[Federal Register Volume 88, Number 167 (Wednesday, August 30, 2023)]
[Notices]
[Pages 59922-59923]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-18769]


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FEDERAL TRADE COMMISSION


Agency Information Collection Activities; Proposed Collection; 
Comment Request; Extension

AGENCY: Federal Trade Commission.

ACTION: Notice.

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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') is 
seeking public comments on its proposal to extend for an additional 
three years the current Paperwork Reduction Act (``PRA'') clearance for 
information collection requirements contained in the FTC's trade 
regulation rule entitled ``Use of Prenotification Negative Option 
Plans'' (``Negative Option Rule'' or ``Rule''). That clearance expires 
on January 31, 2024.

DATES: Comments must be filed by October 30, 2023.

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 ``Negative Option 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.

FOR FURTHER INFORMATION CONTACT: Katherine Johnson, Attorney, Division 
of Enforcement, Federal Trade Commission, Room CC-9528, 600 
Pennsylvania Avenue NW, Washington, DC 20580, (202) 326-2185.

SUPPLEMENTARY INFORMATION: 
    Title: Use of Prenotification Negative Option Plans (Negative 
Option Rule or Rule), 16 CFR part 425.\1\
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    \1\ The Commission recently published a Notice of Proposed 
Rulemaking seeking comment on proposed amendments to the 
Commission's Negative Option Rule. 88 FR 24716 (Apr. 24, 2023). The 
present PRA Notice is not part of that proceeding and merely seeks 
comment on the existing burden estimates for the current Rule, which 
applies only to ``prenotification'' negative option plans.
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    OMB Control Number: 3084-0104.
    Type of Review: Extension without change of currently approved 
collection.
    Abstract: The Negative Option Rule governs the operation of 
prenotification subscription plans. Under these types of plans--which 
can include things such as a book of the month club, food of the month 
club, or clothing items of the month club--a seller provides a consumer 
with automatic shipments of merchandise unless the consumer 
affirmatively notifies the seller they do not want the shipment. The 
Rule requires that a seller notify a member that they will 
automatically ship merchandise to the member and bill the member for 
the merchandise if the subscriber fails to expressly reject the 
merchandise beforehand within a prescribed time. The Rule protects 
consumers by: (1) requiring that promotional materials disclose the 
terms of membership clearly and conspicuously; and (2) establishing 
procedures for the administration of such ``negative option'' plans.
    Affected Public: Private Sector: Sellers of prenotification 
subscription plans.
    Estimated Annual Burden Hours: 2,500 hours.
    Estimated Annual Labor Costs: $152,350 (solely related to labor 
costs).
    Estimated Annual Non-Labor Costs: $0 or de minimis.
    As required by section 3506(c)(2)(A) of the PRA, 44 U.S.C. 
3506(c)(2)(A), the FTC is providing this opportunity for public comment 
before requesting that OMB extend the existing clearance for the 
information collection requirements contained in the Rule.

Burden Statement

    Estimated Annual Burden Hours: 2,500.
    Based on industry input, FTC staff estimates that approximately 25 
clubs are subject to the disclosure requirements contained in the 
Rule.\2\ FTC staff further estimates that each club will require 
annually about 100 hours to comply with the Rule's disclosure 
requirements. This yields a total annual burden of 2,500 hours (25 
clubs x 100 hours).
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    \2\ According to industry input, many firms previously covered 
have transitioned to a subscription-based approach. Thus, the 
current estimate is lower than past estimates. Additionally, 
industry sources have indicted in the past that a substantial 
portion of the existing clubs would make these disclosures absent 
the Rule because they help foster long-term relationships with 
consumers.
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    Estimated Annual Cost Burden: $152,350 (solely related to labor 
costs).
    Based on recent data from the Bureau of Labor Statistics, the mean 
hourly wage for advertising and promotion managers is approximately 
$70.70 per hour; \3\ compensation for office and administrative support 
personnel is approximately $21.90 per hour.\4\

[[Page 59923]]

Assuming that managers perform the bulk of the work, and clerical 
personnel perform associated tasks (e.g., placing advertisements and 
responding to inquiries about offerings or prices), the total cost to 
the industry for the Rule's information collection requirements would 
be approximately $152,350 [(80 hours managerial time x 25 clubs x 
$70.70 per hour) + (20 hours clerical time x 25 clubs x $21.90 per 
hour)].
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    \3\ See Occupational Employment and Wages--May 2022, Table 1, at 
https://www.bls.gov/news.release/ocwage.t01.htm (mean hourly wage 
rate for advertising and promotion managers).
    \4\ See id. (mean hourly wage rate for office and administrative 
support occupations).
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    Because the Rule has been in effect since 1974, the vast majority 
of the negative option clubs have no current start-up costs. For new 
clubs entering the market, the costs associated with the Rule's 
disclosure requirements, beyond the additional labor costs discussed 
above, are de minimis. Negative option clubs already have access to the 
ordinary office equipment necessary to comply with the Rule. Similarly, 
the Rule imposes few, if any, printing and distribution costs. The 
required disclosures generally constitute only a small addition to the 
advertising for negative option plans. Because printing and 
distribution expenditures are incurred to market the product regardless 
of the Rule, adding the required disclosures results in marginal 
incremental expense.

Request for Comment

    Pursuant to section 3506(c)(2)(A) of the PRA, the FTC invites 
comments on: (1) whether the disclosure and recordkeeping requirements 
are necessary, including whether the information will be practically 
useful; (2) the accuracy of our burden estimates, including whether the 
methodology and assumptions used are valid; (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.
    For the FTC to consider a comment, we must receive it on or before 
October 30, 2023. Your comment, including your name and your state, 
will be placed on the public record of this proceeding, including the 
https://www.regulations.gov website.
    You can file a comment online or on paper. Due to heightened 
security screening, postal mail addressed to the Commission will be 
subject to delay. We encourage you to submit your comments online 
through the https://www.regulations.gov website.
    If you file your comment on paper, write ``Negative Option Rule; 
PRA Comment: FTC File No. P072108'' on your comment and on the 
envelope, and mail it to the following address: Federal Trade 
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite 
CC-5610 (Annex J), Washington, DC 20580.
    Because your comment will become publicly available at https://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 (1) be filed in paper form, (2) be clearly labeled 
``Confidential,'' and (3) 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. See FTC Rule 4.9(c). 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.
    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 30, 
2023. For information on the Commission's privacy policy, including 
routine uses permitted by the Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

Josephine Liu,
Assistant General Counsel for Legal Counsel.
[FR Doc. 2023-18769 Filed 8-29-23; 8:45 am]
BILLING CODE 6750-01-P