[Federal Register Volume 84, Number 250 (Tuesday, December 31, 2019)]
[Notices]
[Pages 72362-72364]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-28194]


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FEDERAL TRADE COMMISSION


Agency Information Collection Activities; Proposed Collection; 
Comment Request

AGENCY: Federal Trade Commission (FTC or Commission).

ACTION: Notice.

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SUMMARY: The FTC plans to ask the Office of Management and Budget (OMB) 
to extend for an additional three years the current Paperwork Reduction 
Act (PRA) clearance for information collection requirements contained 
in the FTC's Rule Governing Pre-sale Availability of Written Warranty 
Terms. The current clearance expires on April 30, 2020.

DATES: Comments must be received on or before March 2, 2020.

ADDRESSES: Interested parties may file a comment online or on paper by 
following the instructions in the Request for Comments part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Pre-sale Availability 
Rule; PRA Comment: FTC File No. P072108'' on your comment, and file 
your comment online at https://www.regulations.gov by following the 
instructions on the web-based form. If you prefer to file your comment 
on paper, mail your comment to the following address: Federal Trade 
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite 
CC-5610 (Annex J), Washington, DC 20580, or deliver your comment to the 
following address: Federal Trade Commission, Office of the Secretary, 
Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex 
J), Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT: Christine M. Todaro, Attorney, 
Division of Marketing Practices, Bureau of Consumer Protection, Federal 
Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580, 
(202) 326-3711.

SUPPLEMENTARY INFORMATION:

Proposed Information Collection Activities

    Under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501-3520, 
federal agencies must get OMB approval for each collection of 
information they conduct, sponsor, or require. ``Collection of 
information'' means agency requests or requirements to submit reports, 
keep records, or provide information to a third party. 44 U.S.C. 
3502(3); 5 CFR 1320.3(c). As required by section 3506(c)(2)(A) of the 
PRA, the FTC is providing this opportunity for public comment before 
requesting that OMB extend the FTC's existing PRA clearance for the 
information collection requirements associated with the Commission's 
Rule Governing Pre-sale Availability of Written Warranty Terms, (the 
Pre-sale Availability Rule), 16 CFR 702 (OMB Control Number 3084-0112).
    The Pre-sale Availability Rule, 16 CFR 702, is one of three rules 
\1\ that the FTC issued as required by the Magnuson Moss Warranty Act, 
15 U.S.C. 2301 et seq. (Warranty Act or Act).\2\ The Pre-sale 
Availability Rule requires sellers and warrantors to make the text of 
any written warranty on a consumer product costing more than $15 
available to the consumer before sale. Among other things, the Rule 
requires sellers to make the text of the warranty readily available 
either by (1) displaying it in close proximity to the product or (2) 
furnishing it on request and posting signs in prominent locations 
advising consumers that the warranty is available. The Rule requires 
warrantors to provide materials to enable sellers to comply with the 
Rule's requirements and also sets out the methods by which warranty 
information can be made available before the sale if the product is 
sold through catalogs, mail order, or door to door sales. In addition, 
in 2016, the FTC revised the Rule to allow warrantors to post warranty 
terms on internet websites if they also provide a non-internet based 
method for

[[Page 72363]]

consumers to obtain the warranty terms and satisfy certain other 
conditions.\3\ The revised Rule also allows certain sellers to display 
warranty terms pre-sale in an electronic format if the warrantor has 
used the online method of disseminating warranty terms.
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    \1\ The other two rules relate to the information that must 
appear in a written warranty on a consumer product costing more than 
$15 if a warranty is offered and minimum standards for informal 
dispute settlement mechanisms that are incorporated into a written 
warranty.
    \2\ 40 FR 60168 (Dec. 31, 1975).
    \3\ 81 FR 63664-70 (Sept. 15, 2016).
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Burden Statement

    Total annual hours burden: 3,069,314.
    In its 2016 submission to OMB, FTC staff estimated that the 
information collection burden of making the disclosures required by the 
Pre-sale Availability Rule was approximately 2,823,803 hours per year. 
Although there has been no change in the Rule's information collection 
requirements since 2016, staff has adjusted slightly downward its 
previous estimate of the number of manufacturers subject to the Rule 
based on recent Census data. From that, staff now estimates that there 
are approximately 742 large manufacturers and 30,287 small 
manufacturers subject to the Rule.\4\ In addition, staff has adjusted 
slightly upward its previous estimate of number of retailers subject to 
the Rule based on recent Census data. There are now an estimated 8,628 
large retailers and 566,549 small retailers impacted by the Rule.\5\ 
These estimates likely overstate the number of manufacturers and 
retailers because some of the included manufacturers and retailers may 
make and sell products that are not covered by the Rule.
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    \4\ The 2014 estimate was 1,028 large manufacturers and 30,299 
small manufacturers subject to the Rule.
    \5\ The 2014 estimate was 7,745 large retailers and 508,575 
small retailers subject to the Rule.
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    In September 2016, the FTC approved amendments to the Pre-sale 
Availability Rule, which became effective on October 17, 2016.\6\ Under 
the amendments, warrantors may display warranty terms online and 
provide information to consumers to obtain those terms via non-internet 
means. The amendments also allow sellers to provide pre-sale warranty 
terms electronically or conventionally if the warrantor has chosen to 
display its warranty terms online. Sellers of warranted goods for which 
the warrantor has chosen the online method may incur a slightly 
increased burden because the seller will have to ensure it provides 
consumers a method of reviewing the warranty terms both prior to and at 
the point of sale. That burden, however, should be minimal, given that 
the warrantor will have to make the warranty terms available on an 
internet website, and given the provision requiring the warrantor to 
supply a hard copy of the warranty terms, promptly and free of charge, 
in response to a seller's or a consumer's request. In addition, any 
burden on sellers could be offset by sellers having additional 
flexibility to make pre-sale warranty terms available to consumers 
electronically.
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    \6\ See footnote 3.
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    Therefore, staff continues to estimate that large retailers spend 
an average of 20.8 hours per year and small retailers spend an average 
4.8 hours per year to comply with the Rule. Accordingly, the total 
annual burden for retailers is approximately 2,898,897.6 hours ((8,628 
large retailers x 20.8 burden hours) + (566,549 small retailers x 4.8 
burden hours)). Staff also estimates that more manufacturers will 
provide retailers with warranty information in electronic form in 
fulfilling their obligations under the Rule and thus staff has adjusted 
the hour burden for manufacturers as it did in its previous submission 
to OMB. Applying a 20% reduction to its previous estimates, staff now 
assumes that large manufacturers spend an average of 21.5 hours per 
year and that small manufacturers spend an average of 5.1 hours per 
year to comply with the Rule. Accordingly, the total annual burden 
incurred by manufacturers is approximately 170,416.7 hours ((742 large 
manufacturers x 21.5 hours) + (30,287 small manufacturers x 5.1 
hours)).
    Thus, the total annual burden for all covered entities is 
approximately 3,069,314 hours (2,898,897.6 hours for retailers + 
170,416.7 hours for manufacturers).
    Total annual labor cost: $70,594,222.
    The work required to comply with the Pre-sale Availability Rule 
entails a mix of clerical work and work performed by sales associates. 
Staff estimates that half of the total burden hours would likely be 
performed by sales associates. At the manufacturing level, this work 
would entail ensuring that the written warranty is available for every 
warranted consumer product. At the retail level, this work would entail 
ensuring that the written warranty is made available to the consumer 
prior to sale. The remaining half of the work required to comply with 
the Pre-sale Availability Rule is clerical in nature, e.g., shipping or 
otherwise providing copies of manufacturer warranties to retailers, 
along with retailer maintenance of the warranties. Applying a sales 
associate wage rate of $24/hour to half of the burden hours and a 
clerical wage rate of $22/hour to half of the burden hours, the total 
annual labor cost burden is approximately $70,594,222 (1,534,657 hours 
x $24 per hour) + (1,534,657 hours x $22 per hour).\7\
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    \7\ The wage rates are derived from occupational data found in 
the Bureau of Labor Statistics, Occupational Employment and Wages 
(May 2018).
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    Total annual capital or other non labor costs: De minimis.
    The vast majority of retailers and warrantors already have 
developed systems to provide the information the Rule requires. 
Compliance by retailers typically entails keeping warranties on file 
electronically, in binders or otherwise, and posting an inexpensive 
sign indicating warranty availability. Warrantor compliance under the 
2016 amendments entails providing retailers, together with the 
warranted good, a copy of the warranty or the address of the 
warrantor's internet website where the consumer can review and obtain 
the warranty terms, along with the contact information where the 
consumer may use a non-internet based method to obtain a free copy of 
the warranty terms. Commission staff believes that, in light of the 
amendments, annual capital or other non-labor costs will remain de 
minimis.

Request for Comments

    Pursuant to Section 3506(c)(2)(A) of the PRA, the FTC invites 
comments on: (1) Whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility; (2) the 
accuracy of the agency's estimate of the burden of the proposed 
collection of information, including the validity of the methodology 
and assumptions used; (3) ways to enhance the quality, utility, and 
clarity of the information to be collected; and (4) ways to minimize 
the burden of the collection of information on those who are to 
respond. All comments must be received on or before March 2, 2020.
    You can file a comment online or on paper. For the FTC to consider 
your comment, we must receive it on or before March 2, 2020. Write 
``Pre-sale Availability Rule; PRA Comment: FTC File No. P072108'' on 
your comment. 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, or to send them to the Commission 
by courier or overnight service. To make sure that the Commission 
considers your online comment, you must file it through the https://www.regulations.gov website by following the instructions on the web-
based form. Your comment--including your name and your state--will be

[[Page 72364]]

placed on the public record of this proceeding, including the https://www.regulations.gov website. As a matter of discretion, the Commission 
tries to remove individuals' home contact information from comments 
before placing them on www.regulations.gov.
    If you file your comment on paper, write ``Pre-sale Availability 
Rule; PRA Comment: FTC File No. P072108'' on your comment and on the 
envelope, and mail your comment to the following address: Federal Trade 
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite 
CC-5610 (Annex J), Washington, DC 20580, or deliver your comment to the 
following address: Federal Trade Commission, Office of the Secretary, 
Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex 
J), Washington, DC 20024. If possible, submit your paper comment to the 
Commission by courier or overnight service.
    Because your comment will be placed on the publicly accessible FTC 
website at www.regulations.gov, you are solely responsible for making 
sure that your comment does not include any sensitive or confidential 
information. In particular, your comment should not include any 
sensitive personal information, such as your or anyone else'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 does not include 
any sensitive health information, such as medical records or other 
individually identifiable health information. In addition, your comment 
should not include any ``trade secret or any commercial or financial 
information which . . . . is privileged or confidential''--as provided 
by 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)--including in particular competitively 
sensitive information such as costs, sales statistics, inventories, 
formulas, patterns, devices, manufacturing processes, or customer 
names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c). 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.\8\ Your comment will be kept confidential only if 
the General Counsel grants your request in accordance with the law and 
the public interest. Once your comment has been posted publicly at 
www.regulations.gov, we cannot redact or remove your comment unless you 
submit a confidentiality request that meets the requirements for such 
treatment under FTC Rule 4.9(c), and the General Counsel grants that 
request.
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    \8\ See FTC Rule 4.9(c).
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    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 March 2, 2020. 
You can find more information, including routine uses permitted by the 
Privacy Act, in the Commission's privacy policy, at https://www.ftc.gov/site-information/privacy-policy.

Heather Hippsley,
Deputy General Counsel.
[FR Doc. 2019-28194 Filed 12-30-19; 8:45 am]
 BILLING CODE 6750-01-P