist Belts Rule due, in part, to lack of the 
need for enforcement, the Commission stated that should it find any 
future deception of the type that the Rule was intended to prevent, 
the Commission could address this deception through case-by-case 
enforcement).

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[[Page 50487]]

V. The Repeal of the Rule Is Not Intended To Preempt State Action for 
Deceptive or Unfair Acts or Practices Regarding Television Screen Size

    To prevent what CTA characterized as the potential for ``a 
complicated patchwork quilt of inconsistent [state law] mandates,'' 
\42\ it asked the Commission to issue an affirmative statement that by 
repealing the Rule it intends to preempt any state regulatory or 
enforcement actions regarding representations of television screen 
size.\43\ The Commission declines to issue such a statement.
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    \42\ CTA-II at 9.
    \43\ CTA-II at 9-11.
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    While the Commission concludes that a trade regulation rule for 
television screen measurement is no longer necessary, it retains its 
authority to address future unfair or deceptive practices relating to 
television screen measurement on a case-by-case basis.\44\ Similarly, 
states have authority under analogous state laws. Therefore, the 
Commission's repeal of the Rule is not intended to preempt the states 
from taking regulatory or enforcement actions to prevent deception or 
unfairness concerning television screen measurement.
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    \44\ See n. 41, supra.
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VI. Regulatory Flexibility Act and Regulatory Analysis

    Under Section 22 of the FTC Act, 15 U.S.C. 57b-3, the Commission 
must issue a final regulatory analysis for a proceeding to amend a rule 
only when it: (1) Estimates that the amendment will have an annual 
effect on the national economy of $100 million or more; (2) estimates 
that the amendment will cause a substantial change in the cost or price 
of certain categories of goods or services; or (3) otherwise determines 
that the amendment will have a significant effect upon covered entities 
or upon consumers. The Commission determines that the repeal of the 
Rule will not have such effects on the national economy; on the cost of 
televisions; or on covered parties or consumers. The Rule repeal, 
rather than imposing any costs on covered parties or consumers, will 
eliminate any costs associated with complying with the Rule. 
Accordingly, the repeal of the Rule is exempt from Section 22's final 
regulatory analysis requirements.
    The Regulatory Flexibility Act (``RFA''), 5 U.S.C. 601-612, 
requires that the Commission conduct an analysis of the anticipated 
economic impact of the amendment of a rule on small entities. The 
purpose of a regulatory flexibility analysis is to ensure that an 
agency considers the impacts on small entities and examines regulatory 
alternatives that could achieve the regulatory purpose while minimizing 
burdens on small entities. Section 605 of the RFA, 5 U.S.C. 605, 
provides that such an analysis is not required if the agency head 
certifies that the regulatory action will not have a significant 
economic impact on a substantial number of small entities. The 
Commission concludes that the repeal of the Rule will not have a 
significant economic impact upon small entities because the Rule's 
repeal will eliminate any costs associated with complying with the 
Rule. Therefore, in the Commission's view, the repeal of the Rule will 
not have a significant or disproportionate impact on the costs of small 
entities that sell televisions. These entities appear to provide 
consumers with the screen size as measured by a television's 
manufacturer and that typically appears on a television's packaging. In 
addition, the Commission is not aware of any existing federal laws or 
regulations that address the measurement of television screens and that 
would conflict with the repeal of the Rule. Therefore, based on 
available information, the Commission certifies that repealing the Rule 
will not have a significant economic impact on a substantial number of 
small entities.

VII. Repeal of Rule

    For the reasons stated in the preamble, and under the authority of 
15 U.S.C. 57a, the Commission removes 16 CFR part 410.

List of Subjects in 16 CFR Part 410

    Advertising, Electronic funds transfer, Television, and Trade 
practices.

    By direction of the Commission, Commissioner Wilson not 
participating.
Donald S. Clark,
Secretary.

PART 410--[REMOVED]

0
Accordingly, under the authority of 15 U.S.C. 57a, the Commission 
removes 16 CFR part 410.

[FR Doc. 2018-21803 Filed 10-5-18; 8:45 am]
 BILLING CODE 6750-01-P