[Federal Register Volume 85, Number 206 (Friday, October 23, 2020)]
[Notices]
[Pages 67541-67544]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-23515]


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FEDERAL TRADE COMMISSION


Agency Information Collection Activities; Submission for OMB 
Review; Comment Request

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

ACTION: Notice.

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SUMMARY: The information collection requirements described below will 
be submitted to the Office of Management and Budget (``OMB'') for 
review, as required by the Paperwork Reduction Act (``PRA''). The FTC 
seeks public comments on proposed information requests sent pursuant to 
compulsory process to a combined ten or more of the largest domestic 
cigarette manufacturers and smokeless tobacco manufacturers. The 
information sought would include, among other things, data on annual 
sales and marketing expenditures. The current FTC clearance from the 
Office of Management and Budget (``OMB'') to conduct such information 
collection expires December 31, 2020. The Commission intends to ask OMB 
for

[[Page 67542]]

renewed three-year clearance to collect this information.

DATES: Comments on the proposed information requests must be received 
on or before November 23, 2020.

ADDRESSES: Written comments and recommendations for the proposed 
information collection should be sent within 30 days of publication of 
this notice to www.reginfo.gov/public/do/PRAMain. Find this particular 
information collection by selecting ``Currently under 30-day Review--
Open for Public Comments'' or by using the search function. The 
reginfo.gov web link is a United States Government website produced by 
OMB and the General Services Administration (GSA). Under PRA 
requirements, OMB's Office of Information and Regulatory Affairs (OIRA) 
reviews Federal information collections.

FOR FURTHER INFORMATION CONTACT: Requests for additional information or 
copies of the proposed collection of information should be addressed to 
Michael Ostheimer, Division of Advertising Practices, Bureau of 
Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue 
NW, Mailstop CC-10507, Washington, DC 20580, (202) 326-2699.

SUPPLEMENTARY INFORMATION:
    Title: FTC Cigarette and Smokeless Tobacco Data Collection.
    OMB Control Number: 3084-0134.
    Type of Review: Extension of a currently approved collection.
    On June 25, 2020, the FTC sought public comment on the information 
collection requirements associated with the Cigarette and Smokeless 
Tobacco Data Collection. 85 FR 38139. Four germane comments were 
received. Pursuant to the OMB regulations, 5 CFR part 1320, that 
implement the PRA, 44 U.S.C. 3501 et seq., the FTC is providing this 
second opportunity for public comment while seeking OMB approval to 
renew the pre-existing clearance for the Cigarette and Smokeless 
Tobacco Data Collection.
    In response to the June 25, 2020 Notice, the Commission received 
comments from the Campaign for Tobacco-Free Kids (``CTFK''), the 
American Lung Association (``ALA''), Truth Initiative, and Altria 
Client Services (``Altria'').

I. CTFK

    The CTFK comment specifically noted the utility and importance of 
the Commission's Cigarette and Smokeless Tobacco Reports, and urged the 
agency to continue collecting and reporting industry sales and 
marketing expenditure data, which CTFK stated provide ``critical data 
to researchers, policymakers, advocates and the general public.'' CTFK 
additionally observed:

    The FTC is currently the only public source for data on 
cigarette and smokeless tobacco companies' marketing and promotional 
expenditures. No other agency collects and publishes such 
information directly from the companies, making the FTC reports the 
most accurate and reliable assessment of tobacco marketing and 
promotion expenditures available.

    CTFK at 1. CTFK, however, suggested certain modifications to the 
Commission's reports. Specifically, CTFK recommended that the 
Commission: (1) Clarify in which category coupons that consumers obtain 
online are to be counted; (2) report data on a company-specific or 
brand-specific basis, rather than on a fully-aggregated basis; (3) 
require manufacturers to report expenditures related to corporate 
sponsorships and advertisements; and (4) publish reports within one 
year of data collection. Id. at 2. CTFK also requested that the FTC 
extend its data collection to include electronic cigarettes (``e-
cigarettes'') and cigars.\1\
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    \1\ Two other commenters, ALA and Truth Initiative, made the 
same suggestion. The collection of data regarding e-cigarettes or 
cigars is beyond the scope of this proposed collection. Note though 
that the FTC has a separate ongoing study on e-cigarettes. See FTC 
Press Release, FTC to Study E-Cigarette Manufacturers' Sales, 
Advertising, and Promotional Methods (Oct. 3, 2019), https://www.ftc.gov/news-events/press-releases/2019/10/ftc-study-e-cigarette-manufacturers-sales-advertising-promotional.
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    The Commission's proposed Orders clarify that expenditures on 
coupons delivered online should be reported together with coupons 
delivered by other means. The full impact of couponing by the major 
cigarette and smokeless tobacco manufacturers can only be seen if 
expenditures for all coupons are reported together, regardless of how 
those coupons are delivered to consumers.
    Regarding CTFK's suggestion that data be reported on other than a 
fully-aggregated, nationwide basis, the cigarette and smokeless tobacco 
companies assert that those data are confidential and, as CTFK 
acknowledges, the Commission cannot publicly release trade secrets or 
certain commercial or financial information. Id. at 2, n.2.
    The Commission has for a number of years required the recipients of 
its 6(b) Orders to report certain expenditures related to corporate 
sponsorships and advertisements made in the name of the company, rather 
than any of its brands.\2\ The Commission has not included those data 
in its Cigarette and Smokeless Tobacco Reports, and has therefore 
decided to cease collecting this information.
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    \2\ Both the cigarette and smokeless tobacco Orders required the 
recipients to report expenditures on ``public entertainment events 
(including, but not limited to, concerts and sporting events) 
bearing or otherwise displaying the name of the Company or any 
variation thereof but not bearing or otherwise displaying the name, 
logo, or an image of any portion of the package'' of any of its 
cigarettes or smokeless tobacco products, or otherwise referring to 
those products.
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    Regarding CTFK's suggestion to publish reports within one year of 
data collection, the Commission always strives to publish the Cigarette 
and Smokeless Tobacco Reports as quickly as possible. It takes the 
recipients of its 6(b) Orders time to submit their reports and they may 
request extensions, such as this year due to the COVID-19 pandemic. 
After reviewing the resulting reports, staff often has to go back to 
one or more of the 6(b) Order recipients for clarifications and 
corrections. The data also requires analysis, and the reports require 
writing and review and approval at multiple levels. The Commission does 
in fact usually publish the Cigarette and Smokeless Tobacco Reports 
well within a year of when the data is first submitted.

II. ALA

    The ALA comment stated that the Commission's Cigarette and 
Smokeless Tobacco Reports provide ``valuable information on cigarette 
and smokeless tobacco products sales and marketing that is used on an 
ongoing basis in the Lung Association's education and public policy 
activities related to preventing and reducing tobacco use.'' ALA at 1. 
ALA additionally observed:

    These data are also important for public health officials and 
other organizations working to reduce the terrible burden caused by 
tobacco. By understanding how much tobacco companies spend on 
marketing and the distribution channels they use, it allows public 
health officials to determine where and how best to deliver tobacco 
prevention and cessation messages.

Id.

III. Truth Initiative

    Truth Initiative's comment stressed the critical importance and 
utility of the Cigarette and Smokeless Tobacco reports. Truth 
Initiative at 1. It said that the reports provide information that is 
not available elsewhere and is not duplicative of other data 
collections. Id. Truth Initiative believes the reports often provide 
the basis for strong public health policies with regard to tobacco use 
and marketing and such policies save lives. Id.
    Truth Initiative, however, suggested certain modifications to the

[[Page 67543]]

Commission's reports. Specifically, Truth Initiative recommended that 
the Commission: (1) Collect information regarding heated tobacco 
products with its cigarette Orders; (2) collect information regarding 
low nicotine cigarettes; (3) reinstate previously asked questions 
requesting lists of new and discontinued cigarette products; (4) 
collect information regarding nicotine pouches and lozenges that do not 
contain tobacco; (5) collect information regarding the flavors of 
smokeless tobacco products; (6) clarify that streaming shows are 
included in questions about product placement; (7) define ``youth'' as 
persons younger than 18 years of age and ``underage'' as persons 
younger than 21 years of age. Id. at 2-6.
    The Commission agrees that heated, non-combusted tobacco products 
are an important emerging segment of the tobacco market. The Commission 
plans to monitor these products and will consider whether and how best 
to collect information about these products when the market has further 
developed to make such information collection warranted.
    As for Truth Initiative's suggestion that the Commission collect 
information regarding low-nicotine cigarette products, none of the 
current recipients of the cigarette Orders sell such products. The 
Commission's Cigarette Reports focus on the largest cigarette 
manufacturers and do not attempt to present a complete picture of the 
cigarette market. There are numerous smaller manufacturers and 
importers of cigarettes to which the Commission does not direct its 
cigarette Orders. The Commission does not intend, at this time, to seek 
information specifically regarding low nicotine cigarettes or to direct 
an Order to the one company that has expressed an intention in 
marketing such products.
    In 2017, the Commission determined that it no longer needed lists 
of cigarettes first sold or discontinued in a calendar year and it does 
not see a sufficient basis to revisit that decision.
    As the Truth Initiative notes, nicotine pouches and lozenges are 
currently being marketed by some of the major smokeless tobacco 
companies, and are an important emerging segment of the tobacco market. 
Id. at 4. The Commission will add a question to its smokeless tobacco 
Orders about total unit and dollar sales of these products to help the 
agency assess whether collection of more complete information about 
such products would be warranted.
    Given the information presented by the Truth Initiative regarding 
the popularity of flavored smokeless tobacco, especially among youth 
(id. at 4), and the Commission's collection of flavor information 
regarding cigarettes (and recently e-cigarettes), the Commission will 
modify its smokeless tobacco 6(b) Orders to seek information regarding 
the flavors of smokeless tobacco products.
    The Commission believes that its product placement questions that 
ask about ``motion picture(s)'' and ``television show(s)'' cover 
``original shows streamed via the internet.'' On the other hand, the 
Commission sees no harm in clarifying that is the case and intends to 
do so.
    The Truth Initiative correctly points out that the federal minimum 
age to purchase tobacco is now 21. Id. at 6. The Commission will use 
the term ``underage persons'' in lieu of ``youth'' in its 6(b) Orders 
and define ``underage persons'' as persons younger than 21 years of 
age.

IV. Altria

    Altria stated that the Commission should no longer collect any 
information from cigarette and smokeless tobacco manufacturers ``due to 
the Food and Drug Administration's . . . extensive, active regulatory 
authority over tobacco products under the Family Smoking Prevention and 
Tobacco Control Act.'' Altria at 1. Because FDA has the authority to 
require tobacco product manufacturers to submit additional information 
to promulgate additional regulations regarding advertising and 
promotion of tobacco products, Altria calls the Commission's 
collections ``superfluous'' and unnecessary ``burdens.'' Id. at 2. 
Altria also contends that ``responding to FTC's collection requests 
requires several full-time employees (across multiple departments and 
operating companies) to spend weeks compiling data, revising reports, 
and reviewing ledgers before preparing for submission to FTC'' and that 
this effort takes ``far longer than 180 hours'' estimated by the 
Commission as the ``average annual burden on manufacturers.'' Id. at 2.
    The FTC staff and FDA staff have a long tradition of working 
together on the many areas where the two agencies share jurisdiction. 
However, since the FDA is not collecting cigarette or smokeless tobacco 
sales and marketing expenditure data like that required by the 
Commission's 6(b) Orders, there is no overlap or duplication with 
respect to such data. The Commission intends to continue collecting 
cigarette and smokeless tobacco sales and marketing expenditure data. 
To the extent that in the future FDA duplicates the FTC's data 
collection, the FTC can modify or cease its collection.
    Altria contends that the Commission underestimates its burden in 
responding to the FTC's information collection and that its burden is 
``far longer than 180 hours.'' The Commission's burden estimate of 180 
hours was an average for the nine largest recipients of the 
Commission's information request. The recipients vary greatly in size, 
in the number of products that they sell, and in the extent and variety 
of their advertising and promotion. Our burden estimate clearly stated 
that the very largest recipients might require hundreds of hours. 
Altria, which owns Philip Morris USA and the U.S. Smokeless Tobacco 
Co., says on its website that its ``tobacco companies . . . have been 
the undisputed market leaders in the U.S. tobacco industry for 
decades.'' \3\ Altria's comment is consistent with the number of hours 
that its Philip Morris subsidiary previously told FTC staff that it 
spent complying with the Commission's cigarette Order. All the other 
tobacco companies that responded to the FTC staff's latest inquiries 
reported spending substantially fewer hours. We also note that Altria 
is the recipient of two 6(b) Orders, one for cigarettes and one for 
smokeless tobacco. To err on the side of caution, the Commission will 
increase its burden estimate from 1,980 hours to 2,940 hours.
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    \3\ See www.altria.com/about-altria?src=megaspotlight.
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Burden Statement

    Estimated Annual Burden: 2,940 hours.\4\
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    \4\ The Commission intends to use this PRA clearance renewal to 
collect information from the companies concerning their marketing 
and sales activities for the years 2021, 2022, and 2023. The 
Commission expects to issue compulsory process orders seeking this 
information annually, but it is possible that orders might not be 
issued in any given year and that orders seeking information for two 
years would be issued the next year. The figures set forth in this 
notice for the estimated hours and labor costs associated with this 
information collection represent average annual burden over the 
course of the prospective PRA clearance.
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    Estimated Number of Respondents: 15 6(b) recipients (maximum).\5\
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    \5\ Since three and possibly more of these 6(b) recipients are 
parent companies that have separately incorporated subsidiaries or 
affiliates that the FTC anticipates or expects that the parent 
companies will transmit the collection instrument to and seek 
information from, the proposal to send up to 15 6(b) Orders could 
equate to 20 ``persons'' under the PRA. See 5 CFR 1320.3(c)(4) 
(``[ten or more persons] . . . refers to the persons to whom a 
collection of information is addressed by the agency within any 12-
month period, and to any independent entities to which the initial 
addressee may reasonably be expected to transmit the collection of 
information during that period, including . . . separately 
incorporated subsidiaries or affiliates.'').

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    These estimates include any time spent by separately incorporated 
subsidiaries and other entities affiliated with the ultimate parent 
companies that receive the information requests.
    Estimated Average Burden per Year Per Request: 196 hours.
    (a) Information requests to the four largest recipients \6\ of the 
Commission's information request, at a per request average each year of 
400 hours = 2,400 hours, cumulatively, per year; and
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    \6\ There are two tobacco companies that receive both a 
cigarette Order and a smokeless tobacco Order. Thus, this would 
equate to six requests for burden analysis.
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    (b) Information requests to nine additional respondents, of smaller 
size, at a per request average each year of 60 hours = 540 hours, 
cumulatively, per year.
    Estimated Annual Labor Cost: $294,000.
    Estimated Capital or Other Non-Labor Cost: de minimis.
Request for Comment
    Your comment--including your name and your state--will be placed on 
the public record of this proceeding. Because your comment will be made 
public, you are solely responsible for making sure that your comment 
does not 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 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.

Josephine Liu,
Assistant General Counsel for Legal Counsel.
[FR Doc. 2020-23515 Filed 10-22-20; 8:45 am]
BILLING CODE 6750-01-P