[The Regulatory Plan and Unified Agenda of Federal Regulatory and Deregulatory Actions]
[Federal Trade Commission Regulatory Plan]
[From the U.S. Government Printing Office, www.gpo.gov]

Federal Register / Vol. 61, No. 231 / Friday, November 29, 1996 / The
                            Regulatory Plan

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FEDERAL TRADE COMMISSION (FTC)
Statement of Regulatory Priorities
Regulatory Priorities
Background
The Federal Trade Commission (FTC or Commission) is an independent 
agency charged with protecting American consumers from ``unfair methods 
of competition'' and ``unfair or deceptive acts or practices'' in the 
marketplace. The Commission strives to ensure that consumers benefit 
from a vigorously competitive marketplace; it does not seek to supplant 
competition with regulation. The Commission's work is rooted in a 
belief that free markets work--that competition among producers and 
information in the hands of consumers bring the best products at the 
lowest prices for consumers, spurs efficiency and innovation, and 
strengthens the economy. The Commission is, first and foremost, a law 
enforcement agency.
The Commission pursues its goal of promoting competition in the 
marketplace through two different, but complementary, approaches. 
First, for competition to thrive, curbing deception and fraud is 
critical. Through its consumer protection activities, the Commission 
seeks to ensure that consumers receive accurate, not false or 
misleading, information in the marketplace. At the same time, for 
consumers to have a choice of products and services at competitive 
prices and quality, the marketplace must be free from anticompetitive 
business practices. Thus, the second part of the Commission's basic 
mission--antitrust enforcement--is to prohibit anticompetitive mergers 
or other anticompetitive business practices without interfering with 
the legitimate activities of businesses. These two complementary parts 
of its mission make the Commission the Nation's only Federal agency to 
be given this combination of statutory authority to protect consumers.
The Commission pursues its mandate primarily through case-by-case 
enforcement of the Federal Trade Commission Act and other statutes. The 
Commission, however, is also charged with the responsibility of issuing 
and enforcing regulations under a number of statutes. In addition, 
under the FTC Act, the Commission currently has in place seventeen 
trade regulation rules. The Commission also has adopted a number of 
voluntary industry guides. Most of the regulations and guides pertain 
to consumer protection matters, and are generally intended to ensure 
that consumers receive the information necessary to evaluate competing 
products and make informed purchasing decisions.
Ten-Year Review Program
In 1992, the Commission implemented a 10-year review program to review 
its rules and guides. The Commission's review program is derived from 
provisions in the Regulatory Flexibility Act. Under the Commission's 
program, however, rules are reviewed at least every 10 years, not just 
once as required by section 610 of the Regulatory Flexibility Act. 
Thus, this program provides the Commission with an on-going systematic 
approach for seeking information about the costs and benefits of its 
rules and guides and whether there are changes that could minimize any 
adverse economic effects.
As part of the 10-year plan, the Commission examines the effect of 
rules and guides on small businesses and on the marketplace in general. 
These reviews often lead to the reform of rules and guides to ensure 
that the Commission's consumer protection and competition goals are 
achieved efficiently and at the least cost to business. In a number of 
instances, the Commission has determined that existing rules and guides 
were no longer necessary and in the public interest. In the past year, 
for example, the Commission has rescinded 32 percent of its trade 
regulation rules and 30 percent of its consumer protection guides 
because they had ceased to serve a useful purpose.
Current Reviews
As part of its 10-year review of rules and guides, the Commission is 
reviewing the Franchise Rule, which requires the disclosure of 20 
categories of material information to help prospective franchisees 
evaluate their investment decision. The Commission is considering 
issues relating to the Uniform Franchise Offering Circular, earnings 
claims, and international and new technology issues. 60 FR 17656 (Apr. 
7, 1995).
The Commission is also seeking comment regarding three warranty-related 
rules. The Rule Governing Disclosure of Written Consumer Product 
Warranty Terms and Conditions, 16 CFR part 701, establishes 
requirements disclosing the terms and conditions of written warranties 
on certain consumer products. The Commission has sought comment on, 
among other things, the economic impact of and the continuing need for 
the rule; possible conflict between the rule and State, local, and 
other Federal laws; and the effect on the rule of any technological, 
economic, or other industry changes. See 61 FR 14688 (Apr. 3, 1996).
The Rule Governing the Pre-Sale Availability of Written Warranty Terms, 
16 CFR part 702, establishes certain requirements for sellers and 
warrantors for making the terms of a written warranty available to the 
consumer prior to sale. The Commission is reviewing this rule in 
conjunction with part 701 because both rules establish requirements for 
warranty terms (701-disclosures; 702-pre-sale availability). See 61 FR 
14688 (Apr. 3, 1996). In addition, the Commission has sought comment on 
Interpretations of the Magnuson-Moss Warranty Act, 16 CFR part 700. See 
61 FR 14688 (Apr. 3, 1996).
Fiscal 1997 Reviews
In fiscal 1997, the Commission will commence a review of the Negative 
Option Rule, the 900-Number Rule, and the Informal Dispute Settlement 
Procedures Rule. The 900-Number Rule became effective in 1993 and was 
promulgated pursuant to the Telephone Disclosure and Dispute Resolution 
Act of 1992, which required that the rule be reviewed 4 years after 
issuance. The Commission is reviewing the other two rules pursuant to 
its 10-year regulatory review plan, discussed above.
The Commission also expects to complete review of a number of rules and 
industry guides in fiscal 1997. It is likely that the Commission will 
modify some existing regulations and eliminate unneeded regulations. 
With respect to rule modifications, the Commission has proposed 
amending the Care Labeling Rule, which requires manufacturers and 
importers of wearing apparel to attach care labels to garments (for 
example, ``dry clean only''). The rule currently requires the 
instructions to be in words, but allows symbols to be used in addition 
to words. Symbols could make care instructions more understandable to 
some consumers and could foster trade with Mexico and Canada, 
consistent with the goals of the North American Free Trade Agreement 
(NAFTA). Accordingly, the Commission has requested comment on a 
proposed conditional exemption to permit the use of certain care 
symbols in lieu of words so long as hangtags with explanatory language 
are used for the first 12-month period of symbol use. See 60 FR 57552 
(Nov. 16, 1995). The Commission has also sought comment on other care

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labeling issues, such as whether it is desirable to require washing 
instructions for all washable garments in amending the rule's current 
requirement that either a washing instruction or a dry cleaning 
instruction may be used. See 60 FR 67102 (Dec. 28, 1995).
Amendments to Rules
The Commission has amended the Textile Rule by adding the International 
System of Units (SI Metric System) equivalents beside the inch/pound 
unit measurements in the Textile Rules (16 CFR 303.10, 303.21, 303.32, 
and 303.45). See 61 FR 11543 (Mar. 21, 1996). These amendments are 
required by Executive Order 12770 of July 25, 1991, and the Metric 
Conversion Act, as amended by the Omnibus Trade and Competitiveness 
Act. The Commission has also sought comment with regard to other 
textile issues, including whether to allow a system of shared 
information for manufacturer or importer identification among the NAFTA 
countries; whether to eliminate certain required disclosures on textile 
labels; and whether to allow the use of abbreviations for fiber content 
labels and abbreviations and symbols in country of origin labeling. See 
61 FR 5340 (Feb. 12, 1996). The Commission plans to seek comment on 
similar issues with respect to its Wool and Fur Rules.
The Commission has amended the Appliance Labeling Rule to permit 
placement of energy use labels required by the Canadian and Mexican 
Governments directly adjoining the Commission's required 
``EnergyGuide'' label. See 61 FR 33651 (June 28, 1996). Previously, the 
rule prohibited placing non-required information ``on or directly 
adjoining'' the EnergyGuide. The Commission has determined that 
relaxing the prohibition will facilitate trade among the NAFTA 
countries.
In connection with its 10-year review plan, the Commission has 
completed its review of the Cooling-Off Rule, which requires sellers 
who are selling away from their regular place of business to give 
customers 3 days in which to cancel contracts. The Commission found 
that the Cooling-Off Rule continues to serve a valuable function and 
determined to retain the rule with certain nonsubstantive amendments 
(e.g., adding a parenthetical statement to the Cooling-Off Rule's 
definition of the term ``Door-to-Door Sale'' to give examples of the 
kinds of sales locations covered by the rule). 60 FR 54180 (Oct. 20, 
1995).
The Commission reviewed the Used Car Rule, which requires automobile 
dealers to post warranty information on used cars offered for sale, as 
part of its 10-year regulatory review plan. The Commission also found 
that this rule continues to serve a valuable purpose and approved 
certain nonsubstantive amendments to the rule (e.g., permitting dealers 
required to comply with the Used Car Rule to post Buyers Guides 
anywhere on the car as long as they are prominently and conspicuously 
displayed). 60 FR 62195 (Dec. 5, 1995).
Additionally, the Commission completed the regulatory review of the R-
Value Rule for insulation and issued nonsubstantive amendments. 61 FR 
13659 (Mar. 28, 1996). The Commission is now considering 
recommendations for certain substantive changes, such as whether the 
rule should impose additional requirements on manufacturers or 
installers to help consumers ensure that the requisite amount of 
insulation has been installed in their homes.
Statutory Rulemakings
In fiscal 1996, the Commission adopted two new rules pursuant to 
statutory requirements: the Telemarketing Sales Rule and the Recycled 
Oil Rule. The Telemarketing Sales Rule, which became effective December 
31, 1995, implemented the Telemarketing and Consumer Fraud and Abuse 
Prevention Act. Among other things, the Telemarketing Sales Rule 
provides restrictions on the time of day telemarketers may call 
consumers; requires disclosure of the fact that the call is a sales 
call and the nature of the goods or services being offered; prohibits 
telemarketers from calling consumers who have said they do not want to 
be called; and prohibits misrepresentations about the cost, quantity, 
and other aspects of the offered goods or services.
The Commission promulgated the other new rule, the Recycled Oil Rule, 
after it received a report from the National Institute of Standards and 
Technology (NIST), as required under the Energy Policy and Conservation 
Act (EPCA). Under EPCA, the Recycled Oil Rule preempts the Commission's 
Used Oil Rule labeling and advertising requirements for engine oils. 
The Recycled Oil Rule, published on October 31, 1995, permits 
manufacturers to label processed used engine oil as substantially 
equivalent to new oil only if that determination has been based on the 
test procedures certified by NIST and prescribed in the rule. The rule 
became effective on November 30, 1995.
Rescissions of Rules and Guides and Amendments to Guides
In light of the Commission's promulgation of the Recycled Oil Rule, the 
Commission is considering repeal of the Used Oil Rule, certain 
provisions of which, as discussed above, are preeempted by the Recycled 
Oil Rule. For non-engine oils, the Used Oil Rule's original labeling 
disclosure provisions continue to be subject to a stay imposed by the 
Used Oil Recycling Act, and the original advertising disclosure 
provisions continue to be subject to a 1981 Commission stay. See 46 FR 
20979 (Apr. 8, 1981) announcing both the statutory suspension and a 
statement of enforcement policy suspending enforcement of the 
advertising portions of the Used Oil Rule. A notice of proposed 
rulemaking requesting comment on whether the rule should be repealed 
was published on July 26, 1996. See 61 FR 39101.
In December 1995, the Commission rescinded six rules as part of its 10-
year plan for reviewing all its rules and guides: (1) the Binocular 
Rule, 60 FR 65529 (Dec. 20, 1995); (2) the Quick-Freeze Spray Rule, 60 
FR 66071 (Dec. 21, 1995); (3) the Glass Fiber Curtain Rule, 60 FR 65532 
(Dec. 20, 1995); (4) the Sleeping Bag Rule, 60 FR 65528 (Dec. 20, 
1995); (5) the Tablecloth Rule, 60 FR 65530 (Dec. 20, 1995); and (6) 
the Extension Ladder Rule, 60 65533 (Dec. 20, 1995). In 1996, the 
Commission also rescinded the Leather Belt Rule, 61 FR 25560 (May 22, 
1996) and the Light Bulb Rule, 61 FR 33308 (June 27, 1996). A staff 
report recommending repeal of the Games of Chance Rule was placed on 
the public record for public comment, 61 FR 29039 (June 7, 1996), and 
the comment period closed on August 6, 1996.
In 1996, the Commission repealed two voluntary industry guides: the 
Watch Band Guides, 61 FR 27222 (May 30, 1996) and the Hosiery Guides, 
61 FR 3799 (Feb. 2, 1996); sought public comment in its review of five 
other guides: the Environmental Guides, 60 FR 38978 (July 31, 1995), 
the Mirror Guides, 61 FR 10708 (Mar. 15, 1996), the Warranty Guides, 61 
FR 14688 (Apr. 3, 1996), the Vocational Schools Guides, 61 FR 14685 
(Apr. 3, 1996), and the Jewelry Guides, 61 FR 27224 (May 30, 1996); and 
amended another guide: the Fuel Economy Guide, 60 FR 56230 (Nov. 8, 
1995). The Fuel Economy Guide was amended to conform to the 
Environmental Protection Agency's

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(EPA) rule regarding fuel economy labeling of new automobiles. In part, 
the amendments are intended to conform the Guide to those portions of 
EPA's rule that now require disclosure of certain fuel economy 
information, including adjusted city and adjusted highway miles-per-
gallon (mpg) numbers, rather than the one ``estimated mpg'' number 
previously required.
Summary
With regard to both content and process, the FTC's ongoing and proposed 
regulatory actions are compatible with the President's priorities. The 
actions under consideration inform and protect consumers and reduce the 
regulatory burdens on business. The Commission will continue working 
toward these goals. The Commission's efforts in 1996 also serve to 
promote environmental protection, conserve energy resources, and foster 
a system of shared information consistent with NAFTA. The Commission's 
10-year review program is based on provisions in the Regulatory 
Flexibility Act and complies with the Small Business Regulatory 
Enforcement Fairness Act of 1996. The Commission's 10-year program also 
is consistent with President Clinton's National Regulatory Reinvention 
Initiative, which, among other things, urges agencies to eliminate 
obsolete or unnecessary regulations. The program corresponds as well to 
section 5(a) of Executive Order 12866, 58 FR 51735 (Sept. 30, 1993), 
which directs executive branch agencies to develop a plan to reevaluate 
periodically all of their significant existing regulations.
As set forth in Executive Order 12866, the Commission continues to 
identify and weigh the costs and benefits of proposed actions and 
possible alternative actions and receive the broadest practicable array 
of comments from affected consumers, businesses, and the public at 
large. As stated above, during the past year, the Commission has 
rescinded 32 percent of its trade regulation rules and 30 percent of 
its consumer protection guides and policy statements because they had 
ceased to serve a useful purpose. In sum, the Federal Trade 
Commission's regulatory actions are aimed at efficiently and fairly 
promoting the ability of ``private markets to protect or improve the 
health and safety of the public, the environment, or the well-being of 
the American people.'' Executive Order 12866, section 1.
II. Regulatory Actions
The Commission has no actions that constitute ``significant regulatory 
actions'' under the definition in Executive Order 12866.
BILLING CODE 6750-01-F