Last updated on March 29th, 2023 at 03:32 pm
Title 16 – Commercial Practices–Volume 1
CHAPTER I – FEDERAL TRADE COMMISSION
SUBCHAPTER A – ORGANIZATION, PROCEDURES AND RULES OF PRACTICE
PART 0 – ORGANIZATION
§ 0.1 The Commission.
The Federal Trade Commission is an independent administrative agency that was organized in 1915 pursuant to the Federal Trade Commission Act of 1914 (38 Stat. 717, as amended; 15 U.S.C. 41-58). It is responsible for the administration of a variety of statutes that, in general, are designed to promote competition and to protect the public from unfair and deceptive acts and practices in the advertising and marketing of goods and services. It is composed of five members appointed by the President and confirmed by the Senate for terms of seven years.
§ 0.2 Official address.
The principal office of the Commission is in Washington, DC. All communications to the Commission should be addressed to the Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580, unless otherwise specifically directed. The Commission’s Web site address is www.ftc.gov.
§ 0.3 Hours.
Principal and regional offices are open from 8:30 a.m. to 5 p.m., except on Saturdays, Sundays, and legal holidays.
§ 0.4 Laws administered.
The Commission exercises enforcement and administrative authority under the Federal Trade Commission Act (15 U.S.C. 41-58), Clayton Act (15 U.S.C. 12-27), and more than 70 other Federal statutes, which are listed at https://www.ftc.gov/enforcement/statutes.
(a) The Commission is authorized to entertain monetary claims against it under three statutes.
(1) The Federal Tort Claims Act (28 U.S.C. 2671-2680) provides that the United States will be liable for injury or loss of property or personal injury or death caused by the negligent or wrongful acts or omissions of its employees acting within the scope of their employment or office.
(2) The Military Personnel and Civilian Employees Claims Act of 1964 (31 U.S.C. 3701, 3721) authorizes the Commission to compensate employees’ claims for damage to or loss of personal property incident to their service.
(3) The Equal Access to Justice Act (5 U.S.C. 504 and 28 U.S.C. 2412) provides that an eligible prevailing party other than the United States will be awarded fees and expenses incurred in connection with any adversary adjudicative and court proceeding, unless the adjudicative officer finds that the agency was substantially justified or that special circumstances make an award unjust.
(b) In addition, eligible parties, including certain small businesses, will be awarded fees and expenses incurred in defending against an agency demand that is substantially in excess of the final decision of the adjudicative officer and is unreasonable when compared with such decision under the facts and circumstances of the case, unless the adjudicative officer finds that the party has committed a willful violation of law or otherwise acted in bad faith, or special circumstances make an award unjust. Questions may be addressed to the Office of the General Counsel.
§ 0.6 [Reserved]
§ 0.7 Delegation of functions.
(a) The Commission, under the authority provided by Reorganization Plan No. 4 of 1961 (15 U.S.C. 41 note), may delegate, by published order or rule, certain of its functions to a division of the Commission, an individual Commissioner, an administrative law judge, or an employee or employee board, and retains a discretionary right to review such delegated action upon its own initiative or upon petition of a party to or an intervenor in such action.
(b) The Commission delegates its functions, subject to certain limitations, when no quorum is available for the transaction of business. The delegate or delegates are authorized to act in instances in which no party or intervenor would be adversely affected by the delegated action and entitled to seek review by the Commission, as provided by section 1(b) of Reorganization Plan No. 4 of 1961, or in instances in which all such adversely affected parties or intervenors have waived such a right. In actions in which at least one Commissioner is participating, this delegation is to the participating Commissioner or to the body of Commissioners who are participating. In actions in which no Commissioner is available or no Commissioner is participating, the General Counsel in consultation, where appropriate, with the Directors of the Bureaus of Consumer Protection, Competition, and Economics will exercise this delegated authority without power of redelegation. This delegation does not alter or affect other delegations to Commission staff. This delegation is only authorized for those instances in which the Commission lacks a quorum as set forth in Commission Rule 4.14(b), 16 CFR 4.14(b) (Commission quorum).
§ 0.8 The Chair.
The Chair of the Commission is designated by the President, and, subject to the general policies of the Commission, is the executive and administrative head of the agency. The Chair presides at meetings of and hearings before the Commission and participates with other Commissioners in all Commission decisions. In rulemaking proceedings under section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)), the Chair serves as or may designate another Commissioner to serve as the Chief Presiding Officer or may appoint another person to serve as Chief Presiding Officer who is not responsible to any other official or employee of the Commission. Attached to the Office of the Chair, and reporting directly to the Chair, and through the Chair to the Commission, are the following staff units:
(a) The Office of the Chief Privacy Officer, which ensures that the agency’s practices and policies comply with applicable federal information privacy and security requirements and standards;
(b) The Office of Congressional Relations, which coordinates all liaison activities with Congress;
(c) The Office of Equal Employment Opportunity and Workplace Inclusion, which advises and assists the Chair and the organizational units in EEO policy and diversity management issues;
(d) The Office of Policy Planning, which assists the Commission to develop and implement long-range competition and consumer protection policy initiatives; and
(e) The Office of Public Affairs, which furnishes information concerning Commission activities to news media and the public.
§ 0.9 Organization structure.
The Federal Trade Commission includes the following principal units: Office of the Executive Director; Office of the General Counsel; Office of the Secretary; Office of the Inspector General; Office of Administrative Law Judges; Bureau of Competition; Bureau of Consumer Protection; Bureau of Economics; and Office of International Affairs.
§ 0.10 Office of the Executive Director.
The Executive Director, under the direction of the Chairman, is the chief operating official who develops and implements management and administrative policies, programs, and directives for the Commission. The Executive Director works closely with the Bureaus on strategic planning and assessing the management and resource implications of any proposed action. In addition, the Executive Director manages the Commission’s facilities and administrative services, financial management, information technology, and human resources.
§ 0.11 Office of the General Counsel.
The General Counsel is the Commission’s chief law officer and adviser, who renders necessary legal services to the Commission; represents the Commission in the Federal and State courts, and before administrative agencies in coordination with the Bureaus, in appellate litigation, investigative compulsory process enforcement, and defensive litigation; advises the Commission and other agency officials and staff with respect to questions of law and policy, including advice with respect to legislative matters and ethics; represents the agency in employment and labor disputes; and responds to requests and appeals filed under the Freedom of Information and Privacy Acts and to intra- and intergovernmental information access requests.
§ 0.12 Office of the Secretary.
The Secretary is the legal custodian of the Commission’s seal, property, papers, and records, including legal and public records, and is responsible for the minutes of Commission meetings. The Secretary, or in the Secretary’s absence an Acting Secretary, signs Commission orders and official correspondence. In addition, the Secretary is responsible for the publication of all Commission actions that appear in the
§ 0.13 Office of the Inspector General.
The Office of Inspector General (OIG) was established within the Federal Trade Commission in 1989 as required by the Inspector General Act Amendments of 1988 (5 U.S.C. app. 3). The OIG promotes the economy, efficiency, and effectiveness of FTC programs and operations. To this end, the OIG independently conducts audits and investigations to find and prevent fraud, waste, and abuse within the agency.
§ 0.14 Office of Administrative Law Judges.
Administrative law judges are officials to whom the Commission, in accordance with law, delegates the initial performance of statutory fact-finding functions and initial rulings on conclusions of law, to be exercised in conformity with Commission decisions and policy directives and with its Rules of Practice.
§ 0.15 [Reserved]
§ 0.16 Bureau of Competition.
The Bureau is responsible for enforcing Federal antitrust and trade regulation laws under section 5 of the Federal Trade Commission Act (15 U.S.C. 45), the Clayton Act (15 U.S.C. 12-27), and a number of other special statutes that the Commission is charged with enforcing. The Bureau carries out its responsibilities by investigating alleged law violations, recommending to the Commission such further steps as may be appropriate, and prosecuting enforcement actions authorized by the Commission. Such further steps may include seeking injunctive and other relief as permitted by statute in Federal district court; litigating before the agency’s administrative law judges; negotiating settlement of complaints; and initiating rules or reports. The Bureau also conducts compliance investigations and, in compliance with Section 16(a)(1) of the FTC Act (15 U.S.C. 56(a)(1)), initiates proceedings for civil penalties to assure compliance with final Commission orders dealing with competition and trade restraint matters. The Bureau’s activities also include business and consumer education and staff advice on competition laws and compliance, and liaison functions with respect to foreign antitrust and competition law enforcement agencies and organizations, including requests for international enforcement assistance.
§ 0.17 Bureau of Consumer Protection.
The Bureau is responsible for enforcing the prohibition against unfair or deceptive acts or practices in section 5 of the Federal Trade Commission Act (15 U.S.C. 45), as well as numerous special statutes that the Commission is charged with enforcing. The Bureau carries out its responsibilities by investigating alleged law violations, recommending to the Commission such further steps as may be appropriate, and prosecuting enforcement actions authorized by the Commission. Such further steps may include seeking injunctive and other relief as permitted by statute in Federal district court; litigating before the agency’s administrative law judges; negotiating settlement of complaints; initiating rules or reports; and initiating civil penalty proceedings for rule violations. The Bureau also conducts compliance investigations and, in compliance with Section 16(a)(1) of the FTC Act (15 U.S.C. 56(a)(1)), initiates proceedings for civil penalties to assure compliance with final Commission orders dealing with unfair or deceptive practices. The Bureau participates in trade regulation rulemaking proceedings under section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)) and other rulemaking proceedings under statutory authority. In addition, the Bureau seeks to educate both consumers and the business community about the laws it enforces, and to assist and cooperate with other state, local, and international agencies and organizations in consumer protection enforcement and regulatory matters.
§ 0.18 Bureau of Economics.
The Bureau aids and advises the Commission concerning the economic aspects of all of its functions, and is responsible for the preparation of various economic reports and surveys. The Bureau provides economic and statistical assistance to the enforcement Bureaus in the investigation and trial of cases.
§ 0.19 The Regional Offices.
(a) These offices are investigatory and enforcement arms of the Commission, and have responsibility for investigational, trial, compliance, and consumer educational activities as delegated by the Commission. They are under the general supervision of the Bureaus of Competition and Consumer Protection and clear their activities through the appropriate operating Bureau.
(b) The names and geographic areas of responsibility of the respective regional offices are as follows:
(1) Northeast Region (located in New York City, New York), covering Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, Puerto Rico, and the U.S. Virgin Islands.
(2) Southeast Region (located in Atlanta, Georgia), covering Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, and Tennessee.
(3) East Central Region (located in Cleveland, Ohio), covering Delaware, District of Columbia, Maryland, Michigan, Ohio, Pennsylvania, Virginia, and West Virginia.
(4) Midwest Region (located in Chicago, Illinois), covering Illinois, Indiana, Iowa, Kansas, Kentucky, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, and Wisconsin.
(5) Southwest Region (located in Dallas, Texas), covering Arkansas, Louisiana, New Mexico, Oklahoma, and Texas.
(6) Northwest Region (located in Seattle, Washington), covering Alaska, Idaho, Montana, Oregon, Washington, and Wyoming.
(7) Western Region Los Angeles (located in Los Angeles, California), covering Arizona, Hawaii, Southern California, Southern Nevada, Guam, the Northern Mariana Islands, and American Samoa.
(8) Western Region San Francisco (located in San Francisco, California), covering Colorado, Northern California, Northern Nevada, and Utah.
(c) Each of the regional offices is supervised by a Regional Director and an Assistant Regional Director, who are available for conferences with attorneys, consumers, and other members of the public on matters relating to the Commission’s activities.
§ 0.20 Office of International Affairs.
The Office of International Affairs (OIA) is responsible for the agency’s international antitrust and international consumer protection missions in coordination and consultation with the appropriate Bureaus, including the design and implementation of the Commission’s international program. OIA provides support to the Bureaus of Competition and Consumer Protection with regard to the international aspects of investigation and prosecution of unlawful conduct; builds cooperative relationships between the Commission and foreign authorities; cooperates with foreign authorities on investigations and enforcement; works closely with the Bureaus to recommend agency policies to the Commission; works, through bilateral relationships, multilateral organizations, and trade fora to promote Commission priorities and policies; participates in the United States government interagency process to promote agency views on international issues within the FTC’s mandate; and coordinates staff exchanges and internships at the FTC for staff of non-U.S. competition, consumer protection, and privacy agencies. OIA also assists young agencies around the world to build capacity to promote sound competition and consumer protection law enforcement.
PART 1 – GENERAL PROCEDURES
Subpart A – Industry Guidance
Advisory Opinions
§ 1.1 Policy.
(a) Any person, partnership, or corporation may request advice from the Commission with respect to a course of action which the requesting party proposes to pursue. The Commission will consider such requests for advice and inform the requesting party of the Commission’s views, where practicable, under the following circumstances.
(1) The matter involves a substantial or novel question of fact or law and there is no clear Commission or court precedent; or
(2) The subject matter of the request and consequent publication of Commission advice is of significant public interest.
(b) The Commission has authorized its staff to consider all requests for advice and to render advice, where practicable, in those circumstances in which a Commission opinion would not be warranted. Hypothetical questions will not be answered, and a request for advice will ordinarily be considered inappropriate where:
(1) The same or substantially the same course of action is under investigation or is or has been the subject of a current proceeding involving the Commission or another governmental agency, or
(2) An informed opinion cannot be made or could be made only after extensive investigation, clinical study, testing, or collateral inquiry.
§ 1.2 Procedure.
(a) Application. The request for advice or interpretation should be submitted in writing (one original and two copies) to the Secretary of the Commission and should: (1) State clearly the question(s) that the applicant wishes resolved; (2) cite the provision of law under which the question arises; and (3) state all facts which the applicant believes to be material. In addition, the identity of the companies and other persons involved should be disclosed. Letters relating to unnamed companies or persons may not be answered. Submittal of additional facts may be requested prior to the rendering of any advice.
(b) Compliance matters. If the request is for advice as to whether the proposed course of action may violate an outstanding order to cease and desist issued by the Commission, such request will be considered as provided for in § 2.41 of this chapter.
§ 1.3 Advice.
(a) On the basis of the materials submitted, as well as any other information available, and if practicable, the Commission or its staff will inform the requesting party of its views.
(b) Any advice given by the Commission is without prejudice to the right of the Commission to reconsider the questions involved and, where the public interest requires, to rescind or revoke the action. Notice of such rescission or revocation will be given to the requesting party so that he may discontinue the course of action taken pursuant to the Commission’s advice. The Commission will not proceed against the requesting party with respect to any action taken in good faith reliance upon the Commission’s advice under this section, where all the relevant facts were fully, completely, and accurately presented to the Commission and where such action was promptly discontinued upon notification of rescission or revocation of the Commission’s approval.
(c) Advice rendered by the staff is without prejudice to the right of the Commission later to rescind the advice and, where appropriate, to commence an enforcement proceeding.
§ 1.4 Public disclosure.
Written advice rendered pursuant to this section and requests therefor, including names and details, will be placed in the Commission’s public record immediately after the requesting party has received the advice, subject to any limitations on public disclosure arising from statutory restrictions, the Commission’s rules, and the public interest. A request for confidential treatment of information submitted in connection with the questions should be made separately.
Industry Guides
§ 1.5 Purpose.
Industry guides are administrative interpretations of laws administered by the Commission for the guidance of the public in conducting its affairs in conformity with legal requirements. They provide the basis for voluntary and simultaneous abandonment of unlawful practices by members of industry. Failure to comply with the guides may result in corrective action by the Commission under applicable statutory provisions. Guides may relate to a practice common to many industries or to specific practices of a particular industry.
§ 1.6 How promulgated.
Industry guides
Subpart B – Rules and Rulemaking Under Section 18(a)(1)(B) of the FTC Act
§ 1.7 Scope of rules in this subpart.
The rules in this subpart apply to and govern proceedings for the promulgation of rules as provided in section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)). Such rules will be known as trade regulation rules. All other rulemaking proceedings will be governed by the rules in subpart C of this part, except as otherwise required by law or as otherwise specified in this chapter.
(a) For the purpose of carrying out the provisions of the Federal Trade Commission Act, the Commission is empowered to promulgate trade regulation rules, which define with specificity acts or practices that are unfair or deceptive acts or practices in or affecting commerce. Trade regulation rules may include requirements prescribed for the purpose of preventing such acts or practices. A violation of a rule constitutes an unfair or deceptive act or practice in violation of section 5(a)(1) of that Act (15 U.S.C. 45(a)(1)), unless the Commission otherwise expressly provides in its rule. The respondents in an adjudicative proceeding may show that the alleged conduct does not violate the rule or assert any other defense to which they are legally entitled.
(b) The Commission at any time may conduct such investigations, make such studies, and hold such conferences as it may deem necessary. All or any part of any such investigation may be conducted under the provisions of part 2, subpart A of this chapter.
§ 1.9 Petitions to commence trade regulation rule proceedings.
Trade regulation rule proceedings may be commenced by the Commission upon its own initiative or pursuant to written petition filed with the Secretary by any interested person stating reasonable grounds therefor. Such petitions will be handled in the same manner and pursuant to the same procedures as prescribed in § 1.31 of this chapter.
§ 1.10 Advance notice of proposed rulemaking.
(a) Prior to the commencement of any trade regulation rule proceeding, the Commission must publish in the
(b) The advance notice must:
(1) Contain a brief description of the area of inquiry under consideration, the objectives which the Commission seeks to achieve, and possible regulatory alternatives under consideration by the Commission; and
(2) Invite the response of interested persons with respect to such proposed rulemaking, including any suggestions or alternative methods for achieving such objectives.
(c) The advance notice must be submitted to the Committee on Commerce, Science, and Transportation of the Senate and to the Committee on Energy and Commerce of the House of Representatives.
(d) The Commission may, in addition to publication of the advance notice, use such additional mechanisms as it considers useful to obtain suggestions regarding the content of the area of inquiry before publication of a notice of proposed rulemaking pursuant to § 1.11.
§ 1.11 Commencement of a rulemaking proceeding.
(a) Notice of proposed rulemaking. A trade regulation rule proceeding will commence with a notice of proposed rulemaking (NPRM). An NPRM will be published in the
(b) Contents of NPRM. The NPRM will include:
(1) A statement containing, with particularity, the text of the proposed rule, including any alternatives, which the Commission proposes to promulgate;
(2) Reference to the legal authority under which the rule is proposed;
(3) A statement describing the reason for the proposed rule;
(4) An invitation to comment on the proposed rule, as provided in paragraph (d) of this section;
(5) A list of disputed issues of material fact designated by the Commission as necessary to be resolved, if any;
(6) An explanation of the opportunity for an informal hearing and instructions for submissions relating to such a hearing, as provided in paragraph (e) of this section; and
(7) A statement of the manner in which the public may obtain copies of the preliminary regulatory analysis, if that analysis is not in the notice.
(c) Preliminary regulatory analysis. Except as otherwise provided by statute, the Commission must, when commencing a rulemaking proceeding, issue a preliminary regulatory analysis, which must contain:
(1) A concise statement of the need for, and the objectives of, the proposed rule;
(2) A description of any reasonable alternatives to the proposed rule which may accomplish the stated objective of the rule in a manner consistent with applicable law;
(3) For the proposed rule, and for each of the alternatives described in the analysis, a preliminary analysis of the projected benefits and any adverse economic effects and any other effects, and of the effectiveness of the proposed rule and each alternative in meeting the stated objectives of the proposed rule; and
(4) The information required by the Regulatory Flexibility Act, 5 U.S.C. 601-612, and the Paperwork Reduction Act, 44 U.S.C. 3501-3520, if applicable.
(d) Written comments. The Commission will accept written submissions of data, views, and arguments on all issues of fact, law, and policy. The Commission may in its discretion provide for a separate rebuttal period following the comment period. The subject matter of any rebuttal comments must be confined to subjects and issues identified by the Commission in its notice or by other interested persons in comments and must not introduce new issues into the record. The NPRM will establish deadlines for filing written comments and for filing rebuttal comments on the proposed rule.
(e) Opportunity for hearing. The Commission will provide an opportunity for an informal hearing if an interested person requests to present their position orally or if the Commission in its discretion elects to hold an informal hearing. Any such request regarding an informal hearing must be submitted to the Commission no later than the close of the written comment period, including a rebuttal period, if any, and must include:
(1) A request to make an oral submission, if desired;
(2) A statement identifying the interested person’s interests in the proceeding; and
(3) Any proposals to add disputed issues of material fact beyond those identified in the notice.
§ 1.12 Notice of informal hearing and designations.
(a) Initial notice of informal hearing. If an informal hearing has been requested under § 1.11(e), a notice of informal hearing will be published in the
(1) The designation of a presiding officer, pursuant to § 1.13(a)(1);
(2) The time and place of the informal hearing;
(3) A final list of disputed issues of material fact necessary to be resolved during the hearing, if any;
(4) A list of the interested persons who will make oral presentations;
(5) A list of the groups of interested persons determined by the Commission to have the same or similar interests in the proceeding;
(6) An invitation to interested persons to submit requests to conduct or have conducted cross-examination or to present rebuttal submissions, pursuant to § 1.13(b)(2), if desired; and
(7) Any other procedural rules necessary to promote the efficient and timely determination of the disputed issues to be resolved during the hearing.
(b) Requests to conduct cross-examination or present rebuttal submissions. Cross-examination and rebuttal submissions at an informal hearing are available only to address disputed issues of material fact necessary to be resolved. Requests for an opportunity to cross-examine or to present rebuttal submissions must be accompanied by a specific justification therefor. In determining whether to grant such requests, the presence of the following circumstances indicate that such requests should be granted:
(1) An issue for cross-examination or the presentation of rebuttal submissions, is an issue of specific fact in contrast to legislative fact;
(2) A full and true disclosure with respect to the issue can be achieved only through cross-examination rather than through rebuttal submissions or the presentation of additional oral submissions; and
(3) The particular cross-examination or rebuttal submission is required for the resolution of a disputed issue.
(c) Final notice of informal hearing. Based on requests submitted in response to the initial notice of public hearing, the Commission will publish a final notice of informal hearing in the
(1) A list of the interested persons who will conduct cross-examination regarding disputed issues of material fact;
(2) A list of any groups of interested persons with the same or similar interests in the proceeding who will be required to choose a single representative to conduct cross-examination on behalf of the group, as provided in paragraph (d) of this section; and
(3) A list of the interested persons who will be permitted to make rebuttal submissions regarding disputed issues of material fact.
(d) Designation of group representatives for cross-examination. After consideration of any submissions under § 1.11(e), the Commission will, if appropriate, identify groups of interested persons with the same or similar interests in the proceeding. The Commission may require any group of interested persons with the same or similar interests in the proceeding to select a single representative to conduct cross-examination on behalf of the group.
§ 1.13 Conduct of informal hearing by the presiding officer.
(a) Presiding officer – (1) Designation. In a trade regulation rule proceeding in which the Commission determines an informal hearing will be conducted, the initial notice of informal hearing must designate a presiding officer, who will be appointed by the Chief Presiding Officer specified in § 0.8 of this chapter.
(2) Powers of the presiding officer. The presiding officer is responsible for the orderly conduct of the informal hearing. The presiding officer has all powers necessary or useful to that end, including the following:
(i) To issue any public notice that may be necessary for the orderly conduct of the informal hearing;
(ii) To modify the location, format, or time limits prescribed for the informal hearing, except that the presiding officer may not increase the time allotted for an informal hearing beyond a total of five hearing days over the course of a thirty-day period, unless the Commission, upon a showing of good cause, extends the number of days for the hearing;
(iii) To prescribe procedures or issue rulings to avoid unnecessary costs or delay, including, but not limited to, the imposition of reasonable time limits on the number and duration of oral presentations from individuals or groups with the same or similar interests in the proceeding and requirements that any cross-examination, which a person may be entitled to conduct or have conducted, be conducted by the presiding officer on behalf of that person in such a manner as the presiding officer determines to be appropriate and to be required for a full and true disclosure with respect to any issue designated for consideration in accordance with § 1.13(b)(1);
(iv) To issue rulings selecting or modifying the designated representatives of groups of interested persons, as provided in paragraph (a)(3) of this section;
(v) To require that oral presentations at the informal hearing be under oath;
(vi) To require that oral presentations at the informal hearing be submitted in writing in advance of presentation; and
(viii) To rule on all requests of interested persons made during the course of the informal hearing.
(3) Selection or modification of group representatives. If a group of interested persons designated by the Commission under § 1.12(d) to select a group representative is unable to agree upon a representative, the presiding officer may select a representative for the group. The presiding officer may entertain requests by a member of a group of interested persons to conduct or have conducted cross-examination under paragraph (b)(2) of this section if, after good-faith effort, the person is unable to agree upon a single representative with other group members and is able to demonstrate that the group representative will not adequately represent the person’s interests. If the presiding officer finds that there are substantial and relevant issues or data that will not be adequately presented by the group representative, then the presiding officer may allow that person to conduct or have conducted any appropriate cross-examination on issues affecting the person’s particular interests.
(4) Organization. In the performance of their rulemaking functions, presiding officers are responsible to the chief presiding officer who must not be responsible to any other officer or employee of the Commission.
(5) Ex parte communications. Except as required for the disposition of ex parte matters as authorized by law, no presiding officer may consult any person or party with respect to any fact in issue unless such officer gives notice and opportunity for all parties to participate.
(b) Additional procedures when there are disputed issues of material fact. If requested under § 1.11(d), an informal hearing with the opportunity for oral presentations will be conducted by the presiding officer. In addition, if the Commission determines that there are disputed issues of material fact that are material and necessary to resolve, the informal hearing on such issues will be conducted in accordance with § 1.13(b)(2).
(1) Nature of issues for consideration in accordance with § 1.13(b)(2) – (i) Issues that must be considered in accordance with § 1.13(b)(2). The only issues that must be designated for consideration in accordance with paragraphs (b)(2) of this section are disputed issues of fact that are determined by the Commission to be material and necessary to resolve.
(ii) Addition or modification of issues for consideration in accordance with § 1.13(b)(2). The presiding officer may at any time on the presiding officer’s own motion or pursuant to a written petition by interested persons, add or modify any issues designated pursuant to § 1.12(a). No such petition shall be considered unless good cause is shown why any such proposed issue was not proposed pursuant to § 1.11(e). In the event that new issues are designated, the presiding officer may determine whether interested persons may conduct cross-examination or present rebuttal submissions with respect to each new issue, as provided in § 1.12(b), and may select or modify group representatives for cross examination with respect to each new issue, as provided in paragraph (a)(3) of this section.
(2) Cross-examination and the presentation of rebuttal submissions by interested persons. The presiding officer will conduct or allow to be conducted cross-examination of oral presentations and the presentation of rebuttal submissions relevant to the disputed issues of material fact designated for consideration during the informal hearing. For that purpose, the presiding officer may require submission of written requests for presentation of questions to any person making oral presentations and will determine whether to ask such questions or any other questions. All requests for presentation of questions will be placed in the rulemaking record. The presiding officer will also allow the presentation of rebuttal submissions as appropriate and required for a full and true disclosure with respect to the disputed issues of material fact designated for consideration during the informal hearing.
(c) Written transcript. A verbatim transcript will be made of the informal hearing and placed in the rulemaking record.
(d) Recommended decision. The presiding officer will make a recommended decision based on their findings and conclusions as to all relevant and material evidence. The recommended decision will be made by the presiding officer who presided over the informal hearing except that such recommended decision may be made by another officer if the officer who presided over the hearing is no longer available to the Commission. The recommended decision must be rendered within sixty days of the completion of the hearing. If a petition for review of a ruling by the presiding officer has been filed under paragraph (e) of this section, the recommended decision must be rendered within sixty days following the resolution of that petition or any rehearing required by the Commission. The presiding officer’s recommended decision will be limited to explaining the presiding officer’s proposed resolution of disputed issues of material fact.
(e) Post-hearing review by the Commission of rulings by the presiding officer. (1) Within ten days of the completion of the informal hearing, any interested person may petition the Commission for review of a ruling by the presiding officer denying or limiting the petitioner’s ability to conduct cross-examination or make rebuttal submissions upon a showing that the ruling precluded disclosure of a disputed material fact that was necessary for fair determination by the Commission of the rulemaking proceeding as a whole. Such petitions must not exceed eight thousand words. This word count limitation includes headings, footnotes, and quotations, but does not include the cover, table of contents, table of citations or authorities, glossaries, statements with respect to oral argument, any addendums containing statutes, rules or regulations, any certificates of counsel, or proposed form of order. A petition hereunder will not stay the rulemaking proceeding unless the Commission so orders. All petitions filed under this paragraph will be a part of the rulemaking record.
(2) The Commission may, in its discretion, hear the appeal. Commission review, if granted, will be based on the petition and anything on the rulemaking record, without oral argument or further briefs, unless otherwise ordered by the Commission. If the Commission grants review, it will render a decision within thirty days of the announcement of its decision to review unless, upon a showing of good cause, the Commission extends the number of days for review.
§ 1.14 Promulgation.
(a) The Commission, after review of the rulemaking record, may issue, modify, or decline to issue any rule. If the Commission wants further information or additional views of interested persons, it may withhold final action pending the receipt of such additional information or views. If it determines not to issue a rule, it may adopt and publish an explanation for not doing so.
(1) Statement of basis and purpose. If the Commission determines to promulgate a rule, it will adopt a statement of basis and purpose to accompany the rule, which must include:
(i) A statement regarding the prevalence of the acts or practices treated by the rule;
(ii) A statement as to the manner and context in which such acts or practices are unfair or deceptive; and
(iii) A statement as to the economic effect of the rule, taking into account the effect on small businesses and consumers.
(2) Final regulatory analysis. Except as otherwise provided by statute, if the Commission determines to promulgate a final rule, it will issue a final regulatory analysis relating to the final rule. Each final regulatory analysis must contain:
(i) A concise statement of the need for, and the objectives of, the final rule;
(ii) A description of any alternatives to the final rule that were considered by the Commission;
(iii) An analysis of the projected benefits and any adverse economic effects and any other effects of the final rule;
(iv) An explanation of the reasons for the determination of the Commission that the final rule will attain its objectives in a manner consistent with applicable law and the reasons the particular alternative was chosen;
(v) A summary of any significant issues raised by the comments submitted during the public comment period in response to the preliminary regulatory analysis, and a summary of the assessment by the Commission of such issues; and
(vi) The information required by the Regulatory Flexibility Act, 5 U.S.C. 601-612, and the Paperwork Reduction Act, 44 U.S.C. 3501-3520, if applicable.
(3) Small entity compliance guide. For each rule for which the Commission must prepare a final regulatory flexibility analysis, the Commission will publish one or more guides to assist small entities in complying with the rule. Such guides will be designated as “small entity compliance guides.”
(b) If the Commission determines, upon its review of the rulemaking record, to propose a revised rule for further proceedings in accordance with this subpart, such proceedings, including the opportunity of interested persons to avail themselves of the procedures of § 1.13(b)(2), will be limited to those portions of the revised rule, the subjects and issues of which were not substantially the subject of comment in response to a previous notice of proposed rulemaking.
(c) The final rule will be published in the
§ 1.15 Amendment or repeal of a rule.
(a) Substantive amendment or repeal of a rule. The procedures for substantive amendment to or repeal of a rule are the same as for the issuance thereof.
(b) Nonsubstantive amendment of a rule. The Commission may make a nonsubstantive amendment to a rule by announcing the amendment in the
§ 1.16 Petition for exemption from trade regulation rule.
Any person to whom a rule would otherwise apply may petition the Commission for an exemption from such rule. Petitions for exemptions will be handled in the same manner and pursuant to the same procedures as prescribed in § 1.31 of this chapter.
§ 1.17 [Reserved]
§ 1.18 Rulemaking record.
(a) Definition. For purposes of these rules the term rulemaking record includes the final rule, its statement of basis and purpose, the verbatim transcripts of the informal hearing, if any, written submissions, the recommended decision of the presiding officer, any communications placed on the rulemaking record pursuant to § 1.18(c), and any other information the Commission considers relevant to the rule.
(b) Public availability. The rulemaking record will be publicly available except when the Commission, for good cause shown, determines that it is in the public interest to allow any submission to be received in camera subject to the provisions of § 4.9 of this chapter.
(c) Communications to Commissioners and Commissioners’ personal staffs – (1) Communications by outside parties. Except as otherwise provided in this subpart or by the Commission, after the Commission votes to issue a notice of proposed rulemaking, comment on the proposed rule should be directed as provided in the notice. Communications with respect to the merits of that proceeding from any outside party to any Commissioner or Commissioner’s advisor will be subject to the following treatment:
(i) Written communications. Written communications, including written communications from members of Congress, received within the period for acceptance of initial or rebuttal written comments or other written submissions will be placed on the rulemaking record. Written communications received outside of the time periods designated for acceptance of written comments or other written submissions will be placed on public record unless the Commission votes to place them on the rulemaking record.
(ii) Oral communications. Oral communications to a Commissioner or Commissioner’s advisor are permitted only when advance notice of such oral communications is published by the Commission’s Office of Public Affairs in its Weekly Calendar and Notice of “Sunshine” Meetings. A Commissioner’s advisor will ensure such oral communications are transcribed verbatim or summarized at the discretion of the Commissioner or Commissioner’s advisor to whom such oral communications are made and promptly placed on the rulemaking record. Memoranda summarizing such oral communications must list all persons attending or otherwise participating in the meeting at which the oral communication was made, and summarize all data presented and arguments made during the meeting.
(iii) Congressional communications. The provisions of paragraph (c)(1)(ii) of this section do not apply to communications from Members of Congress. Memoranda prepared by the Commissioner or Commissioner’s advisor setting forth the contents of any oral congressional communications will be placed on the public record. If the communication occurs within the comment period and is transcribed verbatim or summarized, the transcript or summary will be promptly placed on the rulemaking record. A transcript or summary of any oral communication which occurs after the time period for acceptance of written comments will be placed promptly on the public record.
(2) Communications by certain officers, employees, and agents of the Commission. After the Commission votes to issue a notice of proposed rulemaking, any officer, employee, or agent of the Commission with investigative or other responsibility relating to any rulemaking proceeding within any operating bureau of the Commission is prohibited from communicating or causing to be communicated to any Commissioner or to the personal staff of any Commissioner any fact which is relevant to the merits of such proceeding and which is not on the rulemaking record of such proceeding, unless such communication is made available to the public and is included in the rulemaking record. The provisions of this subsection do not apply to any communication to the extent such communication is required for the disposition of ex parte matters as authorized by law.
§ 1.19 Modification of a rule by the Commission at the time of judicial review.
If a reviewing court orders, under section 18(e)(2) of the Federal Trade Commission Act (15 U.S.C. 57a(e)(2)), further submissions and presentations on the rule, the Commission may modify or set aside its rule or make a new rule by reason of the additional submissions and presentations. Such modified or new rule will then be filed with the court together with an appropriate statement of basis and purpose and the return of such submissions and presentations.
§ 1.20 Alternative procedures.
If the Commission determines at the commencement of a rulemaking proceeding to employ procedures other than those established in this subpart, it may do so by announcing those procedures in the
Subpart C – Rules Promulgated Under Authority Other Than Section 18(a)(1)(B) of the FTC Act
§ 1.21 Scope of the rules in this subpart.
This subpart sets forth procedures for the promulgation of rules under authority other than section 18(a)(1)(B) of the FTC Act except as otherwise required by law or otherwise specified in the rules of this chapter. This subpart does not apply to the promulgation of industry guides, general statements of policy, rules of agency organization, procedure, or practice, or rules governed by subpart B of this part.
§ 1.22 Rulemaking.
(a) Nature and authority. For the purpose of carrying out the provisions of the statutes administered by it, the Commission is empowered to promulgate rules and regulations applicable to unlawful trade practices. Such rules and regulations express the experience and judgment of the Commission, based on facts of which it has knowledge derived from studies, reports, investigations, hearings, and other proceedings, or within official notice, concerning the substantive requirements of the statutes which it administers.
(b) Scope. Rules may cover all applications of a particular statutory provision and may be nationwide in effect, or they may be limited to particular areas or industries or to particular product or geographic markets, as may be appropriate.
(c) Use of rules in adjudicative proceedings. When a rule is relevant to any issue involved in an ajudicative proceeding thereafter instituted, the Commission may rely upon the rule to resolve such issue, provided that the respondent shall have been given a fair hearing on the applicability of the rule to the particular case.
§ 1.23 Quantity limit rules.
Quantity limit rules are authorized by section 2(a) of the Clayton Act, as amended by the Robinson-Patman Act. These rules have the force and effect of law.
§ 1.24 Rules applicable to wool, fur, and textile fiber products and rules promulgated under the Fair Packaging and Labeling Act.
Rules having the force and effect of law are authorized under section 6 of the Wool Products Labeling Act of 1939, section 8 of the Fur Products Labeling Act, section 7 of the Textile Fiber Products Identification Act, and sections 4, 5, and 6 of the Fair Packaging and Labeling Act.
§ 1.25 Initiation of rulemaking proceedings – petitions.
Proceedings for the issuance, amendment, or repeal of rules issued pursuant to authorities other than Section 18(a)(1)(B) of the FTC Act (15 U.S.C. 57a(1)(B)), including proceedings for exemption of products or classes of products from statutory requirements, may be commenced by the Commission upon its own initiative or pursuant to petition. Such petitions will be handled in the same manner and pursuant to the same procedures as prescribed in § 1.31 of this chapter.
§ 1.26 Procedure.
(a) Investigations and conferences. In connection with any rulemaking proceeding, the Commission at any time may conduct such investigations, make such studies, and hold such conferences as it may deem necessary. All or any part of any such investigation may be conducted under the provisions of subpart A of part 2 of this chapter.
(b) Notice. General notice of proposed rulemaking will be published in the
(1) A statement of the time, place, and nature of the public proceedings;
(2) Reference to the authority under which the rule is proposed;
(3) Either the terms or substance of the proposed rule or description of the subjects and issues involved;
(4) An opportunity for interested persons to participate in the proceeding through the submission of written data, views, or arguments; and
(5) A statement setting forth such procedures for treatment of communications from persons not employed by the Commission to Commissioners or Commissioner Advisors with respect to the merits of the proceeding as will incorporate the requirements of § 1.18(c), including the transcription of oral communications required by § 1.18(c)(2), adapted in such form as may be appropriate to the circumstances of the particular proceeding.
(c) Oral hearings. Oral hearing on a proposed rule may be held within the discretion of the Commission, unless otherwise expressly required by law. Any such hearing will be conducted by the Commission, a member thereof, or a member of the Commission’s staff. At the hearing interested persons may appear and express their views as to the proposed rule and may suggest such amendments, revisions, and additions thereto as they may consider desirable and appropriate. The presiding officer may impose reasonable limitations upon the length of time allotted to any person. If by reason of the limitations imposed the person cannot complete the presentation of his suggestions, he may within twenty-four (24) hours file a written statement covering those relevant matters which he did not orally present.
(d) Promulgation of rules or orders. The Commission, after consideration of all relevant matters of fact, law, policy, and discretion, including all relevant matters presented by interested persons in the proceeding, will adopt and publish in the
(e) Effective date of rules. Except as provided in paragraphs (f) and (g) of this section, the effective date of any rule, or of the amendment, suspension, or repeal of any rule will be as specified in a notice published in the
(f) Effective date of rules and orders under Fair Packaging and Labeling Act. The effective date of any rule or order under the Fair Packaging and Labeling Act will be as specified by order published in the
(g) Objections and request for hearing under Fair Packaging and Labeling Act. On or before the thirtieth (30th) day after the date of publication of an order in the
(1) If they establish that the objector will be adversely affected by the order;
(2) If they specify with particularity the provisions of the order to which objection is taken; and
(3) If they are supported by reasonable grounds which, if valid and factually supported, may be adequate to justify the relief sought.
Subpart D – Petitions for Rulemaking or Exemption
§ 1.31 Procedures for addressing petitions.
(a) Petitions for rulemaking. An interested person may petition for the issuance, amendment, or repeal of a rule, administered by the Commission pursuant to Section 18(a)(1)(B) of the FTC Act (15 U.S.C. 57a(1)(B)) or other statutory authorities. A request to issue, amend, or repeal an interpretive rule, including an industry guide, may also be submitted by petition. For purposes of this section, a “petition” means a written request to issue, amend, or repeal a rule or interpretive rule administered by the Commission or a petition seeking an exemption from the coverage of a rule.
(b) Requirements. Petitions must include the following information:
(1) The petitioner’s full name, address, telephone number, and email address (if available), along with an explanation of how the petitioner’s interests would be affected by the requested action;
(2) A full statement of the action requested by the petitioner, including the text and substance of the proposed rule or amendment, or a statement identifying the rule proposed to be repealed, and citation to any existing Commission rules that would be affected by the requested action;
(3) A full statement of the factual and legal basis on which the petitioner relies for the action requested in the petition, including all relevant facts, views, argument, and data upon which the petitioner relies, as well as information known to the petitioner that is unfavorable to the petitioner’s position. The statement should identify the problem the requested action is intended to address and explain why the requested action is necessary to address the problem.
(c) Supporting data. If an original research report is used to support a petition, the information should be presented in a form that would be acceptable for publication in a peer reviewed scientific or technical journal. If quantitative data are used to support a petition, the presentation of the data should include a complete statistical analysis using conventional statistical methods. Sources of information appropriate to use in support of a petition include, but are not limited to:
(1) Professional journal articles,
(2) Research reports,
(3) Official government statistics,
(4) Official government reports,
(5) Industry data, and
(6) Scientific textbooks.
(d) Filing. A petition should be submitted via email to [email protected] or sent via postal mail or commercial delivery to Federal Trade Commission, Office of the Secretary, Suite CC-5610, 600 Pennsylvania Avenue NW, Washington, DC 20580. If the petition meets the requirements for Commission consideration described in this section, the Secretary will assign a docket number to the petition. Once a petition has been docketed, the FTC will notify the petitioner in writing and provide the petitioner with the number assigned to the petition and an agency contact for inquiries relating to the petition. The petition number should be referenced by the petitioner in all contacts with the agency regarding the petition.
(e) Confidential treatment. If a petition contains material for which the petitioner seeks confidential treatment, the petitioner must file a request for confidential treatment that complies with § 4.9(c) of this chapter and two versions of the petition and all supporting materials, consisting of a confidential and a public version. Every page of each such document shall be clearly and accurately labeled “Public” or “Confidential.” In the confidential version, the petitioner must use brackets or similar conspicuous markings to indicate the material for which it is claiming confidential treatment. In the public version, the petitioner must redact all material for which it seeks confidential treatment in the petition and supporting materials or all portions thereof for which confidential treatment is requested. The written request for confidential treatment that accompanies the petition must include a description of the material for which confidential treatment is requested and the factual and legal basis for the request. Requests for confidential treatment will only be granted if the General Counsel grants the request in accordance with the law and the public interest, pursuant to § 4.9(c) of this chapter.
(f) Notice and public comment. After a petition has been docketed as described in paragraph (d) of this section, the Office of the Secretary will provide public notice of the petition on behalf of the Commission in the
(g) Resolution of petitions. The Commission may grant or deny a petition in whole or in part. If the Commission determines to commence a rulemaking proceeding in response to a petition, the Commission will publish a rulemaking notice in the
Subpart E – Export Trade Associations
§ 1.41 Limited antitrust exemption.
The Export Trade Act authorizes the organization and operation of export trade associations, and extends to them certain limited exemptions from the Sherman Act and the Clayton Act. It also extends the jurisdiction of the Commission under the Federal Trade Commission Act to unfair methods of competition used in export trade against competitors engaged in export trade, even though the acts constituting such unfair methods are done without the territorial jurisdiction of the United States.
§ 1.42 Notice to Commission.
To obtain the exemptions afforded by the Act, an export trade association is required to file with the Commission, within thirty (30) days after its creation, a verified written statement setting forth the location of its offices and places of business, names, and addresses of its officers, stockholders, or members, and copies of its documents of incorporation or association. On the first day of January of each year thereafter, each association must file a like statement and, when required by the Commission to do so, must furnish to the Commission detailed information as to its organization, business, conduct, practices, management, and relation to other associations, corporations, partnerships, and individuals.
§ 1.43 Recommendations.
Whenever the Commission has reason to believe that an association has violated the prohibitions of section 2 of the Act, it may conduct an investigation. If, after investigation, it concludes that the law has been violated, it may make to such association recommendations for the readjustment of its business. If the association fails to comply with the recommendations, the Commission will refer its findings and recommendations to the Attorney General for appropriate action.
Subpart F – Trademark Cancellation Procedure
§ 1.51 Applications.
Applications for the institution of proceedings for the cancellation of registration of trade, service, or certification marks under the Trade-Mark Act of 1946 may be filed with the Secretary of the Commission. Such applications shall be in writing, signed by or in behalf of the applicant, and should identify the registration concerned and contain a short and simple statement of the facts constituting the alleged basis for cancellation, the name and address of the applicant, together with all relevant and available information. If, after consideration of the application, or upon its own initiative, the Commission concludes that cancellation of the mark may be warranted, it will institute a proceeding before the Commissioner of Patents for cancellation of the registration.
Subpart G – Injunctive and Condemnation Proceedings
§ 1.61 Injunctions.
In those cases where the Commission has reason to believe that it would be to the interest of the public, the Commission will apply to the courts for injunctive relief, pursuant to the authority granted in section 13 of the Federal Trade Commission Act.
§ 1.62 Ancillary court orders pending review.
Where petition for review of an order to cease and desist has been filed in a U.S. court of appeals, the Commission may apply to the court for issuance of such writs as are ancillary to its jurisdiction or are necessary in its judgment to prevent injury to the public or to competitors pendente lite.
§ 1.63 Injunctions: Wool, fur, and textile cases.
In those cases arising under the Wool Products Labeling Act of 1939, Fur Products Labeling Act, and Textile Fiber Products Identification Act, where it appears to the Commission that it would be to the public interest for it to do so, the Commission will apply to the courts for injunctive relief, pursuant to the authority granted in such Acts.
§ 1.64 Condemnation proceedings.
In those cases arising under the Wool Products Labeling Act of 1939 and Fur Products Labeling Act, and where it appears to the Commission that the public interest requires such action, the Commission will apply to the courts for condemnation, pursuant to the authority granted in such Acts.
Subpart H – Administration of the Fair Credit Reporting Act
§ 1.71 Administration.
The general administration of the Fair Credit Reporting Act (Title VI of the Consumer Credit Protection Act of 1968; enacted October 26, 1970; Pub. L. 91-508, 82 Stat. 146, 15 U.S.C. 1601 et seq.) is carried out by the Bureau of Consumer Protection, Division of Credit Practices. Any interested person may obtain copies of the Act and these procedures and rules of practice upon request to the Secretary of the Commission, Washington, DC 20580.
§ 1.72 Examination, counseling and staff advice.
The Commission maintains a staff to carry out on-the-scene examination of records and procedures utilized to comply with the Fair Credit Reporting Act and to carry out industry counseling. Requests for staff interpretation of the Fair Credit Reporting Act should be directed to the Division of Credit Practices, Bureau of Consumer Protection. Such interpretations represent informal staff opinion which is advisory in nature and is not binding upon the Commission as to any action it may take in the matter. Administrative action to effect correction of minor infractions on a voluntary basis is taken in those cases where such procedure is believed adequate to effect immediate compliance and protect the public interest.
§ 1.73 Interpretations.
(a) Nature and purpose. (1) The Commission issues and causes to be published in the
(2) The interpretations are not substantive rules and do not have the force or effect of statutory provisions. They are guidelines intended as clarification of the Fair Credit Reporting Act, and, like industry guides, are advisory in nature. They represent the Commission’s view as to what a particular provision of the Fair Credit Reporting Act means for the guidance of the public in conducting its affairs in conformity with that Act, and they provide the basis for voluntary and simultaneous abandonment of unlawful practices by members of industry. Failure to comply with such interpretations may result in corrective action by the Commission under applicable statutory provisions.
(b) Procedure. (1) Requests for Commission interpretations should be submitted in writing to the Secretary of the Federal Trade Commission stating the nature of the interpretation requested and the reasons and justification therefor. If the request is granted, as soon as practicable thereafter, the Commission will publish a notice in the
(2) The issuance of such interpretations is within the discretion of the Commission and the Commission at any time may conduct such investigations and hold such conferences or hearings as it may deem appropriate. Any interpretation issued pursuant to this chapter is without prejudice to the right of the Commission to reconsider the interpretation, and where the public interest requires, to rescind, revoke, modify, or withdraw the interpretation, in which event notification of such action will be published in the
(c) Applicability of interpretations. Interpretations issued pursuant to this subpart may cover all applications of a particular statutory provision, or they may be limited in application to a particular industry, as appropriate.
Subpart I – Procedures for Implementation of the National Environmental Policy Act of 1969
§ 1.81 Authority and incorporation of CEQ Regulations.
This subpart is issued pursuant to 102(2) of the National Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 4321 et seq.). Pursuant to Executive Order 11514 (March 5, 1970, as amended by Executive Order 11991, May 24, 1977) and the Environmental Quality Improvement Act of 1980, as amended (42 U.S.C. 4371 et seq.) the Council on Environmental Quality (CEQ) has issued comprehensive regulations for implementing the procedural provisions of NEPA (40 CFR parts 1500 through 1508) (“CEQ Regulations”). Although it is the Commission’s position that these regulations are not binding on it, the Commission’s policy is to comply fully with the CEQ Regulations unless it determines in a particular instance or for a category of actions that compliance would not be consistent with the requirements of law. With this caveat, the Commission incorporates into this subpart the CEQ Regulations. The following are supplementary definitions and procedures to be applied in conjunction with the CEQ Regulations.
§ 1.82 Declaration of policy.
(a) Except for actions which are not subject to the requirements of section 102(2)(C) of NEPA, no Commission proposal for a major action significantly affecting the quality of the human environment will be instituted unless an environmental impact statement has been prepared for consideration in the decisionmaking. All relevant environmental documents, comments, and responses as provided in this subpart shall accompany such proposal through all review processes. “Major actions, significantly affecting the quality of the human environment” referred to in this subpart “do not include bringing judicial or administrative civil or criminal enforcement actions” CEQ Regulation (40 CFR 1508.18(a)). In the event that the Commission in an administrative enforcement proceeding actively contemplates the adoption of standards or a form of relief which it determines may have a significant effect on the environment, the Commission will, when consistent with the requirements of law, provide for the preparation of an environmental assessment or an environmental impact statement or such other action as will permit the Commission to assess alternatives with a view toward avoiding or minimizing any adverse effect upon the environment.
(b) No Commission proposal for legislation significantly affecting the quality of the human environment and concerning a subject matter in which the Commission has primary responsibility will be submitted to Congress without an accompanying environmental impact statement.
(c) When the Commission finds that emergency action is necessary and an environmental impact statement cannot be prepared in conformance with the CEQ Regulations, the Commission will consult with CEQ about alternative arrangements in accordance with CEQ Regulation (40 CFR 1506.11).
§ 1.83 Whether to commence the process for an environmental impact statement.
(a) The Bureau responsible for submitting a proposed rule, guide, or proposal for legislation to the Commission for agency action shall, after consultation with the Office of the General Counsel, initially determine whether or not the proposal is one which requires an environmental impact statement. Except for matters where the environmental effects, if any, would appear to be either (1) clearly significant and therefore the decision is made to prepare an environmental impact statement, or (2) so uncertain that environmental analysis would be based on speculation, the Bureau should normally prepare an “environmental assessment” CEQ Regulation (40 CFR 1508.9) for purposes of providing sufficient evidence and analysis for determining whether to prepare an environmental impact statement or a finding of no significant impact. The Bureau should involve environmental agencies to the extent practicable in preparing an assessment. An environmental assessment shall be made available to the public when the proposed action is made public along with any ensuing environmental impact statement or finding of no significant impact.
(b) If the Bureau determines that the proposal is one which requires an environmental impact statement, it shall commence the “scoping process” CEQ Regulation (40 CFR 1501.7) except that the impact statement which is part of a proposal for legislation need not go through a scoping process but shall conform to CEQ Regulation (40 CFR 1506.8). As soon as practicable after its decision to prepare an environmental impact statement and before the scoping process, the Bureau shall publish a notice of intent as provided in CEQ Regulations (40 CFR 1501.7 and 1508.22).
(c) If, on the basis of an environmental assessment, the determination is made not to prepare a statement, a finding of “no significant impact” shall be made in accordance with CEQ Regulation (40 CFR 1508.3) and shall be made available to the public as specified in CEQ Regulation (40 CFR 1506.6).
§ 1.84 Draft environmental impact statements: Availability and comment.
Except for proposals for legislation, environmental impact statements shall be prepared in two stages: Draft statement and final statement.
(a) Proposed rules or guides. (1) An environmental impact statement, if deemed necessary, shall be in draft form at the time a proposed rule or guide is published in the
(2) The major decision points with respect to rules and guides are:
(i) Preliminary formulation of a staff proposal;
(ii) The time the proposal is initially published in the
(iii) Presiding officer’s report (in trade regulation rule proceedings);
(iv) Submission to the Commission of the staff report or recommendation for final action on the proposed guide or rule;
(v) Final decision by the Commission. The decision on whether or not to prepare an environmental impact statement should occur at point (a)(2)(i) of this section. The publication of any draft impact statement should occur at point (a)(2)(ii) of this section. The publication of the final environmental impact statement should occur at point (a)(2)(iv) of this section.
(b) Legislative proposals. In legislative matters, a legislative environmental impact statement shall be prepared in accordance with CEQ Regulation (40 CFR 1506.8).
(c) In rule or guide proceedings the draft environmental impact statement shall be prepared in accordance with CEQ Regulation (40 CFR 1502.9) and shall be placed in the public record to which it pertains; in legislative matters, the legislative impact statement shall be placed in a public record to be established, containing the legislative report to which it pertains; these will be available to the public through the Office of the Secretary and will be published in full with the appropriate proposed rule, guide, or legislative report; such statements shall also be filed with the Environmental Protection Agency’s (EPA) Office of Environmental Review (CEQ Regulation (40 CFR 1506.9)) for listing in the weekly
(d) Forty-five (45) days will be allowed for comment on the draft environmental impact statement, calculated from the date of publication in the EPA’s weekly
§ 1.85 Final environmental impact statements.
(a) After the close of the comment period, the Bureau responsible for the matter will consider the comments received on the draft environmental impact statement and will put the draft statement into final form in accordance with the requirements of CEQ Regulation (40 CFR 1502.9(b)), attaching the comments received (or summaries if response was exceptionally voluminous).
(b) Upon Bureau approval of the final environmental impact statement the final statement will be
(1) Filed with the EPA;
(2) Forwarded to all parties which commented on the draft environmental impact statement and to other interested parties, if practicable;
(3) Placed in the public record of the proposed rule or guide proceeding or legislative matter to which it pertains;
(4) Distributed in any other way which the Bureau in consultation with CEQ deems appropriate.
(c) In rule and guide proceedings, at least thirty (30) days will be allowed for comment on the final environmental impact statement, calculated from the date of publication in the EPA’s weekly
§ 1.86 Supplemental statements.
Except for proposals for legislation, as provided in CEQ Regulation (40 CFR 1502.9(c)), the Commission shall publish supplements to either draft or final environmental statements if:
(a) The Commission makes substantial changes in the proposed action that are relevant to environmental concerns; or
(b) There are significant new circumstances or information relevant to environmental concerns and bearing on the proposed action and its impacts. In the course of a trade regulation rule proceeding, the supplement will be placed in the rulemaking record.
§ 1.87 NEPA and agency decisionmaking.
In its final decision on the proposed action or, if appropriate, in its recommendation to Congress, the Commission shall consider all the alternatives in the environmental impact statement and other relevant environmental documents and shall prepare a concise statement which, in accordance with CEQ Regulation § 1505.2, shall:
(a) Identify all alternatives considered by the Commission in reaching its decision or recommendation, specifying the alternatives which were considered to be environmentally preferable;
(b) State whether all practicable means to avoid or minimize environmental harm from the alternative selected have been adopted, and if not, why they were not.
§ 1.88 Implementing procedures.
(a) The General Counsel is designated the official responsible for coordinating the Commission’s efforts to improve environmental quality. He will provide assistance to the staff in determining when an environmental impact statement is needed and in its preparation.
(b) The Commission will determine finally whether an action complies with NEPA.
(c) The Directors of the Bureaus of Consumer Protection and Competition will supplement these procedures for their Bureaus to assure that every proposed rule and guide is reviewed to assess the need for an environmental impact statement and that, where need exists, an environmental impact statement is developed to assure timely consideration of environmental factors.
(d) The General Counsel will establish procedures to assure that every legislative proposal on a matter for which the Commission has primary responsibility is reviewed to assess the need for an environmental impact statement and that, where need exists, and environmental impact statement is developed to assure timely consideration of environmental factors.
(e) Parties seeking information or status reports on environmental impact statements and other elements of the NEPA process, should contact the Assistant General Counsel for Litigation and Environmental Policy.
§ 1.89 Effect on prior actions.
It is the policy of the Commission to apply these procedures to the fullest extent possible to proceedings which are already in progress.
Subpart J – Economic Surveys, Investigations and Reports
§ 1.91 Authority and purpose.
General and special economic surveys, investigations, and reports are made by the Bureau of Economics under the authority of the various laws which the Federal Trade Commission administers. The Commission may in any such survey or investigation invoke any or all of the compulsory processes authorized by law.
Subpart K – Penalties for Violation of Appliance Labeling Rules
§ 1.92 Scope.
The rules in this subpart apply to and govern proceedings for the assessment of civil penalties for the violation of section 332 of the Energy Policy and Conservation Act, 42 U.S.C. 6302, and the Commission’s Rules on Labeling and Advertising of Consumer Appliances, 16 CFR part 305, promulgated under sections 324 and 326 of the Energy Policy and Conservation Act, 42 U.S.C. 6294 and 6296.
§ 1.93 Notice of proposed penalty.
(a) Notice. Before issuing an order assessing a civil penalty under this subpart against any person, the Commission shall provide to such person notice of the proposed penalty. This notice shall:
(1) Inform such person of the opportunity to elect in writing within 30 days of receipt of the notice of proposed penalty to have procedures of § 1.95 (in lieu of those of § 1.94) apply with respect to such assessment; and
(2) Include a copy of a proposed complaint conforming to the provision of § 3.11(b) (1) and (2) of the Commission’s Rules of Practice, or a statement of the material facts constituting the alleged violation and the legal basis for the proposed penalty; and
(3) Include the amount of the proposed penalty; and
(4) Include a statement of the procedural rules that the Commission will follow if respondent elects to proceed under § 1.94 unless the Commission chooses to follow subparts B, C, D, E, and F of part 3 of this chapter.
(b) Election. Within 30 days of receipt of the notice of proposed penalty, the respondent shall, if it wishes to elect to have the procedures of § 1.95 apply, notify the Commission of the election in writing. The notification, to be filed in accordance with § 4.2 of this chapter, may include any factual or legal reasons for which the proposed assessment order should not issue, should be reduced in amount, or should otherwise be modified.
§ 1.94 Commission proceeding to assess civil penalty.
If the respondent fails to elect to have the procedures of § 1.95 apply, the Commission shall determine whether to issue a complaint and thereby commence an adjudicative proceeding in conformance with section 333(d)(2)(A) of the Energy Policy and Conservation Act, 42 U.S.C. 6303(d)(2)(A). If the Commission votes to issue a complaint, the proceeding shall be conducted in accordance with subparts B, C, D, E and F of part 3 of this chapter, unless otherwise ordered in the notice of proposed penalty. In assessing a penalty, the Commission shall take into account the factors listed in § 1.97.
§ 1.95 Procedures upon election.
(a) After receipt of the notification of election to apply the procedures of this section pursuant to § 1.93, the Commission shall promptly assess such penalty as it deems appropriate, in accordance with § 1.97.
(b) If the civil penalty has not been paid within 60 calendar days after the assessment order has been issued under paragraph (a) of this section, the General Counsel, unless otherwise directed, shall institute an action in the appropriate district court of the United States for an order enforcing the assessment of the civil penalty.
(c) Any election to have this section apply may not be revoked except with the consent of the Commission.
§ 1.96 Compromise of penalty.
The Commission may compromise any penalty or proposed penalty at any time, with leave of court when necessary, taking into account the nature and degree of violation and the impact of a penalty upon a particular respondent.
§ 1.97 Amount of penalty.
All penalties assessed under this subchapter shall be in the amount per violation as described in section 333(a) of the Energy Policy and Conservation Act, 42 U.S.C. 6303(a), adjusted for inflation pursuant to § 1.98, unless the Commission otherwise directs. In considering the amount of penalty, the Commission shall take into account:
(a) Respondent’s size and ability to pay;
(b) Respondent’s good faith;
(c) Any history of previous violations;
(d) The deterrent effect of the penalty action;
(e) The length of time involved before the Commission was made aware of the violation;
(f) The gravity of the violation, including the amount of harm to consumers and the public caused by the violation; and
(g) Such other matters as justice may require.
Subpart L – Civil Penalty Adjustments Under the Federal Civil Penalties Inflation Adjustment Act of 1990, as Amended
§ 1.98 Adjustment of civil monetary penalty amounts.
This section makes inflation adjustments in the dollar amounts of civil monetary penalties provided by law within the Commission’s jurisdiction. The following maximum civil penalty amounts apply only to penalties assessed after January 11, 2023, including those penalties whose associated violation predated January 11, 2023.
(a) Section 7A(g)(1) of the Clayton Act, 15 U.S.C. 18a(g)(1) – $50,120;
(b) Section 11(l) of the Clayton Act, 15 U.S.C. 21(l) – $26,628;
(c) Section 5(l) of the FTC Act, 15 U.S.C. 45(l) – $50,120;
(d) Section 5(m)(1)(A) of the FTC Act, 15 U.S.C. 45(m)(1)(A) – $50,120;
(e) Section 5(m)(1)(B) of the FTC Act, 15 U.S.C. 45(m)(1)(B) – $50,120;
(f) Section 10 of the FTC Act, 15 U.S.C. 50 – $659;
(g) Section 5 of the Webb-Pomerene (Export Trade) Act, 15 U.S.C. 65 – $659;
(h) Section 6(b) of the Wool Products Labeling Act, 15 U.S.C. 68d(b) – $659;
(i) Section 3(e) of the Fur Products Labeling Act, 15 U.S.C. 69a(e) – $659;
(j) Section 8(d)(2) of the Fur Products Labeling Act, 15 U.S.C. 69f(d)(2) – $659;
(k) Section 333(a) of the Energy Policy and Conservation Act, 42 U.S.C. 6303(a) – $542;
(l) Sections 525(a) and (b) of the Energy Policy and Conservation Act, 42 U.S.C. 6395(a) and (b), respectively – $26,628 and $50,120, respectively;
(m) Section 621(a)(2) of the Fair Credit Reporting Act, 15 U.S.C. 1681s(a)(2) – $4,705;
(n) Section 1115(a) of the Medicare Prescription Drug Improvement and Modernization Act of 2003, Public Law 108-173, as amended by Public Law 115-263, 21 U.S.C. 355 note – $17,719;
(o) Section 814(a) of the Energy Independence and Security Act of 2007, 42 U.S.C. 17304 – $1,426,319; and
(p) Civil monetary penalties authorized by reference to the Federal Trade Commission Act under any other provision of law within the jurisdiction of the Commission – refer to the amounts set forth in paragraphs (c) through (f) of this section, as applicable.
Subpart M – Submissions Under the Small Business Regulatory Enforcement Fairness Act
§ 1.99 Submission of rules, guides, interpretations, and policy statements to Congress and the Comptroller General.
Whenever the Commission issues or substantively amends a rule or industry guide or formally adopts an interpretation or policy statement that constitutes a “rule” within the meaning of 5 U.S.C. 804(3), a copy of the final rule, guide, interpretation or statement, together with a concise description, the proposed effective date, and a statement of whether the rule, guide, interpretation or statement is a “major rule” within the meaning of 5 U.S.C. 804(2), will be transmitted to each House of Congress and to the Comptroller General. The material transmitted to the Comptroller General will also include any additional relevant information required by 5 U.S.C. 801(a)(1)(B). This provision generally applies to rules issued or substantively amended pursuant to § 1.14(c), § 1.15(a), § 1.19, or § 1.26(d); industry guides issued pursuant to § 1.6; interpretations and policy statements formally adopted by the Commission; and any rule of agency organization, practice or procedure that substantially affects the rights or obligations of non-agency parties.
Subpart N – Administrative Wage Garnishment
§ 1.100 Administrative wage garnishment.
(a) General. The Commission may use administrative wage garnishment for debts, including those referred to Bureau of the Fiscal Service, Department of Treasury, for cross-servicing. Regulations in 31 CFR 285.11 govern the collection of delinquent nontax debts owed to federal agencies through administrative garnishment of non-Federal wages. Whenever the Bureau of the Fiscal Service collects such a debt for the Commission using administrative wage garnishment, the statutory administrative requirements in 31 CFR 285.11 will govern.
(b) Hearing official. Any hearing required to establish the Commission’s right to collect a debt through administrative wage garnishment shall be conducted by a qualified individual selected at the discretion of the Chairman of the Commission, as specified in 31 CFR 285.11.
Subpart O – OMB Control Numbers for Commission Information Collection Requirements
§ 1.101 OMB control numbers assigned pursuant to the Paperwork Reduction Act.
(a) Purpose. This part collects and displays control numbers assigned by the Office of Management and Budget (OMB) pursuant to the Paperwork Reduction Act of 1995 to information collection requirements in rules issued or enforced by the Commission. A response to an information collection is not required unless the collection of information displays a valid OMB control number. This part fulfills the mandate (44 U.S.C. 3507(a)(3), 44 U.S.C. 3512) that agencies display the current control number assigned by the OMB Director to agency information collection requirements and inform affected persons that they need not respond to a collection of information unless it displays a valid control number.
(b) Display.
| Current OMB control number (all numbers begin with 3084-) | 16 CFR part where the information collection requirement is located (or alternate part(s) if issued by another agency, co-enforced by the Federal Trade Commission) |
|---|---|
| 0005 | 801-803. |
| 0025 | 453. |
| 0068 | 306. |
| 0069 | 305. |
| 0085 | 12 CFR part 205; 12 CFR part 1005. |
| 0086 | 12 CFR part 213; 12 CFR part 1013. |
| 0087 | 12 CFR part 202; 12 CFR part 1002. |
| 0088 | 12 CFR part 226; 12 CFR part 1026. |
| 0094 | 309. |
| 0097 | 310. |
| 0099 | 301. |
| 0100 | 300. |
| 0101 | 303. |
| 0102 | 308. |
| 0103 | 423. |
| 0104 | 425. |
| 0105 | 432. |
| 0106 | 435. |
| 0107 | 436. |
| 0108 | 455. |
| 0109 | 460. |
| 0110 | 500-503. |
| 0111 | 701. |
| 0112 | 702. |
| 0113 | 703. |
| 0117 | 312. |
| 0121 | 313. |
| 0127 | 315. |
| 0128 | 12 CFR 1022.136; 12 CFR 1022.137. |
| 0131 | 680; 12 CFR 1022.20. |
| 0132 | 642; 12 CFR 1022.54. |
| 0137 | 641; 681. |
| 0142 | 437. |
| 0144 | 660; 12 CFR 1022.42; 12 CFR 1022.43. |
| 0145 | 640; 12 CFR 1022.70. |
| 0150 | 318. |
| 0156 | 12 CFR part 1014. |
| 0157 | 12 CFR part 1015. |
§§ 1.102-1.109 [Reserved]
Subpart P – Administrative Debt Collection, Including Administrative Offset
§ 1.110 Application of Government-wide administrative claims collections standards and adoption of administrative offset regulations.
(a) The Commission shall apply the Federal Claims Collection Standards (FCCS), 31 CFR parts 900-904, in the administrative collection, offset, compromise, suspension, termination, and referral of collection activity for civil claims for money, funds, or property, as defined by 31 U.S.C. 3701(b), unless specific Federal agency statutes or regulations apply to such activities or, as provided for by Title 11 of the United States Code, when the claims involve bankruptcy. The Commission shall also follow Department of Treasury regulations set forth at 31 CFR part 285, as applicable, for administrative debt collection, including centralized offset of federal payments to collect non-tax debts that may be owed to the Commission, 31 CFR 285.5. Nothing in this subpart shall be construed to supersede or require the Commission to provide additional notice or other procedures that may have already been provided or afforded to a debtor in the course of administrative or judicial litigation or otherwise.
(b) For purposes of 31 U.S.C. 3716(b)(1), the Commission adopts without change the regulations on collection by administrative offset set forth at 31 CFR 901.3 and other relevant sections of the FCCS applicable to such offset.
§§ 1.111-1.119 [Reserved]
Subpart Q – Tax Refund Offset
§ 1.120 Purpose.
This subpart establishes procedures for the Commission’s referral of past-due legally enforceable debts to the Department of the Treasury’s Bureau of the Fiscal Service (Fiscal Service) for offset against the tax refund payments of the debtor, consistent with applicable Fiscal Service regulations and definitions set forth in 31 CFR 285.2 and 285.5.
§ 1.121 Notification of intent to collect.
(a) Notification before tax refund offset. Reduction of a tax refund payment will be made only after the Commission makes a determination that an amount is owed and past-due and gives or makes a reasonable attempt to give the debtor 60 days written notice of the intent to collect by tax refund offset.
(b) Contents of notice. The Commission’s notice of intent to collect by tax refund offset will state:
(1) The amount of the debt;
(2) That unless the debt is repaid within 60 days from the date of the notice, the Commission intends to collect the debt by requesting a reduction of any amounts payable to the debtor as a Federal tax refund payment by an amount equal to the amount of the debt and all accumulated interest and other charges;
(3) That the debtor, within 60 days from the date of the notice, has an opportunity to make a written agreement to repay the amount of the debt, unless such opportunity has previously been provided;
(4) A mailing address for forwarding any written correspondence and a contact name and a telephone number for any questions; and
(5) That the debtor may present evidence to the Commission that all or part of the debt is not past due or legally enforceable by:
(i) Sending a written request for a review of the evidence to the address provided in the notice;
(ii) Stating in the request the amount disputed and the reasons why the debtor believes that the debt is not past due or is not legally enforceable; and
(iii) Including in the request any documents that the debtor wishes to be considered or stating that the additional information will be submitted within the remainder of the 60-day period.
(c) A debtor may dispute the existence or amount of the debt or the terms of repayment, except with respect to debts established by a judicial or administrative order. In those cases, the debtor may not dispute matters or issues already settled, litigated, or otherwise established by such order, including the amount of the debt or the debtor’s liability for that debt, except to the extent that the debtor alleges that the amount of the debt does not reflect payments already made to repay the debt in whole or part.
§ 1.122 Commission action as a result of consideration of evidence submitted in response to the notice of intent.
(a) Consideration of evidence. If, in response to the notice provided to the debtor under § 1.121, the Commission is notified that the debtor will submit additional evidence, or the Commission receives additional evidence from the debtor within the prescribed time, tax refund offset will be stayed until the Commission can:
(1) Consider the evidence presented by the debtor;
(2) Determine whether all or a portion of the debt is still past due and legally enforceable; and
(3) Notify the debtor of its determination, as set forth in paragraph (b) of this section.
(b) Commission action on the debt. (1) If, after considering any additional evidence from the debtor, the Commission determines that the debt remains past-due and legally enforceable, the Commission will notify the debtor of its intent to refer the debt to the Fiscal Service for offset against the debtor’s Federal tax refund payment, including whether the amount of the debt remains the same or is modified; or
(2) If, after considering any additional evidence from the debtor, the Commission determines that no part of the debt remains past-due and legally enforceable, the Commission will so notify the debtor and will not refer the debt to the Fiscal Service for offset against the debtor’s Federal tax refund payment.
§ 1.123 Change in notification to Bureau of the Fiscal Service.
After the Commission sends the Fiscal Service notification of a debtor’s liability for a debt, the Commission will promptly notify the Fiscal Service if the Commission:
(a) Determines that there is a material error or other material change in the information contained in the notification, including in the amount of the debt, subject to any additional due process requirements, where applicable, under this subpart or the Federal Claims Collection Standards, if the amount of debt has increased;
(b) Receives a payment or credits a payment to the account of the debtor named in the notification that reduces the amount of the debt referred to Fiscal Service for offset; or
(c) Otherwise concludes that such notification is appropriate or necessary.
§ 1.124 Interest, penalties, and costs.
To the extent permitted or required by 31 U.S.C. 3717 or other law, regulation, or order, all interest, penalties, and costs applicable to the debt or incurred in connection with its referral for collection by tax refund offset will be assessed on the debt and thus increase the amount of the offset.
§§ 1.125-1.129 [Reserved]
Subpart R – Policy With Regard to Indemnification of FTC Employees
§ 1.130 Policy on employee indemnification.
(a) The Commission may indemnify, in whole or in part, its employees (which for the purpose of this regulation includes former employees) for any verdict, judgment, or other monetary award which is rendered against any such employee, provided that the conduct giving rise to the verdict, judgment, or award was taken within the scope of his or her employment with the Federal Trade Commission and that such indemnification is in the interest of the Federal Trade Commission, as determined as a matter of discretion by the Commission, or its designee.
(b) The Commission may settle or compromise a personal damage claim against its employee by the payment of available funds, at any time, provided the alleged conduct giving rise to the personal damage claim was taken within the scope of employment and that such settlement or compromise is in the interest of the Federal Trade Commission, as determined as a matter of discretion by the Commission, or its designee.
(c) Absent exceptional circumstances, as determined by the Commission or its designee, the Commission will not entertain a request either to agree to indemnify or to settle a personal damage claim before entry of an adverse verdict, judgment, or monetary award.
(d) When an employee of the Federal Trade Commission becomes aware that an action may be or has been filed against the employee in his or her individual capacity as a result of conduct taken within the scope of his or her employment, the employee shall immediately notify his or her supervisor that such an action is pending or threatened. The supervisor shall promptly thereafter notify the Office of the General Counsel. Employees may be authorized to receive legal representation by the Department of Justice in accordance with 28 CFR 50.15.
(e)(1) The employee may, thereafter, request either:
(i) Indemnification to satisfy a verdict, judgment or award entered against the employee; or
(ii) Payment to satisfy the requirements of a settlement proposal.
(2) The employee shall submit a written request, with documentation including copies of the verdict, judgment, award, or settlement proposal, as appropriate, to the head of his or her division or office, who thereupon shall submit to the General Counsel, in a timely manner, a recommended disposition of the request. The General Counsel may also seek the views of the Department of Justice. The failure of an employee to provide notification under paragraph (d) of this section or make a request under this paragraph (e) shall not impair the agency’s ability to provide indemnification or payment under this section if it determines it is appropriate to do so.
(f) Any amount paid under this section either to indemnify a Federal Trade Commission employee or to settle a personal damage claim shall be contingent upon the availability of appropriated funds of the Federal Trade Commission.
Subpart S – Procedures for Submissions Under the Horseracing Integrity and Safety Act
§ 1.140 Definitions.
When used in relation to the Horseracing Integrity and Safety Act, 15 U.S.C. 3051 through 3060, and this subpart –
Act means the Horseracing Integrity and Safety Act, 15 U.S.C. 3051 through 3060.
Breeder means a person who is in the business of breeding covered horses.
Commission means the Federal Trade Commission.
Covered horse means any Thoroughbred horse, or any other horse made subject to the Act by election of the applicable State racing commission or the breed governing organization for such horse under 15 U.S.C. 3054(l), during the period –
(1) Beginning on the date of the horse’s first timed and reported workout at a racetrack that participates in covered horseraces or at a training facility; and
(2) Ending on the date on which the Authority receives written notice that the horse has been retired.
Covered horserace means any horserace involving covered horses that has a substantial relation to interstate commerce, including any Thoroughbred horserace that is the subject of interstate off-track or advance deposit wagers.
Covered persons means all trainers, owners, breeders, jockeys, racetracks, veterinarians, persons (legal and natural) licensed by a State racing commission and the agents, assigns, and employees of such persons and other horse support personnel who are engaged in the care, training, or racing of covered horses.
HISA Guidance means Horseracing Integrity and Safety Authority (Authority) guidance issued under 15 U.S.C. 3054(g)(1), which does not have the force of law.
Horseracing anti-doping and medication control program means the anti-doping and medication program established under 15 U.S.C. 3055(a).
Horseracing Integrity and Safety Authority or Authority means the private, independent, self-regulatory, nonprofit corporation recognized for purposes of developing and implementing a horseracing anti-doping and medication control program and a racetrack safety program for covered horses, covered persons, and covered horseraces.
Interstate off-track wager has the meaning given such term in Section 3 of the Interstate Horseracing Act of 1978, 15 U.S.C. 3002.
Jockey means a rider or driver of a covered horse in covered horseraces.
Owner means a person who holds an ownership interest in one or more covered horses.
Proposed rule means any rule proposed by the Authority pursuant to the Act.
Proposed rule modification or modification means:
(1) Any proposed modification to a rule or proposed rule change; or
(2) Any interpretation or statement of policy or practice relating to an existing rule of the Authority that is not HISA Guidance and would have the force of law if approved as a final rule.
Racetrack means an organization licensed by a State racing commission to conduct covered horseraces.
Racetrack safety program means the program established under 15 U.S.C. 3056(a).
State racing commission means an entity designated by State law or regulation that has jurisdiction over the conduct of horseracing within the applicable State.
Trainer means an individual engaged in the training of covered horses.
Training facility means a location that is not a racetrack licensed by a State racing commission that operates primarily to house covered horses and conduct official timed workouts.
Veterinarian means a licensed veterinarian who provides veterinary services to covered horses.
Workout means a timed running of a horse over a predetermined distance not associated with a race or its first qualifying race, if such race is made subject to the Act by election under 15 U.S.C. 3054(l) of the horse’s breed governing organization or the applicable State racing commission.
§ 1.141 Required submissions.
The Authority must submit to the Commission any proposed rule, or proposed rule modification, of the Authority relating to –
(a) The bylaws of the Authority;
(b) A list of permitted and prohibited medications, substances, and methods, including allowable limits of permitted medications, substances, and methods;
(c) Laboratory standards for accreditation and protocols;
(d) Standards for racing surface quality maintenance;
(e) Racetrack safety standards and protocols;
(f) A program for injury and fatality data analysis;
(g) A program of research and education on safety, performance, and anti-doping and medication control;
(h) A description of safety, performance, and anti-doping and medication control rule violations applicable to covered horses and covered persons;
(i) A schedule of civil sanctions for violations;
(j) A process or procedures for disciplinary hearings;
(k) A formula or methodology for determining assessments described in 15 U.S.C. 3052(f); and
(l) Any other proposed rule or modification the Act requires the Authority to submit to the Commission for approval.
§ 1.142 Submission of proposed rule or modification.
(a) Contents of submission. In order for a submission to qualify as a proposed rule or proposed rule modification under 15 U.S.C. 3053(a), the Authority must submit to the Commission a complete draft of the
(1) The reasons for adopting the proposed rule or modification.
(2) Any problems the proposed rule or modification is intended to address and how the proposed rule or modification will resolve those problems.
(3) A description of any reasonable alternatives to the proposed rule or modification that may accomplish the stated objective and an explanation of the reasons the Authority chose the proposed rule or modification over its alternatives.
(4) How the proposed rule or modification will affect covered persons, covered horses, and covered horseraces.
(5) Why the proposed rule or modification is consistent with the requirements of the Act and any rules and regulations applicable to the Authority, including the following:
(i) Anti-doping and medication control program. When proposing a rule or modification to the horseracing anti-doping and medication control program, the Authority must explain how it considered the factors in 15 U.S.C. 3055, including:
(A) Under 15 U.S.C. 3055(a)(2), the unique characteristics of a breed of horse made subject to the Act by election of a State racing commission or breed governing organization for such horse pursuant to 15 U.S.C. 3054(l);
(B) The factors listed in 15 U.S.C. 3055(b); and
(C) The baseline anti-doping and medication control rules identified in 15 U.S.C. 3055(g)(2)(A). For a proposed rule, the Authority must state whether its proposed rule adopts the baseline standards identified in 15 U.S.C. 3055(g)(2)(A). If there is a conflict in any baseline standards identified in 15 U.S.C. 3055(g)(2)(A), the Authority must identify the conflict and state whether the standard it adopted is the most stringent standard. For a proposed rule modification, the Authority must explain whether the modification renders an anti-doping and medication control rule less stringent than the baseline anti-doping and medication control rules described in 15 U.S.C. 3055(g)(2)(A), and state whether the anti-doping and medication control enforcement agency has approved of the change.
(ii) Racetrack safety program. When proposing a rule or modification to any rule regarding the racetrack safety program required under 15 U.S.C. 3056(a)(1), the Authority must explain how the proposed rule or modification meets the requirements in 15 U.S.C. 3056(b). The Authority must explain how it considered and whether it adopted the safety standards in 15 U.S.C. 3056(a)(2). If any horseracing safety standards in 15 U.S.C. 3056(a)(2) were considered but not adopted or were modified, the Authority must explain why it decided not to adopt or why it decided to modify such standard.
(iii) Other rules. To the extent the Act requires the Authority to consider any factors or standards not specifically referenced in this section, the Authority must explain whether and how it considered those factors when proposing a rule or modification. For instance, when proposing a civil sanctions rule or modification pursuant to 15 U.S.C. 3057(d)(1), the Authority must explain how the rule or modification meets the requirements of 15 U.S.C. 3057(d)(2).
(6) If written comments were solicited, the Authority’s draft
(7) The date that the Authority proposes for the
(b) Supporting documentation. The Authority’s submission to the Commission required under paragraph (a) of this section must also include copies of the pertinent factual information underlying the Authority’s development of the proposed rule or modification, including a copy of existing standards used as a reference for the development of the proposed rule or modification and scientific data, studies, or analysis underlying the development of the proposed rule or modification. Supporting documentation must be attached as exhibits, and each exhibit must clearly identify the proposed rule or modification it supports.
(c) Redline document for proposed rule modification. For proposed rule modifications, the Authority must also provide, in a document separate from the
(d) Timing of submission. To qualify as a proposed rule or proposed modification under 15 U.S.C. 3053(a), the Authority’s submission must provide the information in paragraphs (a), (b), and (c) of this section at least 90 days in advance of the proposed date for the
(e) Conclusory statements and failure to provide requisite analysis. Information required to be submitted under this section must be sufficiently detailed and contain sufficient analysis to support a Commission finding that a proposed rule or modification satisfies the statutory requirements. For instance, a mere assertion or conclusory statement that a proposed rule or modification is consistent with the requirements of the Act is insufficient. Failure to describe and justify the proposed rule or modification in the manner described in this section or failure to submit the information required by this section may result in the Commission’s having insufficient information to make an affirmative finding that the proposed rule or modification is consistent with the Act and the applicable rules approved by the Commission.
(f) Public comments. The Authority is encouraged to solicit public comments on its proposed rule or modification in advance of making a submission to the Commission pursuant to this section. If the Authority solicits public comments, it must attach a copy of the comments as an exhibit to its submission. By soliciting public comments and addressing significant issues raised therein, the Authority facilitates the Commission’s review and approval of the Authority’s proposed rule or modification.
§ 1.143 Submissions to the Secretary.
(a) Electronic submission. All rule submissions under § 1.142 and 15 U.S.C. 3053(a), rate increases that must be reported to the Commission under 15 U.S.C. 3052(f)(1)(C)(iv), or HISA Guidance that must be submitted to the Commission under 15 U.S.C. 3054(g)(2) must be emailed to the Secretary of the Commission at [email protected]. The subject line of the email must state: “HISA Rule Submission,” “HISA Rate Increase Submission,” or “HISA Guidance Submission,” as applicable.
(b) Format for submission of proposed rules or modifications – (1) Electronic format. Except for supporting documentation submitted pursuant to § 1.142(b) and copies of comments submitted pursuant to § 1.142(f), all documents submitted to the Secretary must be in a word processing format.
(2) Table of contents. Submissions with more than one attachment must contain a table of contents in the body of the email with a brief description of each item.
(3) Contact information. The Authority must provide the name, telephone number, and email address of a person on the staff of the Authority responsible for responding to questions and comments on the submission in the body of the email.
(4) Draft
(i) Contain proper preamble captions and content;
(ii) State the purpose of, and basis for, the proposed rule or modification;
(iii) Set forth regulatory text, headings, and authority citations;
(iv) Use correct numbering, structure, and amendatory language; and
(v) Conform to the style and formatting established by the Office of the Federal Register and Government Publishing Office. (See, specifically, section 2.17 (proposed rules) of the Office of the Federal Register’s Document Drafting Handbook.)
(c) Confidential information. If a document filed with the Secretary contains confidential information, the Secretary must be so informed, and a request for confidential treatment must be submitted in accordance with 16 CFR 4.9.
(d) Date of filing. If the conditions of this section are otherwise satisfied, all filings submitted electronically on or before 5:30 p.m. Eastern Time, on a business day, will be deemed filed on that business day, and all filings submitted after 5:30 p.m. Eastern Time, will be deemed filed on the next business day.
(e) Authority to reject documents for filing. The Secretary of the Commission may reject a document for filing that fails to comply with the Commission’s rules for filing in this section or § 1.142.
(f)
§ 1.144 Approval or disapproval of proposed rules and proposed rule modifications.
(a) Commission decision. The Commission will approve or disapprove a proposed rule or modification by issuing an order within 60 days of the date the proposed rule or modification was published in the
(b) Standard of review. The Commission will approve a proposed rule or modification if the Commission finds that the proposed rule or modification is consistent with the Act and the applicable rules approved by the Commission. If the Commission disapproves a rule or modification, it will make recommendations to the Authority to modify the proposed rule or modification within 30 days of such disapproval.
(c) Effect. A proposed rule or modification will not take effect unless it has been approved by the Commission.
Subpart T – Procedures for Review of Final Civil Sanctions Imposed under the Horseracing Integrity and Safety Act
§ 1.145 Submission of notice of civil sanctions.
(a) Requirement to file. If the Horseracing Integrity and Safety Authority (Authority) imposes a final civil sanction under 15 U.S.C. 3057(d) for a covered person’s violation of a rule of the Authority, the Authority must submit notice of the sanction to the Federal Trade Commission (Commission) no later than two days after the sanction has been issued for the sanction to be enforceable.
(b) Format and procedure for submission of notice. The notice submitted to the Commission must:
(1) Be emailed to the Secretary of the Commission (Secretary) at [email protected];
(2) Contain the subject line “HISA Civil Sanction Notice”;
(3) Clearly indicate that it relates to a civil sanction imposed on a covered person resulting from a violation of an Authority rule;
(4) Include contact information for an employee at the Authority responsible for communications regarding review of the civil sanction;
(5) Be sent in portable document format (or .PDF) or such other format as the Secretary may permit;
(6) Contain only public information; and
(7) Be served the same day upon the person aggrieved by the sanction in accordance with 16 CFR 4.4(b) as made applicable to review proceedings under this part.
§ 1.146 Review of civil sanction by an Administrative Law Judge.
(a) Application for review. An application for review of a final civil sanction imposed by the Authority may be filed by the Commission or by the person aggrieved by the civil sanction. Any such application must: be filed within 30 days of the submission of the notice of civil sanctions under § 1.145; state the civil sanction imposed; include a copy of the final Authority decision imposing the sanction; and be served on the Authority (and, if filed by the Commission, served on the aggrieved person) in accordance with 16 CFR 4.4(b) as made applicable to review proceedings in this part.
(1) Application by aggrieved person. An application filed by an aggrieved person also must state in no more than 1,000 words the reasons for challenging the sanction and whether the person requests an evidentiary hearing conducted by the Administrative Law Judge; if a hearing is requested, the applicant must state whether the hearing is sought to supplement or to contest facts in the record found by the Authority. Each issue must be plainly and concisely stated. Further, the applicant must provide support for each issue raised, citing to the Authority’s record when assignments of error are based on the record, and citing to the principal legal authorities the applicant relies upon, whether statutes, regulations, cases, or other authorities. Except for good cause shown, no assignment of error by the aggrieved party may rely on any question of fact or law not presented to the Authority. Within 10 days of being served with the application, the Authority may file a response limited to no more than 1,000 words stating the reasons the sanction should be upheld and whether an evidentiary hearing conducted by the Administrative Law Judge is either unnecessary, or necessary to supplement or to contest facts in the record found by the Authority.
(2) Application by the Commission. When the Commission on its own initiative files an application, the application must identify matters that the Commission finds material to the Administrative Law Judge’s review of the civil sanction imposed by the Authority, whether or not raised by the aggrieved person or the Authority. Notice to the parties of the opportunity for further factual development of the record through an evidentiary hearing conducted by the Administrative Law Judge under paragraph (c) of this section shall be given when the Commission believes that supplementation of the record would significantly aid the decisional process.
(b) Nature of review by the Administrative Law Judge. Under 15 U.S.C. 3058(b)(2)(A), the Administrative Law Judge must determine when reviewing matters under this subpart:
(1) Whether the person has engaged in such acts or practices, or has omitted such acts or practices, as the Authority has found the person to have engaged in or omitted. In making this determination, the Administrative Law Judge may rely on the factual record developed before the Authority and may supplement that record by evidence presented in an administrative hearing under paragraph (c) of this section;
(2) Whether such acts, practices, or omissions are in violation of the Horseracing Integrity and Safety Act, 15 U.S.C. 3051 through 3060, or the rules of the Authority as approved by the Commission. The Administrative Law Judge will make this determination de novo; and
(3) Whether the final civil sanction of the Authority was arbitrary, capricious, an abuse of discretion, prejudicial, the result of a conflict of interest, or otherwise not in accordance with law. The Administrative Law Judge will make this determination de novo.
(c) Administrative hearings – (1) Duties and powers of the Administrative Law Judge and rights of the parties. (i) The Administrative Law Judge has the duty and is granted the necessary powers to conduct fair and impartial hearings, to take all necessary action to avoid delay in the disposition of proceedings, and to maintain order. To effectuate those goals, the hearing conducted by the Administrative Law Judge under 15 U.S.C. 3058(b)(2)(B) shall include (but is not limited to):
(A) Administering oaths and affirmations;
(B) Issuing orders requiring answers to questions;
(C) Compelling admissions, upon request of a party or on its own initiative;
(D) Ruling upon offers of proof and receiving evidence;
(E) Regulating the course of the hearing;
(F) Holding conferences for settlement, simplification of the issues, or other proper purposes;
(G) Ruling on procedural and other motions; and
(H) Issuing a decision.
(ii) All parties are entitled to the right of due notice, cross-examination, presentation of evidence, objection, motion, argument, and all other rights essential to a fair hearing consistent with 5 U.S.C. 556.
(2) The factual record. In reviewing the final civil sanction and decision of the Authority, the Administrative Law Judge may rely in full or in part on the factual record developed before the Authority through the disciplinary process under 15 U.S.C. 3057(c) and disciplinary hearings under Authority Rule Series 8300. The record may be supplemented by an evidentiary hearing conducted by the Administrative Law Judge to ensure each party receives a fair and impartial hearing. Within 20 days of the filing of an application for review, based on the application submitted by the aggrieved party or by the Commission and on any response by the Authority, the Administrative Law Judge will assess whether:
(i) The parties do not request to supplement or contest the facts found by the Authority;
(ii) The parties do not seek to contest any facts found by the Authority, but at least one party requests to supplement the factual record;
(iii) At least one party seeks to contest any facts found by the Authority;
(iv) The Commission, if it filed the application for review, seeks supplementation of the record; or
(v) In the Administrative Law Judge’s view, the factual record is insufficient to adjudicate the merits of the review proceeding.
(3) Hearings for which neither a party nor the Commission requests to supplement or contest the facts found by the Authority and whose record the Administrative Law Judge deems sufficient. When neither a party nor the Commission requests to supplement or alter the factual record before the Authority, and the Administrative Law Judge has not determined the factual record is insufficient, the factual record will be deemed closed, and no evidentiary hearing will be held. In such cases, the administrative hearing conducted by the Administrative Law Judge will be limited to briefing by the parties, unless the Administrative Law Judge elects to hear oral argument. Within 30 days of the application for review, each party will concurrently file with the Secretary for consideration by the Administrative Law Judge proposed findings of fact, conclusions of law, and a proposed order, together with a supporting legal brief providing the party’s reasoning. Such filings, limited to 7,500 words, must be served on the other party and contain references to the record and authorities on which they rely. Reply findings of fact, conclusions of law, and briefs, limited to 2,500 words, may be filed by each party within 10 days of service of the initial filings.
(4) Hearings for which no party contests facts found by the Authority but at least one party or the Commission seeks to supplement the record or for which the Administrative Law Judge determines that supplementation is necessary. When a party or the Commission seeks to supplement the record, or when the Administrative Law Judge determines the factual record is insufficient, the factual record developed before the Authority will be considered the initial record before the Administrative Law Judge. The record will be supplemented by evidence presented in a hearing before the Administrative Law Judge.
(i) The Administrative Law Judge will conduct an evidentiary hearing lasting no more than 8 hours for each party or the Commission seeking supplementation. The hearing may be extended by request of a party, the Commission, or on the Administrative Law Judge’s own initiative, for good cause. When a party seeks to supplement the record, the hearing will be limited to:
(A) An opening statement by the party requesting supplementation of no more than 15 minutes;
(B) Direct examination by the party requesting supplementation, with opportunity for cross-examination by the other party; and
(C) The admission of documentary evidence. When the Administrative Law Judge or the Commission seek supplementation of the record, the Administrative Law Judge or the Commission may issue an order allowing the consideration of additional evidence, describing the additional evidence sought, and prescribing the procedures for holding the hearing before the Administrative Law Judge.
(ii) Within 30 days of the hearing’s conclusion, each party will concurrently file with the Secretary for consideration by the Administrative Law Judge proposed findings of fact, conclusions of law, and a proposed order, and a supporting legal brief explaining the party’s reasoning. Such filings, limited to 7,500 words, must be served upon the other party and contain references to the record and authorities on which they rely. Reply briefs, limited to 2,500 words, may be filed by each party within 10 days of service of the initial filings.
(iii) The Administrative Law Judge must hear closing statements from the parties within 10 days of the date on which reply briefs are due if either party, in its reply brief, requests the opportunity to make a closing statement.
(5) Hearings in which a party seeks to supplant facts found by the Authority. (i) In an application for review, an aggrieved person may request an extended hearing before the Administrative Law Judge to supplant facts found by the Authority. The extended hearing may last up to 40 hours. To receive an extended hearing, the aggrieved person must make a proffer of weighty, probative, and substantial evidence and compelling argument in support of its contention that the disciplinary process before the Authority failed to comply with the requirements of 15 U.S.C. 3057(c) or of the Authority’s Rule Series 8300, or that prejudicial errors, procedural irregularities, or conflicts of interest were present in, or committed during, the Authority’s proceeding and resulted in a failure to provide the “adequate due process” required under section 3057(c)(3). Extended hearings are disfavored and granted only in these circumstances. For applications for review in which applicants request an extended hearing, the total application is limited to 2,500 words (instead of the ordinary 1,000 words).
(ii) The Authority may file a response to the request for an extended hearing within 10 days of being served with the application for review, limited to 2,500 words (instead of the ordinary 1,000 words). The Authority may, in its response, elect to concede that the contention of procedural inadequacy has substantial evidence in support of it. Presented with such a concession, the Administrative Law Judge must order the final civil sanction set aside without prejudice and remand the matter to the Authority.
(iii) The Administrative Law Judge will issue a decision resolving the request for an extended hearing within 10 days of the date on which the Authority’s response is due. If the request for an extended hearing is granted in part or in full, the extended hearing will be limited to the same elements listed in paragraph (c)(4) of this section, adjusted as deemed necessary by the Administrative Law Judge.
(iv) The final factual record will consist of:
(A) Those facts found by the Authority that, in the determination of the Administrative Law Judge, were found in a process that was consistent with 15 U.S.C. 3057(c), the Authority’s Rule Series 8300, and adequate due process; as well as
(B) Any new facts adduced at the hearing and found by the Administrative Law Judge.
(6) Evidence – (i) Burden of proof. The burden of proof is on the Authority to show, by a preponderance of the evidence, that the covered person has violated a rule issued by the Authority, but the proponent of any factual proposition is required to sustain the burden of proof with respect thereto.
(ii) Admissibility. Only relevant, material, and reliable evidence will be admitted. Evidence, even if relevant, may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice or confusion of the issues, or if the evidence would be misleading, cause undue delay, waste time, or present duplicative evidence. Evidence that constitutes hearsay may be admitted if it is relevant, material, and bears satisfactory indicia of reliability.
(iii) Presentation of evidence. A party is entitled to present its case or defense by sworn oral testimony and documentary evidence, to submit rebuttal evidence, and to conduct such cross-examination as, in the discretion of the Administrative Law Judge, may be required for a full and true disclosure of the facts. The Administrative Law Judge must exercise reasonable control over the mode and order of interrogating witnesses and presenting evidence so as to make the presentation effective for the ascertainment of the truth while avoiding needless consumption of time and to protect witnesses from harassment or undue embarrassment.
(iv) Adverse witnesses. Adverse parties, or officers, agents, or employees thereof, and any witnesses who appears to be hostile, unwilling, or evasive, may be interrogated by leading questions and may also be contradicted and impeached by the party calling them.
(v) Objections. Objections to evidence must be timely and must briefly state the grounds relied upon. The transcript must not include argument or debate thereon except as ordered by the Administrative Law Judge. Rulings on all objections must appear in the record.
(7) In camera treatment of material. (i) A party or third party may obtain in camera treatment for material, or portions thereof, offered into evidence only by motion to the Administrative Law Judge. The Administrative Law Judge has the authority to order such material, whether admitted or rejected, be placed in camera only after finding that its public disclosure will likely result in a clearly defined, serious injury to the party requesting in camera treatment or after finding that the material constitutes sensitive personal information. “Sensitive personal information” includes, but is not limited to, an individual’s Social Security number, taxpayer identification number, financial account number, credit card or debit card number, driver’s license number, state-issued identification number, passport number, date of birth (other than year), and any sensitive health information identifiable by individual, such as an individual’s medical records.
(ii) Material made subject to an in camera order will be kept confidential and not placed on the public record. Parties must not disclose information that has been granted in camera status or is subject to confidentiality protections pursuant to a protective order in the public version of proposed findings, briefs, or other documents. Parties who seek to use material obtained from a third party subject to confidentiality restrictions must show that the third party has been given at least 10 days’ notice of the proposed use of such material.
(d) Decision by the Administrative Law Judge – (1) When filed. The Administrative Law Judge must file a decision within 30 days of closing statements or, if no closing statements are ordered, within 30 days of the date on which reply findings of fact, conclusions of law, and briefs are due. The Administrative Law Judge may extend this time period for up to 30 days for good cause. The decision must be filed within 60 days of the conclusion of the administrative hearing.
(2) Content. The decision by the Administrative Law Judge must be based on a consideration of the whole record relevant to the issues decided and must be supported by reliable and probative evidence. The decision must include a statement of findings of fact (with specific page references to principal supporting items of evidence in the record) and conclusions of law, explaining the reasons for the decision, and an appropriate order. Rulings containing information granted in camera status must be issued such that only counsel for the parties receive an unredacted confidential version of the ruling and that only a version of the ruling redacting confidential information is placed on the public record.
(3) Disposition. In the decision, the Administrative Law Judge may:
(i) Affirm, reverse, modify, set aside, or remand for further proceedings, in whole or in part, the final civil sanction of the Authority; and
(ii) Make any finding or conclusion that, in the judgment of the Administrative Law Judge, is proper and based on the record.
(4) Final decision; waiver upon Commission review. A decision by the Administrative Law Judge will constitute the final decision of the Commission subject to judicial review under 5 U.S.C. 704 without further proceedings unless a notice or an application for review to the Commission is timely filed under § 1.147. Any objection to any ruling by the Administrative Law Judge or to any finding, conclusion, or a provision of the order in the decision of the Administrative Law Judge that is not made a part of an appeal to the Commission will be deemed to have been waived.
§ 1.147 Review by the Commission of the decision of the Administrative Law Judge.
(a) Notice of review by the Commission. The Commission may on its own motion review any decision of an Administrative Law Judge issued under § 1.146 by providing written notice to the Authority and any other party within 45 days of the issuance of the decision. The order will set forth the scope of such review and the issues to be considered and will set a briefing schedule. If no party has filed an application for the Commission to review the decision of the Administrative Law Judge and the Commission does not initiate a review on its own motion, the decision of the Administrative Law Judge becomes the final decision of the Commission for purposes of 5 U.S.C. 704 without the need for further agency proceedings 46 days after its issuance.
(b) Application for review and response – (1) Timing. The Authority or a person aggrieved by the decision of the Administrative Law Judge under § 1.146 may petition the Commission for review of such decision by filing an application for review with the Secretary of the Commission within 30 days of the issuance of the decision.
(2) Contents of application and response. (i) The application must specify the party or parties against whom the appeal is taken and specify the decision and order or parts thereof appealed from. The application, limited to 1,000 words, must provide the reasons it should be granted by addressing the matters the Commission considers in determining whether to grant the application under paragraph (b)(4)(i) of this section. Unless the application is denied, the applicant must perfect its application by filing its opening brief consistent with the requirements in paragraph (c)(3)(i) of this section.
(ii) Any other party to the matter may respond to the application no later than 10 days after it is filed by providing the reasons, limited to 1,000 words, it should not be granted by addressing the matters the Commission considers in determining whether to grant the application under paragraph (b)(4)(i) of this section.
(3) Effect of denial of application for review. If an application for review is denied, the decision of the Administrative Law Judge becomes the final decision of the Commission for purposes of 5 U.S.C. 704 without the need for further agency proceedings.
(4) Discretion of the Commission – (i) In general. A decision whether to grant an application for review is subject to the sole discretion of the Commission. The Commission will issue an order resolving an application for its review as expeditiously as possible. The Commission may decide to grant review of only one issue or any subset of all the issues raised in the application for review.
(ii) Matters to be considered. In determining whether to grant an application for review, in full or in part, the Commission considers whether the application makes a reasonable showing that:
(A) A prejudicial error was committed in the conduct of the proceeding before the Administrative Law Judge; or
(B) The decision involved:
(1) An erroneous application of the anti-doping and medication control or racetrack safety rules approved by the Commission; or
(2) An exercise of discretion or a decision of law or policy that warrants review by the Commission.
(c) Nature of review on the merits – (1) Standard of review. The Commission reviews de novo the factual findings and conclusions of law made by the Administrative Law Judge.
(2) Consideration of additional evidence. In those cases in which the Commission believes it requires additional information or evidence before issuing a final decision, the Commission, in its discretion, may withhold issuing its decision until it obtains additional information or evidence.
(i) Order by Commission. The Commission may issue on its own motion an order allowing the consideration of additional evidence and prescribing the procedures for doing so.
(ii) Motion by a party. A party may file a motion to have the Commission consider additional evidence at any time before the issuance of a decision by the Commission. The motion must show, with particularity, that:
(A) Such additional evidence is material; and
(B) There were reasonable grounds for failure to submit the evidence previously.
(iii) Commission determination. Upon motion by a party, the Commission may:
(A) Accept or hear additional evidence itself; or
(B) Remand the proceeding to the Administrative Law Judge for the consideration of additional evidence.
(3) Briefing schedule – (i) Opening brief. If the Commission grants an application for review, the applicant must perfect its application by filing its opening brief, limited to 7,500 words (without leave of the Commission), within 30 days of the Commission’s order granting the application for review. The opening brief must contain, in the following order:
(A) A subject index of the matter in the brief, with page references, and a table of cases with page references;
(B) A concise statement of the case, which includes a statement of facts relevant to the issues submitted for review, and a summary of the argument, which must contain a succinct, clear, and accurate statement of the arguments made in the body of the brief;
(C) A list of the questions presented on appeal that the Commission has agreed to hear;
(D) The argument, clearly presenting the points of fact and law relied upon in support of the position taken on each question, with specific page references to the record and the legal or other material relied upon; and
(E) A proposed order for the Commission’s consideration.
(ii) Answering brief. The opposing party may respond to the opening brief by filing an answering brief, limited to 7,500 words (without leave of the Commission), within 30 days of service of the opening brief. The answering brief must contain a subject index, with page references, and a table of cases with page references, as well as arguments in response to the applicant’s appeal brief.
(iii) Reply brief. The applicant may file a reply to an answering brief within 14 days of service of the answering brief. The reply brief, limited to 2,500 words, must be limited to rebuttal of matters in the answering brief and must not introduce new material. The Commission will not consider new arguments or matters raised in reply briefs that could have been raised earlier in the principal briefs. No further briefs may be filed except by leave of the Commission.
(iv) Word count limitation. The word count limitations in this section include headings, footnotes, and quotations, but do not include the cover, table of contents, table of citations or authorities, glossaries, statements with respect to oral argument, any addendums containing statutes, rules or regulations, any certificates of counsel, and any proposed form of order. Extensions of word count limitations are disfavored and will only be granted when a party can make a strong showing that undue prejudice would result from complying with the existing limit.
(4) Oral argument. Oral arguments will be held in all cases on review to the Commission unless the Commission orders otherwise or upon request of any party made at the time of filing of its brief. Unless the Commission orders otherwise, argument will be held within 30 days of the deadline for filing reply briefs and will be limited to 20 minutes per side.
(5) Decision – (i) Timing. The Commission will issue its final decision within 30 days of oral argument or, if no argument is held, within 30 days of the deadline for the filing of reply briefs. The Commission may extend this time period by up to 30 days for good cause.
(ii) Content; resolution. The Commission will include in its decision a statement of the reasons or bases for its action and any concurring and dissenting opinions. Based on its decision, the Commission may:
(A) Affirm, reverse, modify, set aside, or remand for further proceedings before the Administrative Law Judge, in whole or in part, the decision of the Administrative Law Judge; and
(B) Make any finding or conclusion that, in the judgment of the Commission, is proper and based on the record.
§ 1.148 Stay of proceedings.
(a) In general. Review by an Administrative Law Judge or by the Commission under this subpart will not operate as a stay of a final civil sanction of the Authority unless the Administrative Law Judge or the Commission orders such a stay.
(b) Application for a stay – (1) Before the Administrative Law Judge. A person subject to a final civil sanction imposed by the Authority may apply to the Administrative Law Judge for a stay of all or part of that sanction pending review by the Administrative Law Judge. Any application for a stay is limited to 1,000 words, must be filed concurrently with the application for review of the sanction, and must be served on the Authority in accordance with the provisions of 16 CFR 4.4(b) that are applicable to service in review proceedings under this part. The Authority may file an opposition, limited to 1,000 words, within 7 days of being served with the application for a stay. The Administrative Law Judge must resolve the stay application within 10 days of the date on which the Authority’s opposition is due.
(2) Before the Commission – (i) Expedited application for a stay. The party aggrieved by the sanction and denied a stay by the Administrative Law Judge under paragraph (b)(1) of this section may file an expedited application for a stay with the Commission within 3 days of the Administrative Law Judge’s denial. An expedited application for a stay is limited to 1,000 words and must be served on the Authority in accordance with the provisions of 16 CFR 4.4(b) that are applicable to service in review proceedings under this part. The Authority may file an opposition, limited to 1,000 words, within 3 days of service of the expedited application. The application and opposition should address the factors in paragraph (d) of this section the Commission considers in resolving a stay application. The Commission will issue its decision on the stay application as soon as practicable.
(ii) Application for a stay after the Commission decides to review the Administrative Law Judge’s decision. If the Commission grants the application for review of the decision of the Administrative Law Judge, or orders review of the decision on its own motion, the person subject to the sanction may apply to the Commission for a stay of the sanction pending the Commission’s decision. In this circumstance, the aggrieved person may seek a stay of the sanction before the Commission a second time under this paragraph (b)(2)(ii) even if the person was previously denied an expedited application for a stay under paragraph (b)(2)(i) of this section. The application for a stay, limited to 1,000 words, must be filed within 7 days of the Commission’s order granting the application for review or ordering review under § 1.147(a), and must be served on the Authority in accordance with the provisions of 16 CFR 4.4(b) that are applicable to service in review proceedings under this part. The Authority may file an opposition, limited to 1,000 words, within 7 days of being served with the stay application.
(c) Content of stay application and opposition. An application for a stay of the sanction, and any opposition to the application, must provide the reasons a stay is or is not warranted by addressing the factors described in paragraph (d) of this section, and the facts relied upon, and may include supporting affidavits or other sworn statements, and a copy of the relevant portions of the record.
(d) Factors considered in deciding a stay application. The parties, the Administrative Law Judge, and the Commission must address the following factors, in advocating for or against, or in resolving, a stay application:
(1) The likelihood of the applicant’s success on review;
(2) Whether the applicant will suffer irreparable harm if a stay is not granted;
(3) The degree of injury to other parties or third parties if a stay is granted; and
(4) Whether the stay is in the public interest.
§ 1.149 Adoption of miscellaneous rules.
Part 4 of this subchapter is adopted into this subpart and governs proceedings under this subpart, and, within §§ 4.2 and 4.4, references to “part 3” shall include this subpart.
Subpart U – Procedures for Oversight of the Horseracing Integrity and Safety Authority’s Annual Budget
§ 1.150 Authority’s proposed budget submissions.
(a) Mandatory annual submission. The Authority must submit a proposed annual budget to the Commission every year, irrespective of whether there is a “proposed increase in the amount required” under 15 U.S.C. 3052(f)(1)(C)(iv). The submission of the proposed budget for the following year must be made by September 1 of the current year, following the procedures set forth in § 1.143. The Authority’s annual budget will use the calendar year as its fiscal year.
(b) Public comments. In addition to submitting its planned budget to the Commission by September 1 of the preceding year, the Authority shall post such planned budget on its own website as early as is practicable, with an invitation to the public to submit comments to the Authority on any aspect of the planned next year’s budget. The Authority shall post such comments on its website upon their arrival and shall review them to ascertain whether to revise the budget in any manner. In addition, the Authority shall promptly forward to the Commission:
(1) Any such public comments that it receives; and
(2) An assessment of such public comments that it believes would assist the Commission’s evaluation of the Authority’s planned budget.
(c) Contents of submission – (1) Indication of Board vote. The Authority’s proposed budget must be approved by a majority of its Board of Directors (or, in the case of its initial budget or a budget that exceeds the preceding year’s budget by 5 percent or more, a two-thirds supermajority) and must state the Board vote on the motion to approve the budget.
(2) Revenue information. The proposed budget must identify both the estimated amount required from each State racing commission as calculated under 15 U.S.C. 3052(f) and all other sources of Authority revenue as well as any loans proposed to be obtained by the Authority.
(3) Expenditure information. The proposed budget must identify expenditures separately for:
(i) The racetrack safety program;
(ii) The anti-doping and medication control program;
(iii) All other programmatic expenditures other than for racetrack safety and anti-doping and medication control, such as the administration of the Authority or its technological needs;
(iv) Repayment of any loans; and
(v) Any funding shortfall incurred.
(4) Line items. For both revenue and expenditure information, the Authority’s proposed budget must provide sufficient information, by line item, as would be required for members of the Authority’s Board of Directors to exercise their fiduciary duty of care. For example, the proposed budget’s expenditure information for anti-doping and medication control might include separate line items for in-house salaries, the costs of testing of laboratory samples, the costs of arbitrators, and all the costs associated with contracting with an anti-doping and medication control enforcement agency. The proposed budget must include a narrative component that provides a brief explanation of each line item’s utility in carrying out the purposes of the Horseracing Integrity and Safety Act.
(5) Comparison of approved budget to actual revenues and expenditures. The proposed budget must provide a comparison showing, for each approved line item, the actual revenues and expenditures for the current year along with a narrative component explaining why any line item is anticipated to deviate by 10 percent or more during the current year.
(d) Approval and publication of submission. The Commission will publish the Authority’s proposed budget in the
§ 1.151 Commission’s decision on Authority’s proposed budget.
(a) Commission approval required. The Authority’s proposed budget takes effect only if approved by the Commission. The Commission will approve or disapprove the proposed budget after considering the public comments filed and the Commission’s internal review per the submission requirements in § 1.150. The Commission will vote on the Authority’s proposed budget no later than November 1.
(b) Conditional collection of fees allowed. The notice required to be sent to State racing commissions estimating the amount required from each State for the subsequent year must state that the amount required is based on the proposed annual budget, as approved by the Board of Directors, which takes effect only if approved by the Commission. The State racing commissions (or covered persons in States that do not elect to remit fees) may nevertheless elect to remit fees, and the Authority may conditionally collect them, even before the Commission approves the proposed budget. If the Commission makes any modifications to line items under paragraph (d) of this section that have the net effect of reducing the budget, the Authority must refund any State racing commission or covered person that has conditionally paid by the proportionate amount owed within 30 days. If the Commission makes any modifications to line items under paragraph (d) of this section that have the net effect of increasing the budget, the Authority may obtain loans to make up the difference or may account for the difference as a funding shortfall incurred in the subsequent year’s proposed budget.
(c) Decisional criteria. The Commission will approve the proposed budget if the Commission determines that, on balance, the proposed budget serves the goals of the Horseracing Integrity and Safety Act in a prudent and cost-effective manner, utilizing commercially reasonable terms with all outside vendors, and that its anticipated revenues are sufficient to meet its anticipated expenditures.
(d) Modification of line items. In its decision on the proposed budget, the Commission may modify the amount of any line item.
(e) Public comments. Public comments on the Authority’s proposed budget should provide commenters’ views as to the decisional criteria and whether any line items should be modified.
§ 1.152 Deviation from approved budget.
(a) When notice to the Commission is required. The Authority may deviate from the approved budget’s expenditure information in a year as to any line item by up to 10 percent in a year. If the Authority determines that it is likely to expend more than the approved expenditure of any line item by 10 percent or more, or if it will exceed its approved total expenditure by any amount, it must notify the Commission immediately upon such a determination.
(b) Line-item deviations of more than 10 percent. If the Authority determines that it is likely to expend more than the approved expenditure of any line item by 10 percent or more, its notice to the Commission must indicate whether it intends to repurpose funds from one or more different line items to cover the increased expenditure. The Commission retains the discretion to disapprove such a proposed repurposing. The Commission must issue any decision to disapprove a proposed repurposing within 7 business days of receiving notice of the Authority’s proposal to repurpose funds from another line item. If the Commission takes no action, the Authority’s proposal takes effect as an amendment to its approved budget.
(c) Total expenditure deviation. If the Authority determines that it is likely to expend more than the total approved expenditure, its notice to the Commission must indicate by what means it proposes to cover the difference. The Commission retains the discretion to disapprove the proposed means of covering the difference. The Commission must issue any decision to disapprove a proposed means of covering the difference within 7 business days of receiving notice of the Authority’s proposal to cover the difference. If the Commission takes no action, the Authority’s proposal takes effect as an amendment to its approved budget.
PART 2 – NONADJUDICATIVE PROCEDURES
Subpart A – Inquiries; Investigations; Compulsory Processes
§ 2.1 How initiated.
Commission investigations and inquiries may be originated upon the request of the President, Congress, governmental agencies, or the Attorney General; upon referrals by the courts; upon complaint by members of the public; or by the Commission upon its own initiative. The Commission has delegated to the Director, Deputy Directors, and Assistant Directors of the Bureau of Competition, the Director, Deputy Directors, and Associate Directors of the Bureau of Consumer Protection and, the Regional Directors and Assistant Regional Directors of the Commission’s regional offices, without power of redelegation, limited authority to initiate investigations. The Director of the Bureau of Competition has also been delegated, without power of redelegation, authority to open investigations in response to requests pursuant to an agreement under the International Antitrust Enforcement Assistance Act, 15 U.S.C. 6201 et seq., if the requests do not ask the Commission to use process. Before responding to such a request, the Bureau Director shall transmit the proposed response to the Secretary and the Secretary shall notify the Commission of the proposed response. If no Commissioner objects within three days following the Commission’s receipt of such notification, the Secretary shall inform the Bureau Director that he or she may proceed.
§ 2.2 Complaint or request for Commission action.
(a) A complaint or request for Commission action may be submitted via the Commission’s web-based complaint site (https://www.ftccomplaintassistant.gov/); by a telephone call to 1-877-FTC-HELP (1-877-382-4357); or by a signed statement setting forth the alleged violation of law with such supporting information as is available, and the name and address of the person or persons complained of, filed with the Office of the Secretary in conformity with § 4.2(d) of this chapter. No forms or formal procedures are required.
(b) The person making the complaint or request is not regarded as a party to any proceeding that might result from the investigation.
(c) Where the complainant’s identity is not otherwise made public, the Commission’s policy is not to publish or divulge the name of a complainant except as authorized by law or by the Commission’s rules. Complaints or requests submitted to the Commission may, however, be lodged in a database and made available to federal, state, local, and foreign law enforcement agencies that commit to maintain the privacy and security of the information provided. Further, where a complaint is by a consumer or consumer representative concerning a specific consumer product or service, the Commission in the course of a referral of the complaint or request, or in furtherance of an investigation, may disclose the identity of the complainant. In referring any such consumer complaint, the Commission specifically retains its right to take such action as it deems appropriate in the public interest and under any of the statutes it administers.
§ 2.3 Policy as to private controversies.
The Commission acts only in the public interest and does not initiate an investigation or take other action when the alleged violation of law is merely a matter of private controversy and does not tend adversely to affect the public.
§ 2.4 Investigational policy.
Consistent with obtaining the information it needs for investigations, including documentary material, the Commission encourages the just and speedy resolution of investigations. The Commission will therefore employ compulsory process when in the public interest. The Commission encourages cooperation in its investigations. In all matters, whether involving compulsory process or voluntary requests for documents and information, the Commission expects all parties to engage in meaningful discussions with staff to prevent confusion or misunderstandings regarding the nature and scope of the information and material being sought, in light of the inherent value of genuinely cooperative discovery.
§ 2.5 By whom conducted.
Inquiries and investigations are conducted under the various statutes administered by the Commission by Commission representatives designated and duly authorized for the purpose. Such representatives are “examiners” or “Commission investigators” within the meaning of the Federal Trade Commission Act and are authorized to exercise and perform the duties of their office in accordance with the laws of the United States and the regulations of the Commission. Included among such duties is the administration of oaths and affirmations in any matter under investigation by the Commission.
§ 2.6 Notification of purpose.
Any person, partnership, or corporation under investigation compelled or requested to furnish information or documentary material shall be advised of the purpose and scope of the investigation, the nature of the acts or practices under investigation, and the applicable provisions of law. A copy of a Commission resolution, as prescribed under § 2.7(a), shall be sufficient to give persons, partnerships, or corporations notice of the purpose of the investigation. While investigations are generally nonpublic, Commission staff may disclose the existence of an investigation to potential witnesses or other third parties to the extent necessary to advance the investigation.
§ 2.7 Compulsory process in investigations.
(a) In general. When the public interest warrants, the Commission may issue a resolution authorizing the use of compulsory process. The Commission or any Commissioner may, pursuant to a Commission resolution, issue a subpoena, or a civil investigative demand, directing the recipient named therein to appear before a designated representative at a specified time and place to testify or to produce documentary material, or both, and in the case of a civil investigative demand, to provide a written report or answers to questions, relating to any matter under investigation by the Commission. For the purposes of this subpart, the term:
(1) Electronically stored information (“ESI”) means any writings, drawings, graphs, charts, photographs, sound recordings, images and other data or data compilations stored in any electronic medium from which information can be obtained either directly or, if necessary, after translation by the responding party into a reasonably usable form.
(2) “Documentary material” includes all documents, materials, and information, including ESI, within the meaning of the Federal Rules of Civil Procedure.
(3) “Compulsory process” means any subpoena, CID, access order, or order for a report issued by the Commission.
(4) “Protected status” refers to information or material that may be withheld from production or disclosure on the grounds of any privilege, work product protection, or statutory exemption.
(b) Civil Investigative Demands. Civil Investigative Demands (“CIDs”) shall be the only form of compulsory process issued in investigations with respect to unfair or deceptive acts or practices under section 5(a)(1) of the Federal Trade Commission Act (hereinafter referred to as “unfair or deceptive acts or practices”).
(1) CIDs for the production of documentary material, including ESI, shall describe each class of material to be produced with sufficient definiteness and certainty as to permit such material to be fairly identified, prescribe a return date providing a reasonable period of time within which the material so demanded may be assembled and made available for inspection and copying or reproduction, and identify the Commission’s custodian to whom such material shall be made available. Documentary material, including ESI, for which a CID has been issued shall be made available as prescribed in the CID. Such productions shall be made in accordance with the procedures prescribed by section 20(c)(11) of the Federal Trade Commission Act.
(2) CIDs for tangible things, including electronic media, shall describe each class of tangible thing to be produced with sufficient definiteness and certainty as to permit each such thing to be fairly identified, prescribe a return date providing a reasonable period of time within which the things so demanded may be assembled and submitted, and identify the Commission’s custodian to whom such things shall be submitted. Submission of tangible things in response to a CID shall be made in accordance with the procedures prescribed by section 20(c)(12) of the Federal Trade Commission Act.
(3) CIDs for written reports or answers to questions shall propound with sufficient definiteness and certainty the reports to be produced or the questions to be answered, prescribe a return date, and identify the Commission’s custodian to whom such reports or answers to questions shall be submitted. The submission of written reports or answers to questions in response to a CID shall be made in accordance with the procedures prescribed by section 20(c)(13) of the Federal Trade Commission Act.
(4) CIDs for the giving of oral testimony shall prescribe a date, time, and place at which oral testimony shall commence, and identify the hearing official and the Commission custodian. Oral testimony in response to a CID shall be taken in accordance with the procedures set forth in section 20(c)(14) of the Federal Trade Commission Act.
(c) Subpoenas. Except in investigations with respect to unfair or deceptive acts or practices, the Commission may require by subpoena the attendance and testimony of witnesses and the production of documentary material relating to any matter under investigation. Subpoenas for the production of documentary material, including ESI, shall describe each class of material to be produced with sufficient definiteness and certainty as to permit such material to be fairly identified, prescribe a return date providing a reasonable period of time for production, and identify the Commission’s custodian to whom such material shall be made available. A subpoena may require the attendance of the witness or the production of documentary material at any place in the United States.
(d) Special reports. Except in investigations regarding unfair or deceptive acts or practices, the Commission may issue an order requiring a person, partnership, or corporation to file a written report or answers to specific questions relating to any matter under investigation, study or survey, or under any of the Commission’s reporting programs.
(e) Commission orders requiring access. Except in investigations regarding unfair or deceptive acts or practices, the Commission may issue an order requiring any person, partnership, or corporation under investigation to grant access to their files, including electronic media, for the purpose of examination and to make copies.
(f) Investigational hearings. (1) Investigational hearings may be conducted in the course of any investigation undertaken by the Commission, including rulemaking proceedings under subpart B of part 1 of this chapter, inquiries initiated for the purpose of determining whether a respondent is complying with an order of the Commission or to monitor performance under, and compliance with, a decree entered in suits brought by the United States under the antitrust laws, the development of facts in cases referred by the courts to the Commission as a master in chancery, and investigations made under section 5 of the Webb-Pomerene (Export Trade) Act.
(2) Investigational hearings shall be conducted by one or more Commission employees designated for the purpose of hearing the testimony of witnesses (the “hearing official”) and receiving documents and information relating to any subject under investigation. Such hearings shall be under oath or affirmation, stenographically recorded, and the transcript made a part of the record of the investigation. The Commission may, in addition, employ other means to record the hearing.
(3) Unless otherwise ordered by the Commission, investigational hearings shall not be public. For investigational hearings conducted pursuant to a CID for the giving of oral testimony, the hearing official shall exclude from the hearing room all persons other than the person being examined, counsel for the person being examined, Commission staff, and any stenographer or other person recording such testimony. A copy of the transcript shall promptly be forwarded by the hearing official to the Commission custodian designated under § 2.16 of this part. At the discretion of the hearing official, and with the consent of the person being examined (or, in the case of an entity, its counsel), persons other than Commission staff, court reporters, and the hearing official may be present in the hearing room.
(g) Depositions. Except in investigations with respect to unfair or deceptive acts or practices, the Commission may order by subpoena a deposition pursuant to section 9 of the Federal Trade Commission Act, of any person, partnership, or corporation, at any stage of an investigation. The deposition shall take place upon notice to the subjects of the investigation, and the examination and cross-examination may proceed as they would at trial. Depositions shall be conducted by a hearing official, for the purpose of hearing the testimony of witnesses and receiving documents and information relating to any subject under investigation. Depositions shall be under oath or affirmation, stenographically recorded, and the transcript made a part of the record of the investigation. The Commission may, in addition, employ other means to record the deposition.
(h) Testimony from an entity. Where Commission compulsory process requires oral testimony from an entity, the compulsory process shall describe with reasonable particularity the matters for examination and the entity must designate one or more officers, directors, or managing agents, or designate other persons who consent, to testify on its behalf. Unless a single individual is designated by the entity, the entity must designate in advance and in writing the matters on which each designee will testify. The persons designated must testify about information known or reasonably available to the entity and their testimony shall be binding upon the entity.
(i) Inspection, copying, testing, and sampling of documentary material, including electronic media. The Commission, through compulsory process, may require the production of documentary material, or electronic media or other tangible things, for inspection, copying, testing, or sampling.
(j) Manner and form of production of ESI. When Commission compulsory process requires the production of ESI, it shall be produced in accordance with the instructions provided by Commission staff regarding the manner and form of production. All instructions shall be followed by the recipient of the process absent written permission to the contrary from a Commission official identified in paragraph (l) of this section. Absent any instructions as to the form for producing ESI, ESI must be produced in the form or forms in which it is ordinarily maintained or in a reasonably usable form.
(k) Mandatory pre-petition meet and confer process. Unless excused in writing or granted an extension of no more than 30 days by a Commission official identified in paragraph (l) of this section, a recipient of Commission compulsory process shall meet and confer with Commission staff within 14 days after receipt of process or before the deadline for filing a petition to quash, whichever is first, to discuss compliance and to address and attempt to resolve all issues, including issues relating to protected status and the form and manner in which claims of protected status will be asserted. The initial meet and confer session and all subsequent meet and confer sessions may be in person or by telephone. The recipient must make available personnel with the knowledge necessary for resolution of the issues relevant to compliance with compulsory process. Such personnel could include individuals knowledgeable about the recipient’s information or records management systems, individuals knowledgeable about other relevant materials such as organizational charts, and persons knowledgeable about samples of material required to be produced. If any issues relate to ESI, the recipient shall have a person familiar with its ESI systems and methods of retrieval participate in the meeting. The Commission will not consider petitions to quash or limit absent a pre-filing meet and confer session with Commission staff and, absent extraordinary circumstances, will consider only issues raised during the meet and confer process.
(l) Delegations. The Directors of the Bureaus of Competition, Consumer Protection, and Economics and the Office of Policy Planning, their Deputy Directors, the Assistant Directors of the Bureaus of Competition and Economics, the Associate Directors of the Bureau of Consumer Protection, the Regional Directors, and the Assistant Regional Directors are all authorized to modify and, in writing, approve the terms of compliance with all compulsory process, including subpoenas, CIDs, reporting programs, orders requiring reports, answers to questions, and orders requiring access. If a recipient of compulsory process has demonstrated satisfactory progress toward compliance, a Commission official identified in this paragraph may, at his or her discretion, extend the time for compliance with Commission compulsory process. The subpoena power conferred by section 329 of the Energy Policy and Conservation Act (42 U.S.C. 6299) and section 5 of the Webb-Pomerene (Export Trade) Act (15 U.S.C. 65) are specifically included within this delegation of authority.
§ 2.8 [Reserved]
§ 2.9 Rights of witnesses in investigations.
(a) Any person compelled to submit data to the Commission or to testify in a deposition or investigational hearing shall be entitled to retain a copy or, on payment of lawfully prescribed costs, procure a copy of any document submitted, and of any testimony as stenographically recorded, except that in a nonpublic hearing the witness may for good cause be limited to inspection of the official transcript of the testimony. Upon completion of transcription of the testimony, the witness shall be offered an opportunity to read the transcript. Any changes by the witness shall be entered and identified upon the transcript by the hearing official, together with a statement of the reasons given by the witness for requesting such changes. After the changes are entered, the transcript shall be signed by the witness unless the witness cannot be found, is ill and unavailable, waives in writing his or her right to sign, or refuses to sign. If the transcript is not signed by the witness within 30 days of having been afforded a reasonable opportunity to review it, the hearing official shall sign the transcript and state on the hearing record the fact of the waiver, illness, absence of the witness, or the refusal to sign, together with any reasons given for the failure to sign, as prescribed by section 20(c)(14)(E)(ii) of the Federal Trade Commission Act.
(b) Any witness compelled to appear in person in a deposition or investigational hearing may be accompanied, represented, and advised by counsel, as follows:
(1) In depositions or investigational hearings conducted pursuant to section 9 of the Federal Trade Commission Act, counsel may not consult with the witness while a question directed to a witness is pending, except with respect to issues involving protected status.
(2) Any objection during a deposition or investigational hearing shall be stated concisely on the hearing record in a nonargumentative and nonsuggestive manner. Neither the witness nor counsel shall otherwise object or refuse to answer any question. Following an objection, the examination shall proceed and the testimony shall be taken, except for testimony requiring the witness to divulge information protected by the claim of protected status. Counsel may instruct a witness not to answer only when necessary to preserve a claim of protected status.
(3) The hearing official may elect to recess the deposition or investigational hearing and reconvene the deposition or hearing at a later date to continue a course of inquiry interrupted by any objection made under paragraph (b)(1) or (2) of this section. The hearing official shall provide written notice of the date of the reconvened deposition or hearing to the witness, which may be in the form of an email or facsimile. Failure to reappear or to file a petition to limit or quash in accordance with § 2.10 of this part shall constitute noncompliance with Commission compulsory process for the purposes of a Commission enforcement action under § 2.13 of this part.
(4) In depositions or investigational hearings, immediately following the examination of a witness by the hearing official, the witness or his or her counsel may on the hearing record request that the hearing official permit the witness to clarify any answers. The grant or denial of such request shall be within the discretion of the hearing official and would ordinarily be granted except for good cause stated and explained on the hearing record, and with an opportunity for counsel to undertake to correct the expressed concerns of the hearing official or otherwise to reply.
(5) The hearing official shall conduct the deposition or investigational hearing in a manner that avoids unnecessary delay, and prevents and restrains disorderly or obstructionist conduct. The hearing official shall, where appropriate, report pursuant to § 4.1(e) of this chapter any instance where an attorney, in the course of the deposition or hearing, has allegedly refused to comply with his or her directions, or has allegedly engaged in conduct addressed in § 4.1(e). The Commission may take any action as circumstances may warrant under § 4.1(e) of this chapter.
§ 2.10 Petitions to limit or quash Commission compulsory process.
(a) In general. (1) Petitions. Any petition to limit or quash any compulsory process shall be filed with the Secretary within 20 days after service of the Commission compulsory process or, if the return date is less than 20 days after service, prior to the return date. Such petition shall set forth all assertions of protected status or other factual and legal objections to the Commission compulsory process, including all appropriate arguments, affidavits, and other supporting documentation. Such petition shall not exceed 5,000 words, including all headings, footnotes, and quotations, but excluding the cover, table of contents, table of authorities, glossaries, copies of the compulsory process order or excerpts thereof, appendices containing only sections of statutes or regulations, the statement required by paragraph (a)(2) of this section, and affidavits and other supporting documentation. Petitions to limit or quash that fail to comply with these provisions shall be rejected by the Secretary pursuant to § 4.2(g) of this chapter.
(2) Statement. Each petition filed pursuant to paragraph (a)(1) of this section shall be accompanied by a signed separate statement representing that counsel for the petitioner has conferred with Commission staff pursuant to § 2.7(k) of this part in an effort in good faith to resolve by agreement the issues raised by the petition and has been unable to reach such an agreement. If some of the issues in controversy have been resolved by agreement, the statement shall, in a nonargumentative manner, specify the issues so resolved and the issues remaining unresolved. The statement shall recite the date, time, and place of each conference between counsel, and the names of all parties participating in each such conference. Failure to include the required statement may result in a denial of the petition.
(3) Reconvened investigational hearings or depositions. If the hearing official elects pursuant to § 2.9(b)(3) of this part to recess the investigational hearing or deposition and reconvene it at a later date, the witness compelled to reappear may challenge the reconvening by filing with the Secretary a petition to limit or quash the reconvening of the hearing or deposition. Such petition shall be filed within 5 days after receiving written notice of the reconvened hearing; shall set forth all assertions of protected status or other factual and legal objections to the reconvening of the hearing or deposition, including all appropriate arguments, affidavits, and other supporting documentation; and shall be subject to the word count limit in paragraph (a)(1) of this section. Except for good cause shown, the Commission will not consider issues presented and ruled upon in any earlier petition filed by or on behalf of the witness.
(4) Staff reply. Commission staff may, without serving the petitioner, provide the Commission a statement that shall set forth any factual and legal response to the petition to limit or quash.
(5) Extensions of time. The Directors of the Bureaus of Competition, Consumer Protection, and Economics and the Office of Policy Planning, their Deputy Directors, the Assistant Directors of the Bureaus of Competition and Economics, the Associate Directors of the Bureau of Consumer Protection, the Regional Directors, and the Assistant Regional Directors are delegated, without power of redelegation, the authority to rule upon requests for extensions of time within which to file petitions to limit or quash Commission compulsory process.
(b) Stay of compliance period. The timely filing of a petition to limit or quash any Commission compulsory process shall stay the remaining amount of time permitted for compliance as to the portion or portions of the challenged specifications or provisions. If the petition is denied in whole or in part, the ruling by the Commission shall specify new terms for compliance, including a new return date, for the Commission’s compulsory process.
(c) Disposition and review. The Commission will issue an order ruling on a petition to limit or quash within 40 days after the petition is filed with the Secretary. The order may be served on the petitioner via email, facsimile, or any other method reasonably calculated to provide notice to the petitioner of the order.
(d) Public disclosure. All petitions to limit or quash Commission compulsory process and all Commission orders in response to those petitions shall become part of the public records of the Commission, except for information granted confidential treatment under § 4.9(c) of this chapter.
§ 2.11 Withholding requested material.
(a)(1) Any person withholding information or material responsive to an investigational subpoena, CID, access order, or order to file a report issued pursuant to § 2.7 of this part, or any other request for production of material issued under this part, shall assert a claim of protected status, as that term is defined in § 2.7(a)(4), not later than the date set for the production of the material. The claim of protected status shall include a detailed log of the items withheld, which shall be attested by the lead attorney or attorney responsible for supervising the review of the material and who made the determination to assert the claim. A document, including all attachments, may be withheld or redacted only to the extent necessary to preserve any claim of protected status. The information provided in the log shall be of sufficient detail to enable the Commission staff to assess the validity of the claim for each document, including attachments, without disclosing the protected information. The failure to provide information sufficient to support a claim of protected status may result in a denial of the claim. Absent an instruction as to the form and content of the log, the log shall be submitted in a searchable electronic format, and shall, for each document, including attachments, provide:
(i) Document control number(s);
(ii) The full title (if the withheld material is a document) and the full file name (if the withheld material is in electronic form);
(iii) A description of the material withheld (for example, a letter, memorandum, or email), including any attachments;
(iv) The date the material was created;
(v) The date the material was sent to each recipient (if different from the date the material was created);
(vi) The email addresses, if any, or other electronic contact information to the extent used in the document, from which and to which each document was sent;
(vii) The names, titles, business addresses, email addresses or other electronic contact information, and relevant affiliations of all authors;
(viii) The names, titles, business addresses, email addresses or other electronic contact information, and relevant affiliations of all recipients of the material;
(ix) The names, titles, business addresses, email addresses or other electronic contact information, and relevant affiliations of all persons copied on the material;
(x) The factual basis supporting the claim that the material is protected (for example, that it was prepared by an attorney rendering legal advice to a client in a confidential communication, or prepared by an attorney in anticipation of litigation regarding a specifically identified claim); and
(xi) Any other pertinent information necessary to support the assertion of protected status by operation of law.
(2) Each attorney who is an author, recipient, or person copied on the material shall be identified in the log by an asterisk. The titles, business addresses, email addresses, and relevant affiliations of all authors, recipients, and persons copied on the material may be provided in a legend appended to the log. However, the information required by paragraph (a)(1)(vi) of this section shall be provided in the log.
(b) A person withholding responsive material solely for the reasons described in paragraph (a) of this section shall meet and confer with Commission staff pursuant to § 2.7(k) of this part to discuss and attempt to resolve any issues associated with the manner and form in which privilege or protection claims will be asserted. The participants in the meet and confer session may agree to modify the logging requirements set forth in paragraph (a) of this section. The failure to comply with paragraph (a) shall constitute noncompliance subject to judicial enforcement under § 2.13(a) of this part.
(c) Unless otherwise provided in the instructions accompanying the compulsory process, and except for information or material subject to a valid claim of protected status, all responsive information and material shall be produced without redaction.
(d)(1)(i) The disclosure of material protected by the attorney-client privilege or as work product shall not operate as a waiver if:
(A) The disclosure is inadvertent;
(B) The holder of the privilege or protection took reasonable steps to prevent disclosure; and
(C) The holder promptly took reasonable steps to rectify the error, including notifying Commission staff of the claim and the basis for it.
(ii) After being so notified, Commission staff must:
(A) Promptly return or destroy the specified material and any copies, not use or disclose the material until any dispute as to the validity of the claim is resolved; and take reasonable measures to retrieve the material from all persons to whom it was disclosed before being notified; or
(B) Sequester such material until such time as an Administrative Law Judge or court may rule on the merits of the claim of privilege or protection in a proceeding or action resulting from the investigation.
(iii) The producing party must preserve the material until the claim of privilege or protection is resolved, the investigation is closed, or any enforcement proceeding is concluded.
(2) When a disclosure is made that waives attorney-client privilege or work product, the waiver extends to an undisclosed communication or information only if:
(i) The waiver is intentional;
(ii) The disclosed and undisclosed information or material concern the same subject matter; and
(iii) They ought in fairness to be considered together.
§ 2.12 [Reserved]
§ 2.13 Noncompliance with compulsory processes.
(a) In cases of failure to comply with Commission compulsory processes, appropriate action may be initiated by the Commission or the Attorney General, including actions for enforcement, forfeiture, civil penalties, or criminal sanctions. The Commission may also take any action as the circumstances may warrant under § 4.1(e) of this chapter.
(b) The General Counsel, pursuant to delegation of authority by the Commission, without power of redelegation, is authorized, when he or she deems appropriate:
(1) To initiate, on behalf of the Commission, an enforcement proceeding in connection with the failure or refusal of a recipient to comply with, or to obey, a subpoena, a CID, or an access order, if the return date or any extension thereof has passed, or if the recipient breaches any modification regarding compliance;
(2) To approve and have prepared and issued, in the name of the Commission, a notice of default in connection with the failure of a recipient of an order to file a report pursuant to section 6(b) of the Federal Trade Commission Act to timely file that report, if the return date or any extension thereof has passed; to initiate, on behalf of the Commission, an enforcement proceeding; or to request to the Attorney General, on behalf of the Commission, to initiate a civil action in connection with the failure of such recipient to timely file a report, when the return date or any extension thereof has passed;
(3) To initiate, on behalf of the Commission, an enforcement proceeding under section 7A(g)(2) of the Clayton Act (15 U.S.C. 18a(g)(2)) in connection with the failure to substantially comply with any request for the submission of additional information or documentary material under section 7A(e)(1) of the Clayton Act (15 U.S.C. 18a(e)(1)), provided that the General Counsel shall provide notice to the Commission at least 2 days before initiating such action; and
(4) To seek an order of civil contempt in cases where a court order enforcing compulsory process has been violated.
§ 2.14 Disposition.
(a) When an investigation indicates that corrective action is warranted, and the matter is not subject to a consent settlement pursuant to subpart C of this part, the Commission may initiate further proceedings.
(b) When corrective action is not necessary or warranted in the public interest, the investigation shall be closed. The matter may nevertheless be further investigated at any time if circumstances so warrant.
(c) In matters in which a recipient of a preservation demand, an access letter, or Commission compulsory process has not been notified that an investigation has been closed or otherwise concluded, after a period of twelve months following the last written communication from the Commission staff to the recipient or the recipient’s counsel, the recipient is relieved of any obligation to continue preserving information, documentary material, or evidence, for purposes of responding to the Commission’s process or the staff’s access letter. The “written communication” may be in the form of a letter, an email, or a facsimile.
(d) The Commission has delegated to the Directors of the Bureaus of Competition and Consumer Protection, their Deputy Directors, the Assistant Directors of the Bureau of Competition, the Associate Directors of the Bureau of Consumer Protection, and the Regional Directors, without power of redelegation, limited authority to close investigations.
§ 2.15 Orders requiring witnesses to testify or provide other information and granting immunity.
(a) The Bureau Director, Deputy Directors, and Assistant Directors in the Bureaus of Competition and Economics, the Bureau Director, Deputy Directors and Associate Directors of the Bureau of Consumer Protection, Regional Directors and Assistant Regional Directors are hereby authorized to request, through the Commission’s liaison officer, approval from the Attorney General for the issuance of an order requiring a witness to testify or provide other information granting immunity under title 18, section 6002, of the United States Code.
(b) The Commission retains the right to review the exercise of any of the functions delegated under paragraph (a) of this section. Appeals to the Commission from an order requiring a witness to testify or provide other information will be entertained by the Commission only upon a showing that a substantial question is involved, the determination of which is essential to serve the interests of justice. Such appeals shall be made on the record and shall be in the form of a brief not to exceed fifteen (15) pages in length and shall be filed within five (5) days after notice of the complained of action. The appeal shall not operate to suspend the hearing unless otherwise determined by the person conducting the hearing or ordered by the Commission.
§ 2.16 Custodians.
(a) Designation. The Commission shall designate a custodian and one or more deputy custodians for material to be delivered pursuant to compulsory process in an investigation, a purpose of which is to determine whether any person may have violated any provision of the laws administered by the Commission. The custodian shall have the powers and duties prescribed by section 21 of the FTC Act. Deputy custodians may perform all of the duties assigned to custodians. The appropriate Bureau Directors, Deputy Directors, Associate Directors in the Bureau of Consumer Protection, Assistant Directors in the Bureau of Competition, Regional Directors or Assistant Regional Directors shall take the action required by section 21(b)(7) of the FTC Act if it is necessary to replace a custodian or deputy custodian.
(b) Copying of custodial documents. The custodian designated pursuant to section 21 of the Federal Trade Commission Act (subject to the general supervision of the Executive Director) may, from among the material submitted, select the material the copying of which is necessary or appropriate for the official use of the Commission, and shall determine, the number of copies of any such material that are to be reproduced. Copies of material in the physical possession of the custodian may be reproduced by or under the authority of an employee of the Commission designated by the custodian.
(c) Material produced pursuant to the Federal Trade Commission Act, while in the custody of the custodian, shall be for the official use of the Commission in accordance with the Act; but such material shall upon reasonable notice to the custodian be made available for examination by the person who produced such material, or his duly authorized representative, during regular office hours established for the Commission.
§ 2.17 Statutory delays of notifications and prohibitions of disclosure.
Upon authorization by the Commissioner who issues compulsory process pursuant to § 2.7(a) or, alternatively, upon authorization by the General Counsel, Commission attorneys may seek to delay notifications or prohibit disclosures pursuant to the Right to Financial Privacy Act (12 U.S.C. 3409), the Electronic Communications Privacy Act (18 U.S.C. 2705), or section 7 of the U.S. SAFE WEB Act (15 U.S.C. 57b-2a).
Subpart B – Petitions Filed Under Section 7A of the Clayton Act, as Amended, for Review of Requests for Additional Information or Documentary Material
§ 2.20 Petitions for review of requests for additional information or documentary material.
(a) For purposes of this section, “second request” refers to a request for additional information or documentary material issued under 16 CFR 803.20.
(b) Second request procedures – (1) Notice. Every request for additional information or documentary material issued under 16 CFR 803.20 shall inform the recipient(s) of the request that the recipient has a right to discuss modifications or clarifications of the request with an authorized representative of the Commission. The request shall identify the name and telephone number of at least one such representative.
(2) Second request conference. An authorized representative of the Commission shall invite the recipient to discuss the request for additional information or documentary material soon after the request is issued. At the conference, the authorized representative shall discuss the competitive issues raised by the proposed transaction, to the extent then known, and confer with the recipient about the most effective way to obtain information and documents relating to the competitive issues raised. The conference will ordinarily take place within 5 business days of issuance of the request, unless the recipient declines the invitation or requests a later date.
(3) Modification of requests. The authorized representative shall modify the request for additional information or documentary material, or recommend such modification to the responsible Assistant Director of the Bureau of Competition, if he or she determines that a less burdensome request would be consistent with the needs of the investigation. A request for additional information or documentary material may be modified only in writing signed by the authorized representative.
(4) Review of request decisions. (i) If the recipient of a request for additional information or documentary material believes that compliance with portions of the request should not be required and the recipient has exhausted reasonable efforts to obtain clarifications or modifications of the request from an authorized representative, the recipient may petition the General Counsel to consider and rule on unresolved issues. Such petition shall be submitted by letter to the General Counsel with a copy to the authorized representative who participated in the second request conference held under paragraph (b)(3) of this section. The petition shall not, without leave of the General Counsel, exceed 500 words, excluding any cover, table of contents, table of authorities, glossaries, proposed form of relief and any appendices containing only sections of statutes or regulations, and shall address petitioner’s efforts to obtain modification from the authorized representative.
(ii) Within 2 business days after receiving such a petition, the General Counsel shall set a date for a conference with the petitioner and the authorized representative.
(iii) Such conference shall take place within 7 business days after the General Counsel receives the petition, unless the request recipient agrees to a later date or declines to attend a conference.
(iv) Not later than 3 business days before the date of the conference, the petitioner and the authorized representative may each submit memoranda regarding the issues presented in the petition. Such memoranda shall not, without leave of the General Counsel, exceed 1250 words, excluding any cover, table of contents, table of authorities, glossaries, proposed form of relief and appendices containing only sections of statutes or regulations. Such memoranda shall be delivered to counsel for the other participants on the same day they are delivered to the General Counsel.
(v) The petitioner’s memorandum shall include a concise statement of reasons why the request should be modified, together with proposed modifications, or a concise explanation why the recipient believes it has substantially complied with the request for additional information or documentary material.
(vi) The authorized representative’s memorandum shall include a concise statement of reasons why the petitioner’s proposed modifications are inappropriate or a concise statement of the reasons why the representative believes that the petitioner has not substantially complied with the request for additional information and documentary material.
(vii) The General Counsel shall advise the petitioner and the authorized representative of his or her decision within 3 business days following the conference.
Subpart C – Consent Order Procedure
§ 2.31 Opportunity to submit a proposed consent order.
(a) Where time, the nature of the proceeding, and the public interest permit, any individual, partnership, or corporation being investigated shall be afforded the opportunity to submit through the operating Bureau or Regional Office having responsibility in the matter a proposal for disposition of the matter in the form of a consent order agreement executed by the party being investigated and complying with the requirements of § 2.32, for consideration by the Commission in connection with a proposed complaint submitted by the Commission’s staff.
(b) After a complaint has been issued, the consent order procedure described in this part will not be available except as provided in § 3.25(b).
§ 2.32 Agreement.
Every agreement in settlement of a Commission complaint shall contain, in addition to an appropriate proposed order, either an admission of the proposed findings of fact and conclusions of law submitted simultaneously by the Commission’s staff or an admission of all jurisdictional facts and an express waiver of the requirement that the Commission’s decision contain a statement of findings of fact and conclusions of law. Every agreement also shall waive further procedural steps and all rights to seek judicial review or otherwise to challenge or contest the validity of the order. In addition, where appropriate, every agreement in settlement of a Commission complaint challenging the lawfulness of a proposed merger or acquisition shall also contain a hold-separate or asset-maintenance order. The agreement may state that the signing thereof is for settlement purposes only and does not constitute an admission by any party that the law has been violated as alleged in the complaint. Every agreement shall provide that:
(a) The complaint may be used in construing the terms of the order;
(b) No agreement, understanding, representation, or interpretation not contained in the order or the aforementioned agreement may be used to vary or to contradict the terms of the order;
(c) The order will have the same force and effect and may be altered, modified or set aside in the same manner provided by statute for Commission orders issued on a litigated or stipulated record;
(d) Except as provided by order of the Commission, any order issued pursuant to the agreement will become final upon service;
(e) The agreement will not become a part of the public record unless and until it is accepted by the Commission; and
(f) If the Commission accepts the agreement, further proceedings will be governed by § 2.34.
§ 2.33 Compliance procedure.
The Commission may in its discretion require that a proposed agreement containing an order to cease and desist be accompanied by an initial report signed by the respondent setting forth in precise detail the manner in which the respondent will comply with the order when and if entered. Such report will not become part of the public record unless and until the accompanying agreement and order are accepted by the Commission. At the time any such report is submitted a respondent may request confidentiality for any portion thereof with a precise showing of justification therefor as set out in § 4.9(c) and the General Counsel or the General Counsel’s designee will dispose of such requests in accordance with that section.
§ 2.34 Disposition.
(a) Acceptance of proposed consent agreement. The Commission may accept or refuse to accept a proposed consent agreement. Except as otherwise provided in paragraph (c) of this section, acceptance does not constitute final approval, but it serves as the basis for further actions leading to final disposition of the matter.
(b) Effectiveness of hold-separate or asset-maintenance order. Following acceptance of a consent agreement, the Commission will, if it deems a hold-separate or asset-maintenance order appropriate, issue a complaint and such an order as agreed to by the parties. Such order will be final upon service. The issuance of a complaint under this paragraph will neither commence an adjudicatory proceeding subject to part 3 of this chapter nor subject the consent agreement proceeding to the prohibitions specified in § 4.7 of this chapter.
(c) Public comment. Promptly after its acceptance of the consent agreement, the Commission will place the order contained in the consent agreement, the complaint, and the consent agreement on the public record for a period of 30 days, or such other period as the Commission may specify, for the receipt of comments or views from any interested person. At the same time, the Commission will place on the public record an explanation of the provisions of the order and the relief to be obtained thereby and any other information that it believes may help interested persons understand the order. The Commission also will publish the explanation in the
(d) Comment on initial compliance report. If respondents have filed an initial report of compliance pursuant to § 2.33, the Commission will place that report on the public record, except for portions, if any, granted confidential treatment pursuant to § 4.9(c) of this chapter, with the complaint, the order, and the consent agreement.
(e) Action following comment period. (1) Following the comment period, on the basis of comments received or otherwise, the Commission may either withdraw its acceptance of the agreement and so notify respondents, in which event it will take such other action as it may consider appropriate, or issue and serve its complaint in such form as the circumstances may require and its decision in disposition of the proceeding.
(2) The Commission, following the comment period, may determine, on the basis of the comments or otherwise, that a Final Decision and Order that was issued in advance of the comment period should be modified. Absent agreement by respondents to the modifications, the Commission may initiate a proceeding to reopen and modify the decision and order in accordance with § 3.72(b) of this chapter or commence a new administrative proceeding by issuing a complaint in accordance with § 3.11 of this chapter.
Subpart D – Reports of Compliance
§ 2.41 General compliance obligations and specific obligations regarding acquisitions and divestitures.
(a) In every proceeding in which the Commission has issued an order pursuant to the provisions of section 5 of the Federal Trade Commission Act or section 11 of the Clayton Act, as amended, and except as otherwise specifically provided in any such order, each respondent named in such order shall file with the Commission, within sixty (60) days after service thereof, or within such other time as may be provided by the order or the rules in this chapter, a report in writing, signed by the respondent, setting forth in detail the manner and form of his compliance with the order, and shall thereafter file with the Commission such further signed, written reports of compliance as it may require. An original and one copy of each such report shall be filed with the Secretary of the Commission, and one copy of each such report shall be filed with the Associate Director for Enforcement in the Bureau of Consumer Protection (for consumer protection orders) or with the Assistant Director for Compliance in the Bureau of Competition (for competition orders). Reports of compliance shall be under oath if so requested. Where the order prohibits the use of a false advertisement of a food, drug, device, or cosmetic which may be injurious to health because of results from its use under the conditions prescribed in the advertisement, or under such conditions as are customary or usual, or if the use of such advertisement is with intent to defraud or mislead, or in any other case where the circumstances so warrant, the order may provide for an interim report stating whether and how respondents intend to comply to be filed within ten (10) days after service of the order. Neither the filing of an application for stay pursuant to § 3.56, nor the filing of a petition for judicial review, shall operate to postpone the time for filing a compliance report under the order or this section. If the Commission, or a court, determines to grant a stay of an order, or portion thereof, pending judicial review, or if any order provision is automatically stayed by statute, no compliance report shall be due as to those portions of the order that are stayed unless ordered by the court. Thereafter, as to orders, or portions thereof, that are stayed, the time for filing a report of compliance shall begin to run de novo from the final judicial determination, except that if no petition for certiorari has been filed following affirmance of the order of the Commission by a court of appeals, the compliance report shall be due the day following the date on which the time expires for the filing of such petition. Staff of the Bureaus of Competition and Consumer Protection will review such reports of compliance and may advise each respondent whether the staff intends to recommend that the Commission take any enforcement action. The Commission may, however, institute proceedings, including certification of facts to the Attorney General pursuant to the provisions of section 5(l) of the Federal Trade Commission Act (15 U.S.C. 45(l)) and section 11(1) of the Clayton Act, as amended (15 U.S.C. 21(1)), to enforce compliance with an order, without advising a respondent whether the actions set forth in a report of compliance evidence compliance with the Commission’s order or without prior notice of any kind to a respondent.
(b) The Commission has delegated to the Director, the Deputy Directors, and the Assistant Director for Compliance of the Bureau of Competition, and to the Director, the Deputy Directors, and the Associate Director for Enforcement of the Bureau of Consumer Protection the authority to monitor compliance reports and to open and close compliance investigations. With respect to any compliance matter which has received previous Commission consideration as to compliance or in which the Commission or any Commissioner has expressed an interest, any matter proposed to be closed by reason of expense of investigation or testing, or any matter involving substantial questions as to the public interest, Commission policy or statutory construction, the Bureaus shall submit an analysis to the Commission regarding their intended actions.
(c) The Commission has delegated to the Director, Deputy Directors, and Assistant Directors of the Bureau of Competition and to the Director, Deputy Directors, and Associate Directors of the Bureau of Consumer Protection, and to the Regional Directors, the authority, for good cause shown, to extend the time within which reports of compliance with orders to cease and desist may be filed. It is to be noted, however, that an extension of time within which a report of compliance may be filed, or the filing of a report which does not evidence full compliance with the order, does not in any circumstances suspend or relieve a respondent from his obligation under the law with respect to compliance with such order. An order of the Commission to cease and desist becomes final on the date and under the conditions provided in the Federal Trade Commission Act and the Clayton Act. Any person, partnership or corporation against which an order to cease and desist has been issued who is not in full compliance with such order on and after the date provided in these statutes for the order to become final is in violation of such order and is subject to an immediate action for civil penalties. The authority under this paragraph may not be redelegated, except that the Associate Director for Enforcement in the Bureau of Consumer Protection and the Assistant Director for Compliance in the Bureau of Competition may each name a designee under this paragraph.
(d) Any respondent subject to a Commission order may request advice from the Commission as to whether a proposed course of action, if pursued by it, will constitute compliance with such order. The request for advice should be submitted in writing to the Secretary of the Commission and should include full and complete information regarding the proposed course of action. On the basis of the facts submitted, as well as other information available to the Commission, the Commission will inform the respondent whether or not the proposed course of action, if pursued, would constitute compliance with its order. A request ordinarily will be considered inappropriate for such advice:
(1) Where the course of action is already being followed by the requesting party;
(2) Where the same or substantially the same course of action is under investigation or is or has been the subject of a current proceeding, order, or decree initiated or obtained by the Commission or another governmental agency; or
(3) Where the proposed course of action or its effects may be such that an informed decision thereon cannot be made or could be made only after extensive investigation, clinical study, testing or collateral inquiry.
(e) The Commission may at any time reconsider any advice given under this section and, where the public interest requires, rescind or revoke its prior advice. In such event the respondent will be given notice of the Commission’s intent to revoke or rescind and will be given an opportunity to submit its views to the Commission. The Commission will not proceed against a respondent for violation of an order with respect to any action which was taken in good faith reliance upon the Commission’s advice under this section, where all relevant facts were fully, completely, and accurately presented to the Commission and where such action was promptly discontinued upon notification of rescission or revocation of the Commission’s advice.
(f)(1) All applications for approval of proposed divestitures, acquisitions, or similar transactions subject to Commission review under outstanding orders (including modifications to previously approved transactions) shall fully describe the terms of the transaction or modification and shall set forth why the transaction or modification merits Commission approval. Such applications will be placed on the public record, together with any additional applicant submissions that the Commission directs be placed on the public record. The Director of the Bureau of Competition is delegated authority to direct such placement.
(2) The Commission will receive public comment on a prior approval application submitted pursuant to paragraphs (f)(1) or (5) of this section for thirty (30) days. During the comment period, any person may file formal written objections or comments with the Secretary of the Commission, and such objections or comments shall be placed on the public record. In appropriate cases, the Commission may shorten, eliminate, extend, or reopen a comment period.
(3) Responses to applications under this section, together with a statement of supporting reasons, will be published when made, together with responses to any public comments filed under this section.
(4) Persons submitting information that is subject to public record disclosure under this section may request confidential treatment for that information or portions thereof in accordance with § 4.9(c) and the General Counsel or the General Counsel’s designee will dispose of such requests in accordance with that section. Nothing in this section requires that confidentiality requests be resolved prior to, or contemporaneously with, the disposition of the application.
(5)(i) Any application to modify either:
(A) An agreement that has been approved by the Commission pursuant to paragraph (f) of this section, or
(B) An agreement incorporated by reference into a final order of the Commission issued in connection with a merger, acquisition, or similar transaction shall be subject to review and approval in the manner described in paragraphs (f)(1) through (4) of this section, except as provided in paragraph (f)(5)(ii) of this section.
(ii) If the application establishes that the proposed modification is purely ministerial, or unlikely under any plausible facts to affect achieving the remedial purposes of the order at issue, the Commission has delegated to the Director, Deputy Directors, and Assistant Director for Compliance of the Bureau of Competition, without power of redelegation, for good cause shown, the authority.
(A) To waive the approval requirement of paragraph (f)(5)(i) of this section; and
(B) To shorten, eliminate, extend or reopen the comment period pursuant to paragraph (f)(2) of this section.
(iii) Any agreement containing a modification approved, or for which the approval requirement is waived, pursuant to this paragraph (f)(5), shall be subject to any outstanding Commission order to the same extent as was the original agreement.
Subpart E – Requests To Reopen
§ 2.51 Requests to reopen.
(a) Scope. Any person, partnership, or corporation subject to a Commission decision containing a rule or order which has become effective, or an order to cease and desist which has become final, may file with the Secretary a request that the Commission reopen the proceeding to consider whether the rule or order, including any affirmative relief provision contained therein, should be altered, modified, or set aside in whole or in part.
(b) Contents. A request under this section shall contain a satisfactory showing that changed conditions of law or fact require the rule or order to be altered, modified or set aside, in whole or in part, or that the public interest so requires.
(1) This requirement shall not be deemed satisfied if a request is merely conclusory or otherwise fails to set forth by affidavit(s) specific facts demonstrating in detail:
(i) The nature of the changed conditions and the reasons why they require the requested modifications of the rule or order; or
(ii) The reasons why the public interest would be served by the modification.
(2) Each affidavit shall set forth facts that would be admissible in evidence and shall show that the affiant is competent to testify to the matters stated therein. All information and material that the requester wishes the Commission to consider shall be contained in the request at the time of filing.
(c) Opportunity for public comment. A request under this section shall be placed on the public record except for material exempt from public disclosure under rule 4.10(a). Unless the Commission determines that earlier disposition is necessary, the request shall remain on the public record for thirty (30) days after a press release on the request is issued. Bureau Directors are authorized to publish a notice in the
(d) Determination. After the period for public comments on a request under this section has expired and no later than one hundred and twenty (120) days after the date of the filing of the request, the Commission shall determine whether the request complies with paragraph (b) of this section and whether the proceeding shall be reopened and the rule or order should be altered, modified, or set aside as requested. In doing so, the Commission may, in its discretion, issue an order reopening the proceeding and modifying the rule or order as requested, issue an order to show cause pursuant to § 3.72, or take such other action as is appropriate: Provided, however, That any action under § 3.72 or otherwise shall be concluded within the specified 120-day period.
PART 3 – RULES OF PRACTICE FOR ADJUDICATIVE PROCEEDINGS
Subpart A – Scope of Rules; Nature of Adjudicative Proceedings
§ 3.1 Scope of the rules in this part; expedition of proceedings.
The rules in this part govern procedure in formal adjudicative proceedings. To the extent practicable and consistent with requirements of law, the Commission’s policy is to conduct such proceedings expeditiously. In the conduct of such proceedings the Administrative Law Judge and counsel for all parties shall make every effort at each stage of a proceeding to avoid delay. In the event of a scheduling conflict between a proceeding in which the Commission also has sought or is seeking relief under Section 13(b) of the FTC Act, 15 U.S.C. 53(b), and another proceeding, the proceeding in which the Commission also has sought or is seeking relief under Section 13(b) shall take precedence. The Commission, at any time, or the Administrative Law Judge at any time prior to the filing of his or her initial decision, may, with the consent of the parties, shorten any time limit prescribed by these Rules of Practice.
§ 3.2 Nature of adjudicative proceedings.
Adjudicative proceedings are those formal proceedings conducted under one or more of the statutes administered by the Commission which are required by statute to be determined on the record after opportunity for an agency hearing. The term includes hearings upon objections to orders relating to the promulgation, amendment, or repeal of rules under sections 4, 5 and 6 of the Fair Packaging and Labeling Act, but does not include rulemaking proceedings up to the time when the Commission determines under § 1.26(g) of this chapter that objections sufficient to warrant the holding of a public hearing have been filed. The term also includes proceedings for the assessment of civil penalties pursuant to § 1.94 of this chapter. The term does not include other proceedings such as negotiations for and Commission consideration of the entry of consent orders; investigational hearings as distinguished from proceedings after the issuance of a complaint; requests for extensions of time to comply with final orders or other proceedings involving compliance with final orders; proceedings for the promulgation of industry guides or trade regulation rules; or the promulgation of substantive rules and regulations.
Subpart B – Pleadings
§ 3.11 Commencement of proceedings.
(a) Complaint. Except as provided in § 3.13, an adjudicative proceeding is commenced when an affirmative vote is taken by the Commission to issue a complaint.
(b) Form of complaint. The Commission’s complaint shall contain the following:
(1) Recital of the legal authority and jurisdiction for institution of the proceeding, with specific designation of the statutory provisions alleged to have been violated;
(2) A clear and concise factual statement sufficient to inform each respondent with reasonable definiteness of the type of acts or practices alleged to be in violation of the law;
(3) Where practical, a form of order which the Commission has reason to believe should issue if the facts are found to be as alleged in the complaint; and
(4) Notice of the specific date, time and place for the evidentiary hearing. Unless a different date is determined by the Commission, the date of the evidentiary hearing shall be 5 months from the date of the administrative complaint in a proceeding in which the Commission, in an ancillary proceeding, has sought or is seeking relief pursuant to Section 13(b) of the FTC Act, 15 U.S.C. 53(b), and 8 months from the date of issuance of the administrative complaint in all other proceedings.
§ 3.12 Answer.
(a) Time for filing. A respondent shall file an answer within 14 days after being served with the complaint.
(b) Content of answer. An answer shall conform to the following:
(1) If allegations of complaint are contested. An answer in which the allegations of a complaint are contested shall contain:
(i) A concise statement of the facts constituting each ground of defense;
(ii) Specific admission, denial, or explanation of each fact alleged in the complaint or, if the respondent is without knowledge thereof, a statement to that effect. Allegations of a complaint not thus answered shall be deemed to have been admitted.
(2) If allegations of complaint are admitted. If the respondent elects not to contest the allegations of fact set forth in the complaint, the answer shall consist of a statement that the respondent admits all of the material allegations to be true. Such an answer shall constitute a waiver of hearings as to the facts alleged in the complaint, and together with the complaint will provide a record basis on which the Commission shall issue a final decision containing appropriate findings and conclusions and a final order disposing of the proceeding. In such an answer, the respondent may, however, reserve the right to submit proposed findings of fact and conclusions of law under § 3.46.
(c) Default. Failure of the respondent to file an answer within the time provided shall be deemed to constitute a waiver of the respondent’s right to appear and contest the allegations of the complaint and to authorize the Commission, without further notice to the respondent, to find the facts to be as alleged in the complaint and to enter a final decision containing appropriate findings and conclusions and a final order disposing of the proceeding.
§ 3.13 Adjudicative hearing on issues arising in rulemaking proceedings under the Fair Packaging and Labeling Act.
(a) Notice of hearing. When the Commission, acting under § 1.26(g) of this chapter, determines that objections which have been filed are sufficient to warrant the holding of an adjudicative hearing in rulemaking proceedings under the Fair Packaging and Labeling Act, or when the Commission otherwise determines that the holding of such a hearing would be in the public interest, a hearing will be held before an Administrative Law Judge for the purpose of receiving evidence relevant and material to the issues raised by such objections or other issues specified by the Commission. In such case the Commission will publish a notice in the
(1) The provisions of the rule or order to which objections have been filed;
(2) The issues raised by the objections or the issues on which the Commission wishes to receive evidence;
(3) The time and place for hearing, the time to be at least thirty (30) days after publication of the notice; and
(4) The time within which, and the conditions under which, any person who petitioned for issuance, amendment, or repeal of the rule or order, or any person who filed objections sufficient to warrant the holding of the hearing, or any other interested person, may file notice of intention to participate in the proceeding.
(b) Parties. Any person who petitions for issuance, amendment, or repeal of a rule or order, and any person who files objections sufficient to warrant the holding of a hearing, and who files timely notice of intention to participate, shall be regarded as a party and shall be individually served with any pleadings filed in the proceeding. Upon written application to the Administrative Law Judge and a showing of good cause, any interested person may be designated by the Administrative Law Judge as a party.
§ 3.14 Intervention.
(a) Any individual, partnership, unincorporated association, or corporation desiring to intervene in an adjudicative proceeding shall make written application in the form of a motion setting forth the basis therefor. Such application shall be served upon each party to the proceeding in accordance with the provisions of § 4.4(b) of this chapter. The answer filed by any party shall be served upon the applicant in accordance with the provisions of § 4.4(b). The Administrative Law Judge or the Commission may by order permit the intervention to such extent and upon such terms as are provided by law or as otherwise may be deemed proper.
(b) In an adjudicative proceeding where the complaint states that divestiture relief is contemplated, the labor organization[s] representing employees of the respondent[s] may intervene as a matter of right. Applications for such intervention are to be made in accordance with the procedures set forth in paragraph (a) of this section and must be filed within 60 days of the issuance of the complaint. Intervention as a matter of right shall be limited to the issue of the effect, if any, of proposed remedies on employment, with full rights of participation in the proceeding concerning this issue. This paragraph does not affect a labor organization’s ability to petition for leave to intervene pursuant to § 3.14(a).
§ 3.15 Amendments and supplemental pleadings.
(a) Amendments – (1) By leave. If and whenever determination of a controversy on the merits will be facilitated thereby, the Administrative Law Judge may, upon such conditions as are necessary to avoid prejudicing the public interest and the rights of the parties, allow appropriate amendments to pleadings or notice of hearing: Provided, however, That a motion for amendment of a complaint or notice may be allowed by the Administrative Law Judge only if the amendment is reasonably within the scope of the original complaint or notice. Motions for other amendments of complaints or notices shall be certified to the Commission.
(2) Conformance to evidence. When issues not raised by the pleadings or notice of hearing but reasonably within the scope of the original complaint or notice of hearing are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings or notice of hearing; and such amendments of the pleadings or notice as may be necessary to make them conform to the evidence and to raise such issues shall be allowed at any time.
(b) Supplemental pleadings. The Administrative Law Judge may, upon reasonable notice and such terms as are just, permit service of a supplemental pleading or notice setting forth transactions, occurrences, or events which have happened since the date of the pleading or notice sought to be supplemented and which are relevant to any of the issues involved.
Subpart C – Prehearing Procedures; Motions; Interlocutory Appeals; Summary Decisions
§ 3.21 Prehearing procedures.
(a) Meeting of the parties before scheduling conference. As early as practicable before the prehearing scheduling conference described in paragraph (b) of this section, but in any event no later than 5 days after the answer is filed by the last answering respondent, counsel for the parties shall meet to discuss the nature and basis of their claims and defenses and the possibilities for a prompt settlement or resolution of the case. The parties shall also agree, if possible, on –
(1) A proposed discovery plan specifically addressing a schedule for depositions of fact witnesses, the production of documents and electronically stored information, and the timing of expert discovery pursuant to § 3.31A. The parties’ agreement regarding electronically stored information should include the scope of and a specified time period for the exchange of such information that is subject to §§ 3.31(b)(2), 3.31(c), and 3.37(a), and the format for the disclosure of such information, consistent with §§ 3.31(c)(3) and 3.37(c);
(2) A preliminary estimate of the time required for the evidentiary hearing; and
(3) Any other matters to be determined at the scheduling conference.
(b) Scheduling conference. Not later than 10 days after the answer is filed by the last answering respondent, the Administrative Law Judge shall hold a scheduling conference. At the scheduling conference, counsel for the parties shall be prepared to address:
(1) Their factual and legal theories;
(2) The current status of any pending motions;
(3) A schedule of proceedings that is consistent with the date of the evidentiary hearing set by the Commission;
(4) Steps taken to preserve evidence relevant to the issues raised by the claims and defenses;
(5) The scope of anticipated discovery, any limitations on discovery, and a proposed discovery plan, including the disclosure of electronically stored information;
(6) Issues that can be narrowed by agreement or by motion, suggestions to expedite the presentation of evidence at trial, and any request to bifurcate issues, claims or defenses; and
(7) Other possible agreements or steps that may aid in the just and expeditious disposition of the proceeding and to avoid unnecessary cost.
(c) Prehearing scheduling order. (1) Not later than 2 days after the scheduling conference, the Administrative Law Judge shall enter an order that sets forth the results of the conference and establishes a schedule of proceedings that will permit the evidentiary hearing to commence on the date set by the Commission, including a plan of discovery that addresses the deposition of fact witnesses, timing of expert discovery, and the production of documents and electronically stored information, dates for the submission and hearing of motions, the specific method by which exhibits shall be numbered or otherwise identified and marked for the record, and the time and place of a final prehearing conference. The Commission may, upon a showing of good cause, order a later date for the evidentiary hearing than the one specified in the complaint.
(2) The Administrative Law Judge may, upon a showing of good cause, grant a motion to extend any deadline or time specified in this scheduling order other than the date of the evidentiary hearing. Such motion shall set forth the total period of extensions, if any, previously obtained by the moving party. In determining whether to grant the motion, the Administrative Law Judge shall consider any extensions already granted, the length of the proceedings to date, the complexity of the issues, and the need to conclude the evidentiary hearing and render an initial decision in a timely manner. The Administrative Law Judge shall not rule on ex parte motions to extend the deadlines specified in the scheduling order, or modify such deadlines solely upon stipulation or agreement of counsel.
(d) Meeting prior to final prehearing conference. Counsel for the parties shall meet before the final prehearing conference described in paragraph (e) of this section to discuss the matters set forth therein in preparation for the conference.
(e) Final prehearing conference. As close to the commencement of the evidentiary hearing as practicable, the Administrative Law Judge shall hold a final prehearing conference, which counsel shall attend in person, to submit any proposed stipulations as to law, fact, or admissibility of evidence, exchange exhibit and witness lists, and designate testimony to be presented by deposition. At this conference, the Administrative Law Judge shall also resolve any outstanding evidentiary matters or pending motions (except motions for summary decision) and establish a final schedule for the evidentiary hearing.
(f) Additional prehearing conferences and orders. The Administrative Law Judge shall hold additional prehearing and status conferences or enter additional orders as may be needed to ensure the just and expeditious disposition of the proceeding and to avoid unnecessary cost. Such conferences shall be held in person to the extent practicable.
(g) Public access and reporting. Prehearing conferences shall be public unless the Administrative Law Judge determines in his or her discretion that the conference (or any part thereof) shall be closed to the public. The Administrative Law Judge shall have discretion to determine whether a prehearing conference shall be stenographically reported.
§ 3.22 Motions.
(a) Presentation and disposition. Motions filed under § 4.17 of this chapter shall be directly referred to and ruled on by the Commission. Motions to dismiss filed before the evidentiary hearing (other than motions to dismiss under § 3.26(d)), motions to strike, and motions for summary decision shall be directly referred to the Commission and shall be ruled on by the Commission unless the Commission in its discretion refers the motion to the Administrative Law Judge. Except as otherwise provided by an applicable rule, motions not referred to the Administrative Law Judge shall be ruled on by the Commission within 45 days of the filing of the last-filed answer or reply to the motion, if any, unless the Commission determines there is good cause to extend the deadline. If the Commission refers the motion to the Administrative Law Judge, it may set a deadline for the ruling by the Administrative Law Judge, and a party may seek review of the ruling of the Administrative Law Judge in accordance with § 3.23. During the time a proceeding is before an Administrative Law Judge, all other motions shall be addressed to and decided by the Administrative Law Judge, if within his or her authority. The Administrative Law Judge shall certify to the Commission a motion to disqualify filed under § 3.42(g) if the Administrative Law Judge does not disqualify himself or herself within 10 days. The Administrative Law Judge shall certify to the Commission forthwith any other motion upon which he or she has no authority to rule. Rulings containing information granted in camera status pursuant to § 3.45 shall be filed in accordance with § 3.45(f). When a motion to dismiss is made at the close of the evidence offered in support of the complaint based upon an alleged failure to establish a prima facie case, the Administrative Law Judge shall defer ruling thereon until immediately after all evidence has been received and the hearing record is closed. All written motions shall be filed with the Secretary of the Commission, and all motions addressed to the Commission shall be in writing. The moving party shall also provide a copy of its motion to the Administrative Law Judge at the time the motion is filed with the Secretary.
(b) Proceedings not stayed. A motion under consideration by the Commission shall not stay proceedings before the Administrative Law Judge unless the Commission so orders or unless otherwise provided by an applicable rule.
(c) Content. All written motions shall state the particular order, ruling, or action desired and the grounds therefor. Memoranda in support of, or in opposition to, any dispositive motion shall not exceed 10,000 words. Memoranda in support of, or in opposition to, any other motion shall not exceed 2,500 words. Any reply in support of a dispositive motion shall not exceed 5,000 words and any reply in support of any other motion authorized by the Administrative Law Judge or the Commission shall not exceed 1,250 words. These word count limitations include headings, footnotes, and quotations, but do not include the cover, table of contents, table of citations or authorities, glossaries, statements with respect to oral argument, any addendums containing statutes, rules or regulations, any certificates of counsel, proposed form of order, and any attachment required by § 3.45(e). Documents that fail to comply with these provisions shall not be filed with the Secretary. Motions must also include the name, address, telephone number, fax number, and e-mail address (if any) of counsel and attach a draft order containing the proposed relief. If a party includes in a motion information that has been granted in camera status pursuant to § 3.45(b) or is subject to confidentiality protections pursuant to a protective order, the party shall file 2 versions of the motion in accordance with the procedures set forth in § 3.45(e). The party shall mark its confidential filings with brackets or similar conspicuous markings to indicate the material for which it is claiming confidential treatment. The time period specified by § 3.22(d) within which an opposing party may file an answer will begin to run upon service on that opposing party of the confidential version of the motion.
(d) Responses. Within 10 days after service of any written motion, or within such longer or shorter time as may be designated by the Administrative Law Judge or the Commission, the opposing party shall answer or shall be deemed to have consented to the granting of the relief asked for in the motion. If an opposing party includes in an answer information that has been granted in camera status pursuant to § 3.45(b) or is subject to confidentiality protections pursuant to a protective order, the opposing party shall file 2 versions of the answer in accordance with the procedures set forth in § 3.45(e). The moving party shall have no right to reply, except for dispositive motions or as otherwise permitted by the Administrative Law Judge or the Commission. Reply and surreply briefs to motions other than dispositive motions shall be permitted only in circumstances where the parties wish to draw the Administrative Law Judge’s or the Commission’s attention to recent important developments or controlling authority that could not have been raised earlier in the party’s principal brief. The reply may be conditionally filed with the motion seeking leave to reply. Any reply with respect to a dispositive motion, or any permitted reply to any other motion, shall be filed within 5 days after service of the last answer to that motion.
(e) Rulings on motions. Unless otherwise provided by a relevant rule, the Administrative Law Judge shall rule on motions within 14 days after the filing of all motion papers authorized by this section. The Commission, for good cause, may extend the time allowed for a ruling.
(f) Motions for extensions. The Administrative Law Judge or the Commission may waive the requirements of this section as to motions for extensions of time; however, the Administrative Law Judge shall have no authority to rule on ex parte motions for extensions of time.
(g) Statement. Each motion to quash filed pursuant to § 3.34(c), each motion to compel or determine sufficiency pursuant to § 3.38(a), each motion for sanctions pursuant to § 3.38(b), and each motion for enforcement pursuant to § 3.38(c) shall be accompanied by a signed statement representing that counsel for the moving party has conferred with opposing counsel in an effort in good faith to resolve by agreement the issues raised by the motion and has been unable to reach such an agreement. If some of the matters in controversy have been resolved by agreement, the statement shall specify the matters so resolved and the matters remaining unresolved. The statement shall recite the date, time, and place of each such conference between counsel, and the names of all parties participating in each such conference. Unless otherwise ordered by the Administrative Law Judge, the statement required by this rule must be filed only with the first motion concerning compliance with the discovery demand at issue.
§ 3.23 Interlocutory appeals.
(a) Appeals without a determination by the Administrative Law Judge. (1) The Commission may, in its discretion, entertain interlocutory appeals where a ruling of the Administrative Law Judge:
(i) Requires the disclosure of records of the Commission or another governmental agency or the appearance of an official or employee of the Commission or another governmental agency pursuant to § 3.36, if such appeal is based solely on a claim of privilege: Provided, that the Administrative Law Judge shall stay until further order of the Commission the effectiveness of any ruling, whether or not appeal is sought, that requires the disclosure of nonpublic Commission minutes, Commissioner circulations, or similar documents prepared by the Commission, an individual Commissioner, or the Office of the General Counsel;
(ii) Suspends an attorney from participation in a particular proceeding pursuant to § 3.42(d); or
(iii) Grants or denies an application for intervention pursuant to the provisions of § 3.14.
(2) Appeal from such rulings may be sought by filing with the Commission an application for review within 3 days after notice of the Administrative Law Judge’s ruling. An answer may be filed within 3 days after the application for review is filed. The Commission upon its own motion may enter an order staying compliance with a discovery demand authorized by the Administrative Law Judge pursuant to § 3.36 or placing the matter on the Commission’s docket for review. Any order placing the matter on the Commission’s docket for review will set forth the scope of the review and the issues which will be considered and will make provision for the filing of memoranda of law if deemed appropriate by the Commission.
(b) Other interlocutory appeals. A party may request the Administrative Law Judge to determine that a ruling involves a controlling question of law or policy as to which there is substantial ground for difference of opinion and that an immediate appeal from the ruling may materially advance the ultimate termination of the litigation or subsequent review will be an inadequate remedy. An answer may be filed within 3 days after the request for determination is filed. The Administrative Law Judge shall issue a ruling on the request for determination within 3 days of the deadline for filing an answer. The party may file an application for review with the Commission within 1 day after notice that the Administrative Law Judge has issued the requested determination or 1 day after the deadline has passed for the Administrative Law Judge to issue a ruling on the request for determination and the Administrative Law Judge has not issued his or her ruling. An answer may be filed within 3 days after the application for review is filed.
(c) The application for review shall attach the ruling from which appeal is being taken and any other portions of the record on which the moving party relies. Neither the application for review nor the answer shall exceed 2,500 words. This word count limitation includes headings, footnotes, and quotations, but does not include the cover, table of contents, table of citations or authorities, glossaries, statements with respect to oral argument, any addendums containing statutes, rules or regulations, any certificates of counsel, proposed form of order, and any attachment required by § 3.45(e). The Commission may order additional briefing on the application.
(d) Ruling on application for review. Within 3 days after the deadline for filing an answer, the Commission will determine whether to grant the application for review. The denial of an application shall not constitute a ruling on the merits of the ruling that is the subject of the application.
(e) Proceedings not stayed. An application for review and appeal hereunder shall not stay proceedings before the Administrative Law Judge unless the Judge or the Commission shall so order.
§ 3.24 Summary decisions.
(a) Procedure. (1) Any party may move, with or without supporting affidavits, for a summary decision in the party’s favor upon all or any part of the issues being adjudicated. The motion shall be accompanied by a separate and concise statement of the material facts as to which the moving party contends there is no genuine issue for trial. Counsel in support of the complaint may so move at any time after 20 days following issuance of the complaint and any respondent may so move at any time after issuance of the complaint. Any such motion by any party, however, shall be filed in accordance with the scheduling order issued pursuant to § 3.21, but in any case at least 30 days before the date fixed for the hearing.
(2) Any other party may, within 14 days after service of the motion, file opposing affidavits. The opposing party shall include a separate and concise statement of those material facts as to which the opposing party contends there exists a genuine issue for trial, as provided in § 3.24(a)(3). The parties may file memoranda of law in support of, or in opposition to, the motion consistent with § 3.22(c). If a party includes in any such brief or memorandum information that has been granted in camera status pursuant to § 3.45(b) or is subject to confidentiality protections pursuant to a protective order, the party shall file 2 versions of the document in accordance with the procedures set forth in § 3.45(e). If the Commission (or, when appropriate, the Administrative Law Judge) determines that there is no genuine issue as to any material fact regarding liability or relief, it shall issue a final decision and order. In the event that the motion has been referred to the Administrative Law Judge, such determination by the Administrative Law Judge shall constitute his or her initial decision and shall conform to the procedures set forth in § 3.51(c). A summary decision, interlocutory in character and in compliance with the procedures set forth in § 3.51(c), may be rendered on the issue of liability alone although there is a genuine issue as to relief.
(3) Affidavits shall set forth such facts as would be admissible in evidence and shall show affirmatively that the affiant is competent to testify to the matters stated therein. The Commission (or, when appropriate, the Administrative Law Judge) may permit affidavits to be supplemented or opposed by depositions, answers to interrogatories, or further affidavits. When a motion for summary decision is made and supported as provided in this rule, a party opposing the motion may not rest upon the mere allegations or denials of his or her pleading; the response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue of material fact for trial. If no such response is filed, summary decision, if appropriate, shall be rendered.
(4) Should it appear from the affidavits of a party opposing the motion that it cannot, for reasons stated, present by affidavit facts essential to justify its opposition, the Commission (or, when appropriate, the Administrative Law Judge) may deny the motion for summary decision or may order a continuance to permit affidavits to be obtained or depositions to be taken or discovery to be had or make such other order as is appropriate and a determination to that effect shall be made a matter of record.
(5) If on motion under this rule a summary decision is not rendered upon the whole case or for all the relief asked and a trial is necessary, the Commission (or, when appropriate, the Administrative Law Judge) shall issue an order specifying the facts that appear without substantial controversy and directing further proceedings in the action. The facts so specified shall be deemed established.
(b) Affidavits filed in bad faith. (1) Should it appear to the satisfaction of the Commission (or, when appropriate, the Administrative Law Judge) at any time that any of the affidavits presented pursuant to this rule are presented in bad faith, or solely for the purpose of delay, or are patently frivolous, the Commission (or, when appropriate, the Administrative Law Judge) shall enter a determination to that effect upon the record.
(2) If upon consideration of all relevant facts attending the submission of any affidavit covered by paragraph (b)(1) of this section, the Commission (or, when appropriate, the Administrative Law Judge) concludes that action to suspend or remove an attorney from the case is warranted, it shall take action as specified in § 3.42(d). If the Administrative Law Judge to whom the Commission has referred a motion for summary decision concludes, upon consideration of all the relevant facts attending the submission of any affidavit covered by paragraph (b)(1) of this section, that the matter should be certified to the Commission for consideration of disciplinary action against an attorney, including reprimand, suspension or disbarment, the Administrative Law Judge shall certify the matter, with his or her findings and recommendations, to the Commission for its consideration of disciplinary action in the manner provided by the Commission’s rules. If the Commission has addressed the motion directly, it may consider such disciplinary action without a certification by the Administrative Law Judge.
§ 3.25 Consent agreement settlements.
(a) The Administrative Law Judge may, in his or her discretion and without suspension of prehearing procedures, hold conferences for the purpose of supervising negotiations for the settlement of the case, in whole or in part, by way of consent agreement.
(b) A proposal to settle a matter in adjudication by consent shall be submitted by way of a motion to withdraw the matter from adjudication for the purpose of considering a proposed settlement. Such motion shall be filed with the Secretary of the Commission, as provided in § 4.2. Any such motion shall be accompanied by a consent proposal; the proposal itself, however, shall not be placed on the public record unless and until it is accepted by the Commission as provided herein. If the consent proposal affects only some of the respondents or resolves only some of the charges in adjudication, the motion required by this paragraph shall so state and shall specify the portions of the matter that the proposal would resolve.
(c) If a consent agreement accompanying the motion has been executed by one or more respondents and by complaint counsel, has been approved by the appropriate Bureau Director, and conforms to § 2.32, and the matter is pending before an Administrative Law Judge, the Secretary shall issue an order withdrawing from adjudication those portions of the matter that the proposal would resolve and all proceedings before the Administrative Law Judge shall be stayed with respect to such portions, pending a determination by the Commission pursuant to paragraph (f) of this section. If a consent proposal is not in the form of a consent agreement executed by a respondent, does not otherwise conform to § 2.32, or has not been executed by complaint counsel, and the matter is pending before the Administrative Law Judge, he or she shall certify the motion and proposal to the Commission upon a written determination that there is a reasonable possibility of settlement. The certification may be accompanied by a recommendation to the Commission as to the disposition of the motion. The Administrative Law Judge shall make a determination as to whether to certify the motion within 5 days after the filing of the motion. The filing of a motion under paragraph (b) of this section and certification thereof to the Commission shall not stay proceedings before the Administrative Law Judge unless the Commission shall so order. Upon certification of such motion, the Commission in its discretion may issue an order withdrawing from adjudication those portions of the matter that the proposal would resolve for the purpose of considering the consent proposal.
(d) If the matter is no longer pending before the Administrative Law Judge, the Commission in its discretion may, upon motion filed under paragraph (b) of this section, issue an order withdrawing from adjudication those portions of the matter that the proposal would resolve for the purpose of considering the consent proposal. Such order may issue whether or not the consent proposal is in the form of a consent agreement executed by a respondent, otherwise conforms to § 2.32, or has been executed by complaint counsel.
(e) The Commission will treat those portions of a matter withdrawn from adjudication pursuant to paragraphs (c) or (d) of this section as being in a nonadjudicative status. Portions not so withdrawn shall remain in an adjudicative status.
(f) After some or all of the allegations in a matter have been withdrawn from adjudication, the Commission may accept a proposed consent agreement, reject it and return the matter or affected portions thereof to adjudication for further proceedings, or take such other action as it may deem appropriate. If an agreement is accepted, it will be disposed of as provided in § 2.34 of this chapter, except that if, following the public comment period provided for in § 2.34, the Commission decides, based on comments received or otherwise, to withdraw its acceptance of the agreement, it will so notify the parties and will return to adjudication any portions of the matter previously withdrawn from adjudication for further proceedings or take such other action it considers appropriate.
(g) This rule will not preclude the settlement of the case by regular adjudicatory process through the filing of an admission answer or submission of the case to the Administrative Law Judge on a stipulation of facts and an agreed order.
§ 3.26 Motions following denial of preliminary injunctive relief.
(a) This section sets forth two procedures by which respondents may obtain consideration of whether continuation of an adjudicative proceeding is in the public interest after a court has denied preliminary injunctive relief in a separate proceeding brought under section 13(b) of the Federal Trade Commission Act, 15 U.S.C. 53(b), in aid of the adjudicative proceeding.
(b) A motion under this section shall be addressed to the Commission and must be filed within 14 days after, but no earlier than:
(1) A district court has denied the Commission’s request for a preliminary injunction, if the Commission has not filed a motion for relief pending appeal with the court of appeals within 7 days following the district court’s denial of a preliminary injunction; or
(2) A court of appeals has denied a Commission motion for relief pending appeal.
(c) Withdrawal from adjudication. Following denial of court relief as specified in paragraph (b) of this section, respondents may move that the adjudicative proceeding be withdrawn from adjudication in order to consider whether the public interest warrants further litigation. Although all respondents must consent to the filing of such a motion, a motion under this paragraph (c) may be filed jointly or separately by each of the respondents in the adjudicative proceeding. At the time respondents file a motion under this paragraph (c), respondents must also electronically transmit a copy to complaint counsel. The Secretary shall issue an order withdrawing the matter from adjudication 2 days after such a motion is filed, except that, if complaint counsel file an objection asserting that the conditions of paragraph (b) of this section have not been met, the Commission shall decide the motion within 10 days after the objection is filed.
(d) Consideration on the record of a motion to dismiss. (1) In lieu of a motion to withdraw the adjudicative proceeding from adjudication under paragraph (c) of this section, any respondent may file a motion under this paragraph to dismiss the administrative complaint on the basis that the public interest does not warrant further litigation after a court has denied preliminary injunctive relief to the Commission.
(2) Stay. The filing of a motion under this paragraph (d) shall stay the proceeding until 7 days following the disposition of the motion by the Commission, and all deadlines established by these rules shall be tolled for the amount of time the proceeding is so stayed.
(3) Answer. Complaint counsel may file a response within 7 days after such motion is filed.
(4) Ruling by Commission. Within 30 days after the deadline for filing a response, the Commission shall rule on any motion under this paragraph (d).
(e) Form. Memoranda in support of or in opposition to motions authorized by this section shall not exceed 10,000 words. This word count limitation includes headings, footnotes, and quotations, but does not include the cover, table of contents, table of citations or authorities, glossaries, statements with respect to oral argument, any addendums containing statutes, rules or regulations, any certificates of counsel, proposed form of order, and any attachment required by § 3.45(e).
(f) In camera materials. If any filing includes materials that are subject to confidentiality protections pursuant to an order entered in either the proceeding under section 13(b) or the adjudicative proceeding, such materials shall be treated as in camera materials for purposes of this paragraph and the party shall file 2 versions of the document in accordance with the procedures set forth in § 3.45(e). The time within which complaint counsel may file an objection or response under this section will begin to run upon service of the in camera version of the motion (including any supporting briefs and memoranda).
Subpart D – Discovery; Compulsory Process
§ 3.31 General discovery provisions.
(a) Discovery methods. Parties may obtain discovery by one or more of the following methods: Depositions upon oral examination or written questions; written interrogatories; production of documents or things for inspection and other purposes; and requests for admission. Except as provided in the rules, or unless the Administrative Law Judge orders otherwise, the frequency or sequence of these methods is not limited. The parties shall, to the greatest extent practicable, conduct discovery simultaneously; the fact that a party is conducting discovery shall not operate to delay any other party’s discovery. Unless all parties expressly agree otherwise, no discovery shall take place before the issuance of a prehearing scheduling order under § 3.21(c), except for the mandatory initial disclosures required by paragraph (b) of this section.
(b) Mandatory initial disclosures. Complaint counsel and respondent’s counsel shall, within 5 days of receipt of a respondent’s answer to the complaint and without awaiting a discovery request, provide to each other:
(1) The name, and, if known, the address and telephone number of each individual likely to have discoverable information relevant to the allegations of the Commission’s complaint, to the proposed relief, or to the defenses of the respondent, as set forth in § 3.31(c)(1); and
(2) A copy of, or a description by category and location of, all documents and electronically stored information including declarations, transcripts of investigational hearings and depositions, and tangible things in the possession, custody, or control of the Commission or respondent(s) that are relevant to the allegations of the Commission’s complaint, to the proposed relief, or to the defenses of the respondent, as set forth in § 3.31(c)(1); unless such information or materials are subject to the limitations in § 3.31(c)(2), privileged as defined in § 3.31(c)(4), pertain to hearing preparation as defined in § 3.31(c)(5), pertain to experts as defined in § 3.31A, or are obtainable from some other source that is more convenient, less burdensome, or less expensive. A party shall make its disclosures based on the information then reasonably available to it and is not excused from making its disclosures because it has not fully completed its investigation.
(c) Scope of discovery. Unless otherwise limited by order of the Administrative Law Judge or the Commission in accordance with these rules, the scope of discovery under all the rules in this part is as follows:
(1) In general. Parties may obtain discovery to the extent that it may be reasonably expected to yield information relevant to the allegations of the complaint, to the proposed relief, or to the defenses of any respondent. Such information may include the existence, description, nature, custody, condition, and location of any books, documents, other tangible things, electronically stored information, and the identity and location of persons having any knowledge of any discoverable matter. Information may not be withheld from discovery on grounds that the information will be inadmissible at the hearing if the information sought appears reasonably calculated to lead to the discovery of admissible evidence.
(2) Limitations. Complaint counsel need only search for materials that were collected or reviewed in the course of the investigation of the matter or prosecution of the case and that are in the possession, custody or control of the Bureaus or Offices of the Commission that investigated the matter, including the Bureau of Economics. The Administrative Law Judge may authorize for good cause additional discovery of materials in the possession, custody, or control of those Bureaus or Offices, or authorize other discovery pursuant to § 3.36. Neither complaint counsel, respondent, nor a third party receiving a discovery request under these rules is required to search for materials generated and transmitted between an entity’s counsel (including counsel’s legal staff or in-house counsel) and not shared with anyone else, or between complaint counsel and non-testifying Commission employees, unless the Administrative Law Judge determines there is good cause to provide such materials. The frequency or extent of use of the discovery methods otherwise permitted under these rules shall be limited by the Administrative Law Judge if he or she determines that:
(i) The discovery sought from a party or third party is unreasonably cumulative or duplicative, or is obtainable from some other source that is more convenient, less burdensome, or less expensive;
(ii) The party seeking discovery has had ample opportunity by discovery in the action to obtain the information sought; or
(iii) The burden and expense of the proposed discovery on a party or third party outweigh its likely benefit.
(3) Electronically stored information. A party or third party need not provide discovery of electronically stored information from sources that the party or third party identifies as not reasonably accessible because of undue burden or cost. On a motion to compel discovery, the party or third party from whom discovery is sought must show that the information is not reasonably accessible because of undue burden or cost. If that showing is made, the Administrative Law Judge may nonetheless order discovery if the requesting party shows good cause, considering the limitations of paragraph (c)(2). The Administrative Law Judge may specify conditions for the discovery.
(4) Privilege. Discovery shall be denied or limited in order to preserve the privilege of a witness, person, or governmental agency as governed by the Constitution, any applicable act of Congress, or the principles of the common law as they may be interpreted by the Commission in the light of reason and experience.
(5) Hearing preparations: Materials. Subject to the provisions of § 3.31A, a party may obtain discovery of documents and tangible things otherwise discoverable under paragraph (c)(1) of this section and prepared in anticipation of litigation or for hearing by or for another party or by or for that other party’s representative (including the party’s attorney, consultant, or agent) only upon a showing that the party seeking discovery has substantial need of the materials in the preparation of its case and that the party is unable without undue hardship to obtain the substantial equivalent of the materials by other means. In ordering discovery of such materials when the required showing has been made, the Administrative Law Judge shall protect against disclosure of the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party.
(d) Protective orders; orders to preserve evidence. In order to protect the parties and third parties against improper use and disclosure of confidential information, the Administrative Law Judge shall issue a protective order as set forth in the appendix to this section. The Administrative Law Judge may also deny discovery or make any other order which justice requires to protect a party or other person from annoyance, embarrassment, oppression, or undue burden or expense, or to prevent undue delay in the proceeding. Such an order may also be issued to preserve evidence upon a showing that there is substantial reason to believe that such evidence would not otherwise be available for presentation at the hearing.
(e) Supplementation of disclosures and responses. A party who has made a mandatory initial disclosure under § 3.31(b) or responded to a request for discovery with a disclosure or response is under a duty to supplement or correct the disclosure or response to include information thereafter acquired if ordered by the Administrative Law Judge or in the following circumstances:
(1) A party is under a duty to supplement at appropriate intervals its mandatory initial disclosures under § 3.31(b) if the party learns that in some material respect the information disclosed is incomplete or incorrect and if the additional or corrective information has not otherwise been made known to the other parties during the discovery process or in writing.
(2) A party is under a duty to amend in a timely manner a prior response to an interrogatory, request for production, or request for admission if the party learns that the response is in some material respect incomplete or incorrect.
(f) Stipulations. When approved by the Administrative Law Judge, the parties may by written stipulation (1) provide that depositions may be taken before any person, at any time or place, upon any notice, and in any manner and when so taken may be used like other depositions, and (2) modify the procedures provided by these rules for other methods of discovery.
(g) Disclosure of privileged or protected information or communications; scope of waiver; obligations of receiving party. (1)(i) The disclosure of privileged or protected information or communications during a part 3 proceeding or during a Commission precomplaint investigation shall not operate as a waiver if:
(A) The disclosure is inadvertent;
(B) The holder of the privilege or protection took reasonable steps to prevent disclosure; and
(C) The holder promptly took reasonable steps to rectify the error, including notifying any party that received the information or communication of the claim and the basis for it.
(ii) After being notified, the receiving party must promptly return, sequester, or destroy the specified information and any copies it has; must not use or disclose the information until the claim is resolved; must take reasonable steps to retrieve the information if the party disclosed it before being notified; and may promptly present the information to the Administrative Law Judge under seal for a determination of the claim. The producing party must preserve the information until the claim is resolved.
(2) The disclosure of privileged or protected information or communications during a part 3 proceeding or during a Commission precomplaint investigation shall waive the privilege or protection as to undisclosed information or communications only if:
(i) The waiver is intentional;
(ii) The disclosed and undisclosed information or communications concern the same subject matter; and
(iii) They ought in fairness to be considered together.
(h) Restriction on filings. Unless otherwise ordered by the Administrative Law Judge in his or her discretion, mandatory initial and supplemental disclosures, interrogatories, depositions, requests for documents, requests for admissions, and answers and responses thereto shall be served upon other parties but shall not be filed with the Office of the Secretary, the Administrative Law Judge, or otherwise provided to the Commission, except to support or oppose a motion or to offer as evidence.
For the purpose of protecting the interests of the parties and third parties in the above-captioned matter against improper use and disclosure of confidential information submitted or produced in connection with this matter:
1. As used in this Order, “confidential material” shall refer to any document or portion thereof that contains privileged information, competitively sensitive information, or sensitive personal information. “Sensitive personal information” shall refer to, but shall not be limited to, an individual’s Social Security number, taxpayer identification number, financial account number, credit card or debit card number, driver’s license number, state-issued identification number, passport number, date of birth (other than year), and any sensitive health information identifiable by individual, such as an individual’s medical records. “Document” shall refer to any discoverable writing, recording, transcript of oral testimony, or electronically stored information in the possession of a party or a third party. “Commission” shall refer to the Federal Trade Commission (“FTC”), or any of its employees, agents, attorneys, and all other persons acting on its behalf, excluding persons retained as consultants or experts for purposes of this proceeding.
2. Any document or portion thereof submitted by a respondent or a third party during a Federal Trade Commission investigation or during the course of this proceeding that is entitled to confidentiality under the Federal Trade Commission Act, or any other federal statute or regulation, or under any federal court or Commission precedent interpreting such statute or regulation, as well as any information that discloses the substance of the contents of any confidential materials derived from a document subject to this Order, shall be treated as confidential material for purposes of this Order. The identity of a third party submitting such confidential material shall also be treated as confidential material for the purposes of this Order where the submitter has requested such confidential treatment.
3. The parties and any third parties, in complying with informal discovery requests, disclosure requirements, or discovery demands in this proceeding may designate any responsive document or portion thereof as confidential material, including documents obtained by them from third parties pursuant to discovery or as otherwise obtained.
4. The parties, in conducting discovery from third parties, shall provide to each third party a copy of this Order so as to inform each such third party of his, her, or its rights herein.
5. A designation of confidentiality shall constitute a representation in good faith and after careful determination that the material is not reasonably believed to be already in the public domain and that counsel believes the material so designated constitutes confidential material as defined in Paragraph 1 of this Order.
6. Material may be designated as confidential by placing on or affixing to the document containing such material (in such manner as will not interfere with the legibility thereof), or if an entire folder or box of documents is confidential by placing or affixing to that folder or box, the designation “CONFIDENTIAL – FTC Docket No. XXXX” or any other appropriate notice that identifies this proceeding, together with an indication of the portion or portions of the document considered to be confidential material. Confidential information contained in electronic documents may also be designated as confidential by placing the designation “CONFIDENTIAL – FTC Docket No. XXXX” or any other appropriate notice that identifies this proceeding, on the face of the CD or DVD or other medium on which the document is produced. Masked or otherwise redacted copies of documents may be produced where the portions masked or redacted contain privileged matter, provided that the copy produced shall indicate at the appropriate point that portions have been masked or redacted and the reasons therefor.
7. Confidential material shall be disclosed only to: (a) the Administrative Law Judge presiding over this proceeding, personnel assisting the Administrative Law Judge, the Commission and its employees, and personnel retained by the Commission as experts or consultants for this proceeding; (b) judges and other court personnel of any court having jurisdiction over any appellate proceedings involving this matter; (c) outside counsel of record for any respondent, their associated attorneys and other employees of their law firm(s), provided they are not employees of a respondent; (d) anyone retained to assist outside counsel in the preparation or hearing of this proceeding including consultants, provided they are not affiliated in any way with a respondent and have signed an agreement to abide by the terms of the protective order; and (e) any witness or deponent who may have authored or received the information in question.
8. Disclosure of confidential material to any person described in Paragraph 7 of this Order shall be only for the purposes of the preparation and hearing of this proceeding, or any appeal therefrom, and for no other purpose whatsoever, provided, however, that the Commission may, subject to taking appropriate steps to preserve the confidentiality of such material, use or disclose confidential material as provided by its Rules of Practice; sections 6(f) and 21 of the Federal Trade Commission Act; or any other legal obligation imposed upon the Commission.
9. In the event that any confidential material is contained in any pleading, motion, exhibit or other paper filed or to be filed with the Secretary of the Commission, the Secretary shall be so informed by the Party filing such papers, and such papers shall be filed in camera. To the extent that such material was originally submitted by a third party, the party including the materials in its papers shall immediately notify the submitter of such inclusion. Confidential material contained in the papers shall continue to have in camera treatment until further order of the Administrative Law Judge, provided, however, that such papers may be furnished to persons or entities who may receive confidential material pursuant to Paragraphs 7 or 8. Upon or after filing any paper containing confidential material, the filing party shall file on the public record a duplicate copy of the paper that does not reveal confidential material. Further, if the protection for any such material expires, a party may file on the public record a duplicate copy which also contains the formerly protected material.
10. If counsel plans to introduce into evidence at the hearing any document or transcript containing confidential material produced by another party or by a third party, they shall provide advance notice to the other party or third party for purposes of allowing that party to seek an order that the document or transcript be granted in camera treatment. If that party wishes in camera treatment for the document or transcript, the party shall file an appropriate motion with the Administrative Law Judge within 5 days after it receives such notice. Except where such an order is granted, all documents and transcripts shall be part of the public record. Where in camera treatment is granted, a duplicate copy of such document or transcript with the confidential material deleted therefrom may be placed on the public record.
11. If any party receives a discovery request in any investigation or in any other proceeding or matter that may require the disclosure of confidential material submitted by another party or third party, the recipient of the discovery request shall promptly notify the submitter of receipt of such request. Unless a shorter time is mandated by an order of a court, such notification shall be in writing and be received by the submitter at least 10 business days before production, and shall include a copy of this Protective Order and a cover letter that will apprise the submitter of its rights hereunder. Nothing herein shall be construed as requiring the recipient of the discovery request or anyone else covered by this Order to challenge or appeal any order requiring production of confidential material, to subject itself to any penalties for non-compliance with any such order, or to seek any relief from the Administrative Law Judge or the Commission. The recipient shall not oppose the submitter’s efforts to challenge the disclosure of confidential material. In addition, nothing herein shall limit the applicability of Rule 4.11(e) of the Commission’s Rules of Practice, 16 CFR 4.11(e), to discovery requests in another proceeding that are directed to the Commission.
12. At the time that any consultant or other person retained to assist counsel in the preparation of this action concludes participation in the action, such person shall return to counsel all copies of documents or portions thereof designated confidential that are in the possession of such person, together with all notes, memoranda or other papers containing confidential information. At the conclusion of this proceeding, including the exhaustion of judicial review, the parties shall return documents obtained in this action to their submitters, provided, however, that the Commission’s obligation to return documents shall be governed by the provisions of Rule 4.12 of the Rules of Practice, 16 CFR 4.12.
13. The provisions of this Protective Order, insofar as they restrict the communication and use of confidential discovery material, shall, without written permission of the submitter or further order of the Commission, continue to be binding after the conclusion of this proceeding.
§ 3.31A Expert discovery.
(a) The parties shall serve each other with a list of experts they intend to call as witnesses at the hearing not later than 1 day after the close of fact discovery, meaning the close of discovery except for depositions and other discovery permitted under § 3.24(a)(4), and discovery for purposes of authenticity and admissibility of exhibits. Complaint counsel shall serve the other parties with a report prepared by each of its expert witnesses not later than 14 days after the close of fact discovery. Each respondent shall serve each other party with a report prepared by each of its expert witnesses not later than 14 days after the deadline for service of complaint counsel’s expert reports. Complaint counsel shall serve respondents with a list of any rebuttal expert witnesses and a rebuttal report prepared by each such witness not later than 10 days after the deadline for service of respondent’s expert reports. Aside from any information required by paragraph (c), a rebuttal report shall be limited to rebuttal of matters set forth in a respondent’s expert reports. If material outside the scope of fair rebuttal is presented, a respondent may file a motion not later than 5 days after the deadline for service of complaint counsel’s rebuttal reports, seeking appropriate relief with the Administrative Law Judge, including striking all or part of the report, leave to submit a surrebuttal report by respondent’s experts, or leave to call a surrebuttal witness and to submit a surrebuttal report by that witness.
(b) No party may call an expert witness at the hearing unless he or she has been listed and has provided reports as required by this section. Each side will be limited to calling at the evidentiary hearing 5 expert witnesses, including any rebuttal or surrebuttal expert witnesses. A party may file a motion seeking leave to call additional expert witnesses due to extraordinary circumstances.
(c) Each report shall be signed by the expert and contain a complete statement of all opinions to be expressed and the basis and reasons therefor; the data, materials, or other information considered by the witness in forming the opinions; any exhibits to be used as a summary of or support for the opinions; the qualifications of the witness, including a list of all publications authored by the witness within the preceding 10 years; the compensation to be paid for the study and testimony; and a listing of any other cases in which the witness has testified as an expert at trial or by deposition within the preceding 4 years. A rebuttal or surrebuttal report need not include any information already included in the initial report of the witness.
(d) A party may depose any person who has been identified as an expert whose opinions may be presented at trial. Unless otherwise ordered by the Administrative Law Judge, a deposition of any expert witness shall be conducted after the disclosure of a report prepared by the witness in accordance with paragraph (a) of this section. Depositions of expert witnesses shall be completed not later than 65 days after the close of fact discovery. Upon motion, the Administrative Law Judge may order further discovery by other means, subject to such restrictions as to scope as the Administrative Law Judge may deem appropriate.
(e) A party may not discover facts known or opinions held by an expert who has been retained or specifically employed by another party in anticipation of litigation or preparation for hearing and who is not listed as a witness for the evidentiary hearing. A party may not discover drafts of any report required by this section, regardless of the form in which the draft is recorded, or any communications between another party’s attorney and any of that other party’s testifying experts, regardless of the form of the communications, except to the extent that the communications:
(1) Relate to compensation for the expert’s study or testimony;
(2) Identify facts or data that the other party’s attorney provided and that the expert considered in forming the opinions to be expressed; or
(3) Identify assumptions that the other party’s attorney provided and that the expert relied on in forming the opinions to be expressed.
(f) The Administrative Law Judge may, upon a finding of good cause, alter the pre-hearing schedule set forth in this section; provided, however, that no such alteration shall affect the date of the evidentiary hearing noticed in the complaint.
§ 3.32 Admissions.
(a) At any time after 30 days after issuance of a complaint, or after publication of notice of an adjudicative hearing in a rulemaking proceeding under § 3.13, any party may serve on any other party a written request for admission of the truth of any matters relevant to the pending proceeding set forth in the request that relate to statements or opinions of fact or of the application of law to fact, including the genuineness of any documents described in the request. Copies of documents shall be served with the request unless they have been or are otherwise furnished or are known to be, and in the request are stated as being, in the possession of the other party. Each matter of which an admission is requested shall be separately set forth.
(b) The matter is admitted unless, within 10 days after service of the request, or within such shorter or longer time as the Administrative Law Judge may allow, the party to whom the request is directed serves upon the party requesting the admission a sworn written answer or objection addressed to the matter. If objection is made, the reasons therefor shall be stated. The answer shall specifically deny the matter or set forth in detail the reasons why the answering party cannot truthfully admit or deny the matter. A denial shall fairly meet the substance of the requested admission, and when good faith requires that a party qualify its answer or deny only a part of the matter of which an admission is requested, the party shall specify so much of it as is true and qualify or deny the remainder. An answering party may not give lack of information or knowledge as a reason for failure to admit or deny unless the party states that it has made reasonable inquiry and that the information known to or readily obtainable by the party is insufficient to enable it to admit or deny. A party who considers that a matter of which an admission has been requested presents a genuine issue for trial may not, on that ground alone, object to the request; the party may deny the matter or set forth reasons why the party cannot admit or deny it.
(c) Any matter admitted under this rule is conclusively established unless the Administrative Law Judge on motion permits withdrawal or amendment of the admission. The Administrative Law Judge may permit withdrawal or amendment when the presentation of the merits of the proceeding will be subserved thereby and the party who obtained the admission fails to satisfy the Administrative Law Judge that withdrawal or amendment will prejudice him in maintaining his action or defense on the merits. Any admission made by a party under this rule is for the purpose of the pending proceeding only and is not an admission by him for any other purpose nor may it be used against him in any other proceeding.
§ 3.33 Depositions.
(a) In general. Any party may take a deposition of any named person or of a person or persons described with reasonable particularity, provided that such deposition is reasonably expected to yield information within the scope of discovery under § 3.31(c)(1) and subject to the requirements in § 3.36. Such party may, by motion, obtain from the Administrative Law Judge an order to preserve relevant evidence upon a showing that there is substantial reason to believe that such evidence would not otherwise be available for presentation at the hearing. Depositions may be taken before any person having power to administer oaths, either under the law of the United States or of the state or other place in which the deposition is taken, who may be designated by the party seeking the deposition, provided that such person shall have no interest in the outcome of the proceeding. The party seeking the deposition shall serve upon each person whose deposition is sought and upon each party to the proceeding reasonable notice in writing of the time and place at which it will be taken, and the name and address of each person or persons to be examined, if known, and if the name is not known, a description sufficient to identify them. The parties may stipulate in writing or the Administrative Law Judge may upon motion order that a deposition be taken by telephone or other remote electronic means. A deposition taken by such means is deemed taken at the place where the deponent is to answer questions.
(b) The Administrative Law Judge may rule on motion by a party that a deposition shall not be taken upon a determination that such deposition would not be reasonably expected to meet the scope of discovery set forth under § 3.31(c), or that the value of the deposition would be outweighed by the considerations set forth under § 3.43(b). The fact that a witness testifies at an investigative hearing does not preclude the deposition of that witness.
(c)(1) Notice to corporation or other organization. A party may name as the deponent a public or private corporation, partnership, association, governmental agency other than the Federal Trade Commission, or any bureau or regional office of the Federal Trade Commission, and describe with reasonable particularity the matters on which examination is requested. The organization so named shall designate one or more officers, directors, or managing agents, or other persons who consent to testify on its behalf, and may set forth, for each person designated, the matters on which he or she will testify. A subpoena shall advise a non-party organization of its duty to make such a designation. The persons so designated shall testify as to matters known or reasonably available to the organization. This subsection does not preclude taking a deposition by any other procedure authorized in these rules.
(2) Restriction on filings. Except as provided in § 3.31(h), notices of depositions shall not be filed with the Office of the Secretary or with the Administrative Law Judge, or otherwise provided to the Commission.
(d) Taking of deposition. Each deponent shall be duly sworn, and any party shall have the right to question him or her. Objections to questions or to evidence presented shall be in short form, stating the grounds of objections relied upon. The questions propounded and the answers thereto, together with all objections made, shall be recorded and certified by the officer. Thereafter, upon payment of the charges therefor, the officer shall furnish a copy of the deposition to the deponent and to any party.
(e) Depositions upon written questions. A party desiring to take a deposition upon written questions shall serve them upon every other party with a notice stating:
(1) The name and address of the person who is to answer them, and
(2) The name or descriptive title and address of the officer before whom the deposition is to be taken.
A deposition upon written questions may be taken of a public or private corporation, partnership, association, governmental agency other than the Federal Trade Commission, or any bureau or regional office of the Federal Trade Commission in accordance with the provisions of § 3.33(c). Within 30 days after the notice and written questions are served, any other party may serve cross questions upon all other parties. Within 10 days after being served with cross questions, the party taking the deposition may serve redirect questions upon all other parties. Within 10 days after being served with redirect questions, any other party may serve recross questions upon all other parties. The content of any question shall not be disclosed to the deponent prior to the taking of the deposition. A copy of the notice and copies of all questions served shall be delivered by the party taking the deposition to the officer designated in the notice, who shall proceed promptly to take the testimony of the deponent in response to the questions and to prepare, certify, and file or mail the deposition, attaching thereto the copy of the notice and the questions received by him or her. When the deposition is filed the party taking it shall promptly give notice thereof to all other parties.
(f) Correction of deposition. A deposition may be corrected, as to form or substance, in the manner provided by § 3.44(b). Any such deposition shall, in addition to the other required procedures, be read to or by the deponent and signed by him or her, unless the parties by stipulation waive the signing or the deponent is unavailable or cannot be found or refuses to sign. If the deposition is not signed by the deponent within 30 days of its submission or attempted submission, the officer shall sign it and certify that the signing has been waived or that the deponent is unavailable or that the deponent has refused to sign, as the case may be, together with the reason for the refusal to sign, if any has been given. The deposition may then be used as though signed unless, on a motion to suppress under § 3.33(g)(2)(iv), the Administrative Law Judge determines that the reasons given for the refusal to sign require rejection of the deposition in whole or in part. In addition to and not in lieu of the procedure for formal correction of the deposition, the deponent may enter in the record at the time of signing a list of objections to the transcription of his or her remarks, stating with specificity the alleged errors in the transcript.
(g) Objections; errors and irregularities – (1) Objections to admissibility. Subject to the provisions of paragraph (g)(2) of this section, objection may be made at the hearing to receiving in evidence any deposition or part thereof for any reason which would require the exclusion of the evidence if the witness were then present and testifying.
(2) Effect of errors and irregularities in depositions – (i) As to notice. All errors and irregularities in the notice for taking a deposition are waived unless written objection is promptly served upon the party giving the notice.
(ii) As to disqualification of officer. Objection to taking a deposition because of disqualification of the officer before whom it is to be taken is waived unless made before the taking of the deposition begins or as soon thereafter as the disqualification becomes known or could be discovered with reasonable diligence.
(iii) As to taking of deposition. (A) Objections to the competency of a witness or to the competency, relevancy, or materiality of testimony are not waived by failure to make them before or during the taking of the deposition, unless the ground of the objection is one which might have been obviated or removed if presented at that time.
(B) Errors and irregularities occurring at the oral examination in the manner of taking the deposition, in the form of the questions or answers, in the oath or affirmation, or in the conduct of parties, and errors of any kind which might be obviated, removed, or cured if promptly presented, are waived unless seasonable objection thereto is made at the taking of the deposition.
(C) Objections to the form of written questions are waived unless served in writing upon all parties within the time allowed for serving the succeeding cross or other questions and within 5 days after service of the last questions authorized.
(iv) As to completion and return of deposition. Errors and irregularities in the manner in which the testimony is transcribed or the deposition is prepared, signed, certified, endorsed, or otherwise dealt with by the officer are waived unless a motion to suppress the deposition or some part thereof is made with reasonable promptness after such defect is or with due diligence might have been ascertained.
§ 3.34 Subpoenas.
(a) Subpoenas ad testificandum. Counsel for a party may sign and issue a subpoena, on a form provided by the Secretary, requiring a person to appear and give testimony at the taking of a deposition to a party requesting such subpoena or to attend and give testimony at an adjudicative hearing.
(b) Subpoenas duces tecum; subpoenas to permit inspection of premises. Counsel for a party may sign and issue a subpoena, on a form provided by the Secretary, commanding a person to produce and permit inspection and copying of designated books, documents, or tangible things, or commanding a person to permit inspection of premises, at a time and place therein specified. The subpoena shall specify with reasonable particularity the material to be produced. The person commanded by the subpoena need not appear in person at the place of production or inspection unless commanded to appear for a deposition or hearing pursuant to paragraph (a) of this section. As used herein, the term “documents” includes written materials, electronically stored information, and tangible things. A subpoena duces tecum may be used by any party for purposes of discovery, for obtaining documents for use in evidence, or for both purposes, and shall specify with reasonable particularity the materials to be produced.
(c) Motions to quash; limitation on subpoenas. Any motion by the subject of a subpoena to limit or quash the subpoena shall be filed within the earlier of 10 days after service thereof or the time for compliance therewith. Such motions shall set forth all assertions of privilege or other factual and legal objections to the subpoena, including all appropriate arguments, affidavits and other supporting documentation, and shall include the statement required by § 3.22(g). Nothing in paragraphs (a) and (b) of this section authorizes the issuance of subpoenas except in accordance with §§ 3.31(c)(2) and 3.36.
§ 3.35 Interrogatories to parties.
(a) Availability; procedures for use. (1) Any party may serve upon any other party written interrogatories, not exceeding 25 in number, including all discrete subparts, to be answered by the party served or, if the party served is a public or private corporation, partnership, association or governmental agency, by any officer or agent, who shall furnish such information as is available to the party. For this purpose, information shall not be deemed to be available insofar as it is in the possession of the Commissioners, the General Counsel, the office of Administrative Law Judges, or the Secretary in his or her capacity as custodian or recorder of any such information, or their respective staffs.
(2) Each interrogatory shall be answered separately and fully in writing under oath, unless it is objected to on grounds not raised and ruled on in connection with the authorization, in which event the reasons for objection shall be stated in lieu of an answer. The answers are to be signed by the person making them, and the objections signed by the attorney making them. The party upon whom the interrogatories have been served shall serve a copy of the answers, and objections, if any, within 30 days after the service of the interrogatories. The Administrative Law Judge may allow a shorter or longer time.
(3) Except as provided in § 3.31(h), interrogatories shall not be filed with the Office of the Secretary, the Administrative Law Judge, or otherwise provided to the Commission.
(b) Scope; use at hearing. (1) Interrogatories may relate to any matters that can be inquired into under § 3.31(c)(1), and the answers may be used to the extent permitted by the rules of evidence.
(2) An interrogatory otherwise proper is not necessarily objectionable merely because an answer to the interrogatory involves an opinion or contention that relates to fact or the application of law to fact, but such an interrogatory need not be answered until after designated discovery has been completed, but in no case later than 3 days before the final prehearing conference.
(c) Option to produce records. Where the answer to an interrogatory may be derived or ascertained from the records of the party upon whom the interrogatory has been served or from an examination, audit, or inspection of such records, or from a compilation, abstract, or summary based thereon, and the burden of deriving or ascertaining the answer is substantially the same for the party serving the interrogatory as for the party served, it is a sufficient answer to such interrogatory to specify the records from which the answer may be derived or ascertained and to afford to the party serving the interrogatory reasonable opportunity to examine, audit or inspect such records and to make copies, compilations, abstracts or summaries. The specification shall include sufficient detail to permit the interrogating party to identify readily the individual documents from which the answer may be ascertained.
§ 3.36 Applications for subpoenas for records of or appearances by certain officials or employees of the Commission or officials or employees of governmental agencies other than the Commission, and subpoenas to be served in a foreign country.
(a) Form. An application for issuance of a subpoena for the production of documents, as defined in § 3.34(b), or for the issuance of a request requiring the production of or access to documents, other tangible things, or electronically stored information for the purposes described in § 3.37(a), in the possession, custody, or control of the Commissioners, the General Counsel, any Bureau or Office not involved in the matter, the office of Administrative Law Judges, or the Secretary in his or her capacity as custodian or recorder of any such information, or their respective staffs, or of a governmental agency other than the Commission or the officials or employees of such other agency, or for the issuance of a subpoena requiring the appearance of a Commissioner, the General Counsel, an official of any Bureau or Office not involved in the matter, an Administrative Law Judge, or the Secretary in his or her capacity as custodian or recorder of any such information, or their respective staffs, or of an official or employee of another governmental agency, or for the issuance of a subpoena to be served in a foreign country, shall be made in the form of a written motion filed in accordance with the provisions of § 3.22(a). No application for records pursuant to § 4.11 of this chapter or the Freedom of Information Act may be filed with the Administrative Law Judge.
(b) Content. The motion shall make a showing that:
(1) The material sought is reasonable in scope;
(2) If for purposes of discovery, the material falls within the limits of discovery under § 3.31(c)(1), or, if for an adjudicative hearing, the material is reasonably relevant;
(3) If for purposes of discovery, the information or material sought cannot reasonably be obtained by other means or, if for purposes of compelling a witness to appear at the evidentiary hearing, the movant has a compelling need for the testimony;
(4) With respect to subpoenas to be served in a foreign country, that the party seeking discovery or testimony has a good faith belief that the discovery requested would be permitted by treaty, law, custom, or practice in the country from which the discovery or testimony is sought and that any additional procedural requirements have been or will be met before the subpoena is served; and
(5) If the subpoena requires access to documents or other tangible things, it meets the requirements of § 3.37.
(c) Execution. If an Administrative Law Judge issues an order authorizing a subpoena pursuant to this section, the moving party may forward to the Secretary a request for the authorized subpoena, with a copy of the authorizing order attached. Each such subpoena shall be signed by the Secretary; shall have attached to it a copy of the authorizing order; and shall be served by the moving party only in conjunction with a copy of the authorizing order.
§ 3.37 Production of documents, electronically stored information, and any tangible things; access for inspection and other purposes.
(a) Availability; procedures for use. Any party may serve on another party a request: to produce and permit the party making the request, or someone acting on the party’s behalf, to inspect and copy any designated documents or electronically stored information, as defined in § 3.34(b), or to inspect and copy, test, or sample any tangible things which are within the scope of § 3.31(c)(1) and in the possession, custody, or control of the party upon whom the request is served; or to permit entry upon designated land or other property in the possession or control of the party upon whom the order would be served for the purpose of inspection and measuring, surveying, photographing, testing, or sampling the property or any designated object or operation thereon, within the scope of § 3.31(c)(1). Each such request shall specify with reasonable particularity the documents or things to be produced or inspected, or the property to be entered. Each such request shall also specify a reasonable time, place, and manner of making the production or inspection and performing the related acts. Each request may specify the form in which electronically stored information is to be produced, but the requested form of electronically stored information must not be overly burdensome or unnecessarily costly to the producing party. A party shall make documents available as they are kept in the usual course of business or shall organize and label them to correspond with the categories in the request. A person not a party to the action may be compelled to produce documents and things or to submit to an inspection as provided in § 3.34. Except as provided in § 3.31(h), requests under this section shall not be filed with the Office of the Secretary, the Administrative Law Judge, or otherwise provided to the Commission.
(b) Response; objections. No more than 30 days after receiving the request, the response of the party upon whom the request is served shall state, with respect to each item or category, that inspection and related activities will be permitted as requested, unless the request is objected to, in which event the reasons for the objection shall be stated. If objection is made to part of an item or category, the part shall be specified and inspection permitted of the remaining parts. The response may state an objection to a requested form for producing electronically stored information. If the responding party objects to a requested form – or if no form was specified in the request – the party must state the form it intends to use. The party submitting the request may move for an order under § 3.38(a) with respect to any objection to or other failure to respond to the request or any part thereof, or any failure to permit inspection as requested.
(c) Production of documents or electronically stored information. Unless otherwise stipulated or ordered by the Administrative Law Judge, these procedures apply to producing documents or electronically stored information:
(i) A party must produce documents as they are kept in the usual course of business or must organize and label them to correspond to the categories in the request;
(ii) If a request does not specify a form for producing electronically stored information, a party must produce it in a form in which it is ordinarily maintained or in a reasonably usable form; and
(iii) A party need not produce the same electronically stored information in more than one form.
§ 3.38 Motion for order compelling disclosure or discovery; sanctions.
(a) Motion for order to compel. A party may apply by motion to the Administrative Law Judge for an order compelling disclosure or discovery, including a determination of the sufficiency of the answers or objections with respect to the mandatory initial disclosures required by § 3.31(b), a request for admission under § 3.32, a deposition under § 3.33, an interrogatory under § 3.35, or a production of documents or things or access for inspection or other purposes under § 3.37. Any memorandum in support of such motion shall be no longer than 2,500 words. Any response to the motion by the opposing party must be filed within 5 days of receipt of service of the motion and shall be no longer than 2,500 words. These word count limitations include headings, footnotes, and quotations, but do not include the cover, table of contents, table of citations or authorities, glossaries, statements with respect to oral argument, any addendums containing statutes, rules or regulations, any certificates of counsel, proposed form of order, and any attachment required by § 3.45(e). The Administrative Law Judge shall rule on a motion to compel within 3 business days of the date in which the response is due. Unless the Administrative Law Judge determines that the objection is justified, the Administrative Law Judge shall order that an initial disclosure or an answer to any requests for admissions, documents, depositions, or interrogatories be served or disclosure otherwise be made.
(b) If a party or an officer or agent of a party fails to comply with any discovery obligation imposed by these rules, upon motion by the aggrieved party, the Administrative Law Judge or the Commission, or both, may take such action in regard thereto as is just, including but not limited to the following:
(1) Order that any answer be amended to comply with the request, subpoena, or order;
(2) Order that the matter be admitted or that the admission, testimony, documents, or other evidence would have been adverse to the party;
(3) Rule that for the purposes of the proceeding the matter or matters concerning which the order or subpoena was issued be taken as established adversely to the party;
(4) Rule that the party may not introduce into evidence or otherwise rely, in support of any claim or defense, upon testimony by such party, officer, agent, expert, or fact witness, or the documents or other evidence, or upon any other improperly withheld or undisclosed materials, information, witnesses, or other discovery;
(5) Rule that the party may not be heard to object to introduction and use of secondary evidence to show what the withheld admission, testimony, documents, or other evidence would have shown;
(6) Rule that a pleading, or part of a pleading, or a motion or other submission by the party, concerning which the order or subpoena was issued, be stricken, or that a decision of the proceeding be rendered against the party, or both.
(c) Any such action may be taken by written or oral order issued in the course of the proceeding or by inclusion in an initial decision of the Administrative Law Judge or an order or opinion of the Commission. It shall be the duty of parties to seek and Administrative Law Judges to grant such of the foregoing means of relief or other appropriate relief as may be sufficient to compensate for withheld testimony, documents, or other evidence. If in the Administrative Law Judge’s opinion such relief would not be sufficient, or in instances where a nonparty fails to comply with a subpoena or order, he or she shall certify to the Commission a request that court enforcement of the subpoena or order be sought.
§ 3.38A Withholding requested material.
(a) Any person withholding material responsive to a subpoena issued pursuant to § 3.34 or § 3.36, written interrogatories requested pursuant to § 3.35, a request for production or access pursuant to § 3.37, or any other request for the production of materials under this part, shall assert a claim of privilege or any similar claim not later than the date set for production of the material. Such person shall, if so directed in the subpoena or other request for production, submit, together with such claim, a schedule which describes the nature of the documents, communications, or tangible things not produced or disclosed – and does so in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the claim. The schedule need not describe any material outside the scope of the duty to search set forth in § 3.31(c)(2) except to the extent that the Administrative Law Judge has authorized additional discovery as provided in that paragraph.
(b) A person withholding material for reasons described in § 3.38A(a) shall comply with the requirements of that subsection in lieu of filing a motion to limit or quash compulsory process.
(Sec. 5 of theFTC Act (15 U.S.C. 45))
§ 3.39 Orders requiring witnesses to testify or provide other information and granting immunity.
(a) Where Commission complaint counsel desire the issuance of an order requiring a witness or deponent to testify or provide other information and granting immunity under 18 U.S.C. 6002, Directors and Assistant Directors of Bureaus and Regional Directors and Assistant Regional Directors of Commission Regional Offices who supervise complaint counsel responsible for presenting evidence in support of the complaint are authorized to determine:
(1) That the testimony or other information sought from a witness or deponent, or prospective witness or deponent, may be necessary to the public interest, and
(2) That such individual has refused or is likely to refuse to testify or provide such information on the basis of his or her privilege against self-incrimination; and to request, through the Commission’s liaison officer, approval by the Attorney General for the issuance of such order. Upon receipt of approval by the Attorney General (or his or her designee), the Administrative Law Judge is authorized to issue an order requiring the witness or deponent to testify or provide other information and granting immunity when the witness or deponent has invoked his or her privilege against self-incrimination and it cannot be determined that such privilege was improperly invoked.
(b) Requests by counsel other than Commission complaint counsel for an order requiring a witness to testify or provide other information and granting immunity under 18 U.S.C. 6002 may be made to the Administrative Law Judge and may be made ex parte. When such requests are made, the Administrative Law Judge is authorized to determine:
(1) That the testimony or other information sought from a witness or deponent, or prospective witness or deponent, may be necessary to the public interest, and
(2) That such individual has refused or is likely to refuse to testify or provide such information on the basis of his or her privilege against self-incrimination; and, upon making such determinations, to request, through the Commission’s liaison officer, approval by the Attorney General for the issuance of an order requiring a witness to testify or provide other information and granting immunity; and, after the Attorney General (or his or her designee) has granted such approval, to issue such order when the witness or deponent has invoked his or her privilege against self-incrimination and it cannot be determined that such privilege was improperly invoked.
(18 U.S.C. 6002, 6004)
§ 3.40 Admissibility of evidence in advertising substantiation cases.
(a) If a person, partnership, or corporation is required through compulsory process under section 6, 9 or 20 of the Act issued after October 26, 1977 to submit to the Commission substantiation in support of an express or an implied representation contained in an advertisement, such person, partnership or corporation shall not thereafter be allowed, in any adjudicative proceeding in which it is alleged that the person, partnership, or corporation lacked a reasonable basis for the representation, and for any purpose relating to the defense of such allegation, to introduce into the record, whether directly or indirectly through references contained in documents or oral testimony, any material of any type whatsoever that was required to be but was not timely submitted in response to said compulsory process. Provided, however, that a person, partnership, or corporation is not, within the meaning of this section, required through compulsory process to submit substantiation with respect to those portions of said compulsory process to which such person, partnership, or corporation has raised good faith legal objections in a timely motion pursuant to the Commission’s Rules of Practice and Procedure, until the Commission denies such motion; or if the person, partnership, or corporation thereafter continues to refuse to comply, until such process has been judicially enforced.
(b) The Administrative Law Judge shall, upon motion, at any stage exclude all material that was required to be but was not timely submitted in response to compulsory process described in paragraph (a) of this section, or any reference to such material, unless the person, partnership, or corporation demonstrates in a hearing, and the Administrative Law Judge finds, that by the exercise of due diligence the material could not have been timely submitted in response to the compulsory process, and that the Commission was notified of the existence of the material immediately upon its discovery. Said findings of the Administrative Law Judge shall be in writing and shall specify with particularity the evidence relied upon. The rules normally governing the admissibility of evidence in Commission proceedings shall in any event apply to any material coming within the above exception.
Subpart E – Hearings
§ 3.41 General hearing rules.
(a) Public hearings. All hearings in adjudicative proceedings shall be public unless an in camera order is entered by the Administrative Law Judge pursuant to § 3.45(b) of this chapter or unless otherwise ordered by the Commission.
(b) Expedition. Hearings shall proceed with all reasonable expedition, and, insofar as practicable, shall be held at one place and shall continue, except for brief intervals of the sort normally involved in judicial proceedings, without suspension until concluded. The hearing will take place on the date specified in the notice accompanying the complaint, pursuant to § 3.11(b)(4), and should be limited to no more than 210 hours. The Commission, upon a showing of good cause, may order a later date for the evidentiary hearing to commence or extend the number of hours for the hearing. Consistent with the requirements of expedition:
(1) The Administrative Law Judge may order hearings at more than one place and may grant a reasonable recess at the end of a case-in-chief for the purpose of discovery deferred during the prehearing procedure if the Administrative Law Judge determines that such recess will materially expedite the ultimate disposition of the proceeding.
(2) When actions involving a common question of law or fact are pending before the Administrative Law Judge, the Commission or the Administrative Law Judge may order a joint hearing of any or all the matters in issue in the actions; the Commission or the Administrative Law Judge may order all the actions consolidated; and the Commission or the Administrative Law Judge may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay.
(3) When separate hearings will be conducive to expedition and economy, the Commission or the Administrative Law Judge may order a separate hearing of any claim, or of any separate issue, or of any number of claims or issues.
(4) Each side shall be allotted no more than half of the trial time within which to present its opening statements, in limine motions, all arguments excluding the closing argument, direct or cross examinations, or other evidence.
(5) Each side shall be permitted to make an opening statement that is no more than 2 hours in duration.
(6) Each side shall be permitted to make a closing argument no later than 5 days after the last filed proposed findings. The closing argument shall last no longer than 2 hours.
(c) Rights of parties. Every party, except intervenors, whose rights are determined under § 3.14, shall have the right of due notice, cross-examination, presentation of evidence, objection, motion, argument, and all other rights essential to a fair hearing.
(d) Adverse witnesses. An adverse party, or an officer, agent, or employee thereof, and any witness who appears to be hostile, unwilling, or evasive, may be interrogated by leading questions and may also be contradicted and impeached by the party calling him or her.
(e) Requests for an order requiring a witness to testify or provide other information and granting immunity under 18 U.S.C. 6002 shall be disposed of in accordance with § 3.39.
(f) Collateral federal court actions. (1) The pendency of a collateral federal court action that relates to the administrative adjudication shall not stay the proceeding:
(i) Unless a court of competent jurisdiction, or the Commission for good cause, so directs; or
(ii) Except as provided in § 3.26.
(2) A stay shall toll any deadlines set by the rules.
§ 3.42 Presiding officials.
(a) Who presides. Hearings in adjudicative proceedings shall be presided over by a duly qualified Administrative Law Judge or by the Commission or one or more members of the Commission sitting as Administrative Law Judges; and the term Administrative Law Judge as used in this part means and applies to the Commission or any of its members when so sitting.
(b) How assigned. The presiding Administrative Law Judge shall be designated by the Chief Administrative Law Judge or, when the Commission or one or more of its members preside, by the Commission, who shall notify the parties of the Administrative Law Judge designated.
(c) Powers and duties. Administrative Law Judges shall have the duty to conduct fair and impartial hearings, to take all necessary action to avoid delay in the disposition of proceedings, and to maintain order. They shall have all powers necessary to that end, including the following:
(1) To administer oaths and affirmations;
(2) To issue subpoenas and orders requiring answers to questions;
(3) To take depositions or to cause depositions to be taken;
(4) To compel admissions, upon request of a party or on their own initiative;
(5) To rule upon offers of proof and receive evidence;
(6) To regulate the course of the hearings and the conduct of the parties and their counsel therein;
(7) To hold conferences for settlement, simplification of the issues, or any other proper purpose;
(8) To consider and rule upon, as justice may require, all procedural and other motions appropriate in an adjudicative proceeding, including motions to open defaults;
(9) To make and file initial decisions;
(10) To certify questions to the Commission for its determination;
(11) To reject written submissions that fail to comply with rule requirements, or deny in camera status without prejudice until a party complies with all relevant rules; and
(12) To take any action authorized by the rules in this part or in conformance with the provisions of the Administrative Procedure Act as restated and incorporated in title 5, U.S.C.
(d) Suspension of attorneys by Administrative Law Judge. The Administrative Law Judge shall have the authority, for good cause stated on the record, to suspend or bar from participation in a particular proceeding any attorney who shall refuse to comply with his directions, or who shall be guilty of disorderly, dilatory, obstructionist, or contumacious conduct, or contemptuous language in the course of such proceeding. Any attorney so suspended or barred may appeal to the Commission in accordance with the provisions of § 3.23(a). The appeal shall not operate to suspend the hearing unless otherwise ordered by the Administrative Law Judge or the Commission; in the event the hearing is not suspended, the attorney may continue to participate therein pending disposition of the appeal.
(e) Substitution of Administrative Law Judge. In the event of the substitution of a new Administrative Law Judge for the one originally designated, any motion predicated upon such substitution shall be made within five (5) days thereafter.
(f) Interference. In the performance of their adjudicative functions, Administrative Law Judges shall not be responsible to or subject to the supervision or direction of any officer, employee, or agent engaged in the performance of investigative or prosecuting functions for the Commission, and all direction by the Commission to Administrative Law Judges concerning any adjudicative proceedings shall appear in and be made a part of the record.
(g) Disqualification of Administrative Law Judges. (1) When an Administrative Law Judge deems himself disqualified to preside in a particular proceeding, he shall withdraw therefrom by notice on the record and shall notify the Director of Administrative Law Judges of such withdrawal.
(2) Whenever any party shall deem the Administrative Law Judge for any reason to be disqualified to preside, or to continue to preside, in a particular proceeding, such party may file with the Secretary a motion addressed to the Administrative Law Judge to disqualify and remove him, such motion to be supported by affidavits setting forth the alleged grounds for disqualification. If the Administrative Law Judge does not disqualify himself within ten (10) days, he shall certify the motion to the Commission, together with any statement he may wish to have considered by the Commission. The Commission shall promptly determine the validity of the grounds alleged, either directly or on the report of another Administrative Law Judge appointed to conduct a hearing for that purpose.
(3) Such motion shall be filed at the earliest practicable time after the participant learns, or could reasonably have learned, of the alleged grounds for disqualification.
(h) Failure to comply with Administrative Law Judge’s directions. Any party who refuses or fails to comply with a lawfully issued order or direction of an Administrative Law Judge may be considered to be in contempt of the Commission. The circumstances of any such neglect, refusal, or failure, together with a recommendation for appropriate action, shall be promptly certified by the Administrative Law Judge to the Commission. The Commission may make such orders in regard thereto as the circumstances may warrant.
§ 3.43 Evidence.
(a) Burden of proof. Counsel representing the Commission, or any person who has filed objections sufficient to warrant the holding of an adjudicative hearing pursuant to § 3.13, shall have the burden of proof, but the proponent of any factual proposition shall be required to sustain the burden of proof with respect thereto.
(b) Admissibility. Relevant, material, and reliable evidence shall be admitted. Irrelevant, immaterial, and unreliable evidence shall be excluded. Evidence, even if relevant, may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or if the evidence would be misleading, or based on considerations of undue delay, waste of time, or needless presentation of cumulative evidence. Evidence that constitutes hearsay may be admitted if it is relevant, material, and bears satisfactory indicia of reliability so that its use is fair. Hearsay is a statement, other than one made by the declarant while testifying at the hearing, offered in evidence to prove the truth of the matter asserted. If otherwise meeting the standards for admissibility described in this paragraph, depositions, investigational hearings, prior testimony in Commission or other proceedings, expert reports, and any other form of hearsay, shall be admissible and shall not be excluded solely on the ground that they are or contain hearsay. However, absent the consent of the parties, before admitting prior testimony (including expert reports) from other proceedings where either the Commission or respondent did not participate, except for other proceedings where the Commission and at least one respondent did participate, the Administrative Law Judge must make a finding upon the motion of a party seeking the admission of such evidence that the prior testimony would not be duplicative, would not present unnecessary hardship to a party or delay to the proceedings, and would aid in the determination of the matter. Statements or testimony by a party-opponent, if relevant, shall be admitted.
(c) Admissibility of third party documents. Extrinsic evidence of authenticity as a condition precedent to admissibility of documents received from third parties is not required with respect to the original or a duplicate of a domestic record of regularly conducted activity by that third party that otherwise meets the standards of admissibility described in paragraph (b) if accompanied by a written declaration of its custodian or other qualified person, in a manner complying with any Act of Congress or rule prescribed by the Supreme Court pursuant to statutory authority, certifying that the record:
(1) Was made at or near the time of the occurrence of the matters set forth by, or from information transmitted by, a person with knowledge of those matters;
(2) Was kept in the course of the regularly conducted activity; and
(3) Was made by the regularly conducted activity as a regular practice.
(d) Presentation of evidence. (1) A party is entitled to present its case or defense by sworn oral testimony and documentary evidence, to submit rebuttal evidence, and to conduct such cross-examination as, in the discretion of the Commission or the Administrative Law Judge, may be required for a full and true disclosure of the facts.
(2) The Administrative Law Judge shall exercise reasonable control over the mode and order of interrogating witnesses and presenting evidence so as to –
(i) Make the interrogation and presentation effective for the ascertainment of the truth;
(ii) Avoid needless consumption of time; and
(iii) Protect witnesses from harassment or undue embarrassment.
(3) As respondents are in the best position to determine the nature of documents generated by such respondents and which come from their own files, the burden of proof is on the respondent to introduce evidence to rebut a presumption that such documents are authentic and kept in the regular course of business.
(e) Information obtained in investigations. Any documents, papers, books, physical exhibits, or other materials or information obtained by the Commission under any of its powers may be disclosed by counsel representing the Commission when necessary in connection with adjudicative proceedings and may be offered in evidence by counsel representing the Commission in any such proceeding
(f) Official notice. “Official notice” may be taken of any material fact that is not subject to reasonable dispute in that it is either generally known within the Commission’s expertise or capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned. If official notice is requested or is taken of a material fact not appearing in the evidence in the record, the parties, upon timely request, shall be afforded an opportunity to disprove such noticed fact.
(g) Objections. Objections to evidence shall timely and briefly state the grounds relied upon, but the transcript shall not include argument or debate thereon except as ordered by the Administrative Law Judge. Rulings on all objections shall appear in the record.
(h) Exceptions. Formal exception to an adverse ruling is not required.
(i) Excluded evidence. When an objection to a question propounded to a witness is sustained, the questioner may make a specific offer of what he or she expects to prove by the answer of the witness, or the Administrative Law Judge may, in his or her discretion, receive and report the evidence in full. Rejected exhibits, adequately marked for identification, shall be retained in the record so as to be available for consideration by any reviewing authority.
§ 3.44 Record.
(a) Reporting and transcription. Hearings shall be stenographically reported and transcribed by the official reporter of the Commission under the supervision of the Administrative Law Judge, and the original transcript shall be a part of the record and the sole official transcript. Upon a motion by any party, for good cause shown the Administrative Law Judge may order that the live oral testimony of all witnesses be video recorded digitally, at the expense of the moving party, and in such cases the video recording and the written transcript of the testimony shall be made part of the record. If a video recording is so ordered, the moving party shall not pay or retain any person or entity to perform such recording other than the reporter designated by the Commission to transcribe the proceeding, except by order of the Administrative Law Judge upon a finding of good cause. In any order allowing for video recording by a person or entity other than the Commission’s designated reporter, the Administrative Law Judge shall prescribe standards and procedures for the video recording to ensure that it is a complete and accurate record of the witnesses’ testimony. Copies of the written transcript and video recording are available from the reporter at rates not to exceed the maximum rates fixed by contract between the Commission and the reporter. Copies of a video recording made by a person or entity other than the reporter shall be available at the same rates, or no more than the actual cost of duplication, whichever is higher.
(b) Corrections. Corrections of the official transcript may be made only when they involve errors affecting substance and then only in the manner herein provided. Corrections ordered by the Administrative Law Judge or agreed to in a written stipulation signed by all counsel and parties not represented by counsel, and approved by the Administrative Law Judge, shall be included in the record, and such stipulations, except to the extent they are capricious or without substance, shall be approved by the Administrative Law Judge. Corrections shall not be ordered by the Administrative Law Judge except upon notice and opportunity for the hearing of objections. Such corrections shall be made by the official reporter by furnishing substitute type pages, under the usual certificate of the reporter, for insertion in the official record. The original uncorrected pages shall be retained in the files of the Commission.
(c) Closing of the hearing record. Upon completion of the evidentiary hearing, the Administrative Law Judge shall issue an order closing the hearing record after giving the parties 3 business days to determine if the record is complete or needs to be supplemented. The Administrative Law Judge shall retain the discretion to permit or order correction of the record as provided in § 3.44(b).
§ 3.45 In camera orders.
(a) Definition. Except as hereinafter provided, material made subject to an in camera order will be kept confidential and not placed on the public record of the proceeding in which it was submitted. Only respondents, their counsel, authorized Commission personnel, and court personnel concerned with judicial review may have access thereto, provided that the Administrative Law Judge, the Commission and reviewing courts may disclose such in camera material to the extent necessary for the proper disposition of the proceeding.
(b) In camera treatment of material. A party or third party may obtain in camera treatment for material, or portions thereof, offered into evidence only by motion to the Administrative Law Judge. Parties who seek to use material obtained from a third party subject to confidentiality restrictions must demonstrate that the third party has been given at least 10 days notice of the proposed use of such material. Each such motion must include an attachment containing a copy of each page of the document in question on which in camera or otherwise confidential excerpts appear. The Administrative Law Judge shall order that such material, whether admitted or rejected, be placed in camera only after finding that its public disclosure will likely result in a clearly defined, serious injury to the person, partnership, or corporation requesting in camera treatment or after finding that the material constitutes sensitive personal information. “Sensitive personal information” shall include, but shall not be limited to, an individual’s Social Security number, taxpayer identification number, financial account number, credit card or debit card number, driver’s license number, state-issued identification number, passport number, date of birth (other than year), and any sensitive health information identifiable by individual, such as an individual’s medical records. For material other than sensitive personal information, a finding that public disclosure will likely result in a clearly defined, serious injury shall be based on the standard articulated in H.P. Hood & Sons, Inc., 58 F.T.C. 1184, 1188 (1961); see also Bristol-Myers Co., 90 F.T.C. 455, 456 (1977), which established a three-part test that was modified by General Foods Corp., 95 F.T.C. 352, 355 (1980). The party submitting material for which in camera treatment is sought must provide, for each piece of such evidence and affixed to such evidence, the name and address of any person who should be notified in the event that the Commission intends to disclose in camera information in a final decision. No material, or portion thereof, offered into evidence, whether admitted or rejected, may be withheld from the public record unless it falls within the scope of an order issued in accordance with this section, stating the date on which in camera treatment will expire, and including:
(1) A description of the material;
(2) A statement of the reasons for granting in camera treatment; and
(3) A statement of the reasons for the date on which in camera treatment will expire, except in the case of sensitive personal information, which shall be accorded permanent in camera treatment unless disclosure or an expiration date is required or provided by law. For in camera material other than sensitive personal information, an expiration date may not be omitted except in unusual circumstances, in which event the order shall state with specificity the reasons why the need for confidentiality of the material, or portion thereof at issue is not likely to decrease over time, and any other reasons why such material is entitled to in camera treatment for an indeterminate period. If an in camera order is silent as to duration, without explanation, then it will expire 3 years after its date of issuance. Material subject to an in camera order shall be segregated from the public record and filed in a sealed envelope, or other appropriate container, bearing the title, the docket number of the proceeding, the notation “In Camera Record under § 3.45,” and the date on which in camera treatment expires. If the Administrative Law Judge has determined that in camera treatment should be granted for an indeterminate period, the notation should state that fact. Parties are not required to provide documents subject to in camera treatment, including documents obtained from third parties, to any individual or entity other than the Administrative Law Judge, counsel for other parties, and, during an appeal, the Commission or a federal court.
(c) Release of in camera material. In camera material constitutes part of the confidential records of the Commission and is subject to the provisions of § 4.11 of this chapter.
(d) Briefs and other submissions referring to in camera or confidential information. Parties shall not disclose information that has been granted in camera status pursuant to § 3.45(b) or is subject to confidentiality protections pursuant to a protective order in the public version of proposed findings, briefs, or other documents. This provision does not preclude references in such proposed findings, briefs, or other documents to in camera or other confidential information or general statements based on the content of such information.
(e) When in camera or confidential information is included in briefs and other submissions. If a party includes specific information that has been granted in camera status pursuant to paragraph (b) of this section or is subject to confidentiality protections pursuant to a protective order in any document filed in a proceeding under this part, the party shall file 2 versions of the document. A complete version shall be marked “In Camera” or “Subject to Protective Order,” as appropriate, on every page and shall be filed with the Secretary and served by the party on the other parties in accordance with the Commission’s rules. Submitters of in camera or other confidential material should mark any such material in the complete versions of their submissions in a conspicuous matter, such as with highlighting or bracketing. References to in camera or confidential material must be supported by record citations to relevant evidentiary materials and associated Administrative Law Judge in camera or other confidentiality rulings to confirm that in camera or other confidential treatment is warranted for such material. In addition, the document must include an attachment containing a copy of each page of the document in question on which in camera or otherwise confidential excerpts appear, and providing the name and address of any person who should be notified of the Commission’s intent to disclose in a final decision any of the in camera or otherwise confidential information in the document. Any time period within which these rules allow a party to respond to a document shall run from the date the party is served with the complete version of the document. An expurgated version of the document, marked “Public Record” on every page and omitting the in camera and confidential information and attachment that appear in the complete version, shall be filed with the Secretary within 5 days after the filing of the complete version, unless the Administrative Law Judge or the Commission directs otherwise, and shall be served by the party on the other parties in accordance with the rules in this part. The expurgated version shall indicate any omissions with brackets or ellipses, and its pagination and depiction of text on each page shall be identical to that of the in camera version.
(f) When in camera or confidential information is included in rulings or recommendations of the Administrative Law Judge. If the Administrative Law Judge includes in any ruling or recommendation information that has been granted in camera status pursuant to paragraph (b) of this section or is subject to confidentiality protections pursuant to a protective order, the Administrative Law Judge shall file 2 versions of the ruling or recommendation. A complete version shall be marked “In Camera” or “Subject to Protective Order,” as appropriate, on every page and shall be served upon the parties. The complete version will be placed in the in camera record of the proceeding. An expurgated version, to be filed within 5 days after the filing of the complete version, shall omit the in camera and confidential information that appears in the complete version, shall be marked “Public Record” on every page, shall be served upon the parties, and shall be included in the public record of the proceeding.
(g) Provisional in camera rulings. The Administrative Law Judge may make a provisional grant of in camera status to materials if the showing required in § 3.45(b) cannot be made at the time the material is offered into evidence but the Administrative Law Judge determines that the interests of justice would be served by such a ruling. Within 20 days of such a provisional grant of in camera status, the party offering the evidence or an interested third party must present a motion to the Administrative Law Judge for a final ruling on whether in camera treatment of the material is appropriate pursuant to § 3.45(b). If no such motion is filed, the Administrative Law Judge may either exclude the evidence, deny in camera status, or take such other action as is appropriate.
§ 3.46 Proposed findings, conclusions, and order.
(a) General. Within 21 days of the closing of the hearing record, each party may file with the Secretary for consideration of the Administrative Law Judge proposed findings of fact, conclusions of law, and rule or order, together with reasons therefor and briefs in support thereof. Such proposals shall be in writing, shall be served upon all parties, and shall contain adequate references to the record and authorities relied on. If a party includes in the proposals information that has been granted in camera status pursuant to § 3.45(b), the party shall file 2 versions of the proposals in accordance with the procedures set forth in § 3.45(e). Reply findings of fact, conclusions of law, and briefs may be filed by each party within 10 days of service of the initial proposed findings.
(b) Exhibit index. The first statement of proposed findings of fact and conclusions of law filed by a party shall include an index listing for each exhibit offered by the party and received in evidence:
(1) The exhibit number, followed by
(2) The exhibit’s title or a brief description if the exhibit is untitled;
(3) The transcript page at which the Administrative Law Judge ruled on the exhibit’s admissibility or a citation to any written order in which such ruling was made;
(4) The transcript pages at which the exhibit is discussed;
(5) An identification of any other exhibit which summarizes the contents of the listed exhibit, or of any other exhibit of which the listed exhibit is a summary;
(6) A cross-reference, by exhibit number, to any other portions of that document admitted as a separate exhibit on motion by any other party; and
(7) A statement whether the exhibit has been accorded in camera treatment, and a citation to the in camera ruling.
(c) Witness index. The first statement of proposed findings of fact and conclusions of law filed by a party shall also include an index to the witnesses called by that party, to include for each witness:
(1) The name of the witness;
(2) A brief identification of the witness;
(3) The transcript pages at which any testimony of the witness appears; and
(4) A statement whether the witness testimony has been accorded in camera treatment, and a citation to the in camera ruling.
(d) Stipulated indices. As an alternative to the filing of separate indices, the parties are encouraged to stipulate to joint exhibit and witness indices at the time the first statement of proposed findings of fact and conclusions of law is due to be filed.
(e) Rulings. The record shall show the Administrative Law Judge’s ruling on each proposed finding and conclusion, except when the order disposing of the proceeding otherwise informs the parties of the action taken.
Subpart F – Decision
§ 3.51 Initial decision.
(a) When filed and when effective. The Administrative Law Judge shall file an initial decision within 70 days after the filing of the last filed initial or reply proposed findings of fact, conclusions of law and order pursuant to § 3.46, within 85 days of the closing the hearing record pursuant to § 3.44(c) where the parties have waived the filing of proposed findings, or within 14 days after the granting of a motion for summary decision following a referral of such motion from the Commission. The Administrative Law Judge may extend any of these time periods by up to 30 days for good cause. The Commission may further extend any of these time periods for good cause. Except in cases subject to § 3.52(a), once issued, the initial decision shall become the decision of the Commission 30 days after service thereof upon the parties or 30 days after the filing of a timely notice of appeal, whichever shall be later, unless a party filing such a notice shall have perfected an appeal by the timely filing of an appeal brief or the Commission shall have issued an order placing the case on its own docket for review or staying the effective date of the decision.
(b) Exhaustion of administrative remedies. An initial decision shall not be considered final agency action subject to judicial review under 5 U.S.C. 704. Any objection to a ruling by the Administrative Law Judge, or to a finding, conclusion or a provision of the order in the initial decision, which is not made a part of an appeal to the Commission shall be deemed to have been waived.
(c) Content, format for filing. (1) An initial decision shall be based on a consideration of the whole record relevant to the issues decided, and shall be supported by reliable and probative evidence. The initial decision shall include a statement of findings of fact (with specific page references to principal supporting items of evidence in the record) and conclusions of law, as well as the reasons or basis therefor, upon all the material issues of fact, law, or discretion presented on the record (or those designated under paragraph (c)(2) of this section) and an appropriate rule or order. Rulings containing information granted in camera status pursuant to § 3.45 shall be filed in accordance with § 3.45(f).
(2) The initial decision shall be prepared in a common word processing format, such as WordPerfect or Microsoft Word, and shall be filed by the Administrative Law Judge with the Office of the Secretary in both electronic and paper versions.
(3) When more than one claim for relief is presented in an action, or when multiple parties are involved, the Administrative Law Judge may direct the entry of an initial decision as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of initial decision.
(d) By whom made. The initial decision shall be made and filed by the Administrative Law Judge who presided over the hearings, except when he or she shall have become unavailable to the Commission.
(e) Reopening of proceeding by Administrative Law Judge; termination of jurisdiction. (1) At any time from the close of the hearing record pursuant to § 3.44(c) until the filing of his or her initial decision, an Administrative Law Judge may reopen the proceeding for the reception of further evidence for good cause shown.
(2) Except for the correction of clerical errors or pursuant to an order of remand from the Commission, the jurisdiction of the Administrative Law Judge is terminated upon the filing of his or her initial decision with respect to those issues decided pursuant to paragraph (c)(1) of this section.
§ 3.52 Appeal from initial decision.
(a) Automatic review of cases in which the Commission sought preliminary relief in federal court; timing. For proceedings with respect to which the Commission has sought preliminary relief in federal court under 15 U.S.C. 53(b), the Commission will review the initial decision without the filing of a notice of appeal.
(1) In such cases, any party may file objections to the initial decision or order of the Administrative Law Judge by filing its opening appeal brief, subject to the requirements in paragraph (c), within 20 days of the issuance of the initial decision. Any party may respond to any objections filed by another party by filing an answering brief, subject to the requirements of paragraph (d), within 20 days of service of the opening brief. Any party may file a reply to an answering brief, subject to the requirements of paragraph (e), within 5 days of service of the answering brief. Unless the Commission orders that there shall be no oral argument, it will hold oral argument within 10 days after the deadline for the filing of any reply briefs. The Commission will issue its final decision pursuant to § 3.54 within 45 days after oral argument. If no oral argument is scheduled, the Commission will issue its final decision pursuant to § 3.54 within 45 days after the deadline for the filing of any reply briefs.
(2) If no objections to the initial decision are filed, the Commission may in its discretion hold oral argument within 10 days after the deadline for the filing of objection, and will issue its final decision pursuant to § 3.54 within 45 days after oral argument. If no oral argument is scheduled, the Commission will issue its final decision pursuant to § 3.54 within 45 days after the deadline for the filing of objections.
(b) Review in all other cases; timing. (1) In all cases other than those subject to paragraph (a), any party may file objections to the initial decision or order of the Administrative Law Judge by filing a notice of appeal with the Secretary within 10 days after service of the initial decision. The notice shall specify the party or parties against whom the appeal is taken and shall designate the initial decision and order or part thereof appealed from. If a timely notice of appeal is filed by a party, any other party may thereafter file a notice of appeal within 5 days after service of the first notice, or within 10 days after service of the initial decision, whichever period expires last.
(2) In such cases, any party filing a notice of appeal must perfect its appeal by filing its opening appeal brief, subject to the requirements in paragraph (c), within 30 days of the issuance of the initial decision. Any party may respond to the opening appeal brief by filing an answering brief, subject to the requirements of paragraph (d), within 30 days of service of the opening brief. Any party may file a reply to an answering brief, subject to the requirements of paragraph (e), within 7 days of service of the answering brief. Unless the Commission orders that there shall be no oral argument, it will hold oral argument within 15 days after the deadline for the filing of any reply briefs. The Commission will issue its final decision pursuant to § 3.54 within 100 days after oral argument. If no oral argument is scheduled, the Commission will issue its final decision pursuant to § 3.54 within 100 days after the deadline for the filing of any reply briefs.
(c) Appeal brief. (1) The opening appeal brief shall contain, in the order indicated, the following:
(i) A subject index of the matter in the brief, with page references, and a table of cases (alphabetically arranged), textbooks, statutes, and other material cited, with page references thereto;
(ii) A concise statement of the case, which includes a statement of facts relevant to the issues submitted for review, and a summary of the argument, which must contain a succinct, clear, and accurate statement of the arguments made in the body of the brief, and which must not merely repeat the argument headings;
(iii) A specification of the questions intended to be urged;
(iv) The argument presenting clearly the points of fact and law relied upon in support of the position taken on each question, with specific page references to the record and the legal or other material relied upon; and
(v) A proposed form of order for the Commission’s consideration instead of the order contained in the initial decision.
(2) The brief shall not, without leave of the Commission, exceed 14,000 words.
(d) Answering brief. The answering brief shall contain a subject index, with page references, and a table of cases (alphabetically arranged), textbooks, statutes, and other material cited, with page references thereto, as well as arguments in response to the appellant’s appeal brief. The answering brief shall not, without leave of the Commission, exceed 14,000 words.
(e) Reply brief. The reply brief shall be limited to rebuttal of matters in the answering brief and shall not, without leave of the Commission, exceed 7,000 words. The Commission will not consider new arguments or matters raised in reply briefs that could have been raised earlier in the principal briefs. No further briefs may be filed except by leave of the Commission.
(f) In camera information. If a party includes in any brief to be filed under this section information that has been granted in camera status pursuant to § 3.45(b) or is subject to confidentiality provisions pursuant to a protective order, the party shall file 2 versions of the brief in accordance with the procedures set forth in § 3.45(e). The time period specified by this section within which a party may file an answering or reply brief will begin to run upon service on the party of the in camera or confidential version of a brief.
(g) Signature. (1) The original of each brief filed shall have a hand-signed signature by an attorney of record for the party, or in the case of parties not represented by counsel, by the party itself, or by a partner if a partnership, or by an officer of the party if it is a corporation or an unincorporated association.
(2) Signing a brief constitutes a representation by the signer that he or she has read it; that to the best of his or her knowledge, information, and belief, the statements made in it are true; that it is not interposed for delay; that it complies with the applicable word count limitation; and that to the best of his or her knowledge, information, and belief, it complies with all the other rules in this part. If a brief is not signed or is signed with intent to defeat the purpose of this section, it may be stricken as sham and false and the proceeding may go forward as though the brief has not been filed.
(h) Oral argument. All oral arguments shall be public unless otherwise ordered by the Commission. Oral arguments will be held in all cases on appeal or review to the Commission, unless the Commission otherwise orders upon its own initiative or upon request of any party made at the time of filing his or her brief. Oral arguments before the Commission shall be reported stenographically, unless otherwise ordered, and a member of the Commission absent from an oral argument may participate in the consideration and decision of the appeal in any case in which the oral argument is stenographically reported.
(i) Corrections in transcript of oral argument. The Commission will entertain only joint motions of the parties requesting corrections in the transcript of oral argument, except that the Commission will receive a unilateral motion which recites that the parties have made a good faith effort to stipulate to the desired corrections but have been unable to do so. If the parties agree in part and disagree in part, they should file a joint motion incorporating the extent of their agreement, and, if desired, separate motions requesting those corrections to which they have been unable to agree. The Secretary, pursuant to delegation of authority by the Commission, is authorized to prepare and issue in the name of the Commission a brief “Order Correcting Transcript” whenever a joint motion to correct transcript is received.
(j) Briefs of amicus curiae. A brief of an amicus curiae may be filed by leave of the Commission granted on motion with notice to the parties or at the request of the Commission, except that such leave shall not be required when the brief is presented by an agency or officer of the United States; or by a State, territory, commonwealth, or the District of Columbia, or by an agency or officer of any of them. The brief may be conditionally filed with the motion for leave. A motion for leave shall identify the interest of the applicant and state how a Commission decision in the matter would affect the applicant or persons it represents. The motion shall also state the reasons why a brief of an amicus curiae is desirable. Except as otherwise permitted by the Commission, an amicus curiae shall file its brief within the time allowed the parties whose position as to affirmance or reversal the amicus brief will support. The Commission shall grant leave for a later filing only for cause shown, in which event it shall specify within what period such brief must be filed. A motion for an amicus curiae to participate in oral argument will be granted only for extraordinary reasons. An amicus brief may be no more than one-half the maximum length authorized by these rules for a party’s principal brief.
(k) Word count limitation. The word count limitations in this section include headings, footnotes and quotations, but do not include the cover, table of contents, table of citations or authorities, glossaries, statements with respect to oral argument, any addendums containing statutes, rules or regulations, any certificates of counsel, proposed form of order, and any attachment required by § 3.45(e). Extensions of word count limitations are disfavored, and will only be granted where a party can make a strong showing that undue prejudice would result from complying with the existing limit.
§ 3.53 Review of initial decision in absence of appeal.
An order by the Commission placing a case on its own docket for review will set forth the scope of such review and the issues which will be considered and will make provision for the filing of briefs if deemed appropriate by the Commission.
§ 3.54 Decision on appeal or review.
(a) Upon appeal from or review of an initial decision, the Commission will consider such parts of the record as are cited or as may be necessary to resolve the issues presented and, in addition, will, to the extent necessary or desirable, exercise all the powers which it could have exercised if it had made the initial decision.
(b) In rendering its decision, the Commission will adopt, modify, or set aside the findings, conclusions, and rule or order contained in the initial decision, and will include in the decision a statement of the reasons or basis for its action and any concurring and dissenting opinions.
(c) In those cases where the Commission believes that it should have further information or additional views of the parties as to the form and content of the rule or order to be issued, the Commission, in its discretion, may withhold final action pending the receipt of such additional information or views.
(d) The order of the Commission disposing of adjudicative hearings under the Fair Packaging and Labeling Act will be published in the
§ 3.55 Reconsideration.
Within fourteen (14) days after completion of service of a Commission decision, any party may file with the Commission a petition for reconsideration of such decision, setting forth the relief desired and the grounds in support thereof. Any petition filed under this subsection must be confined to new questions raised by the decision or final order and upon which the petitioner had no opportunity to argue before the Commission. Any party desiring to oppose such a petition shall file an answer thereto within ten (10) days after service upon him of the petition. The filing of a petition for reconsideration shall not operate to stay the effective date of the decision or order or to toll the running of any statutory time period affecting such decision or order unless specifically so ordered by the Commission.
§ 3.56 Effective date of orders; application for stay.
(a) Other than consent orders, an order to cease and desist under section 5 of the FTC Act becomes effective upon the sixtieth day after service, except as provided in section 5(g)(3) of the FTC Act, and except for divestiture provisions, as provided in section 5(g)(4) of the FTC Act.
(b) Any party subject to a cease and desist order under section 5 of the FTC Act, other than a consent order, may apply to the Commission for a stay of all or part of that order pending judicial review. If, within 30 days after the application was received by the Commission, the Commission either has denied or has not acted on the application, a stay may be sought in a court of appeals where a petition for review of the order is pending.
(c) An application for stay shall state the reasons a stay is warranted and the facts relied upon, and shall include supporting affidavits or other sworn statements, and a copy of the relevant portions of the record. The application shall address the likelihood of the applicant’s success on appeal, whether the applicant will suffer irreparable harm if a stay is not granted, the degree of injury to other parties if a stay is granted, and why the stay is in the public interest.
(d) An application for stay shall be filed within 30 days of service of the order on the party. Such application shall be served in accordance with the provisions of § 4.4(b) of this part that are applicable to service in adjudicative proceedings. Any party opposing the application may file an answer within 5 business days after receipt of the application. The applicant may file a reply brief, limited to new matters raised by the answer, within 3 business days after receipt of the answer.
Subpart G [Reserved]
Subpart H – Reopening of Proceedings
§ 3.71 Authority.
Except while pending in a U.S. court of appeals on a petition for review (after the transcript of the record has been filed) or in the U.S. Supreme Court, a proceeding may be reopened by the Commission at any time in accordance with § 3.72. Any person subject to a Commission decision containing a rule or order which has become effective, or an order to cease and desist which has become final may file a request to reopen the proceeding in accordance with § 2.51.
§ 3.72 Reopening.
(a) Before statutory review. At any time prior to the expiration of the time allowed for filing a petition for review or prior to the filing of the transcript of the record of a proceeding in a U.S. court of appeals pursuant to a petition for review, the Commission may upon its own initiative and without prior notice to the parties reopen the proceeding and enter a new decision modifying or setting aside the whole or any part of the findings as to the facts, conclusions, rule, order, or opinion issued by the Commission in such proceeding.
(b) After decision has become final. (1) Whenever the Commission is of the opinion that changed conditions of fact or law or the public interest may require that a Commission decision containing a rule or order which has become effective, or an order to cease and desist which has become final by reason of court affirmance or expiration of the statutory period for court review without a petition for review having been filed, or a Commission decision containing an order dismissing a proceeding, should be altered, modified, or set aside in whole or in part, the Commission will, except as provided in § 2.51, serve upon each person subject to such decision (in the case of proceedings instituted under § 3.13, such service may be by publication in the
(2) Whenever an order to show cause is not opposed, or if opposed but the pleadings do not raise issues of fact to be resolved, the Commission, in its discretion, may decide the matter on the order to show cause and answer thereto, if any, or it may serve upon the parties (in the case of proceedings instituted under § 3.13, such service may be by publication in
(3) Termination of existing orders – (i) Generally. Notwithstanding the foregoing provisions of this rule, and except as provided in paragraphs (b)(3) (ii) and (iii) of this section, an order issued by the Commission before August 16, 1995, will be deemed, without further notice or proceedings, to terminate 20 years from the date on which the order was first issued, or on January 2, 1996, whichever is later.
(ii) Exception. This paragraph applies to the termination of an order issued before August 16, 1995, where a complaint alleging a violation of the order was or is filed (with or without an accompanying consent decree) in federal court by the United States or the Federal Trade Commission while the order remains in force, either on or after August 16, 1995, or within the 20 years preceding that date. If more than one complaint was or is filed while the order remains in force, the relevant complaint for purposes of this paragraph will be the latest filed complaint. An order subject to this paragraph will terminate 20 years from the date on which a court complaint described in this paragraph was or is filed, except as provided in the following sentence. If the complaint was or is dismissed, or a federal court rules or has ruled that the respondent did not violate any provision of the order, and the dismissal or ruling was or is not appealed, or was or is upheld on appeal, the order will terminate according to paragraph (b)(3)(i) of this section as though the complaint was never filed; provided, however, that the order will not terminate between the date that such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal. The filing of a complaint described in this paragraph will not affect the duration of any order provision that has expired, or will expire, by its own terms. The filing of a complaint described in this paragraph also will not affect the duration of an order’s application to any respondent that is not named in the complaint.
(iii) Stay of Termination. Any party to an order may seek to stay, in whole or part, the termination of the order as to that party pursuant to paragraph (b)(3) (i) or (ii) of this section. Petitions for such stays shall be filed in accordance with the procedures set forth in § 2.51 of these rules. Such petitions shall be filed on or before the date on which the order would be terminated pursuant to paragraph (b)(3) (i) or (ii) of this section. Pending the disposition of such a petition, the order will be deemed to remain in effect without interruption.
(iv) Orders not terminated. Nothing in § 3.72(b)(3) is intended to apply to in camera orders or other procedural or interlocutory rulings by an Administrative Law Judge or the Commission.
Subpart I – Recovery of Awards Under the Equal Access to Justice Act in Commission Proceedings
§ 3.81 General provisions.
(a) Purpose of these rules. The Equal Access to Justice Act, 5 U.S.C. 504 (called “the Act” in this subpart), provides for the award of attorney fees and other expenses to eligible individuals and entities who are parties to adversary adjudicative proceedings under part 3 of this title. The rules in this subpart describe the parties eligible for awards, how to apply for awards, and the procedures and standards that the Commission will use to make them.
(1) When an eligible party will receive an award. An eligible party will receive an award when:
(i) It prevails in the adjudicative proceeding, unless the Commission’s position in the proceeding was substantially justified or special circumstances make an award unjust. Whether or not the position of the agency was substantially justified will be determined on the basis of the administrative record as a whole that is made in the adversary proceeding for which fees and other expenses are sought; or
(ii) The agency’s demand is substantially in excess of the decision of the adjudicative officer, and is unreasonable when compared with that decision, under all the facts and circumstances of the case. Demand means the express final demand made by the agency prior to initiation of the adversary adjudication, but does not include a recitation by the agency of the statutory penalty in the administrative complaint or elsewhere when accompanied by an express demand for a lesser amount.
(b) When the Act applies. (1) Section 504(a)(1) of the Act applies to any adversarial adjudicative proceeding pending before the Commission at any time after October 1, 1981. This includes proceedings begun before October 1, 1981, if final Commission action has not been taken before that date.
(2) Section 504(a)(4) applies to any adversarial adjudicative proceeding pending before the Commission at any time on or after March 29, 1996.
(c) Proceedings covered. (1) The Act applies to all adjudicative proceedings under part 3 of the rules of practice as defined in § 3.2, except hearings relating to the promulgation, amendment, or repeal of rules under the Fair Packaging and Labeling Act.
(2) [Reserved]
(d) Eligibility of applicants. (1) To be eligible for an award of attorney fees and other expenses under the Act, the applicant must be a party to the adjudicative proceeding in which it seeks an award. The term party is defined in 5 U.S.C. 551(3). The applicant must show that it meets all conditions of eligibility set out in this subpart.
(2) The types of eligible applicants are as follows:
(i) An individual with a net worth of not more than $2 million;
(ii) The sole owner of an unincorporated business who has a net worth of not more than $7 million, including both personal and business interests, and not more than 500 employees;
(iii) A charitable or other tax-exempt organization described in section 501(c)(3) of the Internal Revenue Code (26 U.S.C. 501(c)(3)) with not more than 500 employees;
(iv) A cooperative association as defined in section 15(a) of the Agricultural Marketing Act (12 U.S.C. 1141j(a)) with not more than 500 employees;
(v) Any other partnership, corporation, association, unit of local government, or organization with a net worth of not more than $7 million and not more than 500 employees; and
(vi) For purposes of receiving an award for fees and expenses for defending against an excessive Commission demand, any small entity, as that term is defined under 5 U.S.C. 601.
(3) Eligibility of a party shall be determined as of the date the proceeding was initiated.
(4) An applicant who owns an unincorporated business will be considered as an “individual” rather than a “sole owner of an unincorporated business” if the issues on which the applicant prevails are related primarily to personal interests rather than to business interests.
(5) The employees of an applicant include all persons who regularly perform services for remuneration for the applicant, under the applicant’s direction and control. Part-time employees shall be included on a proportional basis.
(6) The net worth and number of employees of the applicant and all of its affiliates shall be aggregated to determine eligibility. Any individual, corporation or other entity that directly or indirectly controls or owns a majority of the voting shares or other interest of the applicant, or any corporation or other entity of which the applicant directly or indirectly owns or controls a majority of the voting shares or other interest, will be considered an affiliate for purposes of this part, unless the Administrative Law Judge determines that such treatment would be unjust and contrary to the purposes of the Act in light of the actual relationship between the affiliated entities. In addition, the Administrative Law Judge may determine that financial relationships of the applicant other than those described in this paragraph constitute special circumstances that would make an award unjust.
(7) An applicant that participates in a proceeding primarily on behalf of one or more other persons or entities that would be ineligible is not itself eligible for an award.
(e) Standards for awards. (1) For a prevailing party:
(i) A prevailing applicant will receive an award for fees and expenses incurred after initiation of the adversary adjudication in connection with the entire adversary adjudication, or on a substantive portion of the adversary adjudication that is sufficiently significant and discrete to merit treatment as a separate unit unless the position of the agency was substantially justified. The burden of proof that an award should not be made to an eligible prevailing applicant is on complaint counsel, which may avoid an award by showing that its position had a reasonable basis in law and fact.
(ii) An award to prevailing party will be reduced or denied if the applicant has unduly or unreasonably protracted the proceeding or if special circumstances make an award unjust.
(2) For a party defending against an excessive demand:
(i) An eligible applicant will receive an award for fees and expenses incurred after initiation of the adversary adjudication related to defending against the excessive portion of a Commission demand that is substantially in excess of the decision of the adjudicative officer and is unreasonable when compared with that decision under all the facts and circumstances of the case.
(ii) An award will be denied if the applicant has committed a willful violation of law or otherwise acted in bad faith or if special circumstances make an award unjust.
(f) Allowable fees and expenses. (1) Awards will be based on rates customarily charged by persons engaged in the business of acting as attorneys, agents and expert witnesses, even if the services were made available without charge or at a reduced rate to the applicant.
(2) No award for the fee of an attorney or agent under these rules may exceed the hourly rate specified in 5 U.S.C. 504(b)(1)(A). No award to compensate an expert witness may exceed the highest rate at which the Commission paid expert witnesses for similar services at the time the fees were incurred. The appropriate rate may be obtained from the Office of the Executive Director. However, an award may also include the reasonable expenses of the attorney, agent, or witness as a separate item, if the attorney, agent or witness ordinarily charges clients separately for such expenses.
(3) In determining the reasonableness of the fee sought for an attorney, agent or expert witness, the Administrative Law Judge shall consider the following:
(i) If the attorney, agent or witness is in private practice, his or her customary fee for similar services, or, if an employee of the applicant, the fully allocated cost of the services;
(ii) The prevailing rate for similar services in the community in which the attorney, agent or witness ordinarily performs services;
(iii) The time actually spent in the representation of the applicant;
(iv) The time reasonably spent in light of the difficulty or complexity of the issues in the proceeding; and
(v) Such other factors as may bear on the value of the services provided.
(4) The reasonable cost of any study, analysis, engineering report, test, project or similar matter prepared on behalf of a party may be awarded, to the extent that the charge for the service does not exceed the prevailing rate for similar services, and the study or other matter was necessary for preparation of the applicant’s case.
(5) Any award of fees or expenses under the Act is limited to fees and expenses incurred after initiation of the adversary adjudication and, with respect to excessive demands, the fees and expenses incurred in defending against the excessive portion of the demand.
(g) Rulemaking on maximum rates for attorney fees. If warranted by an increase in the cost of living or by special circumstances (such as limited availability of attorneys qualified to handle certain types of proceedings), the Commission may, upon its own initiative or on petition of any interested person or group, adopt regulations providing that attorney fees may be awarded at a rate higher than the rate specified in 5 U.S.C. 504(b)(1)(A) per hour in some or all the types of proceedings covered by this part. Rulemaking under this provision will be in accordance with Rules of Practice part 1, subpart C of this chapter.
§ 3.82 Information required from applicants.
(a) Contents of application. An application for an award of fees and expenses under the Act shall contain the following:
(1) Identity of the applicant and the proceeding for which the award is sought;
(2) A showing that the applicant has prevailed; or, if the applicant has not prevailed, a showing that the Commission’s demand was the final demand before initiation of the adversary adjudication and that it was substantially in excess of the decision of the adjudicative officer and was unreasonable when compared with that decision;
(3) Identification of the Commission position(s) that applicant alleges was (were) not substantially justified; or, identification of the Commission’s demand that is alleged to be excessive and unreasonable and an explanation as to why the demand was excessive and unreasonable;
(4) A brief description of the type and purpose of the organization or business (unless the applicant is an individual);
(5) A statement of how the applicant meets the criteria of § 3.81(d);
(6) The amount of fees and expenses incurred after the initiation of the adjudicative proceeding or, in the case of a claim for defending against an excessive demand, the amount of fees and expenses incurred after the initiation of the adjudicative proceeding attributable to the excessive portion of the demand;
(7) Any other matters the applicant wishes the Commission to consider in determining whether and in what amount an award should be made; and
(8) A written verification under oath or under penalty or perjury that the information provided is true and correct accompanied by the signature of the applicant or an authorized officer or attorney.
(b) Net worth exhibit. (1) Each applicant except a qualified tax-exempt organization or cooperative association must provide with its application a detailed exhibit showing the net worth of the application and any affiliates (as defined in § 3.81(d)(6)) when the proceeding was initiated. The exhibit may be in any form convenient to the applicant that provides full disclosure of the applicant’s and its affiliates’ assets and liabilities and is sufficient to determine whether the applicant qualifies under the standards in this part. The Administrative Law Judge may require an applicant to file additional information to determine its eligibility for an award.
(2) Ordinarily, the net worth exhibit will be included in the public record of the proceeding. However, if an applicant objects to public disclosure of information in any portion of the exhibit and believes there are legal grounds for withholding it from disclosure, the applicant may submit that portion of the exhibit directly to the Administrative Law Judge in a sealed envelope labeled “Confidential Financial Information,” accompanied by a motion to withhold the information from public disclosure. The motion shall describe the information sought to be withheld and explain, in detail, why it falls within one or more of the specific exemptions from mandatory disclosure under the Freedom of Information Act, 5 U.S.C. 552(b) (1) through (9), why public disclosure of the information would adversely affect the applicant, and why disclosure is not required in the public interest. The material in question shall be served on complaint counsel but need not be served on any other party to the proceeding. If the Administrative Law Judge finds that the information should not be withheld from disclosure, it shall be placed in the public record of the proceeding. Otherwise, any request to inspect or copy the exhibit shall be disposed of in accordance with § 4.11.
(c) Documentation of fees and expenses. The application shall be accompanied by full documentation of the fees and expenses incurred after initiation of the adversary adjudication, including the cost of any study, analysis, engineering report, test, project or similar matter, for which an award is sought. With respect to a claim for fees and expenses involving an excessive demand, the application shall be accompanied by full documentation of the fees and expenses incurred after initiation of the adversary adjudication, including the cost of any study, analysis, engineering report, test, project or similar matter, for which an award is sought attributable to the portion of the demand alleged to be excessive and unreasonable. A separate itemized statement shall be submitted for each professional firm or individual whose services are covered by the application, showing the hours spent in connection with the proceeding by each individual, a description of the specific services performed, the rate at which each fee has been computed, any expenses for which reimbursement is sought, the total amount claimed, and the total amount paid or payable by the applicant or by any other person or entity for the services provided. The Administrative Law Judge may require the applicant to provide vouchers, receipts, or other substantiation for any expenses claimed.
(d) When an application may be filed – (1) For a prevailing party:
(i) An application may be filed not later than 30 days after the Commission has issued an order or otherwise taken action that results in final disposition of the proceeding.
(ii) If review or reconsideration is sought or taken of a decision as to which an applicant believes it has prevailed, proceedings for the award of fees shall be stayed pending final disposition of the underlying controversy.
(2) For a party defending against an excessive demand:
(i) An application may be filed not later than 30 days after the Commission has issued an order or otherwise taken action that results in final disposition of the proceeding.
(ii) If review or reconsideration is sought or taken of a decision as to which an applicant believes the agency’s demand was excessive and unreasonable, proceedings for the award of fees and expenses shall be stayed pending final disposition of the underlying controversy.
(3) For purposes of this subpart, final disposition means the later of –
(i) The date that the initial decision of the Administrative Law Judge becomes the decision of the Commission pursuant to § 3.51(a);
(ii) The date that the Commission issues an order disposing of any petitions for reconsideration of the Commission’s final order in the proceeding; or
(iii) The date that the Commission issues a final order or any other final resolution of a proceeding, such as a consent agreement, settlement or voluntary dismissal, which is not subject to a petition for reconsideration.
§ 3.83 Procedures for considering applicants.
(a) Filing and service of documents. Any application for an award or other pleading or document related to an application shall be filed and served on all parties as specified in §§ 4.2 and 4.4(b) of this chapter, except as provided in § 3.82(b)(2) for confidential financial information.
(b) Answer to application. (1) Within 30 days after service of an application, complaint counsel may file an answer to the application. Unless complaint counsel requests an extension of time for filing or files a statement of intent to negotiate under paragraph (b)(2) of this section, failure to file an answer within the 30-day period may be treated as a consent to the award requested.
(2) If complaint counsel and the applicant believe that the issues in the fee application can be settled, they may jointly file a statement of their intent to negotiate a settlement. The filing of this statement shall extend the time for filing an answer for an additional 30 days, and further extensions may be granted by the Administrative Law Judge upon request by complaint counsel and the applicant.
(3) The answer shall explain in detail any objections to the award requested and identify the facts relied on in support of complaint counsel’s position. If the answer is based on any alleged facts not already in the record of the proceeding, complaint counsel shall include with the answer either supporting affidavits or a request for further proceedings under paragraph (f) of this section.
(c) Reply. Within 15 days after service of an answer, the applicant may file a reply. If the reply is based on any alleged facts not already in the record of the proceeding, the applicant shall include with the reply either supporting affidavits or a request for further proceedings under paragraph (f) of this section.
(d) Comments by other parties. Any party to a proceeding other than the applicant and complaint counsel may file comments on an application within 30 days after it is served or on an answer within 15 days after it is served. A commenting party may not participate further in proceedings on the application unless the Administrative Law Judge determines that the public interest requires such participation in order to permit full exploration of matters in the comments.
(e) Settlement. The applicant and complaint counsel may agree on a proposed settlement of the award before final action on the application. A proposed award settlement entered into in connection with a consent agreement covering the underlying proceeding will be considered in accordance with § 3.25. The Commission may request findings of fact or recommendations on the award settlement from the Administrative Law Judge. A proposed award settlement entered into after the underlying proceeding has been concluded will be considered and may be approved or disapproved by the Administrative Law Judge subject to Commission review under paragraph (h) of this section. If an applicant and complaint counsel agree on a proposed settlement of an award before an application has been filed, the application shall be filed with the proposed settlement.
(f) Further proceedings. (1) Ordinarily, the determination of an award will be made on the basis of the written record. However, on request of either the applicant or complaint counsel, or on his or her own initiative, the Administrative Law Judge may order further proceedings, such as an informal conference, oral argument, additional written submissions or an evidentiary hearing. Such further proceedings shall be held only when necessary for full and fair resolution of the issues arising from the application, and shall be conducted as promptly as possible.
(2) A request that the Administrative Law Judge order further proceedings under this section shall specifically identify the information sought or the disputed issues and shall explain why the additional proceedings are necessary to resolve the issues.
(g) Decision. The Administrative Law Judge shall issue an initial decision on the application within 30 days after closing proceedings on the application.
(1) For a decision involving a prevailing party: The decision shall include written findings and conclusions on the applicant’s eligibility and status as a prevailing party, and an explanation of the reasons for any difference between the amount requested and the amount awarded. The decision shall also include, if at issue, findings on whether the agency’s position was substantially justified, whether the applicant unduly protracted the proceedings, or whether special circumstances make an award unjust.
(2) For a decision involving an excessive agency demand: The decision shall include written findings and conclusions on the applicant’s eligibility and an explanation of the reasons why the agency’s demand was or was not determined to be substantially in excess of the decision of the adjudicative officer and was or was not unreasonable when compared with that decision. That decision shall be based upon all the facts and circumstances of the case. The decision shall also include, if at issue, findings on whether the applicant has committed a willful violation of law or otherwise acted in bad faith, or whether special circumstances make an award unjust.
(h) Agency review. Either the applicant or complaint counsel may seek review of the initial decision on the fee application by filing a notice of appeal under § 3.52(a), or the Commission may decide to review the decision on its own initiative, in accordance with § 3.53. If neither the applicant nor complaint counsel seeks review and the Commission does not take review on its own initiative, the initial decision on the application shall become a final decision of the Commission 30 days after it is issued. Whether to review a decision is a matter within the discretion of the Commission. If review is taken, the Commission will issue a final decision on the application or remand the application to the Administrative Law Judge for further proceedings.
(i) Judicial review. Judicial review of final Commission decisions on awards may be sought as provided in 5 U.S.C. 504(c)(2).
(j) Payment of award. An applicant seeking payment of an award shall submit to the Secretary of the Commission a copy of the Commission’s final decision granting the award, accompanied by a statement that the applicant will not seek review of the decision in the United States courts. The agency will pay the amount awarded to the applicant within 60 days, unless judicial review of the award or of the underlying decision of the adjudicative proceeding has been sought by the applicant or any party to the proceeding.
PART 4 – MISCELLANEOUS RULES
§ 4.1 Appearances.
(a) Qualifications – (1) Attorneys – (i) U.S.-admitted. Members of the bar of a Federal court or of the highest court of any State or Territory of the United States are eligible to practice before the Commission.
(ii) European Community (EC)-qualified. Persons who are qualified to practice law in a Member State of the European Community and authorized to practice before The Commission of the European Communities in accordance with Regulation No. 99/63/EEC are eligible to practice before the Commission.
(iii) Any attorney desiring to appear before the Commission or an Administrative Law Judge may be required to show to the satisfaction of the Commission or the Administrative Law Judge his or her acceptability to act in that capacity.
(2) Others. (i) Any individual or member of a partnership involved in any proceeding or investigation may appear on behalf or himself or of such partnership upon adequate identification. A corporation or association may be represented by a bona fide officer thereof upon a showing of adequate authorization.
(ii) At the request of counsel representing any party in an adjudicative proceeding, the Administrative Law Judge may permit an expert in the same discipline as an expert witness to conduct all or a portion of the cross-examination of such witness.
(b) Restrictions as to former members and employees – (1) General prohibition. Except as provided in this section, or otherwise specifically authorized by the Commission, no former member or employee (“former employee” or “employee”) of the Commission may communicate to or appear before the Commission, as attorney or counsel, or otherwise assist or advise behind-the-scenes, regarding a formal or informal proceeding or investigation
(i) The former employee participated personally and substantially on behalf of the Commission in the same proceeding or investigation in which the employee now intends to participate;
(ii) The participation would begin within two years after the termination of the former employee’s service and, within a period of one year prior to the employee’s termination, the proceeding or investigation was pending under the employee’s official responsibility;
(iii) Nonpublic documents or information pertaining to the proceeding or investigation in question, and of the kind delineated in § 4.10(a), came to, or would be likely to have come to, the former employee’s attention in the course of the employee’s duties, (unless Commission staff determines that the nature of the documents or information is such that no present advantage could thereby be derived); or
(iv) The former employee’s participation would begin within one year after the employee’s termination and, at the time of termination, the employee was a member of the Commission or a “senior employee” as defined in 18 U.S.C. 207(c).
(2) Clearance request required. Any former employee, before participating in a Commission proceeding or investigation (see footnote 1), whether through an appearance before a Commission official or behind-the-scenes assistance, shall file with the Secretary a request for clearance to participate, containing the information listed in § 4.1(b)(4) if:
(i) The proceeding or investigation was pending in the Commission while the former employee served;
(ii) A proceeding or investigation from which such proceeding or investigation directly resulted was pending during the former employee’s service; or
(iii) Nonpublic documents or information pertaining to the proceeding or investigation in question, and of the kind delineated in § 4.10(a), came to or would likely have come to the former employee’s attention in the course of the employee’s duties, and the employee left the Commission within the previous three years.
This requirement applies even to a proceeding or investigation that had not yet been initiated formally when the former employee terminated employment, if the employee had learned nonpublic information relating to the subsequently initiated proceeding or investigation.
(3) Exceptions. (i) Paragraphs (b) (1) and (2) of this section do not apply to:
(A) Making a pro se filing of any kind;
(B) Submitting a request or appeal under the Freedom of Information Act, the Privacy Act, or the Government in the Sunshine Act;
(C) Testifying under oath (except that a former employee who is subject to the restrictions contained in paragraph (b)(1)(i) of this section with respect to a particular matter may not, except pursuant to court order, serve as an expert witness for any person other than the United States in that same matter);
(D) Submitting a statement required to be made under penalty of perjury; or
(E) Appearing on behalf of the United States.
(ii) With the exception of subparagraph (b)(1)(iv), paragraphs (b) (1) and (2) of this section do not apply to participating in a Commission rulemaking proceeding, including submitting comments on a matter on which the Commission has invited public comment.
(iii) Paragraph (b)(1)(iv) of this section does not apply to submitting a statement based on the former employee’s own special knowledge in the particular area that is the subject of the statement, provided that no compensation is thereby received, other than that regularly provided by law or by § 4.5 for witnesses.
(iv) Paragraph (b)(2) of this section does not apply to filing a premerger notification form or participating in subsequent events concerning compliance or noncompliance with Section 7A of the Clayton Act, 15 U.S.C. 18a, or any regulation issued under that section.
(4) Request contents. Clearance requests filed pursuant to § 4.1(b)(2) shall contain:
(i) The name and matter number (if known) of the proceeding or investigation in question;
(ii) A description of the contemplated participation;
(iii) The name of the Commission office(s) or division(s) in which the former employee was employed and the position(s) the employee occupied;
(iv) A statement whether, while employed by the Commission, the former employee participated in any proceeding or investigation concerning the same company, individual, or industry currently involved in the matter in question;
(v) A certification that while employed by the Commission, the employee never participated personally and substantially in the same matter or proceeding;
(vi) If the employee’s Commission employment terminated within the past two years, a certification that the matter was not pending under the employee’s official responsibility during any part of the one year before the employee’s termination;
(vii) If the employee’s Commission employment terminated within the past three years, either a declaration that nonpublic documents or information pertaining to the proceeding or investigation in question, and of the kind delineated in § 4.10(a), never came to the employee’s attention, or a description of why the employee believes that such nonpublic documents or information could not confer a present advantage to the employee or to the employee’s client in the proceeding or investigation in question; and
(viii) A certification that the employee has read, and understands, both the criminal conflict of interest law on post-employment activities (18 U.S.C. 207) and this Rule in their entirety.
(5) Definitions. The following definitions apply for purposes of this section:
(i) Behind-the-scenes participation includes any form of professional consultation, assistance, or advice to anyone about the proceeding or investigation in question, whether formal or informal, oral or written, direct or indirect.
(ii) Communicate to or appear before means making any oral or written communication to, or any formal or informal appearance before, the Commission or any of its members or employees on behalf of any person (except the United States) with the intent to influence.
(iii) Directly resulted from means that the proceeding or investigation in question emanated from an earlier phase of the same proceeding or investigation or from a directly linked, antecedent investigation. The existence of some attenuated connection between a proceeding or investigation that was pending during the requester’s tenure and the proceeding or investigation in question does not constitute a direct result.
(iv) Pending under the employee’s official responsibility means that the former employee had the direct administrative or operating authority to approve, disapprove, or otherwise direct official actions in the proceeding or investigation, irrespective of whether the employee’s authority was intermediate or final, and whether it was exercisable alone or only in conjunction with others.
(v) Personal and substantial participation. A former employee participated in the proceeding or investigation personally if the employee either participated directly or directed a subordinate in doing so. The employee participated substantially if the involvement was significant to the matter or reasonably appeared to be significant. A series of peripheral involvements may be considered insubstantial, while a single act of approving or participating in a critical step may be considered substantial.
(vi) Present advantage. Whether exposure to nonpublic information about the proceeding or investigation could confer a present advantage to a former employee will be analyzed and determined on a case-by-case basis. Relevant factors include, inter alia, the nature and age of the information, its relation and current importance to the proceeding or investigation in question, and the amount of time that has passed since the employee left the Commission.
(vii) Proceeding or investigation shall be interpreted broadly and includes an adjudicative or other proceeding; the consideration of an application; a request for a ruling or other determination; a contract; a claim; a controversy; an investigation; or an interpretive ruling.
(6) Advice as to whether clearance request is required. A former employee may ask the General Counsel, either orally or in writing, whether the employee is required to file a request for clearance to participate in a Commission matter pursuant to paragraph (b)(2) of this section. The General Counsel, or the General Counsel’s designee, will make any such determination within three business days.
(7) Deadline for determining clearance requests. By the close of the tenth business day after the date on which the clearance request is filed, the General Counsel, or the General Counsel’s designee, will notify the requester either that:
(i) The request for clearance has been granted;
(ii) The General Counsel or the General Counsel’s designee has decided to recommend that the Commission prohibit the requester’s participation; or
(iii) The General Counsel or the General Counsel’s designee is, for good cause, extending the period for reaching a determination on the request by up to an additional ten business days.
(8) Participation of partners or associates of former employees. (i) If a former employee is prohibited from participating in a proceeding or investigation by virtue of having worked on the matter personally and substantially while a Commission employee, no partner or legal or business associate of that individual may participate except after filing with the Secretary of the Commission an affidavit attesting that:
(A) The former employee will not participate in the proceeding or investigation in any way, directly or indirectly (and describing how the former employee will be screened from participating);
(B) The former employee will not share in any fees resulting from the participation;
(C) Everyone who intends to participate is aware of the requirement that the former employee be screened;
(D) The client(s) have been informed; and
(E) The matter was not brought to the participant(s) through the active solicitation of the former employee.
(ii) If the Commission finds that the screening measures being taken are unsatisfactory or that the matter was brought to the participant(s) through the active solicitation of the former employee, the Commission will notify the participant(s) to cease the representation immediately.
(9) Effect on other standards. The restrictions and procedures in this section are intended to apply in lieu of restrictions and procedures that may be adopted by any state or jurisdiction, insofar as such restrictions and procedures apply to appearances or participation in Commission proceedings or investigations. Nothing in this section supersedes other standards of conduct applicable under paragraph (e) of this section. Requests for advice about this section, or about any matter related to other applicable rules and standards of ethical conduct, shall be directed to the Office of the General Counsel.
(c) Public disclosure. Any request for clearance filed by a former member or employee pursuant to this section, as well as any written response, are part of the public records of the Commission, except for information exempt from disclosure under § 4.10(a) of this chapter. Information identifying the subject of a nonpublic Commission investigation will be redacted from any request for clearance or other document before it is placed on the public record.
(d) Notice of appearance. Any attorney desiring to appear before the Commission or an Administrative Law Judge on behalf of a person or party shall file with the Secretary of the Commission a written notice of appearance, stating the basis for eligibility under this section and including the attorney’s jurisdiction of admission/qualification, attorney identification number, if applicable, and a statement by the appearing attorney attesting to his/her good standing within the legal profession. No other application shall be required for admission to practice, and no register of attorneys will be maintained.
(e) Reprimand, suspension, or disbarment of attorneys. (1)(i) The following provisions govern the evaluation of allegations of misconduct by attorneys practicing before the Commission who are not employed by the Commission.
(A) Does not possess the qualifications required by § 4.1(a);
(B) Has failed to act in a manner consistent with the rules of professional conduct of the attorney’s state(s) of licensure;
(C) Has engaged in obstructionist, contemptuous, or unprofessional conduct during the course of any Commission proceeding or investigation; or
(D) Has knowingly or recklessly given false or misleading information, or has knowingly or recklessly participated in the giving of false information to the Commission or any officer or employee of the Commission.
(ii) An attorney may be responsible for another attorney’s violation of this paragraph (e) if the attorney orders, or with knowledge of the specific conduct, ratifies the conduct involved. In addition, an attorney who has direct supervisory authority over another attorney may be responsible for that attorney’s violation of this paragraph (e) if the supervisory attorney knew of the conduct at a time when its consequences could have been avoided or mitigated but failed to take reasonable remedial action.
(2) Allegations of attorney misconduct in violation of paragraph (e)(1) of this section may be proffered by any person possessing information concerning the alleged misconduct. Any such allegations may be submitted orally or in writing to a Bureau Officer who will evaluate the sufficiency of the allegations in the first instance to determine whether further action by the Commission is warranted. The Director of the Bureau or office responsible for the matter about which the allegations are made, or the Director’s designee, shall serve as the Bureau Officer.
(3) After review and evaluation of the allegations, any supporting materials, and any additional information that the Bureau Officer may acquire, the Bureau Officer, if he or she determines that further action is warranted, shall in writing notify the subject of the complaint of the underlying allegations and potential sanctions available to the Commission under this section, and provide him or her an opportunity to respond to the allegations and provide additional relevant information and material. The Bureau Officer may request that the Commission issue a resolution authorizing the use of compulsory process, and may thereafter initiate the service of compulsory process, to assist in obtaining information for the purpose of making a recommendation to the Commission whether further action may be warranted.
(4) If the Bureau Officer, after review and evaluation of the allegations, supporting material, response by the subject of the allegations, if any, and all additional available information and material, determines that no further action is warranted, he or she may close the matter if the Commission has not issued a resolution authorizing the use of compulsory process. In the event the Bureau Officer determines that further Commission action may be warranted, or if the Commission has issued a resolution authorizing the use of compulsory process, he or she shall make a recommendation to the Commission. The recommendation shall include all relevant information and material as to whether further Commission action, or any other disposition of the matter, may be warranted.
(5) If the Commission has reason to believe, after review of the Bureau Officer’s recommendation, that an attorney has engaged in professional misconduct of the type described in paragraph (e)(1) of this section, the Commission may institute administrative disciplinary proceedings proposing public reprimand, suspension, or disbarment of the attorney from practice before the Commission. Except as provided in paragraph (e)(7) of this section, administrative disciplinary proceedings shall be handled in accordance with the following procedures:
(i) The Commission shall serve the respondent attorney with an order to show cause why the Commission should not impose sanctions against the attorney. The order to show cause shall specify the alleged misconduct at issue and the possible sanctions. The order to show cause shall be accompanied by all declarations, deposition transcripts, or other evidence the staff wishes the Commission to consider in support of the allegations of misconduct.
(ii) Within 14 days of service of the order to show cause, the respondent may file a response to the allegations of misconduct. If the response disputes any of the allegations of misconduct, it shall do so with specificity and include all materials the respondent wishes the Commission to consider relating to the allegations. If no response is filed, the allegations shall be deemed admitted.
(iii) If, upon considering the written submissions of the respondent, the Commission determines that there remains a genuine dispute as to any material fact, the Commission may order further proceedings to be presided over by an Administrative Law Judge or by one or more Commissioners sitting as Administrative Law Judges (hereinafter referred to collectively as the Administrative Law Judge), or by the Commission. The Commission order shall specify the nature and scope of any proceeding, including whether live testimony will be heard and whether any pre-hearing discovery will be allowed and if so to what extent. The attorney respondent shall be granted due opportunity to be heard in his or her own defense and may be represented by counsel. If the written submissions of the respondent raise no genuine dispute of material fact, the Commission may issue immediately any or all of the sanctions enumerated in the order to show cause provided for in paragraph (e)(5)(i) of this section.
(iv) Commission counsel shall be appointed by the Bureau Officer to prosecute the allegations of misconduct in any administrative disciplinary proceedings instituted pursuant to this rule.
(v) If the Commission assigns the matter to an Administrative Law Judge, the Commission will establish a deadline for an initial decision. The deadline shall not be modified by the Administrative Law Judge except that it may be amended by leave of the Commission.
(vi) Based on the entirety of the record of administrative proceedings, the Administrative Law Judge or the Commission if it reviews the matter in the first instance, shall issue a decision either dismissing the allegations or, if it is determined that the allegations are supported by a preponderance of the evidence, specify an appropriate sanction. An Administrative Law Judge’s decision may be appealed to the Commission by either party within 30 days. If the Administrative Law Judge’s decision is appealed, the Commission will thereafter issue a scheduling order governing the appeal.
(vii) Investigations and administrative proceedings prior to the hearing on the order to show cause will be nonpublic unless otherwise ordered by the Commission. Any administrative hearing on the order to show cause, and any oral argument on appeal, shall be open to the public unless otherwise ordered for good cause by the Commission or the Administrative Law Judge.
(6) Regardless of any action or determination the Commission may or may not make, the Commission may direct the General Counsel to refer the allegations of misconduct to the appropriate state, territory, or District of Columbia bar or any other appropriate authority for further action.
(7) Upon receipt of notification from any authority having power to suspend or disbar an attorney from the practice of law within any state, territory, or the District of Columbia, demonstrating that an attorney practicing before the Commission is subject to an order of final suspension (not merely temporary suspension pending further action) or disbarment by such authority, the Commission may, without resort to any of the procedures described in this section, enter an order temporarily suspending the attorney from practice before it and directing the attorney to show cause within 30 days from the date of said order why the Commission should not impose further discipline against the attorney. If no response is filed, the attorney will be deemed to have acceded to such further discipline as the Commission deems appropriate. If a response is received, the Commission may take action or initiate proceedings consistent with paragraph (e)(5) of this section before making a determination whether, and to what extent, to impose further discipline against the attorney.
(8) The disciplinary process described in this section is in addition to, and does not supersede, the authority of the Commission or an Administrative Law Judge to discipline attorneys participating in part 3 proceedings pursuant to §§ 3.24(b)(2) or 3.42(d).
§ 4.2 Requirements as to form, and filing of documents other than correspondence.
(a) Filing. (1) All paper and electronic documents filed with the Commission or with an Administrative Law Judge pursuant to part 0, part 1, part 2, or part 3 of this chapter shall be filed with the Secretary of the Commission, except that:
(i) Documents produced in response to compulsory process issued pursuant to part 2 or part 3 of this chapter shall instead be produced to the custodian, deputy custodian, or other person prescribed therein, and in the manner prescribed therein; and
(ii) Comments filed in response to a Commission request for public comment shall instead be filed in the manner prescribed in the
(iii) Petitions for rulemaking and petitions for exemptions from rules shall instead be filed in the manner prescribed in § 1.31 of this chapter.
(2) All paper and electronic documents filed with the Commission pursuant to parts 4-999 of this chapter shall be filed with the Secretary of the Commission, except as otherwise provided in such part.
(b) Title and public or nonpublic status. All paper and electronic documents filed with the Commission or with an Administrative Law Judge pursuant to any part of this chapter shall clearly show the file or docket number and title of the action in connection with which they are filed. Every page of each such document shall be clearly and accurately labeled “Public”, “In Camera” or “Confidential”.
(c) Paper and electronic copies of filings before the Commission or an Administrative Law Judge in adjudicative proceedings under part 3 of this chapter. (1) Each document filed in an adjudicative proceeding under part 3, except documents covered by § 4.2(a)(1)(i), shall be filed with the Secretary of the Commission, shall be in 12-point font with 1-inch margins, and shall comply with the requirements of §§ 4.2(b) and (f) and 4.3(d). Documents may be filed with the Office of the Secretary either electronically or in hard copy.
(i) Documents may be filed electronically by using the Office of the Secretary’s electronic filing system and complying with the Secretary’s directions for using that system. Documents filed electronically shall be in Adobe portable document format or such other format as the Secretary may direct.
(ii) Documents filed in hard copy shall include a paper original, one paper copy, and an electronic copy in Adobe portable document format or such other format as the Secretary shall direct.
(2) If the document is labeled “In Camera” or “Confidential”, it must include as an attachment either a motion requesting in camera or other confidential treatment, in the form prescribed by § 3.45 of this chapter, or a copy of a Commission, Administrative Law Judge, or federal court order granting such treatment. The document must also include as a separate attachment a set of only those pages of the document on which the in camera or otherwise confidential material appears and comply with all other requirements of § 3.45 and any other applicable rules governing in camera treatment. A document labeled “In Camera” or “Confidential” may be filed electronically using the electronic filing system.
(3) Sensitive personal information, as defined in § 3.45(b) of this chapter, shall not be included in, and must be redacted or omitted from, filings where the filing party determines that such information is not relevant or otherwise necessary for the conduct of the proceeding.
(4) A copy of each document filed in accordance with this section in an adjudicative proceeding under part 3 of this chapter shall be served by the party filing the document or person acting for that party on all other parties pursuant to § 4.4, at or before the time the original is filed.
(d) Other documents filed with the Commission. (1) Each document filed with the Commission, and not covered by § 4.2(a)(1)(i) or (ii) or § 4.2(c), shall be filed with the Secretary of the Commission, and shall be clearly and accurately labeled as required by § 4.2(b).
(2) Each such document shall be signed and shall comply with the requirements of § 4.2(f). Documents filed under this paragraph (d) shall include a paper original, one paper copy, and an electronic copy in Adobe portable document format, unless the Secretary shall otherwise direct.
(3) Each such document labeled “Public” may be placed on the public record of the Commission at the time it is filed.
(4) If such a document is labeled “Confidential”, and it is filed pursuant to § 2.10(a), § 2.41(f), or § 2.51 of this chapter, it will be rejected for filing pursuant to § 4.2(g), and will not stay compliance with any applicable obligation imposed by the Commission or the Commission staff, unless the filer simultaneously files:
(i) An explicit request for confidential treatment that includes the factual and legal basis for the request, identifies the specific portions of the document to be withheld from the public record, provides the name and address of the person(s) who should be notified in the event the Commission determines to disclose some or all of the material labeled “Confidential”, and otherwise conforms to the requirements of § 4.9(c); and
(ii) A redacted public version of the document that is clearly labeled “Public”.
(e) Form. Paper documents filed with the Secretary of the Commission shall be printed, typewritten, or otherwise processed in permanent form and on good unglazed paper. A motion or other document filed in an adjudicative proceeding under part 3 of this chapter shall contain a caption setting forth the title of the case, the docket number, and a brief descriptive title indicating the purpose of the document.
(f) Signature. (1) The original of each document filed shall be signed by an attorney of record for the filing party, or in the case of parties not represented by counsel, by the party itself, or by a partner if a partnership, or by an officer of the party if it is a corporation or an unincorporated association. For documents filed electronically using the Office of the Secretary’s electronic filing system, documents must be signed using a scanned signature image, an “s/” followed by the name of the filer using the electronic filing system, or another signature method as the Secretary may direct.
(2) Signing a document constitutes a representation by the signer that he or she has read it; that to the best of his or her knowledge, information, and belief, the statements made in it are true; that it is not interposed for delay; and that to the best of his or her knowledge, information, and belief, it complies with the rules in this part. If a document is not signed or is signed with intent to defeat the purpose of this section, it may be stricken as sham and false and the proceeding may go forward as though the document had not been filed.
(g) Authority to reject documents for filing. The Secretary of the Commission may reject a document for filing that fails to comply with the Commission’s rules. In cases of extreme hardship, the Secretary may excuse compliance with a rule regarding the filing of documents if the Secretary determines that the non-compliance would not interfere with the functions of the Commission.
§ 4.3 Time.
(a) Computation. Computation of any period of time prescribed or allowed by the rules in this chapter, by order of the Commission or an Administrative Law Judge, or by any applicable statute, shall begin with the first business day following that on which the act, event, or development initiating such period of time shall have occurred. When the last day of the period so computed is a Saturday, Sunday, or national holiday, or other day on which the office of the Commission is closed, the period shall run until the end of the next following business day. When such period of time, with the intervening Saturdays, Sundays, and national holidays counted, is seven (7) days or less, each of the Saturdays, Sundays, and such holidays shall be excluded from the computation. When such period of time, with the intervening Saturdays, Sundays, and national holidays counted, exceeds seven (7) days, each of the Saturdays, Sundays, and such holidays shall be included in the computation.
(b) Extensions. For good cause shown, the Administrative Law Judge may, in any proceeding before him or her: (1) Extend any time limit prescribed or allowed by order of the Administrative Law Judge or the Commission (if the Commission order expressly authorizes the Administrative Law Judge to extend time periods); or (2) extend any time limit prescribed by the rules in this chapter, except those governing motions directed to the Commission, interlocutory appeals and initial decisions and deadlines that the rules expressly authorize only the Commission to extend. Except as otherwise provided by law, the Commission, for good cause shown, may extend any time limit prescribed by the rules in this chapter or by order of the Commission or an Administrative Law Judge, provided, however, that in a proceeding pending before an Administrative Law Judge, any motion on which he or she may properly rule shall be made to the Administrative Law Judge. Notwithstanding the above, where a motion to extend is made after the expiration of the specified period, the motion may be considered where the untimely filing was the result of excusable neglect.
(c) Additional time after certain kinds of service. Whenever a party in an adjudicative proceeding under part 3 of this chapter is required or permitted to do an act within a prescribed period after service of a document upon it and the document is served by first-class mail pursuant to § 4.4(a)(2) or (b), 3 days shall be added to the prescribed period. Whenever a party in an adjudicative proceeding under part 3 is required or permitted to do an act within a prescribed period after service of a document upon it and the document is served by electronic delivery pursuant to § 4.4(e), 1 day shall be added to the prescribed period.
(d) Date of filing. Documents permitted to be filed using the electronic filing system must be received by 11:59 p.m. Eastern Time to be deemed timely filed that day. All other documents must be received in the Office of the Secretary by 5:00 p.m. Eastern Time to be deemed filed that day, and any such document received after 5:00 p.m. Eastern Time will be deemed filed the following business day.
§ 4.4 Service.
(a) By the Commission. (1) Service of complaints, initial decisions, final orders and other processes of the Commission under 15 U.S.C. 45 may be effected as follows:
(i) By registered or certified mail. A copy of the document shall be addressed to the person, partnership, corporation or unincorporated association to be served at his, her or its residence or principal office or place of business, registered or certified, and mailed; service under this provision is complete upon delivery of the document by the Post Office; or
(ii) By delivery to an individual. A copy thereof may be delivered to the person to be served, or to a member of the partnership to be served, or to the president, secretary, or other executive officer or a director of the corporation or unincorporated association to be served; service under this provision is complete upon delivery as specified herein; or
(iii) By delivery to an address. A copy thereof may be left at the principal office or place of business of the person, partnership, corporation, or unincorporated association, or it may be left at the residence of the person or of a member of the partnership or of an executive officer or director of the corporation, or unincorporated association to be served; service under this provision is complete upon delivery as specified herein.
(2) All documents served by the Commission or Administrative Law Judge in adjudicative proceedings under part 3 of this chapter, other than documents governed by paragraph (a)(1) of this section, may be served by personal delivery (including delivery by courier), by electronic delivery in accordance with § 4.4(e), or by first-class mail. Unless otherwise specified in § 4.4(e), documents shall be deemed served on the day of personal or electronic delivery or the day of mailing.
(3) All other orders and notices, including subpoenas, orders requiring access, orders to file annual and special reports, and notices of default, may be served by any method reasonably certain to inform the affected person, partnership, corporation or unincorporated association, including any method specified in paragraph (a)(1) of this section, except that civil investigative demands may only be served in the manner provided by section 20(c)(8) of the FTC Act (in the case of service on a partnership, corporation, association, or other legal entity) or section 20(c)(9) of the FTC Act (in the case of a natural person). Service under this provision is complete upon delivery by the Post Office or upon personal delivery (including delivery by courier).
(b) By parties or third parties in adjudicative proceedings under part 3 of this chapter. (1) Service of documents by complaint counsel, respondents, or third parties in adjudicative proceedings under part 3 shall be by delivering copies using the following methods.
(i) Upon complaint counsel. A copy may be served by personal delivery (including delivery by courier), by electronic delivery in accordance with § 4.4(e), or by first-class mail to the lead complaint counsel, with a copy to the Administrative Law Judge.
(ii) Upon a party other than complaint counsel or upon a third party. A copy may be served by personal delivery (including delivery by courier), by electronic delivery in accordance with § 4.4(e), or by first-class mail, with a copy to the Administrative Law Judge. If the party is an individual or partnership, delivery shall be to such individual or a member of the partnership; if a corporation or unincorporated association, to an officer or agent authorized to accept service of process therefor. Personal delivery includes handing the document to be served to the individual, partner, officer, or agent; leaving it at his or her office with a person in charge thereof; or, if there is no one in charge or if the office is closed or if the party has no office, leaving it at his or her dwelling house or usual place of abode with some person of suitable age and discretion then residing therein.
(2) Unless otherwise specified in § 4.4(e), documents served in adjudicative proceedings under part 3 shall be deemed served on the day of personal delivery (including delivery by courier), the day of electronic delivery, or the day of mailing.
(c) Service upon counsel. When counsel has appeared in a proceeding on behalf of a party, service upon such counsel of any document, other than a complaint, shall be deemed service upon the party. However, service of those documents specified in paragraph (a)(1) of this section shall be in accordance with paragraphs (a)(1)(i), (ii), and (iii) of this section.
(d) Proof of service. In an adjudicative proceeding under part 3, documents presented for filing shall contain proof of service in the form of a statement of the date and manner of service and of the names of the persons served, certified by the person who made service. Proof of service must appear on or be affixed to the documents filed.
(e) Service by electronic delivery in an adjudicative proceeding under part 3 of this chapter – (1) Service through the electronic filing system. A party may elect, for documents labeled “Public” pursuant to § 4.2(b), to be served via the electronic filing system provided by the Office of the Secretary. The electronic filing system cannot be used to serve third parties. For parties that have elected to be served via the electronic filing system:
(i) Service of documents labeled “Public” pursuant to § 4.2(b) may be effected through the electronic filing system;
(ii) Each such party thereby agrees that, for any document served through the electronic filing system, transmission of the notice of electronic filing provided by the electronic filing system shall satisfy the service obligations of the serving party; and
(iii) A document served via the electronic filing system shall be deemed served on the date the notice of electronic filing is transmitted, unless the serving party learns that the notice of electronic filing did not reach the person to be served.
(2) Service by other methods of electronic delivery. (i) In the following circumstances, service by other methods of electronic delivery (including service by email) may be effected as the Administrative Law Judge and the Secretary may direct:
(A) The document to be served is labeled “In Camera” or “Confidential” pursuant to § 4.2(b);
(B) The party to be served has not elected to be served via the electronic filing system;
(C) The document is to be served upon a third party; or
(D) Service under paragraph (e)(1) of this section is unavailable for technical reasons.
(ii) If documents labeled “In Camera” or “Confidential” are being served under this paragraph (e)(2), the documents must be encrypted prior to transit or must be transferred through a secure file transfer protocol. Service of a document under this paragraph (e)(2) shall be complete upon transmission by the serving party, unless the serving party learns that the document did not reach the person to be served.
(f) Service of process upon the Commission. Documents served upon the Commission may be served by personal delivery (including delivery by courier) or by first-class mail to the Office of the Secretary of the Commission.
§ 4.5 Fees.
(a) Deponents and witnesses. Any person compelled to appear in person in response to subpoena shall be paid the same fees and mileage as are paid witnesses in the courts of the United States.
(b) Presiding officers. Officers before whom depositions are taken shall be entitled to the same fees as are paid for like services in the courts of the United States.
(c) Responsibility. The fees and mileage referred to in this section shall be paid by the party at whose instance deponents or witnesses appear.
§ 4.6 Cooperation with other agencies.
It is the policy of the Commission to cooperate with other governmental agencies to avoid unnecessary overlapping or duplication of regulatory functions.
§ 4.7 Ex parte communications.
(a) Definitions. For purposes of this section, ex parte communication means an oral or written communication not on the public record with respect to which reasonable prior notice to all parties is not given, but it shall not include requests for status reports on any matter or proceeding.
(b) Prohibited ex parte communications. While a proceeding is in adjudicative status within the Commission, except to the extent required for the disposition of ex parte matters as authorized by law:
(1) No person not employed by the Commission, and no employee or agent of the Commission who performs investigative or prosecuting functions in adjudicative proceedings, shall make or knowingly cause to be made to any member of the Commission, or to the Administrative Law Judge, or to any other employee who is or who reasonably may be expected to be involved in the decisional process in the proceeding, an ex parte communciation relevant to the merits of that or a factually related proceeding; and
(2) No member of the Commission, the Administrative Law Judge, or any other employee who is or who reasonably may be expected to be involved in the decisional process in the proceeding, shall make or knowingly cause to be made to any person not employed by the Commission, or to any employee or agent of the Commission who performs investigative or prosecuting functions in adjudicative proceedings, an ex parte communication relevant to the merits of that or a factually related proceeding.
(c) Procedures. A Commissioner, the Administrative Law Judge or any other employee who is or who may reasonably be expected to be involved in the decisional process who receives or who make or knowingly causes to be made, a communication prohibited by paragraph (b) of this section shall promptly provide to the Secretary of the Commission:
(1) All such written communications;
(2) Memoranda stating the substance of and circumstances of all such oral communications; and
(3) All written responses, and memoranda stating the substance of all oral responses, to the materials described in paragraphs (c) (1) and (2) of this section. The Secretary shall make relevant portions of any such materials part of the public record of the Commission, pursuant to § 4.9, and place them in the docket binder of the proceeding to which it pertains, but they will not be considered by the Commission as part of the record for purposes of decision unless introduced into evidence in the proceeding. The Secretary shall also send copies of the materials to or otherwise notify all parties to the proceeding.
(d) Sanctions. (1) Upon receipt of an ex parte communication knowingly made or knowingly caused to be made by a party and prohibited by paragraph (b) of this section, the Commission, Administrative Law Judge, or other employee presiding over the proceeding may, to the extent consistent with the interests of justice and the policy of the underlying statutes administered by the Commission, require the party to show cause why his claim or interest in the proceeding should not be dismissed, denied, disregarded, or otherwise adversely affected on account of such violation. The Commission may take such action as it considers appropriate, including but not limited to, action under § 4.1(e)(2) and 5 U.S.C. 556(d).
(2) A person, not a party to the proceeding who knowingly makes or causes to be made an ex parte communication prohibited by paragraph (b) of this section shall be subject to all sanctions provided herein if he subsequently becomes a party to the proceeding.
(e) The prohibitions of this section shall apply in an adjudicative proceeding from the time the Commission votes to issue a complaint pursuant to § 3.11, to conduct adjudicative hearings pursuant to § 3.13, or to issue an order to show cause pursuant to § 3.72(b), or from the time an order by a U.S. court of appeals remanding a Commission decision and order for further proceedings becomes effective, until the time the Commission votes to enter its decision in the proceeding and the time permitted by § 3.55 to seek reconsideration of that decision has elapsed. For purposes of this section, an order of remand by a U.S. court of appeals shall be deemed to become effective when the Commission determines not to file a petition for a writ of certiorari, or when the time for filing such a petition has expired without a petition having been filed, or when such a petition has been denied. If a petition for reconsideration of a Commission decision is filed pursuant to § 3.55, the provisions of this section shall apply until the time the Commission votes to enter an order disposing of the petition. In addition, the prohibitions of this section shall apply with respect to communications concerning an application for stay filed with the Commission pursuant to § 3.56 from the time that the application is filed until its disposition.
(f) The prohibitions of paragraph (b) of this section do not apply to a communication occasioned by and concerning a nonadjudicative function of the Commission, including such functions as the initiation, conduct, or disposition of a separate investigation, the issuance of a complaint, or the initiation of a rulemaking or other proceeding, whether or not it involves a party already in an adjudicative proceeding; preparations for judicial review of a Commission order; a proceeding outside the scope of § 3.2, including a matter in state or federal court or before another governmental agency; a nonadjudicative function of the Commission, including but not limited to an obligation under § 4.11 or a communication with Congress; or the disposition of a consent settlement under § 3.25 concerning some or all of the charges involved in a complaint and executed by some or all respondents. The Commission, at its discretion and under such restrictions as it may deem appropriate, may disclose to the public or to respondent(s) in a pending adjudicative proceeding a communication made exempt by this paragraph from the prohibitions of paragraph (b) of this section, however, when the Commission determines that the interests of justice would be served by the disclosure. The prohibitions of paragraph (b) of this section also do not apply to a communication between any member of the Commission, the Administrative Law Judge, or any other employee who is or who reasonably may be expected to be involved in the decisional process, and any employee who has been directed by the Commission or requested by an individual Commissioner or Administrative Law Judge to assist in the decision of the adjudicative proceeding. Such employee shall not, however, have performed an investigative or prosecuting function in that or a factually related proceeding.
§ 4.8 Costs for obtaining Commission records.
(a) Definitions. For the purpose of this section:
(1) The term search includes all time spent looking, manually or by automated means, for material that is responsive to a request, including page-by-page or line-by-line identification of material within documents.
(2) The term duplication refers to the process of making a copy of a document for the purpose of releasing that document in response to a request for Commission records. Such copies can take the form of paper copy, microform, audio-visual materials, or machine readable documentation such as magnetic tape or computer disc. For copies prepared by computer and then saved to a computer disc, the Commission charges the direct costs, including operator time, of production of the disc or other output format. Where paper documents must be scanned in order to comply with a requester’s preference to receive the records in an electronic format, the requester shall pay the direct costs associated with scanning those materials. As set out in § 4.8(b), certain requesters do not pay for direct costs associated with duplicating the first 100 pages.
(3) The term review refers to the examination of documents located in response to a request to determine whether any portion of such documents may be withheld, and the redaction or other processing of documents for disclosure. Review costs are recoverable from commercial use requesters even if a record ultimately is not disclosed. Review time includes time spent considering formal objections to disclosure made by a business submitter but does not include time spent resolving general legal or policy issues regarding the release of the document.
(4) The term direct costs means expenditures that the Commission actually incurs in processing requests. Direct costs include the salary of the employee performing work (the basic rate of pay for the employee plus 16 percent of that rate to cover benefits) and the cost of operating duplicating machinery. Not included in direct costs are overhead expenses such as costs of document review facilities or the costs of heating or lighting such a facility or other facilities in which records are stored. The direct costs of specific services are set forth in § 4.8(b)(6).
(b) Fees. User fees pursuant to 31 U.S.C. 9701 and 5 U.S.C. 552(a) shall be charged according to this paragraph, unless the requester establishes the applicability of a public interest fee waiver pursuant to § 4.8(e). The chart summarizes the types of charges that apply to requester categories set out in paragraphs (b)(1)-(b)(3).
| Requester categories | Fee charged for all search time | Fee charged for all review time | Duplication charges |
|---|---|---|---|
| Commercial | Fee | Fee | Fee charged for all duplication. |
| Educational, Non-commercial Scientific Institution, or News Media | No charge | No charge | No charge for first 100 pages. |
| All other requesters (including members of the general public) | Fee after two hours | No charge | No charge for first 100 pages. |
(1) Commercial use requesters. Commercial use requesters will be charged for the direct costs to search for, review, and duplicate documents. A commercial use requester is a requester who seeks information for a use or purpose that furthers the commercial, trade, or profit interests of the requester or the person on whose behalf the request is made.
(2) Educational requesters, non-commercial scientific institution requesters, and representative of the news media. Requesters in these categories will be charged for the direct costs to duplicate documents, excluding charges for the first 100 pages.
(i) An educational institution is a preschool, a public or private elementary or secondary school, an institution of graduate higher education, an institution of undergraduate higher education, an institution of professional education, and an institution of vocational education, which operates a program or programs of scholarly research. To be in this category, a requester must show that the request is authorized by and is made under the auspices of a qualifying institution and that the records are sought to further the scholarly research of the institution and are not sought for a commercial or an individual use or goal.
(ii) A non-commercial scientific institution is an institution that is not operated on a commercial basis as that term is referenced in paragraph (b)(1) of this section, and that is operated solely to conduct scientific research the results of which are not intended to promote any particular product or industry.
(iii) A representative of the news media is any person or entity that gathers information of potential interest to a segment of the public, uses its editorial skills to turn the raw materials into a distinct work, and distributes that work to an audience. The term “news” means information that is about current events or that would be of current interest to the public. Examples of news media entities include television or radio stations broadcasting to the public at large and publishers of periodicals (but only in those instances where they can qualify as disseminators of news) who make their products available for purchase by or subscription by the general public or free distribution to the general public. These examples are not intended to be all-inclusive. As traditional methods of news delivery evolve (e.g., electronic dissemination of newspapers through telecommunications services), such alternative media shall be considered to be news-media entities. A freelance journalist shall be regarded as working for a news-media entity if the journalist can demonstrate a solid basis for expecting publication through that entity, whether or not the journalist is actually employed by the entity. A publication contract would provide a solid basis for such an expectation, but the past publication record of a requester may also be considered in making such a determination. To qualify for news media status, a request must not be for a nonjournalistic commercial use. A request for records supporting the news dissemination function of the requester is not considered a commercial use.
(3) Other requesters. Other requesters not described in paragraphs (b)(1) or (2) will be charged for the direct costs to search for and duplicate documents, except that the first 100 pages of duplication and the first two hours of search time shall be furnished without charge.
(4) Waiver of small charges. Notwithstanding the provisions of paragraphs (b)(1), (2), and (3) of this section, charges will be waived if the total chargeable fees for a request are under $25.00.
(5) Materials available without charge. These provisions do not apply to public records, including but not limited to Commission decisions, orders, and other public materials that may be made available to all requesters without charge.
(6)(i) Schedule of direct costs. The following uniform schedule of fees applies to records held by all constituent units of the Commission:
| Paper to paper copy (up to 8.5″ x 14″) | $0.14 per page. |
| Converting paper into electronic format (scanning) | Quarter hour rate of operator (Clerical, Other Professional, Attorney/Economist). |
| Other reproduction ( | Actual direct cost, including operator time. |
| Compact disc (CD) | $3.00 per disc. |
| DVD | $3.00 per disc. |
| Videotape cassette | $2.00 per cassette. |
| Conversion of existing fiche/film to paper | $0.14 per page. |
| Certification | $25.00 each. |
| Express Mail | U.S. Postal Service Market Rates. |
| Records maintained at Iron Mountain or Washington National Records Center facilities (records retrieval, refiling, et cetera) | Contract Rates. |
| Other Services as they arise | Market Rates. |
(ii) Search, review and duplication fees. Agency staff is divided into three categories: Clerical, attorney/economist, and other professional. Fees for search and review purposes, as well the costs of operating duplication machinery such as converting paper to electronic format (scanning), are assessed on a quarter-hourly basis, and are determined by identifying the category into which the staff member(s) conducting the search or review or duplication procedure belong(s), determining the average quarter-hourly wages of all staff members within that category, and adding 16 percent to reflect the cost of additional benefits accorded to government employees. The exact fees are calculated and announced periodically and are available from the Consumer Response Center, Federal Trade Commission, 600 Pennsylvania Avenue NW., Washington, DC 20580; (202) 326-2222.
(7) Untimely responses. (i) Except as provided in paragraphs (b)(7)(ii)-(iv) of this section, search fees for responding to a Freedom of Information Act request will not be assessed for responses that fail to comply with the time limits, as provided at 5 U.S.C. 552(a)(4)(A)(viii), § 4.11(a)(1)(ii) and § 4.11(a)(3)(ii), if there are no unusual or exceptional circumstances, as those terms are defined by 5 U.S.C. 552(a)(6) and § 4.11(a)(1)(ii). Except as provided below, duplication fees will not be assessed for an untimely response, where there are no unusual or exceptional circumstances, made to a requester qualifying for one of the fee categories set forth in paragraph (b)(2) of this section.
(ii) If the Commission has determined that unusual circumstances apply and has provided a timely written notice to the requester in accordance with 5 U.S.C. 552(a)(6)(B), the delay in a response is excused for an additional 10 days. If the Commission fails to comply with the extended time limit, it will not charge search fees (or, for a requester qualifying for one of the fee categories set forth in paragraph (b)(2) of this section, will not charge duplication fees).
(iii) If the Commission has determined that unusual circumstances apply and more than 5,000 pages are necessary to respond to the request, the agency may charge search fees (or, for requesters qualifying for one of the fee categories set forth in paragraph (b)(2) of this section, may charge duplication fees) if timely written notice has been provided to the requester and the agency has discussed with the requester via written mail, electronic mail, or telephone (or made not less than 3 good-faith attempts to do so) how the requester could effectively limit the scope of the request.
(iv) If a court determines that exceptional circumstances exist, the Commission’s failure to comply with a time limit shall be excused for the length of time provided by the court order.
(c) Information to determine fees. Each request for records shall set forth whether the request is made for either commercial or non-commercial purposes or whether the requester is an educational institution, a noncommercial scientific institution, or a representative of the news media. The deciding official (as designated by the General Counsel) will use this information, any additional information provided by the requester, and any other relevant information to determine the appropriate fee category in which to place the requester. See § 4.11(a)(3)(i)(A)(3) for procedures on appealing fee category and fee waiver determinations.
(d) Agreement to pay fees. (1) Each request that does not contain an application for a fee waiver as set forth in § 4.8(e) shall specifically indicate that the requester will either:
(i) Pay, in accordance with § 4.8(b), whatever fees may be charged for processing the request; or
(ii) Pay such fees up to a specified amount, whereby the processing of the request would cease once the specified amount has been reached.
(2) Each request that contains an application for a fee waiver shall specifically indicate whether the requester, in the case that the fee waiver is not granted, will:
(i) Pay, in accordance with § 4.8(b), whatever fees may be charged for processing the request;
(ii) Pay fees up to a specified amount, whereby the processing of the request would cease once the specified amount has been reached; or
(iii) Not pay fees, whereby the processing of the request will cease at the point fees are to be incurred in accordance with § 4.8(b).
(3) If the agreement required by this section is absent, and if the estimated fees exceed $25.00, the requester will be advised of the estimated fees and the request will not be processed until the requester agrees to pay such fees. If the requester does not respond to the notification that the estimated fees exceed $25.00 within 20 calendar days from the date of the notification, the request will be closed.
(e) Public interest fee waivers – (1) Procedures. A requester may apply for a waiver of fees. The requester shall explain in sufficient detail why a waiver is appropriate under the standards set forth in this paragraph. The application shall also include a statement, as provided by paragraph (d) of this section, of whether the requester agrees to pay costs if the waiver is denied. The deciding official (as designated by the General Counsel) will rule on applications for fee waivers. To appeal the deciding official’s determination of the fee waiver, a requester must follow the procedures set forth in § 4.11(a)(3).
(2) Standards. (i) The first requirement for a fee waiver is that disclosure will likely contribute significantly to public understanding of the operations or activities of the government. This requirement shall be met if the requester establishes that:
(A) The subject matter of the requested information concerns the operations or activities of the Federal government;
(B) The disclosure is likely to contribute to an understanding of these operations or activities;
(C) The understanding to which disclosure is likely to contribute is public understanding, as opposed to the understanding of the individual requester or a narrow segment of interested persons (e.g., by providing specific information about the requester’s expertise in the subject area of the request and about the ability and intention to disseminate the information to the public); and
(D) The likely contribution to public understanding will be significant.
(ii) The second requirement for a fee waiver is that the request not be primarily in the commercial interest of the requester. This requirement shall be met if the requester shows either:
(A) That the requester does not have a commercial interest that would be furthered by the requested disclosure; or
(B) If the requester does have a commercial interest that would be furthered by the requested disclosure, that the public interest in disclosure outweighs the identified commercial interest of the requester so that the disclosure is not primarily in the requester’s commercial interest.
(f) Searches that do not yield responsive records. Charges may be assessed for search time even if the agency fails to locate any responsive records or if it locates only records that are determined to be exempt from disclosure.
(g) Aggregating requests. If the deciding official (as designated by the General Counsel) initially, or the General Counsel on appeal, reasonably believes that a requester, or a group of requesters acting in concert, is attempting to evade an assessment of fees by dividing a single request into a series of smaller requests, the requests may be aggregated and fees charged accordingly.
(h) Advance payment. If the deciding official (as designated by the General Counsel) initially, or the General Counsel on appeal, estimates or determines that allowable charges that a requester may be required to pay are likely to exceed $250.00, or if the requester has previously failed to pay a fee within 30 days of the date of billing, the requester may be required to pay some or all of the total estimated charge in advance. Further, the requester may be required to pay all unpaid bills, including accrued interest, prior to processing the request.
(i) Means of payment. Payment shall be made either electronically through the Department of Treasury’s pay.gov Web site or by check or money order payable to the Treasury of the United States.
(j) Interest charges. The Commission will begin assessing interest charges on an unpaid bill starting on the 31st day following the day on which the bill was sent. Interest will accrue from the date of the billing, and will be calculated at the rate prescribed in 31 U.S.C. 3717.
(k) Effect of the Debt Collection Act of 1982 (Pub. L. 97-365), as amended by the Debt Collection Improvement Act of 1996 (Pub. L. 104-134). The Commission will pursue repayment, where appropriate, by employing the provisions of the Debt Collection Act of 1982, as amended by the Debt Collection Improvement Act of 1996, the Federal Claims Collection Standards (FCSS), 31 CFR 900-904, and any other applicable authorities in collecting unpaid fees assessed under this section, including disclosure to consumer reporting agencies and use of collection agencies. The FTC also reserves the legal right to employ other lawful debt collection methods such as alternative dispute resolution and arbitration when appropriate.
§ 4.9 The public record.
(a) General. (1) Materials on the public record of the Commission are available for public inspection and copying either from the Commission’s Web site or upon request.
(2) Materials that are exempt from mandatory public disclosure, or are otherwise not available from the Commission’s public record, may be made available only upon request under the procedures set forth in § 4.11, or as provided in §§ 4.10(d) through (g), 4.13, and 4.15(b)(3), or by the Commission.
(3) Electronic access to public records. The majority of recent Commission public records are available for review electronically on the Commission’s Web site on the Internet, www.ftc.gov. Copies of records that the Commission is required to make available to the public electronically, pursuant to 5 U.S.C. 552(a)(2), may be obtained in that format from http://www.ftc.gov/foia/readingroom.shtm.
(4) Requesting public records – (i) Procedures. Certain older public records may not be available at the FTC Web site. Any person may request copies of such records by contacting the FTC Reading Room by telephone at (202) 326-2222, extension 2. These requests shall specify as clearly and accurately as reasonably possible the records desired. For records that cannot be specified with complete clarity and particularity, requesters shall provide descriptions sufficient to enable qualified Commission personnel to locate the records sought. The Commission, the Supervisor of the Consumer Response Center, the General Counsel, or the deciding official (as designated by the General Counsel) may decide to provide only one copy of any public record and may refuse to provide copies to the requester if the records have been published or are publicly available at places other than the Commission’s offices.
(ii) Costs; agreement to pay costs. Requesters will be charged search and duplication costs prescribed by Rule 4.8 for requests under this section. All requests shall include a statement of the information needed to determine fees, as provided by § 4.8(c), and an agreement to pay fees (or a statement that the requester will not pay fees if a fee waiver is denied), as provided by § 4.8(d). Requests may also include an application for a fee waiver, as provided by § 4.8(e). Advance payment may be required, as provided by § 4.8(h).
(iii) Records for sale at another government agency. If requested materials are available for sale at another government agency, the requester will not be provided with copies of the materials but will be advised to obtain them from the selling agency. The U.S. Government Printing Office (“GPO”), the official bookstore for most U.S. Government publications, can be contacted at (202) 512-1800 or toll-free at (866) 512-1800, and at [email protected]. The GPO’s online store can be accessed at http://bookstore.gpo.gov and mail orders should be directed to U.S. Government Printing Office, P.O. Box 979050, St. Louis, MO 63197-9000.
(b) Categories. Except to the extent material is confidential, as provided in paragraph (c) of this section, the public record of the Commission includes, but is not necessarily limited to:
(1) Commission Organization and Procedures (16 CFR part 0 and §§ 4.14 through 4.15, 4.17). (i) A current index of opinions, orders, statements of policy and interpretations, administrative staff manuals, general instructions and other public records of the Commission;
(ii) A current record of the final votes of each member of the Commission in all matters of public record, including matters of public record decided by notational voting;
(iii) Descriptions of the Commission’s organization, including descriptions of where, from whom, and how the public may secure information, submit documents or requests, and obtain copies of orders, decisions and other materials;
(iv) Statements of the Commission’s general procedures and policies and interpretations, its nonadjudicative procedures, its rules of practice for adjudicative proceedings, and its miscellaneous rules, including descriptions of the nature and requirements of all formal and informal procedures available, and
(v) Reprints of the principal laws under which the Commission exercises enforcement or administrative responsibilities.
(2) Industry Guidance (16 CFR 1.1-1.6). (i) Any advice, advisory opinion or response given and required to be made public under §§ 1.4 and 2.41 (d) or (f) of this chapter (whether by the Commission or the staff), together with a statement of supporting reasons;
(ii) Industry guides, digests of advisory opinions and compliance advice believed to be of interest to the public generally and other administrative interpretations;
(iii) Transcripts of hearings in all industry guide proceedings, as well as written statements filed with or forwarded to the Commission in connection with these proceedings; and
(iv) Petitions filed with the Secretary of the Commission for the promulgation or issuance, amendment, or repeal of industry guides.
(3) Rulemaking (16 CFR 1.7 through 1.26). (i) Petitions filed with the Secretary of the Commission for the promulgation or issuance, amendment, or repeal of rules or regulations within the scope of §§ 1.7 and 1.21 of this chapter, and petitions for exemptions;
(ii) Notices and advance notices of proposed rulemaking and rules and orders issued in rulemaking proceedings; and
(iii) Transcripts of hearings of all rulemaking proceedings, all other materials that are distributed to the public during these proceedings, and written statements filed with or forwarded to the Commission in connection with these proceedings.
(4) Investigations. (i) Petitions to limit or quash compulsory process and the rulings thereon; and
(ii) Closing letters in initial phase and full phase investigations.
(5) Adjudicative proceedings, stay applications, requests to reopen, and litigated orders. (16 CFR 2.51, 3.1 through 3.24, 3.31 through 3.56, 3.71 through 3.72, 4.7) – Except for transcripts of matters heard in camera pursuant to § 3.45 and material filed in camera pursuant to §§ 3.22, 3.24, 3.45, 3.46, 3.51 and 3.52,
(i) The versions of pleadings and transcripts of prehearing conferences to the extent made available under § 3.21(e), motions, certifications, orders, and the transcripts of hearings (including public conferences), testimony, oral arguments, and other material made a part thereof, and exhibits and material received in evidence or made a part of the public record in adjudicative proceedings;
(ii) Initial decisions of administrative law judges;
(iii) Orders and opinions in interlocutory matters;
(iv) Final orders and opinions in adjudications, and rulings on stay applications, including separate statements of Commissioners;
(v) Petitions for reconsideration, and answers thereto, filed pursuant to § 3.55;
(vi) Applications for stay, answers thereto, and replies, filed pursuant to § 3.56;
(vii) Petitions, applications, pleadings, briefs, and other records filed by the Commission with the courts in connection with adjudicative, injunctive, enforcement, compliance, and condemnation proceedings, and in connection with judicial review of Commission actions, and opinions and orders of the courts in disposition thereof;
(viii) Records of ex parte communications in adjudicative proceedings and stay applications;
(ix) Petitions to reopen proceedings and orders to determine whether orders should be altered, modified, or set aside in accordance with § 2.51; and
(x) Decisions reopening proceedings, and orders to show cause under § 3.72.
(6) Consent agreements (16 CFR 2.31 through 2.34, 3.25). (i) Agreements containing orders, after acceptance by the Commission pursuant to §§ 2.34 and 3.25(f) of this chapter;
(ii) Comments and other materials filed or placed on the public record under §§ 2.34 and 3.25(f) concerning proposed consent agreements and related orders; and
(iii) Decisions and orders issued and served under §§ 2.34 and 3.25(f), including separate statements of Commissioners.
(7) Compliance/enforcement (16 CFR 2.33, 2.41). (i) Reports of compliance filed pursuant to the rules in this chapter or pursuant to a provision in a Commission order and supplemental materials filed in connection with these reports, except for reports of compliance, and supplemental materials filed in connection with Commission orders requiring divestitures or establishment of business enterprises of facilities, which are confidential until the last divestiture or establishment of a business enterprise or facility, as required by a particular order, has been finally approved by the Commission, and staff letters to respondents advising them that their compliance reports do not warrant any further action. At the time each such report is submitted the filing party may request confidential treatment in accordance with paragraph (c) of this section and the General Counsel or the General Counsel’s designee will pass upon such request in accordance with that paragraph;
(ii) Materials required to be made public under 16 CFR 2.41(f) in connection with applications for approval of proposed divestitures, acquisitions or similar transactions subject to Commission review under outstanding orders.
(8) Access to documents and meetings (16 CFR 4.8, 4.11, 4.13, 4.15). (i) Letters requesting access to Commission records pursuant to § 4.11(a) of this chapter and the Freedom of Information Act, 5 U.S.C. 552, and letters granting or denying such requests (not including access requests and answers thereto from the Congress or other government agencies);
(ii) Announcements of Commission meetings as required under the Sunshine Act, 5 U.S.C. 552b, including records of the votes to close such meetings;
(iii) Summaries or other explanatory materials relating to matters to be considered at open meetings made available pursuant to § 4.15(b)(3)
(iv) Commission minutes of open meetings, and, to the extent they are not exempt from mandatory public disclosure under the Sunshine Act or the Freedom of Information Act, portions of minutes or transcripts of closed meetings; and
(v) A guide for requesting records or information from the Commission, including an index of all major information systems, a description of major information and record locator systems maintained by the Commission, and a handbook for obtaining various types and categories of public information.
(9) Standards of conduct (16 CFR 5.5 through 5.6, 5.10 through 5.26, 5.31, 5.57 through 5.68). (i) Memoranda to staff elaborating or clarifying standards described in administrative staff manuals and part 5 of this subchapter.
(10) Miscellaneous (press releases, clearance requests, reports filed by or with the Commission, continuing guaranties, registered identification numbers). (i) Releases by the Commission’s Office of Public Affairs supplying information concerning the activities of the Commission;
(ii) Applications under § 4.1(b)(2) of this chapter for clearance or authorization to appear or participate in a proceeding or investigation and of the Commission’s responses thereto;
(iii) Continuing guaranties filed under the Wool, Fur, and Textile Acts;
(iv) Published reports by the staff or by the Commission on economic surveys and investigations of general interest;
(v) Filings by the Commission or by the staff in connection with proceedings before other federal agencies or state or local government bodies;
(vi) Registration statements and annual reports filed with the Commission by export trade associations, and bulletins, pamphlets, and reports with respect to such associations released by the Commission;
(vii) The identities of holders of registered identification numbers issued by the Commission pursuant to § 1.32 of this chapter;
(viii) The Commission’s annual report submitted after the end of each fiscal year, summarizing its work during the year (with copies obtainable from the Superintendent of Documents, U.S. Government Publishing Office, Washington, DC 20402) and any other annual reports made to Congress on activities of the Commission as required by law;
(ix) Records, as determined by the General Counsel or his or her designee, that have been released in response to a request made under the Freedom of Information Act, 5 U.S.C. 552, and which, because of the nature of the subject matter, have become or are likely to become the subject of subsequent requests for substantially the same records, or that have been requested three or more times, except where some or all of those records would be exempt from disclosure under 5 U.S.C. 552 if requested by another party;
(x) A general index of the records referred to under paragraph (b)(10)(ix) of this section;
(xi) Grants of early termination of waiting periods published in accordance with the Hart-Scott-Rodino premerger notification provisions of the Clayton Act, 15 U.S.C. 18a(b)(2);
(xii) Reports on appliance energy consumption or efficiency filed with the Commission pursuant to § 305.8 of this chapter;
(xiii) Annual filings by professional boxing sanctioning organizations as required by the Muhammed Ali Boxing Reform Act, 15 U.S.C. 6301 note, 6307a-6307h;
(xiv) All transcripts or other materials that are distributed by staff at public workshops;
(xv) Other documents that the Commission has determined to place on the public record; and
(xvi) Every amendment, revision, substitute, or repeal of any of the foregoing items listed in paragraphs (b)(1) through (10) of this section.
(c) Confidentiality and in camera material. (1) Persons submitting material to the Commission described in this section may designate that material or portions of it confidential and request that it be withheld from the public record. All requests for confidential treatment shall be supported by a showing of justification in light of applicable statutes, rules, orders of the Commission or its administrative law judges, orders of the courts, or other relevant authority. The General Counsel or the General Counsel’s designee will act upon such request with due regard for legal constraints and the public interest. No such material or portions of material (including documents generated by the Commission or its staff containing or reflecting such material or portions of material) will be placed on the public record until the General Counsel or the General Counsel’s designee has ruled on the request for confidential treatment and provided any prior notice to the submitter required by law.
(2) Motions seeking in camera treatment of material submitted in connection with a proceeding under part 3 of these rules, except stay applications under § 3.56, shall be filed with the Administrative Law Judge who is presiding over the proceeding. Requests for confidential treatment of material submitted in connection with a stay application shall be made in accordance with § 4.9(c)(1).
(3) To the extent that any material or portions of material otherwise falling within paragraph (b) of this section contain information that is not required to be made public under § 4.10 of this part, the General Counsel or the General Counsel’s designee may determine, with due regard for legal constraints and the public interest, to withhold such materials from the public record.
§ 4.10 Nonpublic material.
(a) The following records and other material of the Commission are not required to be made public pursuant to 5 U.S.C. 552.
(1) Records, except to the extent required to be disclosed under other laws or regulations, related solely to the internal personnel rules and practices of the Commission. This exemption applies to internal rules or instructions to Commission personnel which must be kept confidential in order to assure effective performance of the functions and activities for which the Commission is responsible and which do not affect members of the public.
(2) Trade secrets and commercial or financial information obtained from a person and privileged or confidential. As provided in section 6(f) of the Federal Trade Commission Act, 15 U.S.C. 46(f), this exemption applies to competitively sensitive information, such as costs or various types of sales statistics and inventories. It includes trade secrets in the nature of formulas, patterns, devices, and processes of manufacture, as well as names of customers in which there is a proprietary or highly competitive interest.
(3) Interagency or intra-agency memoranda or letters that would not routinely be available by law to a private party in litigation with the Commission, provided that the deliberative process privilege shall not apply to records created 25 years or more before the date on which the records are requested. This exemption preserves the existing freedom of Commission officials and employees to engage in full and frank communication with each other and with officials and employees of other governmental agencies. This exemption includes records of the deliberations of the Commission except for the record of the final votes of each member of the Commission in every agency proceeding. It includes intraagency and interagency reports, memorandums, letters, correspondence, work papers, and minutes of meetings, as well as staff papers prepared for use within the Commission or between the Commission and other governmental agencies. It also includes information scheduled for public release, but as to which premature release would be contrary to the public interest;
(4) Personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy except to the extent such files or materials must be disclosed under other laws or regulations. This exemption applies to personnel and medical records and similar records containing private or personal information concerning any individual which, if disclosed to any person other than the individual concerned or his designated legal representative without his permission in writing, would constitute a clearly unwarranted invasion of personal privacy. Examples of files exempt from disclosure include, but are not limited to:
(i) The personnel records of the Commission;
(ii) Files containing reports, records or other material pertaining to individual cases in which disciplinary or other administrative action has been or may be taken, including records of proceedings pertaining to the conduct or performance of duties by Commission personnel;
(5) Records or information compiled for law enforcement purposes, but only to the extent that production of such law enforcement records or information:
(i) Could reasonably be expected to interfere with enforcement proceedings;
(ii) Would deprive a person of a right to a fair trial or an impartial adjudication;
(iii) Could reasonably be expected to constitute an unwarranted invasion of personal privacy;
(iv) Could reasonably be expected to disclose the identity of a confidential source, including a State, local, or foreign agency or authority or any private institution that furnished information on a confidential basis, and, in the case of a record or information compiled by a criminal law enforcement authority in the course of a criminal investigation, or by an agency conducting a lawful national security intelligence investigation, information furnished by a confidential source;
(v) Would disclose techniques and procedures for law enforcement investigations or prosecutions, or would disclose guidelines for law enforcement investigations or prosecutions if such disclosure could reasonably be expected to risk circumvention of the law; or
(vi) Could reasonably be expected to endanger the life or physical safety of any individual.
(6) Information contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions;
(7) Geological and geophysical information and data, including maps, concerning wells; and
(8) Material, as that term is defined in section 21(a) of the Federal Trade Commission Act, which is received by the Commission:
(i) In an investigation, a purpose of which is to determine whether any person may have violated any provision of the laws administered by the Commission; and
(ii) Which is provided pursuant to any compulsory process under the Federal Trade Commission Act, 15 U.S.C. 41, et seq., or which is provided voluntarily in place of compulsory process in such an investigation. See section 21(f) of the Federal Trade Commission Act.
(9) Material, as that term is defined in section 21(a) of the Federal Trade Commission Act, which is received by the Commission pursuant to compulsory process in an investigation, a purpose of which is to determine whether any person may have violated any provision of the laws administered by the Commission. See section 21(b)(3)(C) of the Federal Trade Commission Act.
(10) Such other material of the Commission as may from time to time be designated by the Commission as confidential pursuant to statute or Executive Order. This exempts from disclosure any information that has been designated nonpublic pursuant to criteria and procedures prescribed by Executive Order and that has not been subsequently declassified in accordance with applicable procedures. The exemption also preserves the full force and effect of statutes that restrict public access to specific government records or material.
(11) Material in an investigation or proceeding that involves a possible violation of criminal law, when there is reason to believe that the subject of the investigation or proceeding is not aware of its pendency, and disclosure of the existence of the investigation could reasonably be expected to interfere with enforcement proceedings. When a request is made for records under § 4.11(a), the Commission may treat the records as not subject to the requirements of the Freedom of Information Act.
(b) With respect to information contained in transcripts of Commission meetings, the exemptions contained in paragraph (a) of this section, except for paragraphs (a)(3) and (a)(7) of this section, shall apply; in addition, such information will not be made available if it is likely to have any of the effects described in 5 U.S.C. 552b (c)(5), (c)(9), or (c)(10).
(c) Under section 10 of the Federal Trade Commission Act, any officer or employee of the Commission who shall make public any information obtained by the Commission, without its authority, unless directed by a court, shall be deemed guilty of a misdemeanor, and upon conviction thereof, may be punished by a fine not exceeding five thousand dollars ($5,000), or by imprisonment not exceeding 1 year, or by fine and imprisonment, in the discretion of the court.
(d) Except as provided in paragraphs (f) or (g) of this section or in § 4.11(b), (c), (d), (i), or (j), no material that is marked or otherwise identified as confidential and that is within the scope of § 4.10(a)(8), and no material within the scope of § 4.10(a)(9) that is not otherwise public, will be made available without the consent of the person who produced the material, to any individual other than a duly authorized officer or employee of the Commission or a consultant or contractor retained by the Commission who has agreed in writing not to disclose the information. All other Commission records may be made available to a requester under the procedures set forth in § 4.11 or may be disclosed by the Commission except where prohibited by law.
(e) Except as provided in paragraphs (f) or (g) of this section or in § 4.11(b), (c), (d), (i), or (j), material not within the scope of § 4.10(a)(8) or § 4.10(a)(9) that is received by the Commission and is marked or otherwise identified as confidential may be disclosed only if it is determined that the material is not within the scope of § 4.10(a)(2), and the submitter is provided at least ten days notice of the intent to disclose the material.
(f) Nonpublic material obtained by the Commission may be disclosed to persons other than the submitter in connection with the taking of oral testimony without the consent of the submitter only if the material or transcript is not within the scope of § 4.10(a)(2). If the material is marked confidential, the submitter will be provided 10 days’ notice of the intended disclosure or will be afforded an opportunity to seek an appropriate protective order.
(g) Material obtained by the Commission:
(1) Through compulsory process and protected by section 21(b) of the Federal Trade Commission Act, 15 U.S.C. 57b-2(b) or voluntarily in lieu thereof and designated by the submitter as confidential and protected by section 21(f) of the Federal Trade Commission Act, 15 U.S.C. 57b-2(f), and § 4.10(d) of this part; or
(2) That is designated by the submitter as confidential, and protected by section 21(c) of the Federal Trade Commission Act, 15 U.S.C. 57b-2(c), and § 4.10(e) of this part; or
(3) That is confidential commercial or financial information protected by section 6(f) of the Federal Trade Commission Act, 15 U.S.C. 46(f), and § 4.10(a)(2) of this part, may be disclosed in Commission administrative or court proceedings subject to Commission or court protective or in camera orders as appropriate. See §§ 1.18(b) and 3.45.
§ 4.11 Disclosure requests.
(a) Freedom of Information Act – (1) Initial requests – (i) Form and contents; time of receipt. (A) A request under the provisions of the Freedom of Information Act, 5 U.S.C. 552, as amended, for access to Commission records shall be in writing and transmitted by one of the following means: by the form located on the FTC’s FOIA Web site, found at www.ftc.gov; by email message to the FOIA email account at [email protected]; by facsimile transmission to (202) 326-2477; or by mail to the following address: Freedom of Information Act Request, Office of the General Counsel, Federal Trade Commission, 600 Pennsylvania Avenue NW., Washington, DC 20580.
(B) Failure to mark the envelope and the request in accordance with paragraph (a)(1)(i)(A) of this section, or the filing of a request for expedited treatment under paragraph (a)(1)(i)(G) of this section, will result in the request (or requests, if expedited treatment has been requested) as received on the date that the processing unit in the Office of General Counsel actually receives the request(s).
(C) Acknowledgment of requests. Once a FOIA request is properly received by the processing unit in the Office of the General Counsel, a letter acknowledging the receipt of the request shall be mailed to the requester if processing the request will likely take more than 5 business days.
(D) Identifiability. (1) A properly filed FOIA request shall reasonably describe the records sought with enough detail to enable the Commission to locate them with a reasonable amount of effort. Whenever possible, the request should include specific information about each record sought such as date, title, name, author, recipient, subject matter of the record, provide information regarding fees pursuant to § 4.8(c), and provide sufficient contact information for a response to be sent. Although a mailing address is generally required, an email address can suffice in some instances. The FOIA Office will consider requests to send responses by email.
(2) A denial of a request may state that the description required by paragraph (a)(2)(ii)(A) of this section is insufficient to allow identification and location of the records.
(E) Costs; agreement to pay costs. Requesters will be charged search, review, duplication and other chargeable direct costs as prescribed by § 4.8 for requests under this section. All requests shall include a statement of the information needed to determine fees, as provided by § 4.8(c), and an agreement to pay fees (or a statement that the requester will not pay fees if a fee waiver is denied), as provided by § 4.8(d). Requests may also include an application for a fee waiver, as provided by § 4.8(e). An advance payment may be required in appropriate cases as provided by § 4.8(h).
(F) Failure to agree to pay fees. If a request does not include an agreement to pay fees, and if the requester is notified of the estimated costs pursuant to § 4.8(d)(3), the request will be deemed not to have been received until the requester agrees to pay such fees. If a requester declines to pay fees within 20 calendar days and is not granted a fee waiver, the request will be denied.
(G) Expedited treatment. Requests may include an application for expedited treatment. Where such an application is not included with an initial request for access to records under paragraph (a)(1) of this section, the application may be included in any appeal of that request filed under paragraph (a)(3) of this section. Such application, which shall be certified by the requester to be true and correct to the best of such person’s knowledge and belief, shall describe the compelling need for expedited treatment, including an explanation as to why a failure to obtain the requested records on an expedited basis could reasonably be expected to pose an imminent threat to the life or physical safety of an individual, or, with respect to a request made by a person primarily engaged in disseminating information, an explanation of the urgency to inform the public concerning actual or alleged Federal Government activity. The deciding official (as designated by the General Counsel) will, within 10 calendar days of receipt of a request for expedited treatment, notify the requester, in writing, of the decision to either grant or deny the request for expedited treatment, and, if the request is denied, advise the requester that this determination may be appealed to the General Counsel.
(H) Records for sale at another government agency. If requested materials are available for sale at another government agency, the requester will not be provided with copies of the materials but will be advised to obtain them from the selling agency. The U.S. Government Printing Office (“GPO”), the official bookstore for most U.S. Government publications, can be contacted at (202) 512-1800 (for those in the Washington, DC area), toll-free at (866) 512-1800 and at [email protected]. The GPO’s online store can be accessed at http://bookstore.gpo.gov and mail orders should be directed to U.S. Government Printing Office, P.O. Box 979050, St. Louis, MO 63197-9000.
(ii) Time limit for initial determination. (A) The deciding official (as designated by the General Counsel) will, within 20 working days of the receipt of a request, or if applicable, the date that a request is properly filed, either grant or deny, in whole or in part, such request, unless the request has been granted expedited treatment in accordance with this section, in which case the request will be processed as soon as practicable. The date that a request is properly filed is the date on which the requester agrees to pay fees necessary for a response, reasonably describes the records sought, and provides sufficient contact information for a response to be sent. Any tolling of the 20-working day period will be done in compliance with the FOIA statute, as amended.
(B) Except in exceptional circumstances as provided in paragraph (a)(1)(ii)(C) of this section, the deciding official (as designated by the General Counsel) may extend the time limit by not more than 10 working days if such extension is:
(1) Necessary to search for and collect the records from field facilities or other establishments that are separate from the office processing the request; or
(2) Necessary to search for, collect, and appropriately examine a voluminous amount of separate and distinct records which are sought in a single or series of closely related requests; or
(3) Necessary for consultation with another agency having a substantial interest in the determination, or for consultation among two or more components of the Commission having substantial subject matter interest therein.
(C) If the deciding official (as designated by the General Counsel) extends the time limit for initial determination pursuant to paragraph (a)(1)(ii)(B) of this section, the requester will be notified in accordance with 5 U.S.C. 552(a)(6)(B). In exceptional circumstances, when the request cannot be processed within the extended time limit, the requester will be so notified and provided an opportunity to limit the scope of the request so that it may be processed within such time limit, or to arrange an alternative time frame for processing the request or a modified request. In exceptional circumstances, when the request cannot be processed within the extended time limit, the Commission will also make available the agency’s FOIA Public Liaison to assist in the resolution of any disputes and notify the requester of the right to seek dispute resolution services from the Office of Government Information Services. “Exceptional” circumstances will not include delays resulting from a predictable workload of requests under this section. Unwillingness to make reasonable modifications in the scope of the request or to agree to an alternative time frame may be considered as factors in determining whether exceptional circumstances exist and whether the agency has exercised due diligence in responding to the request.
(D) If the deciding official (as designated by the General Counsel) reasonably believes that requests made by a requester, or a group of requesters acting in concert, actually constitute a single request that would otherwise involve unusual circumstances, as specified in paragraph (a)(1)(ii)(B) of this section, and the requests involve clearly related matters, those multiple requests may be aggregated.
(E) If a request is not granted within the time limits set forth in paragraphs (a)(1)(ii)(A) and (B) of this section, the request shall be deemed to be denied and the requesting party may appeal such denial to the General Counsel in accordance with paragraph (a)(3) of this section.
(iii) Initial determination. (A) The deciding official (as designated by the General Counsel) will make reasonable efforts to search, using either manual or electronic means, for documents that exist as of the date of the receipt of a request for the requested records in electronic form or format, except when such efforts would significantly interfere with the operation of the Commission’s automated information systems. The deciding official will only withhold information if the agency reasonably foresees that disclosure would harm an interest protected by a FOIA exemption or disclosure is prohibited by law. The deciding official shall consider whether partial disclosure of information is possible whenever there is a determination that a full disclosure of a requested record is not possible and take reasonable steps necessary to segregate and release nonexempt information. Determination letters to a requester shall include the reasons therefor and the right of such person to seek assistance from the FTC’s FOIA Public Liaison. Denials will advise the requester that this determination may be appealed to the General Counsel not more than 90 days after the date of the determination if the requester believes either that the records are not exempt, or that the General Counsel should exercise discretion to release such records notwithstanding their exempt status. The deciding official (as designated by the General Counsel) will also provide a reasonable, good-faith estimate of the volume of any materials to which access is denied, unless providing such an estimate would harm an interest protected by an exemption in 5 U.S.C. 552(b) that was cited as a basis for withholding materials. In the case of an adverse determination, FOIA response letters will notify requesters that they may seek dispute resolution services from the FTC’s FOIA Public Liaison or from the Office of Government Information Services.
(B) The deciding official (as designated by the General Counsel) is deemed to be the sole official responsible for all denials of initial requests, except denials of access to materials contained in active investigatory files, in which case the Director or Deputy Director of the Bureau or the Director of the Regional Office responsible for the investigation will be the responsible official.
(C) Records to which access has been granted will be made available to the requester in any form or format specified by the requester, if the records are readily reproducible in that form or format, or can be converted to that form or format with a reasonable amount of effort. Certain records which are not easily copied or duplicated, such as tangible exhibits, will be made be available for inspection for a period not to exceed 30 days from date of notification to the requester unless the requester asks for and receives the consent of the deciding official (as designated by the General Counsel) to a longer period. Records assembled pursuant to a request will remain available only during this period and thereafter will be refiled. Appropriate fees may be imposed for any new or renewed request for the same records.
(D) If a requested record cannot be located from the information supplied, or is known to have been destroyed or otherwise disposed of, the requester shall be so notified. The requester will also be notified if a record that is part of an official agency file is lost or missing. If the person so requests, he will also be notified if the record should subsequently be located.
(2) FOIA Requester Service Center. If a requester has questions or comments about the FOIA process, the requester should call the FOIA Requester Service Center at (202) 326-2430 to either speak directly to a FOIA Case Officer or leave a voice message. A requester should also ask the FOIA Case Officer to speak with the FOIA Public Liaison if there are concerns about the quality of the service received, or seek mediation resolution assistance during the FOIA response process.
(3) Appeals to the General Counsel from initial denials – (i) Form and contents; time of receipt – (A)(1) If an initial request for expedited treatment is denied, the requester, at any time before the initial determination of the underlying request for records by the deciding official (as designated by the General Counsel) (or, if the request for expedited treatment was filed with any appeal filed under paragraph (a)(3)(i)(A)(2) of this section, at any time before the General Counsel’s determination on such an appeal), may appeal the denial of expedited treatment to the General Counsel.
(2) If an initial request for records is denied in its entirety, the requester may, within 90 days after the adverse determination, appeal such denial to the General Counsel. If an initial request is denied in part, the time for appeal will not expire until 90 days after the date of the final letter notifying the requester that all records to which access has been granted have been made available. In unusual circumstances, the General Counsel or his or her designee may extend the time to appeal.
(3) If an initial request for a fee waiver or reduction is denied, the requester may, within 30 days of the date of the letter notifying the requester of that decision, appeal such denial to the General Counsel. In unusual circumstances, the time to appeal may be extended by the General Counsel or his or her designee.
(4) The appeal shall be in writing and shall clearly refer to the adverse decision, or portions of the decision, being appealed; the appeal should include a copy of the initial request and a copy of the response to that initial request, if any. The appeal may be: mailed to Freedom of Information Act Appeal, Office of the General Counsel, Federal Trade Commission, 600 Pennsylvania Avenue NW., Washington, DC 20580; submitted by facsimile to (202) 326-3198; or emailed to [email protected].
(B) If the appeal is mailed, failure to mark the envelope and the appeal in accordance with paragraph (a)(3)(i)(A)(4) of this section will result in the appeal (and any request for expedited treatment filed with that appeal) being treated as received on the actual date of receipt by the Office of General Counsel.
(C) Each appeal to the General Counsel that requests him or her to exercise his discretion to release exempt records shall set forth the interest of the requester in the subject matter and the purpose for which the records will be used if the request is granted.
(ii) Time limit for appeal. (A)(1) Regarding appeals from initial denials of a request for expedited treatment, the General Counsel will either grant or deny the appeal expeditiously;
(2) Regarding appeals from initial denials of a request for records, the General Counsel will, within 20 working days of the Office of General Counsel’s receipt of such an appeal, either grant or deny it, in whole or in part, unless expedited treatment has been granted in accordance with this section, in which case the appeal will be processed expeditiously.
(B) The General Counsel may, by written notice to the requester in accordance with 5 U.S.C. 552(a)(6)(B), extend the time limit for deciding an appeal by not more than 10 working days pursuant to paragraph (a)(1)(ii)(B) of this section, provided that the amount of any extension utilized during the initial consideration of the request under that paragraph will be subtracted from the amount of additional time otherwise available. Where exceptional circumstances do not permit the processing of the appeal within the extended time limit, the notice and procedures set forth in paragraph (a)(1)(ii)(C) of this section shall apply.
(iii) Determination of appeal. (A) The General Counsel has the authority to grant or deny all appeals and to release as an exercise of discretion records exempt from mandatory disclosure under 5 U.S.C. 552(b). In unusual or difficult cases, the General Counsel may, in his or her sole discretion, refer an appeal to the Commission for determination. A denial of an appeal in whole or in part will set forth the basis for the denial; will include a reasonable, good-faith estimate of the volume of any materials to which access is denied, unless providing such an estimate would harm an interest protected by an exemption in 5 U.S.C. 552(b) that was cited as a basis for withholding materials; and will advise the requester that judicial review of the decision is available by civil suit in the district in which the requester resides, or has his principal place of business, or in which the agency records are situated, or in the District of Columbia.
(B) The General Counsel may designate a Deputy General Counsel to make any determination assigned to the General Counsel by paragraph (a) of this section. The General Counsel or the official designated by the General Counsel to make the determination shall be deemed solely responsible for the denial of all appeals, except where an appeal is denied by the Commission. In such instances, the Commission shall be deemed solely responsible for the denial.
(b) Requests from congressional committees and subcommittees. Requests from congressional committees and subcommittees for nonpublic material shall be referred to the General Counsel for presentation to the Commission, subject to the provisions in 5 U.S.C. 552(c) and FTC Act 21(b) that neither the Freedom of Information Act, 5 U.S.C. 552, nor the Federal Trade Commission Act, 15 U.S.C. 41, et seq., is authority to withhold information from Congress. Upon receipt of a request from a congressional committee or subcommittee, notice will be given to the submitter of any material marked confidential, or any material within the scope of § 4.10(a)(9), that is responsive to the request that the request has been received. No other notice need be provided prior to granting the request. The Commission will inform the committee or subcommittee that the submitter considers such information confidential.
(c) Requests from Federal and State law enforcement agencies. Requests from law enforcement agencies of the Federal and State governments for nonpublic records shall be addressed to a liaison officer, where the Commission has appointed such an officer, or if there is none, to the General Counsel. With respect to requests under this paragraph, the General Counsel, the General Counsel’s designee, or the appropriate liaison officer is delegated the authority to dispose of them. Alternatively, the General Counsel may refer such requests to the Commission for determination, except that requests must be referred to the Commission for determination where the Bureau having the material sought and the General Counsel do not agree on the disposition. Prior to granting access under this section to any material submitted to the Commission, the General Counsel, the General Counsel’s designee, or the liaison officer will obtain from the requester a certification that such information will be maintained in confidence and will be used only for official law enforcement purposes. The certificate will also describe the nature of the law enforcement activity and the anticipated relevance of the information to that activity. A copy of the certificate will be forwarded to the submitter of the information at the time the request is granted unless the agency requests that the submitter not be notified. Requests for material pursuant to compulsory process, or for voluntary testimony, in cases or matters in which the Commission is not a party will be treated in accordance with paragraph (e) of this section.
(d) Requests from Federal and State agencies for purposes other than law enforcement. Requests from Federal and State agencies for access to nonpublic records for purposes not related to law enforcement should be addressed to the General Counsel. The General Counsel or the General Counsel’s designee is delegated the authority to dispose of requests under this paragraph. Disclosure of nonpublic information will be made consistent with sections 6(f) and 21 of the FTC Act. Requests under this section shall be subject to the fee and fee waiver provisions of § 4.8. Requests for material pursuant to compulsory process, or for voluntary testimony, in cases or matters in which the Commission is not a party will be treated in accordance with paragraph (e) of this section.
(e) Requests for testimony, pursuant to compulsory process or otherwise, and requests for material pursuant to compulsory process, in cases or matters to which the Commission is not a party. (1) The procedures specified in this section will apply to compulsory process and requests for voluntary testimony directed to Commission employees, except special government employees, that relate in any way to the employees’ official duties. These procedures will also apply to compulsory process and requests for voluntary testimony directed to former Commission employees or to current or former special government employees of the Commission that seek nonpublic materials or information acquired during Commission employment. The provisions of paragraph (e)(3) of this section will also apply when requests described above are directed to the Commission. For purposes of this section, the term testimony includes any written or oral statement by a witness, such as depositions, affidavits, declarations, and statements at a hearing or trial; the term nonpublic includes any material or information which, under § 4.10, is not required to be made public; the term employees, except where otherwise specified, includes special government employees and other Commission employees; and the term special government employees includes consultants and other employees as defined by section 202 of title 18 of the United States Code.
(2) Any employee or former employee who is served with compulsory process shall promptly advise the General Counsel of its service, the nature of the material or information sought, and all relevant facts and circumstances. This notification requirement also applies to any employee or former employee whose testimony is sought on a voluntary basis under the conditions set forth in paragraph (e)(1) of this section.
(3) A party who causes compulsory process to be issued to, or who requests testimony by, the Commission or any employee or former employee of the Commission shall furnish a statement to the General Counsel, unless, with respect to a request by a Federal or State agency, the General Counsel determines, as a matter of discretion, to waive this requirement. The statement shall set forth the party’s interest in the case or matter, the relevance of the desired testimony or material, and a discussion of whether it is reasonably available from other sources. If testimony is desired, the statement shall also contain a general summary of the testimony and a discussion of whether Commission records could be produced and used in its place. Any authorization for testimony will be limited to the scope of the demand as summarized in such statement.
(4) Absent authorization from the General Counsel, the employee or former employee shall respectfully decline to produce requested material or to disclose requested information. The refusal should be based on this paragraph and on United States ex rel. Touhy v. Ragen, 340 U.S. 462 (1951).
(5) The General Counsel will consider and act upon compulsory process and requests for voluntary testimony under this section with due regard for statutory restrictions, the Commission’s rules and the public interest, taking into account such factors as the need to conserve the time of employees for conducting official business; the need to avoid spending the time and money of the United States for private purposes; the need to maintain impartiality between private litigants in cases where a substantial government interest is not involved; and the established legal standards for determining whether justification exists for the disclosure of confidential information and material.
(6) Invitations to testify before Congressional committees or subcommittees or to testify before other government bodies on the possible effects of legislative and regulatory proposals are not subject to paragraphs (e)(1) through (5) of this section.
(f) Requests by current or former employees to use nonpublic memoranda as writing samples shall be addressed to the General Counsel. The General Counsel or the General Counsel’s designee is delegated the authority to dispose of such requests consistent with applicable nondisclosure provisions, including sections 6(f) and 21 of the FTC Act.
(g) Employees are encouraged to engage in teaching, lecturing, and writing that is not prohibited by law, Executive order, or regulation. However, an employee shall not use information obtained as a result of his Government employment, except to the extent that such information has been made available to the general public or will be made available on request, or when the General Counsel or the General Counsel’s designee gives written authorization for the use of nonpublic information on the basis that the use is in the public interest.
(h) The General Counsel (or General Counsel’s designee) may authorize a Commission member, other Commission official, or Commission staff to disclose an item or category of information from Commission records not currently available to the public for routine inspection and copying under Rule 4.9(b) where the General Counsel (or General Counsel’s designee) determines that such disclosure would facilitate the conduct of official agency business and would not otherwise be prohibited by applicable law, order, or regulation. Requests for such determinations shall be set forth in writing and, in the case of staff requests, shall be forwarded to the General Counsel (or General Counsel’s designee) through the relevant Bureau. In unusual or difficult cases, the General Counsel may refer the request to the Commission for determination.
(i) The Director of the Bureau of Competition is authorized, without power of redelegation, to respond to access requests for records and other materials pursuant to an agreement under the International Antitrust Enforcement Assistance Act, 15 U.S.C. 6201 et seq. Before responding to such a request, the Bureau Director shall transmit the proposed response to the Secretary and the Secretary shall notify the Commission of the proposed response. If no Commissioner objects within three days following the Commission’s receipt of such notification, the Secretary shall inform the Bureau Director that he or she may proceed.
(j)(1) The procedures specified in this section apply to disclosures of certain records to foreign law enforcement agencies in specified circumstances in accordance with the U.S. SAFE WEB Act of 2006. Nothing in this section authorizes the disclosure of material obtained in connection with the administration of the Federal antitrust laws or foreign antitrust laws, as defined in paragraph (j)(5)(i) of this section.
(2) Requests from foreign law enforcement agencies, as defined in paragraph (j)(5)(ii) of this section, for nonpublic records shall be addressed to the Director of the Office of International Affairs or the Director’s designee, who shall forward them to the General Counsel with recommendations for disposition after obtaining any required certification described in paragraph (j)(3) of this section and approval of the Bureau of Consumer Protection. With respect to requests under this paragraph, the General Counsel or the General Counsel’s designee is delegated the authority to dispose of them. Alternatively, the General Counsel may refer such requests to the Commission for determination, except that requests must be referred to the Commission for determination where the Bureau of Consumer Protection or the Office of International Affairs disagrees with the General Counsel’s proposed disposition.
(3) Access under this section to any material subject to the disclosure restrictions in sections 6(f) or 21(b) of the FTC Act or § 4.10(d) may not be granted unless –
(i) An appropriate official of the foreign law enforcement agency has certified, either by prior agreement or memorandum of understanding or by other written certification, that such material will be maintained in confidence and will be used only for official law enforcement purposes; and
(ii)(A) The foreign law enforcement agency has set forth a bona fide legal basis for its authority to maintain the material in confidence;
(B) The materials are to be used for purposes of investigating, or engaging in enforcement proceedings related to, possible violations of:
(1) Foreign laws prohibiting fraudulent or deceptive commercial practices, or other practices substantially similar to practices prohibited by any law administered by the Commission;
(2) A law administered by the Commission, if disclosure of the material would further a Commission investigation or enforcement proceeding; or
(3) With the approval of the Attorney General, other foreign criminal laws, if such foreign criminal laws are offenses defined in or covered by a criminal mutual legal assistance treaty in force between the government of the United States and the foreign law enforcement agency’s government;
(C) The appropriate Federal banking agency, (as defined in section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)) or, in the case of a Federal credit union, the National Credit Union Administration has given its prior approval if the materials to be provided under paragraph (j)(3)(ii)(B) of this section are requested by the foreign law enforcement agency for the purpose of investigating, or engaging in enforcement proceedings based on, possible violations of law by a bank, a savings and loan institution described in section 18(f)(3) of the Federal Trade Commission Act (15 U.S.C. 57a(f)(3)), or a Federal credit union described in section 18(f)(4) of the Federal Trade Commission Act (15 U.S.C. 57a(f)(4)); and
(D) The foreign law enforcement agency is not from a foreign state that the Secretary of State has determined, in accordance with section 6(j) of the Export Administration Act of 1979 (50 U.S.C. App. 2405(j)), has repeatedly provided support for acts of international terrorism, unless and until such determination is rescinded pursuant to section 6(j)(4) of that Act (50 U.S.C. App. 2405(j)(4)).
(4) A copy of the certificate described in paragraph (j)(3) of this section will be forwarded to the submitter of the information at the time the request is granted unless the foreign law enforcement agency requests that the submitter not be notified.
(5) For purposes of this section:
(i) “Federal antitrust laws” and “foreign antitrust laws” are to be interpreted as defined in paragraphs (5) and (7), respectively, of section 12 of the International Antitrust Enforcement Assistance Act of 1994 (15 U.S.C. 6211); and
(ii) “Foreign law enforcement agency” is defined as:
(A) Any agency or judicial authority of a foreign government, including a foreign state, a political subdivision of a foreign state, or a multinational organization constituted by and comprised of foreign states, that is vested with law enforcement or investigative authority in civil, criminal, or administrative matters and
(B) Any multinational organization, to the extent that it is acting on behalf of an entity described in paragraph (j)(5)(i)(A) of this section.
§ 4.12 Disposition of documents submitted to the Commission.
(a) Material submitted to the Commission. (1) Any person who has submitted material to the Commission may obtain, on request, the return of material submitted to the Commission which has not been received into evidence:
(i) After the close of the proceeding in connection with which the material was submitted; or
(ii) When no proceeding in which the material may be used has been commenced within a reasonable time after completion of the examination and analysis of all such material and other information assembled in the course of the investigation.
(2) Such request shall be in writing, addressed to the custodian designated pursuant to § 2.16 or the Secretary of the Commission in all other circumstances, and shall reasonably describe the material requested. A request for return of material may be filed at any time, but material will not be returned nor will commitments to return material be undertaken prior to the time described in this paragraph.
(b) Commission-made copies of documents submitted to the Commission. The Commission will not return to the submitter copies of documents made by the Commission unless, upon a showing of extraordinary circumstances, the Commission determines that return would be required in the public interest.
(c) Disposition of material not returned. Subsequent to the time prescribed in paragraph (a) of this section, the staff will examine all submitted material and Commission-made copies of documents located in a reasonable search of the Commission’s files and will determine, consistent with the Federal Records Act, 44 U.S.C. 3301, which materials are appropriate for preservation as evidence of the organization, functions, policies, decisions, procedures, operations, or other activities of the Commission or because of the information value of data in them. The Commission will dispose of all material determined not to be appropriate for preservation in accordance with applicable regulations of the National Archives and Records Administration.
§ 4.13 Privacy Act rules.
(a) Purpose and scope. (1) This section is promulgated to implement the Privacy Act of 1974 (Pub. L. 93-579, 5 U.S.C. 552a) by establishing procedures whereby an individual can, as to all systems of records maintained by the Commission except those set forth in § 4.13(m) as exempt from disclosure, (i) Request notification of whether the Commission maintains a record pertaining to him in any system of records, (ii) request access to such a record or to an accounting of its disclosure, (iii) request that the record be amended or corrected, and (iv) appeal an initial adverse determination of any such request. This section also establishes those systems of records that are specifically exempt from disclosure and from other requirements.
(2) The procedures of this section apply only to requests by an individual as defined in § 4.13(b). Except as otherwise provided, they govern only records containing personal information in systems of records for which notice has been published by the Commission in the
(b) Definitions. The following definitions apply to this section only:
(1) Individual means a natural person who is a citizen of the United States or an alien lawfully admitted for permanent residence.
(2) Record means any item, collection, or grouping of personal information about an individual that is maintained by the Commission, including, but not limited to, his education, financial transactions, medical history, and criminal or employment history and that contains his name, or the identifying number, symbol, or other identifying particular assigned to the individual, such as a finger or voice print or a photograph, but does not include information concerning proprietorships, businesses, or corporations.
(3) System of records means a group of any records under the control of the Commission from which information is retrieved by the name of the individual or by some identifying number, symbol, or other identifying particular assigned to the individual, for which notice has been published by the Commission in the
(c) Procedures for requests pertaining to individual records in a record system. An individual may request access to his or her records or any information pertaining to that individual in a system of records, and notification of whether and to whom the Commission has disclosed a record for which an accounting of disclosures is required to be kept and made available to the individual, using the procedures of this section. Requests for the disclosure of records under this section or to determine whether a system of records contains records pertaining to an individual or to obtain an accounting of disclosures, shall be in writing and if mailed, addressed as follows:
(d) Times, places, and requirements for identification of individuals making requests. Verification of identity of persons making written requests to the deciding official (as designated by the General Counsel) ordinarily will not be required. The signature on such requests will be deemed a certification by the signatory that he or she is the individual to whom the record pertains or is the parent or guardian of a minor or the legal guardian of the individual to whom the record pertains. The deciding official (as designated by the General Counsel) may require additional verification of a requester’s identity when such information is reasonably necessary to assure that records are not improperly disclosed; provided, however, that no verification of identity will be required if the records sought are publicly available under the Freedom of Information Act.
(e) Disclosure of requested information to individuals. Within 10 working days of receipt of a request under § 4.13(c), the deciding official (as designated by the General Counsel) will acknowledge receipt of the request. Within 30 working days of the receipt of a request under § 4.13(c), the deciding official (as designated by the General Counsel) will inform the requester whether a system of records containing retrievable information pertaining to the requester exists, and if so, either that the request has been granted or that the requested records or information is exempt from disclosure pursuant to § 4.13(m). When, for good cause shown, the deciding official (as designated by the General Counsel) is unable to respond within 30 working days of the receipt of the request, that official will notify the requester and inform him or her approximately when a response will be made.
(f) Special procedures: Medical records. When the deciding official (as designated by the General Counsel) determines that disclosure of a medical or psychological record directly to a requesting individual could have an adverse effect on the individual, he or she will require the individual to designate a medical doctor to whom the record will be transmitted.
(g) Request for correction or amendment of record. An individual to whom access to his records or any information pertaining to him in a system of records has been granted may request that any portion thereof be amended or corrected because he believes it is not accurate, relevant, timely, or complete. An initial request for correction or amendment of a record shall be in writing whether presented in person or by mail, and if by mail, addressed as in § 4.13(c). In making a request under this subsection, the requesting party shall state the nature of the information in the record the individual believes to be inaccurate, irrelevant, untimely, or incomplete, the correction or amendment desired, and the reasons therefore.
(h) Agency review of request for correction or amendment of record. Whether presented in person or by mail, requests under § 4.13(g) will be acknowledged by the deciding official (as designated by the General Counsel) within 10 working days of the receipt of the request if action on the request cannot be completed and the individual notified of the results within that time. Thereafter, the deciding official (as designated by the General Counsel) will promptly either make the requested amendment or correction or inform the requester of his refusal to make the amendment or correction, the reasons for the refusal, and the requester’s right to appeal that refusal in accordance with § 4.13(i).
(i) Appeal of initial adverse agency determination. (1) If an initial request filed under § 4.13(c) or § 4.13(g) is denied, the requester may appeal that denial to the General Counsel. The appeal shall be in writing and addressed as follows:
(2)(i) If the General Counsel refuses to amend or correct the record in accordance with a request under § 4.13(g), the General Counsel will notify the requester of that decision and inform the requester of the right to file with the deciding official (as designated by the General Counsel) a concise statement setting forth the reasons for the requester’s disagreement with the General Counsel’s determination and the fact that the requester’s statement will be treated as set forth in paragraph (i)(2)(ii) of this section. The General Counsel will also inform the requester that judicial review of the decision is available by a civil suit in the district in which the requester resides, or has his principal place of business, or in which the agency records are situated, or in the District of Columbia.
(ii) If the individual files a statement disagreeing with the General Counsel’s determination not to amend or correct a record, such disagreement will be clearly noted in the record involved and the individual’s statement will be made available to anyone to whom the record has been disclosed after September 27, 1975, or is subsequently disclosed together with, if the General Counsel deems it appropriate, a brief statement of his or her reasons for declining to amend the record.
(j) Disclosure of record to person other than the individual to whom it pertains. Except as provided by 5 U.S.C. 552a(b), the written request or prior written consent of the individual to whom a record pertains, or of his parent if a minor, or legal guardian if incompetent, shall be required before such record is disclosed. If the individual elects to inspect a record in person and desires to be accompanied by another person, the deciding official (as designated by the General Counsel) may require the individual to furnish a signed statement authorizing disclosure of his or her record in the presence of the accompanying named person.
(k) Fees. No fees will be charged for searching for a record, reviewing it, or for copies of records made by the Commission for its own purposes incident to granting access to a requester. Copies of records to which access has been granted under this section may be obtained by the requester from the deciding official (as designated by the General Counsel) on payment of the reproduction fees provided in § 4.8(b)(6).
(l) Penalties. Section 552a(i)(3) of the Privacy Act, 5 U.S.C. 552a(i)(3), makes it a misdemeanor, subject to a maximum fine of $5,000, to knowingly and willfully request or obtain any record concerning an individual under false pretenses. Sections 552a(i) (1) and (2) of the Privacy Act, 5 U.S.C. 552a(i) (1) and (2), provide penalties for violations by agency employees of the Privacy Act or regulations established thereunder. Title 18 U.S.C. 1001, Crimes and Criminal Procedures, makes it a criminal offense, subject to a maximum fine of $10,000 or imprisonment for not more than 5 years or both, to knowingly and willfully make or cause to be made any false or fraudulent statements or representations in any matter within the jurisdiction of any agency of the United States.
(m) Specific exemptions. (1) Pursuant to 5 U.S.C. 552a(j)(2), investigatory materials maintained by an agency component in connection with any activity relating to criminal law enforcement in the following systems of records are exempt from all subsections of 5 U.S.C. 552a, except (b), (c)(1) and (2), (e)(4)(A) through (F), (e)(6), (7), (9), (10), and (11), and (i), and from the provisions of this section, except as otherwise provided in 5 U.S.C. 552a(j)(2):
(i) I-7 – Office of Inspector General Investigative Files – FTC.
(ii) [Reserved]
(2) Pursuant to 5 U.S.C. 552a(k)(2), investigatory materials compiled for law enforcement purposes in the following systems of records are exempt from subsections (c)(3), (d), (e)(1), (e)(4)(G), (H), and (I), and (f) of 5 U.S.C. 552a, and from the provisions of this section, except as otherwise provided in 5 U.S.C. 552a(k)(2):
(i) I-1 – Nonpublic Investigational and Other Nonpublic Legal Program Records – FTC.
(ii) I-2 – Disciplinary Action Investigatory Files – FTC.
(iii) I-4 – Clearance Application and Response Files – FTC.
(iv) I-5 – Matter Management System – FTC.
(v) I-7 – Office of Inspector General Investigative Files – FTC.
(vi) I-8 – Stenographic Reporting Services Request System – FTC.
(vii) II-3 – Worker’s Compensation – FTC.
(viii) II-6 – Discrimination Complaint System – FTC.
(ix) IV-1 – Consumer Information System – FTC.
(x) V-1 – Freedom of Information Act Requests and Appeals – FTC.
(xi) V-2 – Privacy Act Requests and Appeals – FTC.
(xii) VII-6 – Document Management and Retrieval System – FTC.
(3) Pursuant to 5 U.S.C. 552a(k)(5), investigatory materials compiled to determine suitability, eligibility, or qualifications for Federal civilian employment, military service, Federal contracts, or access to classified information, but only where disclosure would reveal the identity of a confidential source of information, in the following systems of records are exempt from subsections (c)(3), (d), (e)(1), (e)(4)(G), (H), and (I), and (f) of 5 U.S.C. 552a, and from the provisions of this section, except as otherwise provided in 5 U.S.C. 552a(k)(5):
(i) II-4 – Employment Application-Related Records – FTC.
(ii) II-11 – Personnel Security, Identity Management and Access Control Records System – FTC.
§ 4.14 Conduct of business.
(a) Matters before the Commission for consideration may be resolved either at a meeting under § 4.15 or by written circulation. Any Commissioner may direct that a matter presented for consideration be placed on the agenda of a Commission meeting.
(b) A majority of the members of the Commission in office and not recused from participating in a matter (by virtue of 18 U.S.C. 208 or otherwise) constitutes a quorum for the transaction of business in that matter.
(c) Any Commission action, either at a meeting or by written circulation, may be taken only with the affirmative concurrence of a majority of the participating Commissioners, except where a greater majority is required by statute or rule or where the action is taken pursuant to a valid delegation of authority. No Commissioner may delegate the authority to determine his or her vote in any matter requiring Commission action, but authority to report a Commissioner’s vote on a particular matter resolved either by written circulation, or at a meeting held in the Commissioner’s absence, may be vested in a member of the Commissioner’s staff.
§ 4.15 Commission meetings.
(a) In general. (1) Meetings of the Commission, as defined in 5 U.S.C. 552b(a)(2), are held at the principal office of the Commission, unless otherwise directed.
(2) Initial announcements of meetings. For each meeting, the Commission shall announce:
(i) The time, place and subject matter of the meeting,
(ii) Whether the meeting will be open or closed to the public, and
(iii) The name and phone number of the official who will respond to requests for information about the meeting.
(3) Announcements of changes in meetings. Following the announcement of a meeting, any change in the time, place or subject matter will be announced at the earliest practicable time, and, except with respect to meetings closed under paragraph (c)(2) of this section, any change in the subject matter or decision to open or close a meeting shall be made only as provided in 5 U.S.C. 552b(e)(2).
(4) Deletions from announcements. The requirements of paragraphs (a)(2) and (a)(3) of this section do not require the disclosure of any information pertaining to a portion of a closed meeting where such disclosure is likely to concern a matter within the scope of 5 U.S.C. 552b(c).
(5) Dissemination of notices. Notices required under paragraphs (a)(2) and (a)(3) of this section will be posted at the principal office of the Commission, recorded on a telephone message device, and, except as to notices of meetings closed under paragraph (c)(2) of this section, submitted to the
(b) Open meetings. (1) Commission meetings shall be open to public observation unless the Commission determines that portions may be closed pursuant to 5 U.S.C. 552b(c).
(2) Any person whose interest may be directly affected if a portion of a meeting is open, may request that the Commission close that portion for any of the reasons described in 5 U.S.C. 552b(c). The Commission shall vote on such requests if at least one member desires to do so. Such requests shall be in writing, filed at the earliest practicable time, and describe how the matters to be discussed will have any of the effects enumerated in 5 U.S.C. 552b(c). Requests shall be addressed as follows:
(3) The Commissioner to whom a matter has been assigned for presentation to the Commission shall have the authority to make available to the public, prior to consideration of that matter at an open meeting, material sufficient to inform the public of the issues likely to be discussed in connection with that matter.
(c) Closed meetings. (1) Whenever the Commission votes to close a meeting or series of meetings under these rules, it shall make publicly available within one day notices both of such vote and the General Counsel’s determination regarding certification under 5 U.S.C. 552b(f)(1). Such determination by the General Counsel shall be made prior to the Commission vote to close a meeting or series of meetings. Further, except with respect to meetings closed under paragraph (c)(2) of this section, the Commission shall make publicly available within one day a full written explanation of its action in closing any meeting, and a list specifying the names and affiliations of all persons expected to attend, except Commission employees and consultants and any stenographer or court reporter attending for the sole purpose of preparing a verbatim transcript. All Commission employees and consultants may attend nonadjudicative portions of any closed meeting and members of Commissioners’ personal staffs, the General Counsel and his staff, and the Secretary and his staff may attend the adjudicative portions of any closed meeting except to the extent the notice of a particular closed meeting otherwise specifically provides. Stenographers or court reporters may attend any closed meeting at which their services are required by the Commission.
(2) If a Commission meeting, or portions thereof, may be closed pursuant to 5 U.S.C. 552b(c)(10), the Commission may, by vote recorded at the beginning of the meeting, or portion thereof, close the portion or portions of the meeting so exempt.
(3) Closed meeting transcripts or minutes required by 5 U.S.C. 552b(f)(1) will be released to the public insofar as they contain information that either is not exempt from disclosure under 5 U.S.C. 552b(c), or, although exempt, should be disclosed in the public interest. The Commission will determine whether to release, in whole or in part, the minutes of its executive sessions to consider oral arguments. With regard to all other closed meetings, the General Counsel or the General Counsel’s designee shall determine, in accordance with § 4.9(c), which portions of the transcripts or minutes may be released.
(d) The presiding officer shall be responsible for preserving order and decorum at meetings and shall have all powers necessary to that end.
§ 4.16 Privilege against self-incrimination.
Section 2.11 of Pub. L. 91-462 specifically repeals paragraph 7 of section 9 of the Federal Trade Commission Act. Title 18, section 6002, of the United States Code provides that whenever a witness refuses, on the basis of his privilege against self-incrimination, to testify or provide other information in a proceeding before or ancillary to:
(a) A court or grand jury of the United States,
(b) An agency of the United States, or
(c) Either House of Congress, a joint committee of the two Houses, or a committee or a subcommittee of either House, and the person presiding over the proceeding communicates to the witness an order issued under section 6004, the witness may not refuse to comply with the order on the basis of his privilege against self-incrimination; but no testimony or other information compelled under the order (or any information directly or indirectly derived from such testimony or other information) may be used against the witness in any criminal case, except a prosecution for perjury, giving a false statement, or otherwise failing to comply with the order. Title 18, section 6004, of the United States Code provides that:
(1) In the case of any individual who has been or who may be called to testify or provide other information at any proceeding before an agency of the United States, the agency may, with the approval of the Attorney General, issue, in accordance with subsection (b) of section 6004, an order requiring the individual to give testimony or provide other information which he refused to give or provide on the basis of his privilege against self-incrimination, such order to become effective as provided in title 18, section 6002, of the United States Code;
(2) An agency of the United States may issue an order under subsection (a) of section 6004 only if in its judgment
(i) The testimony or other information from such individual may be necessary to the public interest; and
(ii) Such individual has refused or is likely to refuse to testify or provide other information on the basis of his privilege against self-incrimination.
§ 4.17 Disqualification of Commissioners.
(a) Applicability. This section applies to all motions seeking the disqualification of a Commissioner from any adjudicative or rulemaking proceeding.
(b) Procedures. (1) Whenever any participant in a proceeding shall deem a Commissioner for any reason to be disqualified from participation in that proceeding, such participant may file with the Secretary a motion to the Commission to disqualify the Commissioner, such motion to be supported by affidavits and other information setting forth with particularity the alleged grounds for disqualification.
(2) Such motion shall be filed at the earliest practicable time after the participant learns, or could reasonably have learned, of the alleged grounds for disqualification.
(3)(i) Such motion shall be addressed in the first instance by the Commissioner whose disqualification is sought.
(ii) In the event such Commissioner declines to recuse himself or herself from further participation in the proceeding, the Commission shall determine the motion without the participation of such Commissioner.
(c) Standards. Such motion shall be determined in accordance with legal standards applicable to the proceeding in which such motion is filed.
PART 5 – STANDARDS OF CONDUCT
Subpart A – Employee Conduct Standards and Financial Conflicts of Interest
§ 5.1 Cross-reference to executive branch-wide regulations.
Commissioners and employees, including special government employees, of the Federal Trade Commission (FTC) are subject to and should refer to the “Standards of Ethical Conduct for Employees of the Executive Branch” at 5 CFR part 2635 (“executive branch-wide Standards of Conduct”) and to the FTC regulations at 5 CFR 5701 that supplement the executive branch-wide Standards of Conduct.
§ 5.2 Exemption of insubstantial financial conflicts.
(a) An employee or special Government employee will not be subject to remedial or disciplinary action or to criminal prosecution under 18 U.S.C. 208(a), if he makes a full disclosure in writing to the official responsible for his appointment of the nature and circumstances of the particular matter involved and of his conflicting financial interest relating thereto, and receives in advance a written determination made by such official that the interest is not so substantial as to be deemed likely to affect the integrity of the services which the Government may expect from the employee or special Government employee.
(b) For the purposes of paragraph (a) of this section, the “official responsible for appointment” shall be the Executive Director in all cases where the employee is classified at grade GS-15 or below, or at a comparable pay level, except that each Commissioner shall be the “official responsible for appointment” of advisors in the Commissioner’s immediate office.
(c) In all other cases, the Chairman shall be the “official responsible for appointment.”
(d) Pursuant to 5 CFR part 2640, certain financial interests are exempted from the provisions of 18 U.S.C. 208(a) as being too remote too inconsequential to affect the integrity of an employee’s services.
Subpart B – Financial Disclosure Requirements
§ 5.10 Cross-reference to executive branch-wide regulations.
Commissioners and employees, including special government employees, of the Federal Trade Commission are subject to and should refer to the executive branch-wide financial disclosure regulations at 5 CFR part 2634, and to the procedures for filing and review of financial disclosure reports found in Chapter 3 of the FTC Administrative Manual.
Subparts C-D [Reserved]
Subpart E – Disciplinary Actions Concerning Postemployment Conflict of Interest
§ 5.51 Scope and applicability.
These regulations establish procedures for investigating and determining alleged violations of 18 U.S.C. 207 (postemployment restrictions applicable to federal employees) or regulations issued by the Office of Government Ethics, set forth in 5 CFR parts 2637 and 2641, reflecting the views of the Office of Government Ethics and the Department of Justice as to the requirements of 18 U.S.C. 207.
§ 5.52 Nonpublic proceedings.
Any investigation or proceedings held under this part shall be nonpublic unless the respondent specifically requests otherwise, except to the extent required by the Freedom of Information Act (5 U.S.C. 552) or by the Sunshine Act (5 U.S.C. 552b). However, the presiding official’s initial decision and any final decision of the Commission shall be placed on the public record, except that information may be designated in camera in accordance with § 3.45 of the Commission’s Rules of Practice.
§ 5.53 Initiation of investigation.
(a) Investigations under this part may be initiated upon the submission by any person of a written statement to the Secretary setting forth sufficient information to indicate a possible violation of 18 U.S.C. 207 or by the Commission on its own initiative when a possible violation is indicated by information within the Commission’s possession.
(b) At the direction of the Commission, the General Counsel shall investigate any alleged violation of 18 U.S.C. 207.
§ 5.54 Referral to the Office of Government Ethics and to the Department of Justice.
(a) The General Counsel shall make a preliminary determination of whether the matter appears frivolous and, if not, shall expeditiously transmit any available information to the Director of the Office of Government Ethics and to the Criminal Division, Department of Justice.
(b) Unless the Department of Justice communicates to the Commission that it does not intend to initiate criminal prosecution, the General Counsel shall coordinate any investigation or proceeding under this part with the Department of Justice in order to avoid prejudicing criminal proceedings.
§ 5.55 Conduct of investigation.
(a) The General Counsel may (1) exercise the authority granted in § 2.5 of the Commission’s Rules of Practice to administer oaths and affirmations; and (2) conduct investigational hearings pursuant to part 2 of these rules. He may also recommend that the Commission issue compulsory process in connection with an investigation under this section.
(b) Witnesses in investigations shall have the rights set forth in § 2.9 of the Commission’s Rules of Practice.
§ 5.56 Disposition.
(a) Upon the conclusion of an investigation under this part, the General Counsel shall forward to the Commission a summary of the facts disclosed by the investigation along with a recommendation as to whether the Commission should issue an order to show cause pursuant to § 5.57.
(b) When the former government employee involved is an attorney, the General Counsel shall also recommend whether the matter should be referred to the disciplinary committee of the bar(s) of which the attorney is a member.
§ 5.57 Order to show cause.
(a) Upon a Commission determination that there exists reasonable cause to believe a former government employee has violated 18 U.S.C. 207, the Commission may issue an order requiring the former employee to show cause why sanctions should not be imposed.
(b) The show cause order shall contain:
(1) The statutory provisions alleged to have been violated and a clear and concise description of the acts of the former employee that are alleged to constitute the violation;
(2) Notice of the respondent’s right to submit an answer and request a hearing, and the time and manner in which the request is to be made; and
(3) A statement of the sanctions that may be imposed pursuant to § 5.67 of this part.
(c) Subsequent to the issuance of an order to show cause, any communications to or from the Commission or any member of the Commission shall be governed by the ex parte provisions of § 4.7 of the Commission’s Rules of Practice. 16 CFR 4.7.
§ 5.58 Answer and request for a hearing.
(a) An answer and request for a hearing must be filed with the Secretary of the Commission within thirty (30) days after service of the order to show cause.
(b) In the absence of good cause shown, failure to file an answer and request for a hearing within the specified time limit:
(1) Will be deemed a waiver of the respondent’s right to contest the allegations of the show cause order or request a hearing and
(2) Shall authorize the Commission to find the facts to be as alleged in the show cause order and enter a final decision providing for the imposition of such sanctions specified in § 5.67 as the Commission deems appropriate.
(c) An answer shall contain (1) a concise statement of the facts or law constituting each ground of defense and (2) specific admission, denial, or explanation of each fact alleged in the show cause order or, if the respondent is without knowledge thereof, a statement to that effect. Any allegations of a complaint not answered in this manner will be deemed admitted.
(d) Hearings shall be deemed waived as to any facts in the show cause order that are specifically admitted or deemed to be admitted as a result of respondent’s failure to deny them. Those portions of respondent’s answer, together with the show cause order, will provide a record basis for initial decision by the Administrative Law Judge or for final decision by the Commission.
(e) If all material factual allegations of the show cause order are specifically admitted or have been deemed admitted in accordance with paragraph (c) of this section, the Commission will decide the matter on the basis of the allegations set forth in the show cause order and respondent’s answer.
§ 5.59 Presiding official.
(a) Upon the receipt of an answer and request for a hearing, the Secretary shall refer the matter to the Chief Administrative Law Judge, who shall appoint an Administrative Law Judge to preside over the hearing and shall notify the respondent and the General Counsel as to the person selected.
(b) The powers and duties of the presiding official shall be as set forth in § 3.42(b) through (h) of the Commission’s Rules of Practice.
§ 5.60 Scheduling of hearing.
The presiding official shall fix the date, time and place of the hearing. The hearing shall not be scheduled earlier than fifteen days after receipt of the respondent’s answer and request for a hearing. In fixing the time, date and place of the hearing, the presiding official shall give due regard to the respondent’s need for adequate time to prepare a defense and an expeditious resolution of allegations that may be damaging to his or her reputation.
§ 5.61 Prehearing procedures; motions; interlocutory appeals; summary decision; discovery; compulsory process.
Because of the nature of the issues involved in proceedings under this part, the Commission anticipates that extensive motions, prehearing proceedings and discovery will not be required in most cases. For this reason, detailed procedures will not be established under this part. However, to the extent deemed warranted by the presiding official, prehearing conferences, motions, interlocutory appeals, summary decisions, discovery and compulsory process shall be permitted and shall be governed, where appropriate, by the provisions set forth in subparts C and D, part 3, of the Commission’s Rules of Practice.
§ 5.62 Hearing rights of respondent.
In any hearing under this subpart, the respondent shall have the right:
(a) To be represented by counsel;
(b) To present and cross-examine witnesses and submit evidence;
(c) To present objections, motions, and arguments, oral or written; and
(d) To obtain a transcript of the proceedings on request.
§ 5.63 Evidence; transcript; in camera orders; proposed findings of fact and conclusions of law.
Sections 3.43, 3.44, 3.45, and 3.46 of the Commission’s Rules of Practice shall govern, respectively, the receipt and objections to admissibility of evidence, the transcript of the hearing, in camera orders and the submission and consideration of proposed findings of fact and conclusions of law except that (a) a copy of the hearing transcript shall be provided the respondent; and (b) the Commission has the burden of establishing, by a preponderance of the evidence on the record as a whole, the allegations stated in the order to show cause.
§ 5.64 Initial decision.
Section 3.51 of the Commission’s Rules of Practice shall govern the initial decision in proceedings under this subpart, except that the determination of the Administrative Law Judge must be supported by a preponderance of the evidence.
§ 5.65 Review of initial decision.
Appeals from the initial decision of the Administrative Law Judge or review by the Commission in the absence of an appeal shall be governed by §§ 3.52 and 3.53 of the Commission’s Rules of Practice except that oral arguments shall be nonpublic subject to the exceptions stated in § 3.52 of this part.
§ 5.66 Commission decision and reconsideration.
The Commission’s decision and any reconsideration or reopening of the proceeding shall be governed by §§ 2.51, 3.54, 3.55, 3.71 and 3.72 of the Commission’s Rules of Practice, except that (a) if the initial decision is modified or reversed, the Commission shall specify such findings of fact and conclusions of law as are different from those of the presiding official; and (b) references therein to “court of appeals” shall be deemed for purposes of proceedings under this part to refer to “district court.”
§ 5.67 Sanctions.
In the case of any respondent who fails to request a hearing after receiving adequate notice of the allegations pursuant to § 5.57 or who is found in the Commission’s final decision to have violated 18 U.S.C. 207 (a), (b), or (c), the Commission may order such disciplinary action as it deems warranted, including:
(a) Reprimand;
(b) Suspension from participating in a particular matter or matters before the Commission; or
(c) Prohibiting the respondent from making, with the intent to influence, any formal or informal appearance before, or any oral or written communication to, the Commission or its staff on any matter or business on behalf of any other person (except the United States) for a period not to exceed five (5) years.
§ 5.68 Judicial review.
A respondent against whom the Commission has issued an order imposing disciplinary action under this part may seek judicial review of the Commission’s determination in an appropriate United States District Court by filing a petition for such review within sixty (60) days of receipt of notice of the Commission’s final decision.
PART 6 – ENFORCEMENT OF NONDISCRIMINATION ON THE BASIS OF HANDICAP IN PROGRAMS OR ACTIVITIES CONDUCTED BY THE FEDERAL TRADE COMMISSION
§ 6.101 Purpose.
This part effectuates section 119 of the Rehabilitation, Comprehensive Services, and Developmental Disabilities Amendments of 1978, which amended section 504 of the Rehabilitation Act of 1973 to prohibit discrimination on the basis of handicap in programs or activities conducted by Executive agencies or the United States Postal Service. This part also implements section 508 of the Rehabilitation Act of 1973, as amended, with respect to the accessibility of electronic and information technology developed, procured, maintained, or used by the agency.
§ 6.102 Application.
This part applies to all programs or activities conducted by the Commission except for programs or activities conducted outside the United States that do not involve individuals with handicaps in the United States.
§ 6.103 Definitions.
For purposes of this part, the term –
Auxiliary aids means services or devices that enable persons with impaired sensory, manual, or speaking skills to have an equal opportunity to participate in, and to enjoy the benefits of, programs or activities conducted by the Commission. For example, auxiliary aids useful for persons with impaired vision include readers, Brailled materials, audio recordings, and other similar services and devices. Auxiliary aids useful for persons with impaired hearing include telephone handset amplifiers, telephones compatible with hearing aids, telecommunication devices for deaf persons (TDD’s), interpreters, notetakers, written materials, and other similar services and devices.
Commission means the Federal Trade Commission.
Complete complaint means a written statement that contains the complainant’s name and address and describes the Commission’s alleged discriminatory action in sufficient detail to inform the Commission of the nature and date of the alleged violation of section 504. It shall be signed by the complainant or by someone authorized to do so on his or her behalf. Complaints filed on behalf of classes or third parties shall describe or identify (by name, if possible) the alleged victims of discrimination.
Electronic and information technology includes information technology and any equipment or interconnected system or subsystem of equipment that is used in the creation, conversion, or duplication of data or information. The term includes, but is not limited to, telecommunications products (such as telephones), information kiosks and transaction machines, World Wide Web sites, multimedia, and office equipment such as copiers and fax machines. The term does not include any equipment that contains embedded information technology that is used as an integral part of the product, but the principal function of which is not the acquisition, storage, manipulation, management, movement, control, display, switching, interchange, transmission, or reception of data or information. For example, HVAC (heating, ventilation, and air conditioning) equipment such as thermostats or temperature control devices, and medical equipment where information technology is integral to its operation are not electronic and information technology.
Facility means all or any portion of buildings, structures, equipment, roads, walks, parking lots, rolling stock or other conveyances, or other real or personal property.
Individual with handicaps means any person who has a physical or mental impairment that substantially limits one or more major life activities, has a record of such an impairment, or is regarded as having such an impairment. As used in this definition, the phrase:
(1) Physical or mental impairment includes –
(i) Any physiological disorder or condition, cosmetic disfigurement, or anatomical loss affecting one or more of the following body systems: Neurological; musculoskeletal; special sense organs; respiratory, including speech organs; cardiovascular; reproductive; digestive; genitourinary; hemic and lymphatic; skin; and endocrine; or
(ii) Any mental or psychological disorder, such as mental retardation, organic brain syndrome, emotional or mental illness, and specific learning disabilities. The term physical or mental impairment includes, but is not limited to, such diseases and conditions as orthopedic, visual, speech, and hearing impairments, cerebral palsy, epilepsy, muscular dystrophy, multiple sclerosis, cancer, heart disease, diabetes, mental retardation, emotional illness, and drug addiction and alcoholism.
(2) Major life activities includes functions such as caring for one’s self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, and working.
(3) Has a record of such an impairment means has a history of, or has been misclassified as having, a mental or physical impairment that substantially limits one or more major life activities.
(4) Is regarded as having an impairment means –
(i) Has a physical or mental impairment that does not substantially limit major life activities but is treated by the Commission as constituting such a limitation;
(ii) Has a physical or mental impairment that substantially limits major life activities only as a result of the attitudes of others toward such impairment; or
(iii) Has none of the impairments defined in paragraph (1) of this definition but is treated by the Commission as having such an impairment.
Information technology means any equipment or interconnected system or subsystem of equipment that is used in the automatic acquisition, storage, manipulation, management, movement, control, display, switching, interchange, transmission, or reception of data or information. The term “information technology” includes computers, ancillary equipment, software, firmware and similar procedures, services (including support services), and related resources.
Qualified individual with handicaps means –
(1) With respect to any Commission program or activity under which a person is required to perform services or to achieve a level of accomplishment, an individual with handicaps who meets the essential eligibility requirements and who can achieve the purpose of the program or activity without modifications in the program or activity that the Commission can demonstrate would result in a fundamental alteration in its nature; and
(2) With respect to any other program or activity, an individual with handicaps who meets the essential eligibility requirements for participation in, or receipt of benefits from, that program or activity.
(3) Qualified handicapped person as that term is defined for purposes of employment in 29 CFR 1613.702 (f), which is made applicable to this part by § 6.140.
Section 504 means section 504 of the Rehabilitation Act of 1973 (Pub. L. 93-112, 87 Stat. 394 (29 U.S.C. 794)), as amended by the Rehabilitation Act Amendments of 1974 (Pub. L. 93-516, 88 Stat. 1617); the Rehabilitation, Comprehensive Services, and Developmental Disabilities Amendments of 1978 (Pub. L. 95-602, 92 Stat. 2955) and the Rehabilitation Act Amendments of 1986 (Pub. L. 99-506, 100 Stat. 1810). As used in this part, section 504 applies only to programs or activities conducted by Executive agencies and not to federally assisted programs.
Section 508 means section 508 of the Rehabilitation Act of 1973, as amended.
§§ 6.104-6.109 [Reserved]
§ 6.110 Self-evaluation.
(a) The Commission shall, by February 1, 1989, evaluate its current policies and practices, and the effects thereof, that do not or may not meet the requirements of this part, and, to the extent modification of any such policies and practices is required, the Commission shall proceed to make the necessary modifications.
(b) The Commission shall provide an opportunity to interested persons, including individuals with handicaps or organizations representing individuals with handicaps, to participate in the self-evaluation process by submitting comments (both oral and written).
(c) The Commission shall, for at least three years following completion of the self-evaluation required under paragraph (a) of this section, maintain on file and make available for public inspection:
(1) A description of areas examined and any problems identified, and
(2) A description of any modifications made.
§ 6.111 Notice.
The Commission shall make available to employees, applicants, participants, beneficiaries, and other interested persons such information regarding the provisions of this part and its applicability to the programs or activities conducted by the Commission, and make such information available to them in such manner as the Chairman or his or her designee finds necessary to apprise such persons of the protections against discrimination assured to them by section 504 and this regulation.
§§ 6.112-6.129 [Reserved]
§ 6.130 General prohibitions against discrimination.
(a) No qualified individual with handicaps shall, on the basis of handicap, be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination under any program or activity conducted by the Commission.
(b)(1) The Commission, in providing any aid, benefit, or service, may not, directly or through contractual, licensing, or other arrangements, on the basis of handicap –
(i) Deny a qualified individual with handicaps the opportunity to participate in or benefit from the aid, benefit, or service;
(ii) Afford a qualified individual with handicaps an opportunity to participate in or benefit from the aid, benefit, or service that is not equal to that afforded others;
(iii) Provide a qualified individual with handicaps with an aid, benefit, or service that is not as effective in affording equal opportunity to obtain the same result, to gain the same benefit, or to reach the same level of achievement as that provided to others;
(iv) Provide different or separate aid, benefits, or services to individuals with handicaps or to any class of individuals with handicaps than is provided to others unless such action is necessary to provide qualified individuals with handicaps with aid, benefits, or services that are as effective as those provided to others;
(v) Deny a qualified individual with handicaps the opportunity to participate as a member of planning or advisory boards; or
(vi) Otherwise limit a qualified individual with handicaps in the enjoyment of any right, privilege, advantage, or opportunity enjoyed by others receiving the aid, benefit, or service.
(2) The Commission may not deny a qualified individual with handicaps the opportunity to participate in programs or activities that are not separate or different, despite the existence of permissibly separate or different programs or activities.
(3) The Commission may not, directly or through contractual or other arrangements, utilize criteria or methods of administration the purpose or effect of which would –
(i) Subject qualified individuals with handicaps to discrimination on the basis of handicap; or
(ii) Defeat or substantially impair accomplishment of the objectives of a program or activity with respect to individuals with handicaps.
(4) The Commission may not, in determining the site or location of a facility, make selections the purpose or effect of which would –
(i) Exclude individuals with handicaps from, deny them the benefits of, or otherwise subject them to discrimination under any program or activity conducted by the Commission; or
(ii) Defeat or substantially impair the accomplishment of the objectives of a program or activity with respect to individuals with handicaps.
(5) The Commission, in the selection of procurement contractors, may not use criteria that subject qualified individuals with handicaps to discrimination on the basis of handicap.
(c) The exclusion of nonhandicapped persons from the benefits of a program limited by Federal statute or Executive order to individuals with handicaps or the exclusion of a specific class of individuals with handicaps from a program limited by Federal statute or Executive order to a different class of individuals with handicaps is not prohibited by this part.
(d) The Commission shall administer programs and activities in the most integrated setting appropriate to the needs of qualified individuals with handicaps.
§§ 6.131-6.139 [Reserved]
§ 6.140 Employment.
No qualified individual with handicaps shall, on the basis of handicap, be subjected to discrimination in employment under any program or activity conducted by the Commission. The definitions, requirements and procedures of section 501 of the Rehabilitation Act of 1973 (29 U.S.C. 791), as established by the Equal Employment Opportunity Commission in 29 CFR part 1613, shall apply to employment in federally conducted programs or activities.
§§ 6.141-6.148 [Reserved]
§ 6.149 Program accessibility: Discrimination prohibited.
Except as otherwise provided in § 6.150, no qualified individuals with handicaps shall, because the Commission’s facilities are inaccessible to or unusable by individuals with handicaps, be denied the benefits of, be excluded from participation in, or otherwise be subjected to discrimination under any program or activity conducted by the Commission.
§ 6.150 Program accessibility: Existing facilities.
(a) General. The Commission shall operate each program or activity so that the program or activity, when viewed in its entirety, is readily accessible to and usable by individuals with handicaps. This paragraph does not –
(1) Necessarily require the Commission to make each of its existing facilities accessible to and usable by individuals with handicaps, or
(2) Require the Commission to take any action that it can demonstrate would result in a fundamental alteration in the nature of a program or activity or in undue financial and administrative burdens. In those circumstances where Commission personnel believe that the proposed action would fundamentally alter the program or activity or would result in undue financial and administrative burdens, the Commission has the burden of proving that compliance with § 6.150(a) would result in such alteration or burdens. The decision that compliance would result in such alteration or burdens must be made by the Chairman or his or her designee after considering all Commission resources available for use in the funding and operation of the conducted program or activity, and must be accompanied by a written statement of the reasons for reaching that conclusion. If an action would result in such an alteration or such burdens, the Commission shall take any other action that would not result in such an alteration or such burdens, but would, nevertheless, ensure that individuals with handicaps receive the benefits and services of the program or activity.
(b) Methods. The Commission may comply with the requirements of this section through such means as redesign of equipment, reassignment of services to accessible buildings, assignment of aides to beneficiaries, home visits, delivery of services at alternate accessible sites, alteration of existing facilities and construction of new facilities, use of accessible rolling stock, or any methods that result in making its programs or activities readily accessible to and usable by individuals with handicaps. The Commission is not required to make structural changes in existing facilities where other methods are effective in achieving compliance with this section. The Commission, in making alterations to existing buildings, shall meet accessibility requirements to the extent compelled by the Architectural Barriers Act of 1968, as amended (42 U.S.C. 4151-4157) and any regulations implementing it. In choosing among available methods for meeting the requirements of this section, the Commission shall give priority to those methods that offer programs and activities to qualified individuals with handicaps in the most integrated setting appropriate.
(c) Time period for compliance. The Commission shall comply with the obligations established under this section by April 1, 1988, except that where structural changes in facilities are undertaken, such changes shall be made by February 1, 1991, but in any event as expeditiously as possible.
(d) Transition plan. In the event that structural changes to facilities will be undertaken to achieve program accessibility, the Commission shall develop, by August 1, 1988, a transition plan setting forth the steps necessary to complete such changes. The Commission shall provide an opportunity to interested persons, including individuals with handicaps or organizations representing individuals with handicaps, to participate in the development of the transition plan by submitting comments (both oral and written). A copy of the transition plan shall be made available for public inspection. The plan shall, at a minimum –
(1) Identify physical obstacles in the Commission’s facilities that limit the accessibility of its programs or activities to individuals with handicaps;
(2) Describe in detail the methods that will be used to make the facilities accessible;
(3) Specify the schedule for taking the steps necessary to achieve compliance with this section and, if the time period of the transition plan is longer than one year, identify steps that will be taken during each year of the transition period;
(4) Indicate the official responsible for implementation of the plan; and
(5) Identify the persons or groups with whose assistance the plan was prepared.
§ 6.151 Program accessibility: New construction and alterations.
Each building or part of a building that is constructed or altered by, on behalf of, or for the use of the Commission shall be designed, constructed, or altered so as to be readily accessible to and usable by individuals with handicaps. The definitions, requirements, and standards of the Architectural Barriers Act (42 U.S.C. 4151-4157), as established in 41 CFR 101-19.600 to 101-19.607, apply to buildings covered by this section.
§ 6.152 Program accessibility: Electronic and information technology.
(a) When developing, procuring, maintaining, or using electronic and information technology, the Commission shall ensure, unless an undue burden would be imposed on the agency, that the electronic and information technology allows, regardless of the type of medium of the technology:
(1) Individuals with disabilities who are employees to have access to and use of information and data that is comparable to the access to and use of the information and data by employees who are not individuals with disabilities; and
(2) Individuals with disabilities who are members of the public seeking information or services from the Commission to have access to and use of information and data that is comparable to the access to and use of the information and data by members of the public who are not individuals with disabilities.
(b) When the development, procurement, maintenance, or use of electronic and information technology that meets the standards published by the Architectural and Transportation Barriers Compliance Board pursuant to section 508(a)(2) of the Rehabilitation Act of 1973, as amended, would impose an undue burden on the Commission, the Commission shall provide individuals with disabilities covered by paragraph (a) of this section with the information and data involved by an alternative means of access that allows such individuals to use the information and data.
(c) This section shall not apply to any matter legally exempted by section 508, by the standards referenced in paragraph (b) of this section, or by other applicable law or regulation. Nothing in this section shall be construed to limit any right, remedy, or procedure otherwise available under any provision of federal law (including sections 501 through 505 of the Rehabilitation Act of 1973, as amended) that provides greater or equal protection for the rights of individuals with disabilities than section 508.
§§ 6.153-6.159 [Reserved]
§ 6.160 Communications.
(a) The Commission shall take appropriate steps to ensure effective communication with applicants, participants, personnel of other Federal entities, and members of the public.
(1) The Commission shall furnish appropriate auxiliary aids where necessary to afford an individual with handicaps an equal opportunity to participate in, and enjoy the benefits of, a program or activity conducted by the Commission.
(i) In determining what type of auxiliary aid is necessary, the Commission shall give primary consideration to the requests of the individual with handicaps.
(ii) The Commission need not provide individually prescribed devices, readers for personal use or study, or other devices of a personal nature.
(2) Where the Commission communicates with applicants and beneficiaries by telephone, telecommunication devices for deaf persons (TDD’s), or equally effective telecommunication systems shall be used.
(b) The Commission shall ensure that interested persons, including persons with impaired vision or hearing, can obtain information as to the existence and location of accessible services, activities, and facilities.
(c) The Commission shall provide signs at a primary entrance to each of its inaccessible facilities, directing users to a location at which they can obtain information about accessible facilities. The international symbol for accessibility shall be used at each primary entrance of an accessible facility.
(d) This section does not require the Commission to take any action that it can demonstrate would result in a fundamental alteration in the nature of a program or activity, or in undue financial and administrative burdens. In those circumstances where Commission personnel believe that the proposed action would fundamentally alter the program or activity or would result in undue financial and administrative burdens, the Commission has the burden of proving that compliance with § 6.160 would result in such alteration or burdens. The decision that compliance would result in such alteration or burdens must be made by the Chairman or his or her designee after considering all Commission resources available for use in the funding and operation of the conducted program or activity, and must be accompanied by a written statement of the reasons for reaching that conclusion. If an action required to comply with this section would result in such an alteration or such burdens, the Commission shall take any other action that would not result in such an alteration or burdens but would nevertheless ensure that, to the maximum extent possible, individuals with handicaps receive the benefits and services of the program or activity.
§§ 6.161-6.169 [Reserved]
§ 6.170 Compliance procedures.
(a) Except as provided in paragraph (b) of this section, this section applies to all allegations of discrimination on the basis of handicap in programs or activities conducted by the Commission.
(b) The Commission shall process complaints alleging violations of section 504 with respect to employment according to the procedures established by the Equal Employment Opportunity Commission in 29 CFR part 1613 pursuant to section 501 of the Rehabilitation Act of 1973 (29 U.S.C. 791). The Commission shall apply the same procedures to process complaints alleging violations of section 508. Complaints alleging a violation of section 508 may not be filed with respect to any exempted matters as described in § 6.152(c) of this chapter, and may be filed only with respect to electronic and information technology procured by the Commission on or after June 21, 2001.
(c) Responsibility for implementation and operation of this section is vested in the Director of Equal Employment Opportunity.
(d)(1) A complete complaint under this section may be filed by any person who believes that he or she or any specific class of persons of which he or she is a member has been subjected to discrimination prohibited by this part. The complaint may also be filed by an authorized representative of any such person.
(2) The complaint must be filed within 180 days of the alleged act of discrimination unless the Director of Equal Employment Opportunity extends the time period for good cause.
(3) The complaint must be addressed to the Director of Equal Employment Opportunity, Federal Trade Commission, 600 Pennsylvania Avenue, NW., Washington, DC 20580.
(e) If the Director of Equal Employment Opportunity receives a complaint over which the Commission does not have jurisdiction, he or she shall promptly notify the complainant and shall make reasonable efforts to refer the complaint to the appropriate Government entity.
(f) The Director of Equal Employment Opportunity shall notify the Architectural and Transportation Barriers Compliance Board upon receipt of any complaint alleging that a building or facility that is subject to the Architectural Barriers Act of 1968, as amended (42 U.S.C. 4151-4157) is not readily accessible to and usable by individuals with handicaps.
(g)(1) The Director of Equal Employment Opportunity shall accept and investigate a complete complaint that is filed in accordance with paragraph (d) of this section and over which the Commission has jurisdiction.
(2) If the Director of Equal Employment Opportunity receives a complaint that is not complete (see § 6.103), he or she shall, within 30 days thereafter, notify the complainant that additional information is needed. If the complainant fails to complete the complaint within 30 days of the date of the Director’s notice, the Director of Equal Employment Opportunity may dismiss the complaint without prejudice.
(h) Within 180 days of the receipt of a complete complaint over which the Commission has jurisdiction, the Director of Equal Employment Opportunity shall notify the complainant of the results of the investigation in a letter containing –
(1) Findings of fact and conclusions of law;
(2) A description of a remedy for each violation found; and
(3) A notice of the right to appeal to the Commission’s General Counsel.
(i)(1) An appeal under this section must be filed within 90 days of the complainant’s receipt of the letter under paragraph (h) of this section unless the General Counsel extends the time period for good cause.
(2) The appeal must be addressed to the General Counsel, Federal Trade Commission, 600 Pennsylvania Avenue, NW., Washington, DC 20580.
(3) The appeal shall specify the questions raised by the appeal and the arguments on the points of fact and law relied upon in support of the position taken on each question; and it shall include copies of the complaint filed under paragraph (d) of this section and the letter by the Director of Equal Employment Opportunity under paragraph (h) of this section as well as any other material relied upon in support of the appeal.
(j) The General Counsel shall notify the complainant of the results of the appeal within 60 days of the receipt of the appeal. If the General Counsel determines that additional information is needed from the complainant, the General Counsel shall have 60 days from the date of receipt of the additional information to make a final determination on the appeal. The General Counsel may submit the appeal to the Commission for final determination provided that any final determination of the appeal is made by the Commission within the 60-day period specified by this paragraph.
(k) The time limits specified by paragraphs (h) and (j) of this section may be extended by the Chairman for good cause.
(l) The Commission may delegate its authority for conducting complaint investigations to other Federal agencies, except that the authority for making the final determination may not be delegated.
§§ 6.171-6.999 [Reserved]
PART 14 – ADMINISTRATIVE INTERPRETATIONS, GENERAL POLICY STATEMENTS, AND ENFORCEMENT POLICY STATEMENTS
§ 14.9 Requirements concerning clear and conspicuous disclosures in foreign language advertising and sales materials.
The Federal Trade Commission has noted that, with increasing intensity, advertisers are making special efforts to reach foreign language-speaking consumers. As part of this special effort, advertisements, brochures and sales documents are being printed in foreign languages. In recent years the Commission has issued various cease-and-desist orders as well as rules, guides and other statements, which require affirmative disclosures in connection with certain kinds of representations and business activities. Generally, these disclosures are required to be “clear and conspicuous.” Because questions have arisen as to the meaning and application of the phrase “clear and conspicuous” with respect to foreign language advertisements and sales materials, the Commission deems it appropriate to set forth the following enforcement policy statement:
(a) Where cease-and-desist orders as well as rules, guides and other statements require “clear and conspicuous” disclosure of certain information in an advertisement or sales material in a newspaper, magazine, periodical, or other publication that is not in English, the disclosure shall appear in the predominant language of the publication in which the advertisement or sales material appears. In the case of any other advertisement or sales material, the disclosure shall appear in the language of the target audience (ordinarily the language principally used in the advertisement or sales material).
(b) Any respondent who fails to comply with this requirement may be the subject of a civil penalty or other law enforcement proceeding for violating the terms of a Commission cease-and-desist order or rule.
§ 14.12 Use of secret coding in marketing research.
(a) The Federal Trade Commission has determined to close its industry-wide investigation of marketing research firms that was initiated in November 1975, to determine if the firms were using questionnaires with invisible coding that could be used to reveal a survey respondent’s identity. After a thorough investigation, the Commission has determined that invisible coding has been used by the marketing research industry, but it is neither a commonly used nor widespread practice. Moreover, use of the practice appears to have diminished in recent years. For these reasons, the Commission has determined that further action is not warranted at this time.
(b) However, for the purpose of providing guidance to the marketing research industry, the Commission is issuing the following statement with regard to its future enforcement intentions. The Commission has reason to believe that it is an unfair or deceptive act or practice, violative of section 5 of the Federal Trade Commission Act (15 U.S.C. 45) to induce consumers to provide information about themselves by expressly or implicitly promising that such information is being provided anonymously, when, in fact, a secret or invisible code is used on the survey form or return envelope that allows identification of the consumer who has provided the information.
(c) While the Commission has made no final determination regarding the legality of the foregoing practice, the Commission will take appropriate enforcement action should it discover the practice to be continuing in the future, and in the event that it may be causing substantial consumer injury. Among the circumstances in which the Commission believes that the use of secret coding may cause significant consumer harm are those in which:
(1) A misleading promise of anonymity is used to obtain highly sensitive information about a consumer that such consumer would not choose to disclose if he or she were informed that a code was being used that would allow his or her name to be associated with the response; and
(2) Information of any sort is used for purposes other than those of the market survey.
§ 14.15 In regard to comparative advertising.
(a) Introduction. The Commission’s staff has conducted an investigation of industry trade associations and the advertising media regarding their comparative advertising policies. In the course of this investigation, numerous industry codes, statements of policy, interpretations and standards were examined. Many of the industry codes and standards contain language that could be interpreted as discouraging the use of comparative advertising. This Policy Statement enunciates the Commission’s position that industry self-regulation should not restrain the use by advertisers of truthful comparative advertising.
(b) Policy Statement. The Federal Trade Commission has determined that it would be of benefit to advertisers, advertising agencies, broadcasters, and self-regulation entities to restate its current policy concerning comparative advertising.
(c) The Commission has supported the use of brand comparisions where the bases of comparision are clearly identified. Comparative advertising, when truthful and nondeceptive, is a source of important information to consumers and assists them in making rational purchase decisions. Comparative advertising encourages product improvement and innovation, and can lead to lower prices in the marketplace. For these reasons, the Commission will continue to scrutinize carefully restraints upon its use.
(1) Disparagement. Some industry codes which prohibit practices such as “disparagement,” “disparagement of competitors,” “improper disparagement,” “unfairly attaching,” “discrediting,” may operate as a restriction on comparative advertising. The Commission has previously held that disparaging advertising is permissible so long as it is truthful and not deceptive. In Carter Products, Inc., 60 F.T.C. 782, modified, 323 F.2d 523 (5th Cir. 1963), the Commission narrowed an order recommended by the hearing examiner which would have prohibited respondents from disparaging competing products through the use of false or misleading pictures, depictions, or demonstrations, “or otherwise” disparaging such products. In explaining why it eliminated “or otherwise” from the final order, the Commission observed that the phrase would have prevented:
respondents from making truthful and non-deceptive statements that a product has certain desirable properties or qualities which a competing product or products do not possess. Such a comparison may have the effect of disparaging the competing product, but we know of no rule of law which prevents a seller from honestly informing the public of the advantages of its products as opposed to those of competing products. 60 F.T.C. at 796.
(2) Substantiation. On occasion, a higher standard of substantiation by advertisers using comparative advertising has been required by self-regulation entities. The Commission evaluates comparative advertising in the same manner as it evaluates all other advertising techniques. The ultimate question is whether or not the advertising has a tendency or capacity to be false or deceptive. This is a factual issue to be determined on a case-by-case basis. However, industry codes and interpretations that impose a higher standard of substantiation for comparative claims than for unilateral claims are inappropriate and should be revised.
§ 14.16 Interpretation of Truth-in-Lending Orders consistent with amendments to the Truth-in-Lending Act and Regulation Z.
The Federal Trade Commission (FTC) has determined that there is a need to clarify the compliance responsibilities under the Truth-in-Lending Act (TILA) (Title I, Consumer Credit Protection Act, 15 U.S.C. 1601 et seq.), as amended by the Truth-in-Lending Simplification and Reform Act of 1980 (Pub. L. 96-221, 94 Stat. 168), and under revised Regulation Z (12 CFR part 226, 46 FR 20848), and subsequent amendments to the TILA and Regulation Z, of those creditors and advertisers who are subject to final cease and desist orders that require compliance with provisions of the Truth-in-Lending statute or Regulation Z. Clarification is necessary because the Truth-in-Lending Simplification and Reform Act and revised Regulation Z significantly relaxed prior Truth-in-Lending requirements on which provisions of numerous outstanding orders were based. The Policy Statement provides that the Commission will interpret and enforce Truth-in-Lending provisions of all orders so as to impose no greater or different disclosure obligations on creditors and advertisers named in such orders than are required generally of creditors and advertisers under the TILA and Regulation Z, and subsequent amendments to the TILA and Regulation Z.
(a) All cease and desist orders issued by the FTC that require compliance with provisions of the Truth-in-Lending Act and Regulation Z (12 CFR part 226) will be interpreted and enforced consistent with the amendments to the TILA incorporated by the Truth-in-Lending Simplification and Reform Act of 1980, and the revision of Regulation Z implementing the same, promulgated on April 1, 1981 by the Board of Governors of the Federal Reserve System (46 FR 20848), and by subsequent amendments to the TILA and Regulation Z. Likewise, the Federal Reserve Board staff commentary to revised Regulation Z (46 FR 50288, October 9, 1981), and subsequent revisions to the Federal Reserve Board staff commentary to Regulation Z, will be considered in interpreting the requirements of existing orders.
(b) After an amendment to Regulation Z becomes effective, compliance with the revised credit disclosure requirements will be considered compliance with the existing order, and:
(1) To the extent that revised Regulation Z deletes disclosure requirements imposed by any Commission order, compliance with these requirements will no longer be required; however,
(2) To the extent that revised Regulation Z imposes additional disclosure or format requirements, a failure to comply with the added requirements will be considered a violation of the TILA.
(c) A creditor or advertiser must continue to comply with all provisions of the order which do not relate to Truth-in-Lending Act requirements or are unaffected by Regulation Z. These provisions are not affected by this policy statement and will remain in full force and effect.
The Commission intends that this Enforcement Policy Statement obviate the need for any creditor or advertiser to file a petition to reopen and modify any affected order under section 2.51 of the Commission’s rules of practice (16 CFR 2.51). However, the Commission recognizes that the policy statement may not provide clear guidance to every creditor or advertiser under order. The staff of the Division of Enforcement, Bureau of Consumer Protection, will respond to written requests for clarification of any order affected by this policy statement.
PART 16 – ADVISORY COMMITTEE MANAGEMENT
§ 16.1 Purpose and scope.
(a) The regulations in this part implement the Federal Advisory Committee Act, 5 U.S.C. App. I.
(b) These regulations shall apply to any advisory committee, as defined in paragraph (b) of § 16.2 of this part. However, to the extent that an advisory committee is subject to particular statutory provisions that are inconsistent with the Federal Advisory Committee Act, these regulations do not apply.
§ 16.2 Definitions.
For purposes of this part:
(a) Administrator means the Administrator of the General Services Administration.
(b) Advisory committee, subject to exclusions described in paragraph (b)(2) of this section, means any committee, board, commission, council, panel, task force, or other similar group, or any subcommittee or other subgroup thereof, which is established or utilized by the Commission for the purpose of obtaining advice or recommendations for the Commission or other agency or officer of the Federal Government on matters that are within the scope of the Commission’s jurisdiction.
(1) Where a group provides some advice to the Commission but the group’s advisory function is incidental and inseparable from other (e.g., operational or management) functions, the provisions of this part do not apply. However, if the advisory function is separable, the group is subject to this part to the extent that the group operates as an advisory committee.
(2) Groups excluded from the effect of the provisions of this part include:
(i) Any committee composed wholly of full-time officers or employees of the Federal Government;
(ii) Any committee, subcommittee or subgroup that is exclusively operational in nature (e.g., has functions that include making or implementing decisions, as opposed to the offering of advice or recommendations);
(iii) Any inter-agency advisory committee unless specifically made applicable by the establishing authority.
(c) Commission means the Federal Trade Commission.
(d) GSA means the General Services Administration.
(e) Secretariat means the Committee Management Secretariat of the General Services Administration.
(f) Sunshine Act means the Government in the Sunshine Act, 5 U.S.C. 552b.
§ 16.3 Policy.
(a) The Commission’s policy shall be to:
(1) Establish an advisory committee only when it is essential to the conduct of agency business;
(2) Insure that adequate information is provided to the Congress and the public regarding advisory committees, and that there are adequate opportunities for access by the public to advisory committee meetings;
(3) Insure that the membership of the advisory committee is balanced in terms of the points of view represented and the functions to be performed; and
(4) Terminate an advisory committee whenever the stated objectives of the committee have been accomplished; the subject matter or work of the advisory committee has become obsolete; the cost of operating the advisory committee is excessive in relation to the benefits accruing to the Commission; or the advisory committee is otherwise no longer a necessary or appropriate means to carry out the purposes for which it was established.
(b) No advisory committee may be used for functions that are not solely advisory unless specifically authorized to do so by law. The Commission shall be solely responsible for making policy decisions and determining action to be taken with respect to any matter considered by an advisory committee.
§ 16.4 Advisory Committee Management Officer.
(a) The Commission shall designate the Executive Director as the Advisory Committee Management Officer who shall:
(1) Exercise control and supervision over the establishment, procedures, and accomplishments of the advisory committees established by the Commission;
(2) Assemble and maintain the reports, records, and other papers of any advisory committee during its existence;
(3) Carry out, on behalf of the Commission, the provisions of the Freedom of Information Act, 5 U.S.C. 552, with respect to such reports, records, and other papers;
(4) Maintain in a single location a complete set for the charters and membership lists of each of the Commission’s advisory committees;
(5) Maintain information on the nature, functions, and operations of each of the Commission’s advisory committees; and
(6) Provide information on how to obtain copies of minutes of meetings and reports of each of the Commission’s advisory committees.
(b) The name of the Advisory Committee Management Officer designated in accordance with this part, and his or her agency address and telephone number, shall be provided to the Secretariat.
§ 16.5 Establishment of advisory committees.
(a) No advisory committee shall be established under this part unless such establishment is:
(1) Specifically authorized by statute; or
(2) Determined as a matter of formal record by the Commission, after consultation with the Administrator, to be in the public interest in connection with the performance of duties imposed on the Commission by law.
(b) In establishing an advisory committee, the Commission shall:
(1) Prepare a proposed charter for the advisory committee in accordance with § 16.6 of this part; and
(2) Submit an original and one copy of a letter to the Administrator requesting concurrence in the Commission’s proposal to establish an advisory committee. The letter from the Commission shall describe the nature and purpose of the proposed advisory committee, including an explanation of why establishment of the advisory committee is essential to the conduct of agency business and in the public interest and why the functions of the proposed committee could not be performed by the Commission, by an existing committee, or through other means. The letter shall also describe the Commission’s plan to attain balanced membership on the proposed advisory committee in terms of points of view to be represented and functions to be performed. The letter shall be accompanied by two copies of the proposed charter.
(c) Upon the receipt of notification from the Administrator of his or her concurrence or nonconcurrence, the Commission shall notify the Administrator in writing that either:
(1) The advisory committee is being established. The filing of an advisory committee charter as specified in § 16.6 of this part shall be deemed appropriate written notification in this instance; or
(2) The advisory committee is not being established.
(d) If the Commission determines that an advisory committee should be established in accordance with paragraph (c) of this section, the Commission shall publish notice to that effect in the
(e) The Commission may issue regulations or guidelines as may be necessary to operate and oversee a particular advisory committee.
§ 16.6 Charter.
(a) No advisory committee established, utilized, reestablished or renewed by the Commission under this part shall meet or take any action until its charter has been filed by the Commission with the standing committees of the Senate and House of Representatives having legislative jurisdiction over the Commission.
(b) The charter required by paragraph (a) of this section shall include the following information:
(1) The committee’s official designation;
(2) The committee’s objectives and the scope of its activity;
(3) The period of time necessary for the committee to carry out its purposes;
(4) The Commission component or official to whom the committee reports;
(5) The agency or official responsible for providing the necessary support for the committee;
(6) A description of the duties for which the committee is responsible, and, if such duties are not solely advisory, a specification of the authority for such functions;
(7) The estimated annual operating cost in dollars and man-years for the committee;
(8) The estimated number and frequency of committee meetings;
(9) The committee’s termination date, if less than two years from the date of committee’s establishment; and
(10) The date the charter is filed.
(c) A copy of the charter required by paragraph (a) of this section shall also be furnished at the time of filing to the Secretariat and the Library of Congress.
(d) The requirements of this section shall also apply to committees utilized as advisory committees, even though not expressly established for that purpose.
§ 16.7 Meetings.
(a) The Commission shall designate an officer or employee of the Federal Government as the Designated Federal Officer for the advisory committee. The Designated Federal Officer shall attend the meetings of the advisory committee, and shall adjourn committee meetings whenever he or she determines that adjournment is in the public interest. The Commission, in its discretion, may authorize the Designated Federal Officer to chair meetings of the advisory committee.
(b) No meeting of any advisory committee shall be held except at the call of, or with the advance approval of, the Designated Federal Officer and with an agenda approved by such official.
(c) The agenda required by paragraph (b) of this section shall identify, in general terms, matters to be considered at the meeting and shall indicate whether any part of the meeting will concern matters that the General Counsel has determined to be covered by one or more of the exemptions of the Sunshine Act.
(d) Timely notice of each meeting of the advisory committee shall be provided in accordance with § 16.9 of this part.
(e) Subject to the provisions of § 16.8 of this part, each meeting of an advisory committee as defined in § 16.2(b) of this part shall be open to the public. Subcommittees and subgroups that are not utilized by the Commission for the purpose of obtaining advice or recommendations do not constitute advisory committees within the meaning of § 16.2(b) and are not subject to the meeting and other requirements of this part.
(f) Meetings that are completely or partly open to the public shall be held at reasonable times and at places that are reasonably accessible to members of the public. The size of the meeting room shall be sufficient to accommodate members of the public who can reasonably be expected to attend.
(g) Any member of the public shall be permitted to file a written statement with the committee concerning any matter to be considered in a meeting. Interested persons may be permitted by the committee chairman to speak at such meetings in accordance with procedures established by the committee and subject to the time constraints under which the meeting is to be conducted.
(h) No meeting of any advisory committee shall be held in the absence of a quorum. Unless otherwise established by statute or in the charter of the committee, a quorum shall consist of a majority of the committee’s authorized membership.
§ 16.8 Closed meetings.
(a) Paragraphs (e), (f), and (g) of § 16.7 of this part, which require that meetings shall be open to the public and that the public shall be afforded an opportunity to participate in such meetings, shall not apply to any advisory committee meeting (or any portion thereof) which the Commission determines is concerned with any matter covered by one or more of the exemptions set forth in paragraph (c) of the Sunshine Act, 5 U.S.C. section 552b(c).
(b) An advisory committee that seeks to have all or part of its meeting closed shall notify the Commission at least thirty days before the scheduled date of the meeting. The notification shall be in writing and shall identify the specific provisions of the Sunshine Act which justify closure. The Commission may waive the thirty-day requirement when a lesser period of time is requested and justified by the advisory committee.
(c) The General Counsel shall review all requests to close meetings and shall advise the Commission on the disposition of each such request.
(d) If the Commission determines that the request is consistent with the policies of the Sunshine Act and the Federal Advisory Committee Act, it shall issue a determination that all or part of the meeting may be closed. A copy of the Commission’s determination shall be made available to the public upon request.
(e) The advisory committee shall issue, on an annual basis, a report that sets forth a summary of its activities in meetings closed pursuant to this section, addressing those related matters as would be informative to the public and consistent with the policy of the Sunshine Act and of this part. Notice of the availability of such annual reports shall be published in accordance with § 16.15 of this part.
§ 16.9 Notice of meetings.
(a) Notice of each advisory committee meeting, whether open or closed to the public, shall be published in the
(b) In addition to the notice required by paragraph (a) of this section, other forms of notice such as press releases and notices in professional journals may be used to inform interested members of the public of advisory committee meetings.
§ 16.10 Minutes and transcripts of meetings.
(a) Detailed minutes of each advisory committee meeting shall be kept. The minutes shall reflect the time, date and place of the meeting; and accurate summary of each matter that was discussed and each conclusion reached; and a copy of each report or other document received, issued, or approved by the advisory committee. In addition, the minutes shall include a list of advisory committee members and staff and full-time Federal employees who attended the meeting; a list of members of the public who presented oral or written statements; and an estimated number of members of the public who were present at the meeting. The minutes shall describe the extent to which the meeting was open to the public and the nature and extent of any public participation. If it is impracticable to attach to the minutes of the meeting any document received, issued, or approved by the advisory committee, then the minutes shall describe the document in sufficient detail to enable any person who may request the document to identify it readily.
(b) The accuracy of all minutes shall be certified to by the chairperson of the advisory committee.
(c) Minutes need not be kept if a verbatim transcript is made.
§ 16.11 Annual comprehensive review.
(a) The Commission shall conduct an annual comprehensive review of the activities and responsibilities of each advisory committee to determine:
(1) Whether such committee is carrying out its purpose;
(2) Whether, consistent with the provisions of applicable statutes, the responsibilities assigned to it should be revised;
(3) Whether it should be merged with any other advisory committee or committees; or
(4) Whether it should be abolished.
(b) Pertinent factors to be considered in the comprehensive review required by paragraph (a) of this section include the following:
(1) The number of times the committee has met in the past year;
(2) The number of reports or recommendations submitted by the committee;
(3) An evaluation of the substance of the committee’s reports or recommendations with respect to the Commission’s programs or operations;
(4) An evaluation (with emphasis on the preceding twelve month period of the committee’s work) of the history of the Commission’s utilization of the committee’s recommendations in policy formulation, program planning, decision making, more effective achievement of program objectives, and more economical accomplishment of programs in general.
(5) Whether information or recommendations could be obtained from sources within the Commission or from another advisory committee already in existence;
(6) The degree of duplication of effort by the committee as compared with that of other parts of the Commission or other advisory committees; and
(7) The estimated annual cost of the committee.
(c) The annual review required by this section shall be conducted on a fiscal year basis, and results of the review shall be included in the annual report to the GSA required by § 16.15 of this part. The report shall contain a justification of each advisory committee which the Commission determines should be continued, making reference, as appropriate, to the factors specified in paragraph (b) of this section.
§ 16.12 Termination of advisory committees.
Any advisory committee shall automatically terminate not later than two years after it is established, reestablished, or renewed, unless:
(a) Its duration is otherwise provided by law;
(b) It is renewed in accordance with § 16.13 of this part; or
(c) The Commission terminates it before that time.
§ 16.13 Renewal of advisory committees.
(a) Any advisory committee established under this part may be renewed by appropriate action of the Commission and the filing of a new charter. An advisory committee may be continued by such action for successive two-year periods.
(b) Before it renews an advisory committee in accordance with paragraph (a) of this section, the Commission will inform the Administrator by letter, not more than sixty days nor less than thirty days before the committee expires, of the following:
(1) Its determination that a renewal is necessary and in the public interest;
(2) The reasons for its determination;
(3) The Commission’s plan to maintain balanced membership on the committee;
(4) An explanation of why the committee’s functions cannot be performed by the Commission or by an existing advisory committee.
(c) Upon receipt of the Administrator’s notification of concurrence or nonconcurrence, the Commission shall publish a notice of the renewal in the
(d) No advisory committee that is required under this section to file a new charter for the purpose of renewal shall take any action, other than preparation and filing of such charter, between the date the new charter is required and the date on which such charter is actually filed.
§ 16.14 Amendments.
(a) The charter of an advisory committee may be amended when the Commission determines that the existing charter no longer accurately describes the committee itself or its goals or procedures. Changes may be minor, such as revising the name of the advisory committee, or may be major, to the extent that they deal with the basic objectives or composition of the committee.
(1) To make a minor amendment to an advisory committee charter, the Commission shall:
(i) Amend the charter language as necessary; and
(ii) File the amended charter in accordance with the provisions of § 16.6 of this part.
(2) To make a major amendment to an advisory committee charter, the Commission shall:
(i) Amend the charter language as necessary;
(ii) Submit the proposed amended charter with a letter to the Administrator requesting concurrence in the amended language and an explanation of why the changes are essential and in the public interest; and
(iii) File the amended charter in accordance with the provisions of § 16.6 of this part.
(b) Amendment of an existing charter does not constitute renewal of the advisory committee under § 16.13 of this part.
§ 16.15 Reports of advisory committees.
(a) The Commission shall furnish, on a fiscal year basis, a report of the activities of each of its advisory committees to the GSA.
(b) Results of the annual comprehensive review of the advisory committee made under § 16.11 shall be included in the annual report.
(c) The Commission shall notify the GSA, by letter, of the termination of, changes in the membership of, or other significant developments with respect to, an advisory committee.
§ 16.16 Compensation.
(a) Committee members. Unless otherwise provided by law, the Commission shall not compensate advisory committee members for their service on an advisory committee. In the exceptional case where the Commission is unable to meet the need for technical expertise or the requirement for balanced membership solely through the appointment of noncompensated members, the Commission may contract for or authorize the advisory committee to contract for the services of a specific consultant who may be appointed as a member of the advisory committee. In such a case, the Commission shall follow the procedures set forth in paragraph (b) of this section.
(b) Consultants. Prior to hiring or authorizing the advisory committee to hire a consultant to an advisory committee, the Commission shall determine that the expertise or viewpoint to be offered by the consultant is not otherwise available without cost to the Commission. The compensation to be paid to such consultant may not exceed the maximum rate of pay authorized by 5 U.S.C. section 3109. Hiring of consultants shall be in accordance with OMB Circular A-120 and applicable statutes, regulations, and Executive Orders.
(c) Staff members. The Commission may fix the pay of each advisory committee staff member at a rate of the General Schedule, General Management Schedule, or Senior Executive Service in which the Staff member’s position would appropriately be placed (5 U.S.C. chapter 51). The Commission may not fix the pay of a staff member at a rate higher than the daily equivalent of the maximum rate for GS-15, unless the Commission has determined that under the General Schedule, General Management Schedule, or Senior Executive Service classification system, the staff member’s position would appropriately be placed at a grade higher than GS-15. The Commission shall review this determination annually.
SUBCHAPTER B – GUIDES AND TRADE PRACTICE RULES
PART 17 – APPLICATION OF GUIDES IN PREVENTING UNLAWFUL PRACTICES
Industry guides are administrative interpretations of laws administered by the Commission for the guidance of the public in conducting its affairs in conformity with legal requirements. They provide the basis for voluntary and simultaneous abandonment of unlawful practices by members of industry. Failure to comply with the guides may result in corrective action by the commission under applicable statutory provisions. Guides may relate to a practice common to many industries or to specific practices of a particular industry. (Authority: Sec. 6(g), 38 Stat. 722; (15 U.S.C. 46(g))
PART 20 – GUIDES FOR THE REBUILT, RECONDITIONED, AND OTHER USED AUTOMOBILE PARTS INDUSTRY
§ 20.0 Scope and purpose of the guides.
(a) The Guides in this part apply to the manufacture, sale, distribution, marketing and advertising (including advertising in electronic format, such as on the Internet) of parts that are not new, and assemblies containing such parts, that were designed for use in automobiles, trucks, motorcycles, tractors, or similar self-propelled vehicles, regardless of whether such parts or assemblies have been cleaned, repaired, reconstructed, or reworked in any other way (industry product or product). Industry products include, but are not limited to, airbags, alternators and generators, anti-lock brake systems, brake cylinders, carburetors, catalytic converters, differentials, engines, fuel injectors, hybrid drive systems and hybrid batteries, navigation and audio systems, power steering pumps, power window motors, rack and pinion units, starters, steering gears, superchargers and turbochargers, tires, transmissions and transaxles, and water pumps.
(b) These guides set forth the Federal Trade Commission’s current views about the manufacture, sale, distribution, and advertising of industry products. The guides help businesses avoid making claims that are unfair or deceptive under Section 5 of the FTC Act, 15 U.S.C. 45. They do not confer any rights on any person and do not operate to bind the FTC or the public. The Commission, however, can take action under the FTC Act if a business makes a claim inconsistent with the guides. In any such enforcement action, the Commission must prove that the challenged act or practice is unfair or deceptive in violation of Section 5 of the FTC Act.
§ 20.1 Deception generally.
(a) It is unfair or deceptive to represent, directly or by implication, that any industry product is new or unused when such is not the fact, or to misrepresent the current condition, or extent of previous use, reconstruction, or repair of any industry product.
(b) It is unfair or deceptive to offer for sale or sell any industry product without disclosing, clearly and conspicuously, in advertising, in promotional literature, on invoices, and on the product’s packaging that the item is an industry product. Additionally, it is unfair or deceptive to offer for sale or to sell any industry product that appears new or unused without disclosing on the product itself that it is an industry product, using appropriate descriptive terms with sufficient permanency to remain visible for a reasonable time after installation. Examples of appropriate descriptive terms include, but are not limited to “Used,” “Secondhand,” “Repaired,” “Relined,” “Reconditioned,” “Rebuilt,” or “Remanufactured.” If the term “recycled” is used, it should be used in a manner consistent with the requirements for that term set forth in the Guides for the Use of Environmental Marketing Claims, 16 CFR 260.7(e). On invoices to the trade only, the disclosure may be by use of any number, mark, or other symbol that is clearly understood by industry members as meaning that the part so marked on the invoices is not new.
(c) It is unfair or deceptive to place any means or instrumentality in the hands of others so that they may mislead consumers as to the previous use of industry products.
§ 20.2 Deception as to the identity of a rebuilder, remanufacturer, reconditioner, reliner, or other reworker.
(a) It is unfair or deceptive to misrepresent the identity of the rebuilder, remanufacturer, reconditioner, reliner or other reworker of an industry product.
(b) If the identity of the original manufacturer of an industry product, or the identity of the manufacturer for which the product was originally made, is revealed and the product was rebuilt, remanufactured, reconditioned, relined, or otherwise reworked by someone else, it is unfair or deceptive to fail to disclose such fact wherever the original manufacturer is identified in advertising or promotional literature concerning the industry product, on the container in which the product is packed, and on the product itself, in close conjunction with, and of the same permanency and conspicuousness as, the disclosure that the product is not new. Examples of such disclosures include:
(1) Disclosure of the identity of the rebuilder: “Rebuilt by John Doe Co.”
(2) Disclosure that the industry product was rebuilt by an independent rebuilder: “Rebuilt by an Independent Rebuilder.”
(3) Disclosure that the industry product was rebuilt by someone other than the manufacturer identified: “Rebuilt by other than XYZ Motors.”
(4) Disclosure that the industry product was rebuilt for the identified manufacturer: “Rebuilt for XYZ Motors.”
§ 20.3 Misrepresentation of the terms “rebuilt,” “factory rebuilt,” “remanufactured,” etc.
(a) It is unfair or deceptive to use the word “Rebuilt,” or any word of similar import, to describe an industry product which, since it was last subjected to any use, has not been dismantled and reconstructed as necessary, all of its internal and external parts cleaned and made rust and corrosion free, all impaired, defective or substantially worn parts restored to a sound condition or replaced with new, rebuilt (in accord with the provisions of this paragraph) or unimpaired used parts, all missing parts replaced with new, rebuilt or unimpaired used parts, and such rewinding or machining and other operations performed as are necessary to put the industry product in sound working condition.
(b) It is unfair or deceptive to represent an industry product as “Remanufactured” or “Factory Rebuilt” unless the product was rebuilt as described in paragraph (a) of this section at a factory generally engaged in the rebuilding of such products.
PART 23 – GUIDES FOR THE JEWELRY, PRECIOUS METALS, AND PEWTER INDUSTRIES
§ 23.0 Scope and application.
(a) The guides in this part apply to jewelry industry products, which include, but are not limited to, the following: Gemstones and their laboratory-created and imitation substitutes; natural and cultured pearls and their imitations; and metallic watch bands not permanently attached to watches. These guides also apply to articles, including optical frames, pens and pencils, flatware, and hollowware, fabricated from precious metals (gold, silver, and platinum group metals), precious metal alloys, and their imitations. These guides also apply to all articles made from pewter. For the purposes of these guides, all articles covered by these guides are defined as “industry products.”
(b) These guides apply to persons, partnerships, or corporations, at every level of the trade (including but not limited to manufacturers, suppliers, and retailers) engaged in the business of offering for sale, selling, or distributing industry products.
To prevent consumer deception, persons, partnerships, or corporations in the business of appraising, identifying, or grading industry products should utilize the terminology and standards set forth in the guides.
(c) These guides apply to claims and representations about industry products included in labeling, advertising, promotional materials, and all other forms of marketing, whether asserted directly or by implication, through words, symbols, emblems, logos, illustrations, depictions, product brand names, or through any other means.
(d) These guides set forth the Federal Trade Commission’s current thinking about claims for jewelry and articles made from precious metals and pewter. The guides help marketers and other industry members avoid making claims that are unfair or deceptive under Section 5 of the FTC Act, 15 U.S.C. 45. They do not confer any rights on any person and do not operate to bind the FTC or the public. The Commission, however, may take action under the FTC Act if a marketer or other industry member makes a claim inconsistent with the guides. In any such enforcement action, the Commission must prove that the challenged act or practice is unfair or deceptive in violation of Section 5 of the FTC Act.
(e) The guides consist of general principles, specific guidance on the use of particular claims for industry products, and examples. Claims may raise issues that are addressed by more than one example and in more than one section of the guides. The examples provide the Commission’s views on how reasonable consumers likely interpret certain claims. Industry members may use an alternative approach if the approach satisfies the requirements of Section 5 of the FTC Act. Whether a particular claim is deceptive will depend on the net impression of the advertisement, label, or other promotional material at issue. In addition, although many examples present specific claims and options for qualifying claims, the examples do not illustrate all permissible claims or qualifications under Section 5 of the FTC Act.
§ 23.1 Deception (general).
It is unfair or deceptive to misrepresent the type, kind, grade, quality, quantity, metallic content, size, weight, cut, color, character, treatment, substance, durability, serviceability, origin, price, value, preparation, production, manufacture, distribution, or any other material aspect of an industry product.
If, in the sale or offering for sale of an industry product, any representation is made as to the grade assigned the product, the identity of the grading system used should be disclosed.
To prevent deception, any qualifications or disclosures, such as those described in the guides, should be sufficiently clear and prominent. Clarity of language, relative type size and proximity to the claim being qualified, and an absence of contrary claims that could undercut effectiveness, will maximize the likelihood that the qualifications and disclosures are appropriately clear and prominent.
An illustration or depiction of a diamond or other gemstone that portrays it in greater than its actual size may mislead consumers, unless a disclosure is made about the item’s true size.
§ 23.2 Misuse of the terms “handmade,” “hand-polished,” etc.
(a) It is unfair or deceptive to represent, directly or by implication, that any industry product is handmade or hand-wrought unless the entire shaping and forming of such product from raw materials and its finishing and decoration were accomplished by hand labor and manually-controlled methods which permit the maker to control and vary the construction, shape, design, and finish of each part of each individual product.
As used herein, “raw materials” include bulk sheet, strip, wire, precious metal clays, ingots, casting grain, and similar items that have not been cut, shaped, or formed into jewelry parts, semi-finished parts, or blanks.
(b) It is unfair or deceptive to represent, directly or by implication, that any industry product is hand-forged, hand-engraved, hand-finished, or hand-polished, or has been otherwise hand-processed, unless the operation described was accomplished by hand labor and manually-controlled methods which permit the maker to control and vary the type, amount, and effect of such operation on each part of each individual product.
§ 23.3 Misrepresentation as to gold content.
(a) It is unfair or deceptive to misrepresent the presence of gold or gold alloy in an industry product, or the quantity or karat fineness of gold or gold alloy contained in the product, or the karat fineness, thickness, weight ratio, or manner of application of any gold or gold alloy plating, covering, or coating on any surface of an industry product or part thereof.
(b) The following are examples of markings or descriptions that may be misleading:
(1) Use of the word “Gold” or any abbreviation, without qualification, to describe all or part of an industry product, including the surface layer of a coated product, which is not composed throughout of fine (24 karat) gold.
(2) Use of the word “Gold” or any abbreviation to describe all or part of an industry product (including the surface layer of a coated product) composed throughout of an alloy of gold (i.e., gold that is less than 24 karats), unless a correct designation of the karat fineness of the alloy immediately precedes the word “Gold” or its abbreviation, and such fineness designation is of at least equal conspicuousness.
(3) Use of the word “Gold” or any abbreviation to describe all or part of an industry product that is not composed throughout of gold or a gold alloy, but is surface-plated or coated with gold alloy, unless the word “Gold” or its abbreviation is adequately qualified to indicate that the product or part is only surface-plated.
(4) Marking, describing, or otherwise representing all or part of an industry product as being plated or coated with gold or gold alloy unless all significant surfaces of the product or part contain a plating or coating of gold or gold alloy that is of reasonable durability.
(5) Use of the term “Gold Plate,” “Gold Plated,” or any abbreviation to describe all or part of an industry product unless such product or part contains a surface-plating of gold alloy, applied by any process, which is of such thickness and extent of surface coverage that reasonable durability
(6) Use of the terms “Gold Filled,” “Rolled Gold Plate,” “Rolled Gold Plated,” “Gold Overlay,” or any abbreviation to describe all or part of an industry product unless such product or part contains a surface-plating of gold alloy applied by a mechanical process and of such thickness and extent of surface coverage that reasonable durability
(7) Use of the terms “Gold Plate,” “Gold Plated,” “Gold Filled,” “Rolled Gold Plate,” “Rolled Gold Plated,” “Gold Overlay,” or any abbreviation to describe a product in which the layer of gold plating has been covered with a base metal (such as nickel), which is covered with a thin wash of gold, unless there is a disclosure that the primary gold coating is covered with a base metal, which is gold washed.
(8) Use of the term “Gold Electroplate,” “Gold Electroplated,” or any abbreviation to describe all or part of an industry product unless such product or part is electroplated with gold or a gold alloy and such electroplating is of such karat fineness, thickness, and extent of surface coverage that reasonable durability
(9) Use of any name, terminology, or other term to misrepresent that an industry product is equal or superior to, or different than, a known and established type of industry product with reference to its gold content or method of manufacture.
(c) The following are examples of markings and descriptions that are consistent with the principles described above:
(1) An industry product or part thereof, composed throughout of an alloy of gold may be marked and described as “Gold” when such word “Gold,” wherever appearing, is immediately preceded by a correct designation of the karat fineness of the alloy, and such karat designation is of equal conspicuousness as the word “Gold” (for example, “14 Karat Gold,” “14 K. Gold,” “14 Kt. Gold,” “9 Karat Gold,” or “9 Kt. Gold”). Such product may also be marked and described by a designation of the karat fineness of the gold alloy unaccompanied by the word “Gold” (for example, “14 Karat,” “14Kt.,” “14 K.,” or “9 K.”).
Use of the term “Gold” or any abbreviation to describe all or part of a product that is composed throughout of gold alloy, but contains a hollow center or interior, may mislead consumers, unless the fact that the product contains a hollow center is disclosed in immediate proximity to the term “Gold” or its abbreviation (for example, “14 Karat Gold-Hollow Center,” or “14 K. Gold Tubing,” when of a gold alloy tubing of such karat fineness). Such products should not be marked or described as “solid” or as being solidly of gold or of a gold alloy. For example, when the composition of such a product is 14 karat gold alloy, it should not be described or marked as either “14 Kt. Solid Gold” or as “Solid 14 Kt. Gold.”
(2) An industry product or part thereof on which there has been affixed on all significant surfaces by soldering, brazing, welding, or other mechanical means a plating of gold alloy of not less than 10 karat fineness and of reasonable durability
(3) An industry product or part thereof on which there has been affixed on all significant surfaces by an electrolytic process an electroplating of gold, or of a gold alloy of not less than 10 karat fineness, which is of reasonable durability
(d) The provisions of this section relating to markings and descriptions of industry products and parts thereof are subject to the applicable tolerances of the National Stamping Act or any amendment thereof.
Exemptions recognized in the assay of karat gold industry products and in the assay of gold filled, gold overlay, and rolled gold plate industry products, and not to be considered in any assay for quality, are listed in the appendix.
§ 23.4 Misuse of the word “vermeil.”
(a) It is unfair or deceptive to represent, directly or by implication, that an industry product is “vermeil” if such mark or description misrepresents the product’s true composition.
(b) An industry product may be described or marked as “vermeil” if it consists of a base of sterling silver coated or plated on all significant surfaces with gold, or gold alloy of not less than 10 karat fineness, that is of reasonable durability
It is unfair or deceptive to use the term “vermeil” to describe a product in which the sterling silver has been covered with a base metal (such as nickel) plated with gold unless there is a disclosure that the sterling silver is covered with a base metal that is plated with gold.
Exemptions recognized in the assay of gold filled, gold overlay, and rolled gold plate industry products are listed in the appendix.
§ 23.5 Misrepresentation as to silver content.
(a) It is unfair or deceptive to misrepresent that an industry product contains silver, or to misrepresent an industry product as having a silver content, plating, electroplating, or coating.
(b) The following are examples of markings or descriptions that may be misleading:
(1) Use of the unqualified word “silver” to mark, describe, or otherwise represent all or part of an industry product, including the surface layer of a coated product, unless an equally conspicuous, accurate quality fineness designation indicating the pure silver content in parts per thousand immediately precedes the term (e.g., “750 silver”).
(2) Use of the words “solid silver,” “Sterling Silver,” “Sterling,” or the abbreviation “Ster.” to mark, describe, or otherwise represent all or part of an industry product unless it is at least 925/1,000ths pure silver.
(3) Use of the words “coin” or “coin silver” to mark, describe, or otherwise represent all or part of an industry product unless it is at least 900/1,000ths pure silver.
(4) Use of the word “silver” to mark, describe, or otherwise represent all or part of an industry product that is not composed throughout of silver, but has a surface layer or coating of silver, unless the term is adequately qualified to indicate that the product or part is only coated.
(5) Marking, describing, or otherwise representing all or part of an industry product as being plated or coated with silver unless all significant surfaces of the product or part contain a plating or coating of silver that is of reasonable durability.
(c) The provisions of this section relating to markings and descriptions of industry products and parts thereof are subject to the applicable tolerances of the National Stamping Act or any amendment thereof.
The National Stamping Act provides that silver plated articles shall not “be stamped, branded, engraved or imprinted with the word `sterling’ or the word `coin,’ either alone or in conjunction with other words or marks.” 15 U.S.C. 297(a).
Exemptions recognized in the assay of silver industry products are listed in the appendix.
§ 23.6 Misuse of the words “platinum,” “iridium,” “palladium,” “ruthenium,” “rhodium,” and “osmium.”
(a) It is unfair or deceptive to use the words “platinum,” “iridium,” “palladium,” “ruthenium,” “rhodium,” and “osmium,” or any abbreviation to mark or describe all or part of an industry product if such marking or description misrepresents the product’s true composition. The Platinum Group Metals (PGM) are Platinum, Iridium, Palladium, Ruthenium, Rhodium, and Osmium.
(b) The following are examples of markings or descriptions that may be misleading:
(1) Use of the word “Platinum” or any abbreviation to describe all or part of a product that is not composed throughout of platinum, but has a surface layer or coating of platinum, unless the word “Platinum” or its abbreviation is adequately qualified to indicate that the product or part is only coated.
(2) Marking, describing, or otherwise representing all or part of an industry product as being plated or coated with platinum unless all significant surfaces of the product or part contain a plating or coating of platinum that is of reasonable durability.
(3) Use of the word “Platinum” or any abbreviation, without qualification, to describe all or part of an industry product (including the surface layer of a coated product) that is not composed throughout of 950 parts per thousand pure Platinum.
(4) Use of the word “Platinum” or any abbreviation accompanied by a number indicating the parts per thousand of pure Platinum contained in the product without mention of the number of parts per thousand of other PGM contained in the product, to describe all or part of an industry product that is not composed throughout of at least 850 parts per thousand pure platinum, for example, “600Plat.”
(5) Use of the word “Platinum” or any abbreviation thereof, to mark or describe any product that is not composed throughout of at least 500 parts per thousand pure Platinum.
(6) Use of the word “Platinum,” or any abbreviation accompanied by a number or percentage indicating the parts per thousand of pure Platinum contained in the product, to describe all or part of an industry product that contains at least 500 parts per thousand, but less than 850 parts per thousand, pure Platinum, and does not contain at least 950 parts per thousand PGM (for example, “585 Plat.”) without a clear and conspicuous disclosure, immediately following the name or description of such product:
(i) Of the full composition of the product (by name and not abbreviation) and percentage of each metal; and
(ii) That the product may not have the same attributes or properties as traditional platinum products. Provided, however, that the marketer need not make disclosure under this paragraph (b)(6)(ii), if the marketer has competent and reliable scientific evidence that such product does not differ materially from any one product containing at least 850 parts per thousand pure Platinum with respect to the following attributes or properties: Durability, luster, density, scratch resistance, tarnish resistance, hypoallergenicity, ability to be resized or repaired, retention of precious metal over time, and any other attribute or property material to consumers.
When using percentages to qualify platinum representations, marketers should convert the amount in parts per thousand to a percentage that is accurate to the first decimal place (e.g., “58.5% Platinum, 41.5% Cobalt”).
(c) The following are examples of markings and descriptions that are not considered unfair or deceptive:
(1) The following abbreviations for each of the PGM may be used for quality marks on articles: “Plat.” or “Pt.” for Platinum; “Irid.” or “Ir.” for Iridium; “Pall.” or “Pd.” for Palladium; “Ruth.” or “Ru.” for Ruthenium; “Rhod.” or “Rh.” for Rhodium; and “Osmi.” or “Os.” for Osmium.
(2) An industry product consisting of at least 950 parts per thousand pure Platinum may be marked or described as “Platinum.”
(3) An industry product consisting of 850 parts per thousand pure Platinum, 900 parts per thousand pure Platinum, or 950 parts per thousand pure Platinum may be marked “Platinum,” provided that the Platinum marking is preceded by a number indicating the amount in parts per thousand of pure Platinum (for industry products consisting of 950 parts per thousand pure Platinum, the marking described in § 23.7(b)(2) above is also appropriate). Thus, the following markings may be used: “950Pt.,” “950Plat.,” “900Pt.,” “900Plat.,” “850Pt.,” or “850Plat.”
(4) An industry product consisting of at least 950 parts per thousand PGM, and of at least 500 parts per thousand pure Platinum, may be marked “Platinum,” provided that the mark of each PGM constituent is preceded by a number indicating the amount in parts per thousand of each PGM (e.g., “600Pt.350Ir.,” “600Plat.350Irid.,” “550Pt.350Pd.50Ir.,” or “550Plat.350Pall.50Irid”).
(5) An industry product consisting of at least 500 parts per thousand, but less than 850 parts per thousand, pure Platinum, and not consisting of at least 950 parts per thousand PGM, may be marked or stamped accurately, with a quality marking on the article, using parts per thousand and standard chemical abbreviations (e.g., “585 Pt., 415 Co.”).
Exemptions recognized in the assay of platinum industry products are listed in the appendix.
§ 23.7 Disclosure of surface-layer application of rhodium.
It is unfair or deceptive to fail to disclose a surface-layer application of rhodium on products marked or described as precious metal.
§ 23.8 Misrepresentation as to products containing more than one precious metal.
(a) It is unfair or deceptive to misrepresent the relative quantity of each precious metal in a product that contains more than than one precious metal. Marketers should list precious metals in the order of their relative weight in the product from greatest to least (i.e., leading with the predominant metal). Listing precious metals in order of relative weight is not necessary where it is clear to reasonable consumers from context that the metal listed first is not predominant.
(b) The following are examples of markings or descriptions that may be misleading:
(1) Use of the terms “Platinum + Silver” to describe a product that contains more silver than platinum by weight.
(2) Use of the terms “14K/Sterling” to describe a product that contains more silver than gold by weight.
(c) The following are examples of markings and descriptions that are not considered unfair or deceptive:
(1) For a product comprised primarily of silver with a surface-layer application of platinum, “900 platinum over silver.”
(2) For a product comprised primarily of silver with visually distinguishable parts of gold, “14k gold-accented silver.”
(3) For a product comprised primarily of gold with visually distinguishable parts of platinum, “850 Platinum inset, 14K gold ring.”
§ 23.9 Misrepresentation as to content of pewter.
(a) It is unfair or deceptive to mark, describe, or otherwise represent all or part of an industry product as “Pewter” or any abbreviation if such mark or description misrepresents the product’s true composition.
(b) An industry product or part thereof may be described or marked as “Pewter” or any abbreviation if it consists of at least 900 parts per 1,000 Grade A Tin, with the remainder composed of metals appropriate for use in pewter.
§ 23.10 Additional guidance for the use of quality marks.
As used in these guides, the term quality mark means any letter, figure, numeral, symbol, sign, word, or term, or any combination thereof, that has been stamped, embossed, inscribed, or otherwise placed on any industry product and which indicates or suggests that any such product is composed throughout of any precious metal or any precious metal alloy or has a surface or surfaces on which there has been plated or deposited any precious metal or precious metal alloy. Included are the words “gold,” “karat,” “carat,” “silver,” “sterling,” “vermeil,” “platinum,” “iridium,” “palladium,” “ruthenium,” “rhodium,” or “osmium,” or any abbreviations thereof, whether used alone or in conjunction with the words “filled,” “plated,” “overlay,” or “electroplated,” or any abbreviations thereof. Quality markings include those in which the words or terms “gold,” “karat,” “silver,” “vermeil,” “platinum” (or platinum group metals), or their abbreviations are included, either separately or as suffixes, prefixes, or syllables.
(a) Deception as to applicability of marks. (1) If a quality mark on an industry product is applicable to only part of the product, the part of the product to which it is applicable (or inapplicable) should be disclosed when, absent such disclosure, the location of the mark misrepresents the product or part’s true composition.
(2) If a quality mark is applicable to only part of an industry product, but not another part which is of similar surface appearance, each quality mark should be closely accompanied by an identification of the part or parts to which the mark is applicable.
(b) Deception by reason of difference in the size of letters or words in a marking or markings. It is unfair or deceptive to place a quality mark on a product in which the words or letters appear in greater size than other words or letters of the mark, or when different markings placed on the product have different applications and are in different sizes, when the net impression of any such marking would be misleading as to the metallic composition of all or part of the product. (An example of improper marking would be the marking of a gold electroplated product with the word “electroplate” in small type and the word “gold” in larger type, with the result that purchasers and prospective purchasers of the product might only observe the word “gold.”)
Legibility of markings. If a quality mark is engraved or stamped on an industry product, or is printed on a tag or label attached to the product, the quality mark should be of sufficient size type as to be legible to persons of normal vision, should be so placed as likely to be observed by purchasers, and should be so attached as to remain thereon until consumer purchase.
Disclosure of identity of manufacturers, processors, or distributors. The National Stamping Act provides that any person, firm, corporation, or association, being a manufacturer or dealer subject to section 294 of the Act, who applies or causes to be applied a quality mark, or imports any article bearing a quality mark “which indicates or purports to indicate that such article is made in whole or in part of gold or silver or of an alloy of either metal” shall apply to the article the trademark or name of such person. 15 U.S.C. 297.
§ 23.11 Misuse of “corrosion proof,” “noncorrosive,” “corrosion resistant,” “rust proof,” “rust resistant,” etc.
(a) It is unfair or deceptive to:
(1) Use the terms “corrosion proof,” “noncorrosive,” “rust proof,” or any other term of similar meaning to describe an industry product unless all parts of the product will be immune from rust and other forms of corrosion during the life expectancy of the product; or
(2) Use the terms “corrosion resistant,” “rust resistant,” or any other term of similar meaning to describe an industry product unless all parts of the product are of such composition as to not be subject to material damage by corrosion or rust during the major portion of the life expectancy of the product under normal conditions of use.
(b) Among the metals that may be considered as corrosion (and rust) resistant are: Pure nickel; gold alloys of not less than 10 Kt. fineness; and austenitic stainless steels.
§ 23.12 Definition and misuse of the word “diamond.”
(a) A diamond is a mineral consisting essentially of pure carbon crystallized in the isometric system. It is found in many colors. Its hardness is 10; its specific gravity is approximately 3.52; and it has a refractive index of 2.42.
(b) It is unfair or deceptive to use the unqualified word “diamond” to describe or identify any object or product not meeting the requirements specified in the definition of diamond provided above, or which, though meeting such requirements, has not been symmetrically fashioned with at least seventeen (17) polished facets.
It is unfair or deceptive to represent, directly or by implication, that industrial grade diamonds or other non-jewelry quality diamonds are of jewelry quality.
(c) The following are examples of descriptions that are not considered unfair or deceptive:
(1) The use of the words “rough diamond” to describe or designate uncut or unfaceted objects or products satisfying the definition of diamond provided above; or
(2) The use of the word “diamond” to describe or designate objects or products satisfying the definition of diamond but which have not been symmetrically fashioned with at least seventeen (17) polished facets when, in immediate conjunction with the word “diamond,” there is either a disclosure of the number of facets and shape of the diamond or the name of a type of diamond that denotes shape and that usually has less than seventeen (17) facets (e.g., “rose diamond”).
(3) The use of the word “cultured” to describe laboratory-created diamonds that have essentially the same optical, physical, and chemical properties as mined diamonds if the term is qualified by a clear and conspicuous disclosure (for example, the words “laboratory-created,” “laboratory-grown,” “[manufacturer name]-created,” or some other word or phrase of like meaning) conveying that the product is not a mined stone.
Additional guidance about imitation and laboratory-created diamond representations and misuse of the words “real,” “genuine,” “natural,” “precious,” “semi-precious,” and similar terms is set forth in §§ 23.25 and 23.27.
§ 23.13 Misuse of the words “flawless,” “perfect,” etc.
(a) It is unfair or deceptive to use the word “flawless” to describe any diamond that discloses flaws, cracks, inclusions, carbon spots, clouds, internal lasering, or other blemishes or imperfections of any sort when examined under a corrected magnifier at 10-power, with adequate illumination, by a person skilled in diamond grading.
(b) It is unfair or deceptive to use the word “perfect,” or any representation of similar meaning, to describe any diamond unless the diamond meets the definition of “flawless” and is not of inferior color or make.
(c) It is unfair or deceptive to use the words “flawless” or “perfect” to describe a ring or other article of jewelry having a “flawless” or “perfect” principal diamond or diamonds, and supplementary stones that are not of such quality, unless there is a disclosure that the description applies only to the principal diamond or diamonds.
§ 23.14 Disclosure of treatments to diamonds.
A diamond is a gemstone product. Treatments to diamonds should be disclosed in the manner prescribed in § 23.24 of these guides (Disclosure of treatments to gemstones).
§ 23.15 Misuse of the term “blue white.”
It is unfair or deceptive to use the term “blue white” or any representation of similar meaning to describe any diamond that under normal, north daylight or its equivalent shows any color or any trace of any color other than blue or bluish.
§ 23.16 Misuse of the term “properly cut,” etc.
It is unfair or deceptive to use the terms “properly cut,” “proper cut,” “modern cut,” or any representation of similar meaning to describe any diamond that is lopsided, or is so thick or so thin in depth as to detract materially from the brilliance of the stone.
Stones that are commonly called “fisheye” or “old mine” should not be described as “properly cut,” “modern cut,” etc.
§ 23.17 Misuse of the words “brilliant” and “full cut.”
It is unfair or deceptive to use the unqualified expressions “brilliant,” “brilliant cut,” or “full cut” to describe, identify, or refer to any diamond except a round diamond that has at least thirty-two (32) facets plus the table above the girdle and at least twenty-four (24) facets below.
Such terms should not be applied to single or rose-cut diamonds. They may be applied to emerald-(rectangular) cut, pear-shaped, heart-shaped, oval-shaped, and marquise-(pointed oval) cut diamonds meeting the above-stated facet requirements when, in immediate conjunction with the term used, the form of the diamond is disclosed.
§ 23.18 Misrepresentation of weight and “total weight.”
(a) It is unfair or deceptive to misrepresent the weight of a diamond.
(b) It is unfair or deceptive to use the word “point” or any abbreviation in any representation, advertising, marking, or labeling to describe the weight of a diamond, unless the weight is also stated as decimal parts of a carat (e.g., 25 points or .25 carat).
A carat is a standard unit of weight for a diamond and is equivalent to 200 milligrams (
(c) If diamond weight is stated as decimal parts of a carat (e.g., .47 carat), the stated figure should be accurate to the last decimal place. If diamond weight is stated to only one decimal place (e.g., .5 carat), the stated figure should be accurate to the second decimal place (e.g., “.5 carat” could represent a diamond weight between .495-.504).
(d) If diamond weight is stated as fractional parts of a carat, a conspicuous disclosure of the fact that the diamond weight is not exact should be made in close proximity to the fractional representation and a disclosure of a reasonable range of weight for each fraction (or the weight tolerance being used) should also be made.
When fractional representations of diamond weight are made, as described in paragraph (d) of this section, in catalogs or other printed materials, the disclosure of the fact that the actual diamond weight is within a specified range should be made conspicuously on every page where a fractional representation is made. Such disclosure may refer to a chart or other detailed explanation of the actual ranges used. For example, “Diamond weights are not exact; see chart on p. X for ranges.”
§ 23.19 Definitions of various pearls.
As used in these guides, the terms set forth below have the following meanings:
(a) Pearl: A calcareous concretion consisting essentially of alternating concentric layers of carbonate of lime and organic material formed within the body of certain mollusks, the result of an abnormal secretory process caused by an irritation of the mantle of the mollusk following the intrusion of some foreign body inside the shell of the mollusk, or due to some abnormal physiological condition in the mollusk, neither of which has in any way been caused or induced by humans.
(b) Cultured pearl: The composite product created when a nucleus (usually a sphere of calcareous mollusk shell) planted by humans inside the shell or in the mantle of a mollusk is coated with nacre by the mollusk.
(c) Imitation pearl: A manufactured product composed of any material or materials that simulate in appearance a pearl or cultured pearl.
(d) Seed pearl: A small pearl, as defined in paragraph (a), that measures approximately two millimeters or less.
§ 23.20 Misuse of the word “pearl.”
(a) It is unfair or deceptive to use the unqualified word “pearl” or any other word or phrase of like meaning to describe, identify, or refer to any object or product that is not in fact a pearl, as defined in § 23.19(a).
(b) It is unfair or deceptive to use the word “pearl” to describe, identify, or refer to a cultured pearl unless it is immediately preceded, with equal conspicuousness, by the word “cultured” or “cultivated,” or by some other word or phrase of like meaning, so as to indicate definitely and clearly that the product is not a pearl.
(c) It is unfair or deceptive to use the word “pearl” to describe, identify, or refer to an imitation pearl unless it is immediately preceded, with equal conspicuousness, by the word “artificial,” “imitation,” or “simulated,” or by some other word or phrase of like meaning, so as to indicate definitely and clearly that the product is not a pearl.
(d) It is unfair or deceptive to use the terms “faux pearl,” “fashion pearl,” “Mother of Pearl,” or any other such term to describe or qualify an imitation pearl product unless it is immediately preceded, with equal conspicuousness, by the word “artificial,” “imitation,” or “simulated,” or by some other word or phrase of like meaning, so as to indicate definitely and clearly that the product is not a pearl.
§ 23.21 Misuse of terms such as “cultured pearl,” “seed pearl,” “Oriental pearl,” “natura,” “kultured,” “real,” “synthetic,” and regional designations.
(a) It is unfair or deceptive to use the term “cultured pearl,” “cultivated pearl,” or any other word, term, or phrase of like meaning to describe, identify, or refer to any imitation pearl.
(b) It is unfair or deceptive to use the term “seed pearl” or any word, term, or phrase of like meaning to describe, identify, or refer to a cultured or an imitation pearl, without using the appropriate qualifying term “cultured” (e.g., “cultured seed pearl”) or “simulated,” “artificial,” or “imitation” (e.g., “imitation seed pearl”).
(c) It is unfair or deceptive to use the term “Oriental pearl” or any word, term, or phrase of like meaning to describe, identify, or refer to any industry product other than a pearl taken from a salt water mollusk and of the distinctive appearance and type of pearls obtained from mollusks inhabiting the Persian Gulf and recognized in the jewelry trade as Oriental pearls.
(d) It is unfair or deceptive to use the word “Oriental” to describe, identify, or refer to any cultured or imitation pearl.
(e) It is unfair or deceptive to use the word “natura,” “natural,” “nature’s,” or any word, term, or phrase of like meaning to describe, identify, or refer to a cultured or imitation pearl. It is unfair or deceptive to use the term “organic” to describe, identify, or refer to an imitation pearl, unless the term is qualified in such a way as to make clear that the product is not a natural or cultured pearl.
(f) It is unfair or deceptive to use the term “kultured,” “semi-cultured pearl,” “cultured-like,” “part-cultured,” “premature cultured pearl,” or any word, term, or phrase of like meaning to describe, identify, or refer to an imitation pearl.
(g) It is unfair or deceptive to use the term “South Sea pearl” unless it describes, identifies, or refers to a pearl that is taken from a salt water mollusk of the Pacific Ocean South Sea Islands, Australia, or Southeast Asia. It is unfair or deceptive to use the term “South Sea cultured pearl” unless it describes, identifies, or refers to a cultured pearl formed in a salt water mollusk of the Pacific Ocean South Sea Islands, Australia, or Southeast Asia.
(h) It is unfair or deceptive to use the term “Biwa cultured pearl” unless it describes, identifies, or refers to cultured pearls grown in fresh water mollusks in the lakes and rivers of Japan.
(i) It is unfair or deceptive to use the word “real,” “genuine,” “precious,” or any word, term, or phrase of like meaning to describe, identify, or refer to any imitation pearl.
(j) It is unfair or deceptive to use the word “synthetic” or similar terms to describe cultured or imitation pearls.
(k) It is unfair or deceptive to use the terms “Japanese Pearls,” “Chinese Pearls,” “Mallorca Pearls,” or any regional designation to describe, identify, or refer to any cultured or imitation pearl, unless the term is immediately preceded, with equal conspicuousness, by the word “cultured,” “artificial,” “imitation,” or “simulated,” or by some other word or phrase of like meaning, so as to indicate definitely and clearly that the product is a cultured or imitation pearl.
§ 23.22 Misrepresentation as to cultured pearls.
It is unfair or deceptive to misrepresent the manner in which cultured pearls are produced, the size of the nucleus artificially inserted in the mollusk and included in cultured pearls, the length of time that such products remained in the mollusk, the thickness of the nacre coating, the value and quality of cultured pearls as compared with the value and quality of pearls and imitation pearls, or any other material matter relating to the formation, structure, properties, characteristics, and qualities of cultured pearls.
§ 23.23 Disclosure of treatments to pearls and cultured pearls.
It is unfair or deceptive to fail to disclose that a pearl or cultured pearl has been treated if:
(a) The treatment is not permanent. The seller should disclose that the pearl or cultured pearl has been treated and that the treatment is or may not be permanent;
(b) The treatment creates special care requirements for the pearl or cultured pearl. The seller should disclose that the pearl or cultured pearl has been treated and has special care requirements. It is also recommended that the seller disclose the special care requirements to the purchaser; or
(c) The treatment has a significant effect on the product’s value. The seller should disclose that the pearl or cultured pearl has been treated.
The disclosures outlined in this section are applicable to sellers at every level of trade, as defined in § 23.0(b) of these guides, and they may be made at the point of sale prior to sale, except that where a product can be purchased without personally viewing the product (e.g., direct mail catalogs, online services, televised shopping programs), disclosure should be made in the solicitation for, or description of, the product.
§ 23.24 Disclosure of treatments to gemstones.
It is unfair or deceptive to fail to disclose that a gemstone has been treated if:
(a) The treatment is not permanent. The seller should disclose that the gemstone has been treated and that the treatment is or may not be permanent;
(b) The treatment creates special care requirements for the gemstone. The seller should disclose that the gemstone has been treated and has special care requirements. It is also recommended that the seller disclose the special care requirements to the purchaser; or
(c) The treatment has a significant effect on the stone’s value. The seller should disclose that the gemstone has been treated.
The disclosures outlined in this section are applicable to sellers at every level of trade, as defined in § 23.0(b) of these guides, and they may be made at the point of sale prior to sale, except that where a product can be purchased without personally viewing the product (e.g., direct mail catalogs, online services, televised shopping programs), disclosure should be made in the solicitation for, or description of, the product.
§ 23.25 Misuse of the words “ruby,” “sapphire,” “emerald,” “topaz,” “stone,” “birthstone,” “gem,” “gemstone,” etc.
(a) It is unfair or deceptive to use the unqualified words “ruby,” “sapphire,” “emerald,” “topaz,” or the name of any other precious or semi-precious stone to describe any product that is not in fact a mined stone of the type described.
(b) It is unfair or deceptive to use the word “ruby,” “sapphire,” “emerald,” “topaz,” or the name of any other precious or semi-precious stone, or the word “stone,” “birthstone,” “gem,” “gemstone,” or similar term to describe a laboratory-grown, laboratory-created, [manufacturer name]-created, synthetic, imitation, or simulated stone, unless such word or name is immediately preceded with equal conspicuousness by the word “laboratory-grown,” “laboratory-created,” “[manufacturer name]-created,” or some other word or phrase of like meaning, or by the word “imitation” or “simulated,” so as to disclose clearly the nature of the product and the fact it is not a mined gemstone.
The use of the word “faux” to describe a laboratory-created or imitation stone is not an adequate disclosure that the stone is not a mined stone.
Marketers may use the word “cultured” to describe laboratory-created gemstone products that have essentially the same optical, physical, and chemical properties as the named stone if the term (e.g., “cultured ruby”) is qualified by a clear and conspicuous disclosure (for example, the words “laboratory-created,” “laboratory-grown,” “[manufacturer name]-created,” or some other word or phrase of like meaning) conveying that the product is not a mined stone. Additional guidance regarding the use of “cultured” to describe a laboratory-created diamond is set forth in § 23.12(c)(3).
(c) It is unfair or deceptive to use the word “laboratory-grown,” “laboratory-created,” “[manufacturer name]-created,” “synthetic,” or other word or phrase of like meaning with the name of any natural stone to describe any industry product unless such product has essentially the same optical, physical, and chemical properties as the stone named.
(d) It is unfair or deceptive to describe products made with gemstone material and any amount of filler or binder, such as lead glass, in the following way:
(1) With the unqualified word “ruby,” “sapphire,” “emerald,” “topaz,” or name of any other precious or semi-precious stone;
(2) As a “treated ruby,” “treated sapphire,” “treated emerald,” “treated topaz,” or “treated [gemstone name]”;
(3) As a “laboratory-grown [gemstone name],” “laboratory-created [gemstone name],” “[manufacturer name]-created [gemstone name],” “or “synthetic [gemstone name];” or
(4) As a “composite [gemstone name],” “hybrid [gemstone name],” or “manufactured [gemstone name],” unless the term is qualified to disclose clearly and conspicuously that the product: (A) Does not have the same characteristics as the named stone; and (B) requires special care. It is further recommended that the seller disclose the special care requirements to the purchaser.
§ 23.26 Misrepresentation as to varietal name.
(a) It is unfair or deceptive to mark or describe an industry product with the incorrect varietal name.
(b) The following are examples of markings or descriptions that may be misleading:
(1) Use of the term “yellow emerald” to describe golden beryl or heliodor.
(2) Use of the term “green amethyst” to describe prasiolite.
A varietal name is given for a division of gem species or genus based on a color, type of optical phenomenon, or other distinguishing characteristic of appearance.
§ 23.27 Misuse of the words “real,” “genuine,” “natural,” “precious,” etc.
It is unfair or deceptive to use the word “real,” “genuine,” “natural,” “precious,” “semi-precious,” or similar terms to describe any industry product that is manufactured or produced artificially.
§ 23.28 Misuse of the words “flawless,” “perfect,” etc.
(a) It is unfair or deceptive to use the word “flawless” as a quality description of any gemstone that discloses blemishes, inclusions, or clarity faults of any sort when examined under a corrected magnifier at 10-power, with adequate illumination, by a person skilled in gemstone grading.
(b) It is unfair or deceptive to use the word “perfect” or any representation of similar meaning to describe any gemstone unless the gemstone meets the definition of “flawless” and is not of inferior color or make.
(c) It is unfair or deceptive to use the word “flawless,” “perfect,” or any representation of similar meaning to describe any imitation gemstone.
Appendix to Part 23 – Exemptions Recognized in the Assay for Quality of Gold Alloy, Gold Filled, Gold Overlay, Rolled Gold Plate, Silver, and Platinum Industry Products
(a) Exemptions recognized in the industry and not to be considered in any assay for quality of a karat gold industry product include springs, posts, and separable backs of lapel buttons, posts and nuts for attaching interchangeable ornaments, bracelet and necklace snap tongues, metallic parts completely and permanently encased in a nonmetallic covering, field pieces and bezels for lockets,
Exemptions recognized in the industry and not to be considered in any assay for quality of a karat gold optical product include: the hinge assembly (barrel or other special types such as are customarily used in plastic frames); washers, bushings, and nuts of screw assemblies; dowels; springs for spring shoe straps; metal parts permanently encased in a non-metallic covering; and for oxfords,
(b) Exemptions recognized in the industry and not to be considered in any assay for quality of a gold filled, gold overlay and rolled gold plate industry product, other than watchcases, include joints, catches, screws, pin stems, pins of scarf pins, hat pins, etc., field pieces and bezels for lockets, posts and separate backs of lapel buttons, bracelet and necklace snap tongues, springs, and metallic parts completely and permanently encased in a nonmetallic covering.
Exemptions recognized in the industry and not to be considered in any assay for quality of a gold filled, gold overlay and rolled gold plate optical product include: Screws; the hinge assembly (barrel or other special types such as are customarily used in plastic frames); washers, bushings, tubes and nuts of screw assemblies; dowels; pad inserts; springs for spring shoe straps, cores and/or inner windings of comfort cable temples; metal parts permanently encased in a nonmetallic covering; and for oxfords, the handle and catch.
(c) Exemptions recognized in the industry and not to be considered in any assay for quality of a silver industry product include screws, rivets, springs, spring pins for wrist watch straps; posts and separable backs of lapel buttons; wire pegs, posts, and nuts used for applying mountings or other ornaments, which mountings or ornaments shall be of the quality marked; pin stems (e.g., of badges, brooches, emblem pins, hat pins, and scarf pins, etc.); levers for belt buckles; blades and skeletons of pocket knives; field pieces and bezels for lockets; bracelet and necklace snap tongues; any other joints, catches, or screws; and metallic parts completely and permanently encased in a nonmetallic covering.
(d) Exemptions recognized in the industry and not to be considered in any assay for quality of an industry product of silver in combination with gold include joints, catches, screws, pin stems, pins of scarf pins, hat pins, etc., posts and separable backs of lapel buttons, springs, bracelet and necklace snap tongues, and metallic parts completely and permanently encased in a nonmetallic covering.
(e) Exemptions recognized in the industry and not to be considered in any assay for quality of a platinum industry product include springs, winding bars, sleeves, crown cores, mechanical joint pins, screws, rivets, dust bands, detachable movement rims, hat pin stems, and bracelet and necklace snap tongues.
PART 24 – GUIDES FOR SELECT LEATHER AND IMITATION LEATHER PRODUCTS
§ 24.0 Scope and purpose of guides.
(a) The Guides in this part apply to the manufacture, sale, distribution, marketing, or advertising of all kinds or types of leather or simulated-leather trunks, suitcases, traveling bags, sample cases, instrument cases, brief cases, ring binders, billfolds, wallets, key cases, coin purses, card cases, French purses, dressing cases, stud boxes, tie cases, jewel boxes, travel kits, gadget bags, camera bags, ladies’ handbags, shoulder bags, purses, pocketbooks, footwear, belts (when not sold as part of a garment) and similar articles (hereinafter, “industry products”).
(b) These Guides represent administrative interpretations of laws administered by the Federal Trade Commission for the guidance of the public in conducting its affairs in conformity with legal requirements. These Guides specifically address the application of section 5 of the FTC Act (15 U.S.C. 45) to the manufacture, sale, distribution, marketing, and advertising of industry products listed in paragraph (a) of this section. They provide the basis for voluntary compliance with such laws by members of industry. Conduct inconsistent with the positions articulated in these Guides may result in corrective action by the Commission under section 5 if, after investigation, the Commission has reason to believe that the behavior falls within the scope of conduct declared unlawful by the statute.
§ 24.1 Deception (general).
It is unfair or deceptive to misrepresent, directly or by implication, the kind, grade, quality, quantity, material content, thickness, finish, serviceability, durability, price, origin, size, weight, ease of cleaning, construction, manufacture, processing, distribution, or any other material aspect of an industry product.
§ 24.2 Deception as to composition.
It is unfair or deceptive to misrepresent, directly or by implication, the composition of any industry product or part thereof. It is unfair or deceptive to use the unqualified term “leather” or other unqualified terms suggestive of leather to describe industry products unless the industry product so described is composed in all substantial parts of leather.
(a) Imitation or simulated leather. If all or part of an industry product is made of non-leather material that appears to be leather, the fact that the material is not leather, or the general nature of the material as something other than leather, should be disclosed. For example: Not leather; Imitation leather; Simulated leather; Vinyl; Vinyl coated fabric; or Plastic.
(b) Embossed or processed leather. The kind and type of leather from which an industry product is made should be disclosed when all or part of the product has been embossed, dyed, or otherwise processed so as to simulate the appearance of a different kind or type of leather. For example:
(1) An industry product made wholly of top grain cowhide that has been processed so as to imitate pigskin may be represented as being made of Top Grain Cowhide.
(2) Any additional representation concerning the simulated appearance of an industry product composed of leather should be immediately accompanied by a disclosure of the kind and type of leather in the product. For example: Top Grain Cowhide With Simulated Pigskin Grain.
(c) Backing material. (1) The backing of any material in an industry product with another kind of material should be disclosed when the backing is not apparent upon casual inspection of the product, or when a representation is made which, absent such disclosure, would be misleading as to the product’s composition. For example: Top Grain Cowhide Backed With Vinyl.
(2) The composition of the different backing material should be disclosed if it is visible and consists of non-leather material with the appearance of leather, or leather processed so as to simulate a different kind of leather.
(d) Misuse of trade names, etc. A trade name, coined name, trademark, or other word or term, or any depiction or device should not be used if it misrepresents, directly or by implication, that an industry product is made in whole or in part from animal skin or hide, or that material in an industry product is leather or other material. This includes, among other practices, the use of a stamp, tag, label, card, or other device in the shape of a tanned hide or skin or in the shape of a silhouette of an animal, in connection with any industry product that has the appearance of leather but that is not made wholly or in substantial part from animal skin or hide.
(e) Misrepresentation that product is wholly of a particular composition. A misrepresentation should not be made, directly or by implication, that an industry product is made wholly of a particular composition. A representation as to the composition of a particular part of a product should clearly indicate the part to which the representation applies.
(1) An industry product made of top grain cowhide except for frame covering, gussets, and partitions that are made of plastic but have the appearance of leather may be described as: Top Grain Cowhide With Plastic Frame Covering, Gussets and Partitions; or Top Grain Cowhide With Gussets, Frame Covering and Partitions Made of Non-Leather Material.
(2) An industry product made throughout, except for hardware, of vinyl backed with cowhide may be described as: Vinyl Backed With Cowhide (See also disclosure provision concerning use of backing material in paragraph (c) of this section).
(3) An industry product made of top grain cowhide except for partitions and stay, which are made of plastic-coated fabric but have the appearance of leather, may be described as: Top Grain Cowhide With Partitions and Stay Made of Non-leather Material; or Top Grain Cowhide With Partitions and Stay Made of Plastic-Coated Fabric.
(f) Ground, pulverized, shredded, reconstituted, or bonded leather. A material in an industry product that contains ground, pulverized, shredded, reconstituted, or bonded leather and thus is not wholly the hide of an animal should not be represented, directly or by implication, as being leather. This provision does not preclude an accurate representation as to the ground, pulverized, shredded, reconstituted, or bonded leather content of the material. However, if the material appears to be leather, it should be accompanied by either:
(1) An adequate disclosure as described by paragraph (a) of this section; or
(2) If the terms “ground leather,” “pulverized leather,” “shredded leather,” “reconstituted leather,” or “bonded leather” are used, a disclosure of the percentage of leather fibers and the percentage of non-leather substances contained in the material. For example: An industry product made of a composition material consisting of 60% shredded leather fibers may be described as: Bonded Leather Containing 60% Leather Fibers and 40% Non-leather Substances.
(g) Form of disclosures under this section. All disclosures described in this section should appear in the form of a stamping on the product, or on a tag, label, or card attached to the product, and should be affixed so as to remain on or attached to the product until received by the consumer purchaser. All such disclosures should also appear in all advertising of such products irrespective of the media used whenever statements, representations, or depictions appear in such advertising which, absent such disclosures, serve to create a false impression that the products, or parts thereof, are of a certain kind of composition. The disclosures affixed to products and made in advertising should be of such conspicuousness and clarity as to be noted by purchasers and prospective purchasers casually inspecting the products or casually reading, or listening to, such advertising. A disclosure necessitated by a particular representation should be in close conjunction with the representation.
§ 24.3 Misuse of the terms “waterproof,” “dustproof,” “warpproof,” “scuffproof,” “scratchproof,” “scuff resistant,” and “scratch resistant.”
It is unfair or deceptive to:
(a) Use the term “Waterproof” to describe all or part of an industry product unless the designated product or material prevents water from contact with its contents under normal conditions of intended use during the anticipated life of the product or material.
(b) Use the term “Dustproof” to describe an industry product unless the product is so constructed that when it is closed dust cannot enter it.
(c) Use the term “Warpproof” to describe all or part of an industry product unless the designated product or part is such that it cannot warp.
(d) Use the term “Scuffproof,” “Scratchproof,” or other terms indicating that the product is not subject to wear in any other respect, to describe an industry product unless the outside surface of the product is immune to scratches or scuff marks, or is not subject to wear as represented.
(e) Use the term “Scuff Resistant,” “Scratch Resistant,” or other terms indicating that the product is resistant to wear in any other respect, unless there is a basis for the representation and the outside surface of the product is meaningfully and significantly resistant to scuffing, scratches, or to wear as represented.
PARTS 25-227 [RESERVED]
PART 233 – GUIDES AGAINST DECEPTIVE PRICING
§ 233.1 Former price comparisons.
(a) One of the most commonly used forms of bargain advertising is to offer a reduction from the advertiser’s own former price for an article. If the former price is the actual, bona fide price at which the article was offered to the public on a regular basis for a reasonably substantial period of time, it provides a legitimate basis for the advertising of a price comparison. Where the former price is genuine, the bargain being advertised is a true one. If, on the other hand, the former price being advertised is not bona fide but fictitious – for example, where an artificial, inflated price was established for the purpose of enabling the subsequent offer of a large reduction – the “bargain” being advertised is a false one; the purchaser is not receiving the unusual value he expects. In such a case, the “reduced” price is, in reality, probably just the seller’s regular price.
(b) A former price is not necessarily fictitious merely because no sales at the advertised price were made. The advertiser should be especially careful, however, in such a case, that the price is one at which the product was openly and actively offered for sale, for a reasonably substantial period of time, in the recent, regular course of his business, honestly and in good faith – and, of course, not for the purpose of establishing a fictitious higher price on which a deceptive comparison might be based. And the advertiser should scrupulously avoid any implication that a former price is a selling, not an asking price (for example, by use of such language as, “Formerly sold at $______”), unless substantial sales at that price were actually made.
(c) The following is an example of a price comparison based on a fictitious former price. John Doe is a retailer of Brand X fountain pens, which cost him $5 each. His usual markup is 50 percent over cost; that is, his regular retail price is $7.50. In order subsequently to offer an unusual “bargain”, Doe begins offering Brand X at $10 per pen. He realizes that he will be able to sell no, or very few, pens at this inflated price. But he doesn’t care, for he maintains that price for only a few days. Then he “cuts” the price to its usual level – $7.50 – and advertises: “Terrific Bargain: X Pens, Were $10, Now Only $7.50!” This is obviously a false claim. The advertised “bargain” is not genuine.
(d) Other illustrations of fictitious price comparisons could be given. An advertiser might use a price at which he never offered the article at all; he might feature a price which was not used in the regular course of business, or which was not used in the recent past but at some remote period in the past, without making disclosure of that fact; he might use a price that was not openly offered to the public, or that was not maintained for a reasonable length of time, but was immediately reduced.
(e) If the former price is set forth in the advertisement, whether accompanied or not by descriptive terminology such as “Regularly,” “Usually,” “Formerly,” etc., the advertiser should make certain that the former price is not a fictitious one. If the former price, or the amount or percentage of reduction, is not stated in the advertisement, as when the ad merely states, “Sale,” the advertiser must take care that the amount of reduction is not so insignificant as to be meaningless. It should be sufficiently large that the consumer, if he knew what it was, would believe that a genuine bargain or saving was being offered. An advertiser who claims that an item has been “Reduced to $9.99,” when the former price was $10, is misleading the consumer, who will understand the claim to mean that a much greater, and not merely nominal, reduction was being offered. [Guide I]
§ 233.2 Retail price comparisons; comparable value comparisons.
(a) Another commonly used form of bargain advertising is to offer goods at prices lower than those being charged by others for the same merchandise in the advertiser’s trade area (the area in which he does business). This may be done either on a temporary or a permanent basis, but in either case the advertised higher price must be based upon fact, and not be fictitious or misleading. Whenever an advertiser represents that he is selling below the prices being charged in his area for a particular article, he should be reasonably certain that the higher price he advertises does not appreciably exceed the price at which substantial sales of the article are being made in the area – that is, a sufficient number of sales so that a consumer would consider a reduction from the price to represent a genuine bargain or saving. Expressed another way, if a number of the principal retail outlets in the area are regularly selling Brand X fountain pens at $10, it is not dishonest for retailer Doe to advertise: “Brand X Pens, Price Elsewhere $10, Our Price $7.50”.
(b) The following example, however, illustrates a misleading use of this advertising technique. Retailer Doe advertises Brand X pens as having a “Retail Value $15.00, My Price $7.50,” when the fact is that only a few small suburban outlets in the area charge $15. All of the larger outlets located in and around the main shopping areas charge $7.50, or slightly more or less. The advertisement here would be deceptive, since the price charged by the small suburban outlets would have no real significance to Doe’s customers, to whom the advertisement of “Retail Value $15.00” would suggest a prevailing, and not merely an isolated and unrepresentative, price in the area in which they shop.
(c) A closely related form of bargain advertising is to offer a reduction from the prices being charged either by the advertiser or by others in the advertiser’s trade area for other merchandise of like grade and quality – in other words, comparable or competing merchandise – to that being advertised. Such advertising can serve a useful and legitimate purpose when it is made clear to the consumer that a comparison is being made with other merchandise and the other merchandise is, in fact, of essentially similar quality and obtainable in the area. The advertiser should, however, be reasonably certain, just as in the case of comparisons involving the same merchandise, that the price advertised as being the price of comparable merchandise does not exceed the price at which such merchandise is being offered by representative retail outlets in the area. For example, retailer Doe advertises Brand X pen as having “Comparable Value $15.00”. Unless a reasonable number of the principal outlets in the area are offering Brand Y, an essentially similar pen, for that price, this advertisement would be deceptive. [Guide II]
§ 233.3 Advertising retail prices which have been established or suggested by manufacturers (or other nonretail distributors).
(a) Many members of the purchasing public believe that a manufacturer’s list price, or suggested retail price, is the price at which an article is generally sold. Therefore, if a reduction from this price is advertised, many people will believe that they are being offered a genuine bargain. To the extent that list or suggested retail prices do not in fact correspond to prices at which a substantial number of sales of the article in question are made, the advertisement of a reduction may mislead the consumer.
(b) There are many methods by which manufacturers’ suggested retail or list prices are advertised: Large scale (often nationwide) mass-media advertising by the manufacturer himself; preticketing by the manufacturer; direct mail advertising; distribution of promotional material or price lists designed for display to the public. The mechanics used are not of the essence. This part is concerned with any means employed for placing such prices before the consuming public.
(c) There would be little problem of deception in this area if all products were invariably sold at the retail price set by the manufacturer. However, the widespread failure to observe manufacturers’ suggested or list prices, and the advent of retail discounting on a wide scale, have seriously undermined the dependability of list prices as indicators of the exact prices at which articles are in fact generally sold at retail. Changing competitive conditions have created a more acute problem of deception than may have existed previously. Today, only in the rare case are all sales of an article at the manufacturer’s suggested retail or list price.
(d) But this does not mean that all list prices are fictitious and all offers of reductions from list, therefore, deceptive. Typically, a list price is a price at which articles are sold, if not everywhere, then at least in the principal retail outlets which do not conduct their business on a discount basis. It will not be deemed fictitious if it is the price at which substantial (that is, not isolated or insignificant) sales are made in the advertiser’s trade area (the area in which he does business). Conversely, if the list price is significantly in excess of the highest price at which substantial sales in the trade area are made, there is a clear and serious danger of the consumer being misled by an advertised reduction from this price.
(e) This general principle applies whether the advertiser is a national or regional manufacturer (or other non-retail distributor), a mail-order or catalog distributor who deals directly with the consuming public, or a local retailer. But certain differences in the responsibility of these various types of businessmen should be noted. A retailer competing in a local area has at least a general knowledge of the prices being charged in his area. Therefore, before advertising a manufacturer’s list price as a basis for comparison with his own lower price, the retailer should ascertain whether the list price is in fact the price regularly charged by principal outlets in his area.
(f) In other words, a retailer who advertises a manufacturer’s or distributor’s suggested retail price should be careful to avoid creating a false impression that he is offering a reduction from the price at which the product is generally sold in his trade area. If a number of the principal retail outlets in the area are regularly engaged in making sales at the manufacturer’s suggested price, that price may be used in advertising by one who is selling at a lower price. If, however, the list price is being followed only by, for example, small suburban stores, house-to-house canvassers, and credit houses, accounting for only an insubstantial volume of sales in the area, advertising of the list price would be deceptive.
(g) On the other hand, a manufacturer or other distributor who does business on a large regional or national scale cannot be required to police or investigate in detail the prevailing prices of his articles throughout so large a trade area. If he advertises or disseminates a list or preticketed price in good faith (i.e., as an honest estimate of the actual retail price) which does not appreciably exceed the highest price at which substantial sales are made in his trade area, he will not be chargeable with having engaged in a deceptive practice. Consider the following example:
(h) Manufacturer Roe, who makes Brand X pens and sells them throughout the United States, advertises his pen in a national magazine as having a “Suggested Retail Price $10,” a price determined on the basis of a market survey. In a substantial number of representative communities, the principal retail outlets are selling the product at this price in the regular course of business and in substantial volume. Roe would not be considered to have advertised a fictitious “suggested retail price.” If retailer Doe does business in one of these communities, he would not be guilty of a deceptive practice by advertising, “Brand X Pens, Manufacturer’s Suggested Retail Price, $10, Our Price, $7.50.”
(i) It bears repeating that the manufacturer, distributor or retailer must in every case act honestly and in good faith in advertising a list price, and not with the intention of establishing a basis, or creating an instrumentality, for a deceptive comparison in any local or other trade area. For instance, a manufacturer may not affix price tickets containing inflated prices as an accommodation to particular retailers who intend to use such prices as the basis for advertising fictitious price reductions. [Guide III]
§ 233.4 Bargain offers based upon the purchase of other merchandise.
(a) Frequently, advertisers choose to offer bargains in the form of additional merchandise to be given a customer on the condition that he purchase a particular article at the price usually offered by the advertiser. The forms which such offers may take are numerous and varied, yet all have essentially the same purpose and effect. Representative of the language frequently employed in such offers are “Free,” “Buy One – Get One Free,” “2-For-1 Sale,” “Half Price Sale,” “1¢ Sale,” “50% Off,” etc. Literally, of course, the seller is not offering anything “free” (i.e., an unconditional gift), or
(b) Where the seller, in making such an offer, increases his regular price of the article required to be bought, or decreases the quantity and quality of that article, or otherwise attaches strings (other than the basic condition that the article be purchased in order for the purchaser to be entitled to the “free” or “1¢” additional merchandise) to the offer, the consumer may be deceived.
(c) Accordingly, whenever a “free,” “2-for-1,” “half price sale,” “1¢ sale,” “50% off” or similar type of offer is made, all the terms and conditions of the offer should be made clear at the outset. [Guide IV]
§ 233.5 Miscellaneous price comparisons.
The practices covered in the provisions set forth above represent the most frequently employed forms of bargain advertising. However, there are many variations which appear from time to time and which are, in the main, controlled by the same general principles. For example, retailers should not advertise a retail price as a “wholesale” price. They should not represent that they are selling at “factory” prices when they are not selling at the prices paid by those purchasing directly from the manufacturer. They should not offer seconds or imperfect or irregular merchandise at a reduced price without disclosing that the higher comparative price refers to the price of the merchandise if perfect. They should not offer an advance sale under circumstances where they do not in good faith expect to increase the price at a later date, or make a “limited” offer which, in fact, is not limited. In all of these situations, as well as in others too numerous to mention, advertisers should make certain that the bargain offer is genuine and truthful. Doing so will serve their own interest as well as that of the public. [Guide V]
PART 238 – GUIDES AGAINST BAIT ADVERTISING
§ 238.0 Bait advertising defined.
1
Bait advertising is an alluring but insincere offer to sell a product or service which the advertiser in truth does not intend or want to sell. Its purpose is to switch consumers from buying the advertised merchandise, in order to sell something else, usually at a higher price or on a basis more advantageous to the advertiser. The primary aim of a bait advertisement is to obtain leads as to persons interested in buying merchandise of the type so advertised.
§ 238.1 Bait advertisement.
No advertisement containing an offer to sell a product should be published when the offer is not a bona fide effort to sell the advertised product. [Guide 1]
§ 238.2 Initial offer.
(a) No statement or illustration should be used in any advertisement which creates a false impression of the grade, quality, make, value, currency of model, size, color, usability, or origin of the product offered, or which may otherwise misrepresent the product in such a manner that later, on disclosure of the true facts, the purchaser may be switched from the advertised product to another.
(b) Even though the true facts are subsequently made known to the buyer, the law is violated if the first contact or interview is secured by deception. [Guide 2]
§ 238.3 Discouragement of purchase of advertised merchandise.
No act or practice should be engaged in by an advertiser to discourage the purchase of the advertised merchandise as part of a bait scheme to sell other merchandise. Among acts or practices which will be considered in determining if an advertisement is a bona fide offer are:
(a) The refusal to show, demonstrate, or sell the product offered in accordance with the terms of the offer,
(b) The disparagement by acts or words of the advertised product or the disparagement of the guarantee, credit terms, availability of service, repairs or parts, or in any other respect, in connection with it,
(c) The failure to have available at all outlets listed in the advertisement a sufficient quantity of the advertised product to meet reasonably anticipated demands, unless the advertisement clearly and adequately discloses that supply is limited and/or the merchandise is available only at designated outlets,
(d) The refusal to take orders for the advertised merchandise to be delivered within a reasonable period of time,
(e) The showing or demonstrating of a product which is defective, unusable or impractical for the purpose represented or implied in the advertisement,
(f) Use of a sales plan or method of compensation for salesmen or penalizing salesmen, designed to prevent or discourage them from selling the advertised product. [Guide 3]
§ 238.4 Switch after sale.
No practice should be pursued by an advertiser, in the event of sale of the advertised product, of “unselling” with the intent and purpose of selling other merchandise in its stead. Among acts or practices which will be considered in determining if the initial sale was in good faith, and not a strategem to sell other merchandise, are:
(a) Accepting a deposit for the advertised product, then switching the purchaser to a higher-priced product,
(b) Failure to make delivery of the advertised product within a reasonable time or to make a refund,
(c) Disparagement by acts or words of the advertised product, or the disparagement of the guarantee, credit terms, availability of service, repairs, or in any other respect, in connection with it,
(d) The delivery of the advertised product which is defective, unusable or impractical for the purpose represented or implied in the advertisement. [Guide 4]
Sales of advertised merchandise. Sales of the advertised merchandise do not preclude the existence of a bait and switch scheme. It has been determined that, on occasions, this is a mere incidental byproduct of the fundamental plan and is intended to provide an aura of legitimacy to the overall operation.
PART 239 – GUIDES FOR THE ADVERTISING OF WARRANTIES AND GUARANTEES
§ 239.1 Purpose and scope of the guides.
The Guides for the Advertising of Warranties and Guarantees are intended to help advertisers avoid unfair or deceptive practices in the advertising of warranties or guarantees. The Guides are based upon Commission cases, and reflect changes in circumstances brought about by the Magnuson-Moss Warranty Act (15 U.S.C. 2301 et seq.) and the FTC Rules promulgated pursuant to the Act (16 CFR parts 701 and 702). The Guides do not purport to anticipate all possible unfair or deceptive acts or practices in the advertising of warranties or guarantees and the Guides should not be interpreted to limit the Commission’s authority to proceed against such acts or practices under section 5 of the Federal Trade Commission Act. The Commission may bring an action under section 5 against any advertiser who misrepresents the product or service offered, who misrepresents the terms or conditions of the warranty offered, or who employs other deceptive or unfair means.
Section 239.2 of the Guides applies only to advertisements for written warranties on consumer products, as “written warranty” and “consumer product” are defined in the Magnuson-Moss Warranty Act, 15 U.S.C. 2301, that are covered by the Rule on Pre-Sale Availability or Written Warranty Terms, 16 CFR part 702. The other sections of the Guides apply to the advertising of any warranty or guarantee.
§ 239.2 Disclosures in warranty or guarantee advertising.
(a) If an advertisement mentions a warranty or guarantee that is offered on the advertised product, the advertisement should disclose, with such clarity and prominence as will be noticed and understood by prospective purchasers, that prior to sale, at the place where the product is sold, prospective purchasers can see the written warranty or guarantee for complete details of the warranty coverage.
A. “The XYZ washing machine is backed by our limited 1 year warranty. For complete details, see our warranty at a dealer near you.”
B. “The XYZ bicycle is warranted for 5 years. Some restrictions may apply. See a copy of our warranty wherever XYZ products are sold.”
C. “We offer the best guarantee in the business. Read the details and compare wherever our fine products are sold.”
D. “See our full 2 year warranty at the store nearest you.”
E. “Don’t take our word – take our warranty. See our limited 2 year warranty where you shop.”
(b) If an advertisement in any catalogue, or in any other solicitation
A. “ABC quality cutlery is backed by our 10 year warranty. Write to us for a free copy at: (address).”
B. “ABC power tools are guaranteed. Read about our limited 90 day warranty in this catalogue.”
C. “Write to us for a free copy of our full warranty. You’ll be impressed how we stand behind our product.”
§ 239.3 “Satisfaction Guarantees” and similar representations in advertising; disclosure in advertising that mentions “satisfaction guarantees” or similar representations.
(a) A seller or manufacturer should use the terms “Satisfaction Guarantee,” “Money Back Guarantee,” “Free Trial Offer,” or similar representations in advertising only if the seller or manufacturer, as the case may be, refunds the full purchase price of the advertised product at the purchaser’s request.
(b) An advertisement that mentions a “Satisfaction Guarantee” or a similar representation should disclose, with such clarity and prominence as will be noticed and understood by prospective purchasers, any material limitations or conditions that apply to the “Satisfaction Guarantee” or similar representation.
§ 239.4 “Lifetime” and similar representations.
If an advertisement uses “lifetime,” “life,” or similar representations to describe the duration of a warranty or guarantee, then the advertisement should disclose, with such clarity and prominence as will be noticed and understood by prospective purchasers, the life to which the representation refers.
§ 239.5 Performance of warranties or guarantees.
A seller or manufacturer should advertise that a product is warranted or guaranteed only if the seller or manufacturer, as the case may be, promptly and fully performs its obligations under the warranty or guarantee.
PART 240 – GUIDES FOR ADVERTISING ALLOWANCES AND OTHER MERCHANDISING PAYMENTS AND SERVICES
§ 240.1 Purpose of the Guides.
The purpose of these Guides is to provide assistance to businesses seeking to comply with sections 2(d) and (e) of the Robinson-Patman Act (the “Act”). The guides are based on the language of the statute, the legislative history, administrative and court decisions, and the purposes of the Act. Although the Guides are consistent with the case law, the Commission has sought to provide guidance in some areas where no definitive guidance is provided by the case law. The Guides are what their name implies – guidelines for compliance with the law. They do not have the force of law. They do not confer any rights on any person and do not operate to bind the FTC or the public.
§ 240.2 Applicability of the law.
(a) The substantive provisions of section 2(d) and (e) apply only under certain circumstances. Section 2(d) applies only to:
(1) A seller of products
(2) Engaged in interstate commerce
(3) That either directly or through an intermediary
(4) Pays a customer for promotional services or facilities provided by the customer
(5) In connection with the resale (not the initial sale between the seller and the customer) of the seller’s products
(6) Where the customer is in competition with one or more of the seller’s other customers also engaged in the resale of the seller’s products of like grade and quality.
(b) Section 2(e) applies only to:
(1) A seller of products
(2) Engaged in interstate commerce
(3) That either directly or through an intermediary
(4) Furnishes promotional services or facilities to a customer
(5) In connection with the resale (not the initial sale between the seller and the customer) of the seller’s products
(6) Where the customer is in competition with one or more of the seller’s other customers also engaged in the resale of the seller’s products of like grade and quality.
(c) Additionally, section 5 of the FTC Act may apply to buyers of products for resale or to third parties. See § 240.13 of these Guides.
§ 240.3 Definition of seller.
Seller includes any person (manufacturer, wholesaler, distributor, etc.) who sells products for resale, with or without further processing. For example, selling candy to a retailer is a sale for resale without processing. Selling corn syrup to a candy manufacturer is a sale for resale with processing.
§ 240.4 Definition of customer.
A customer is any person who buys for resale directly from the seller, or the seller’s agent or broker. In addition, a “customer” is any buyer of the seller’s product for resale who purchases from or through a wholesaler or other intermediate reseller. The word “customer” which is used in section 2(d) of the Act includes “purchaser” which is used in section 2(e).
Note: There may be some exceptions to this general definition of “customer.” For example, the purchaser of distress merchandise would not be considered a “customer” simply on the basis of such purchase. Similarly, a retailer purchasing solely from other retailers, or making sporadic purchases from the seller or one that does not regularly sell the seller’s product, or that is a type of retail outlet not usually selling such products (e.g., a hardware store stocking a few isolated food items) will not be considered a “customer” of the seller unless the seller has been put on notice that such retailer is selling its product.
§ 240.5 Definition of competing customers.
Competing customers are all businesses that compete in the resale of the seller’s products of like grade and quality at the same functional level of distribution regardless of whether they purchase directly from the seller or through some intermediary.
§ 240.6 Interstate commerce.
The term “interstate commerce” has not been precisely defined in the statute. In general, if there is any part of a business which is not wholly within one state (for example, sales or deliveries of products, their subsequent distribution or purchase, or delivery of supplies or raw materials), the business may be subject to sections 2(d) and 2(e) of the Act. (The commerce standard for sections 2(d) and (e) is at least as inclusive as the commerce standard for section 2(a).) Sales or promotional offers within the District of Columbia and most United States possessions are also covered by the Act.
§ 240.7 Services or facilities.
The terms “services” and “facilities” have not been exactly defined by the statute or in decisions. One requirement, however, is that the services or facilities be used primarily to promote the resale of the seller’s product by the customer. Services or facilities that relate primarily to the original sale are covered by section 2(a). The following list provides some examples – the list is not exhaustive – of promotional services and facilities covered by sections 2(d) and (e):
§ 240.8 Need for a plan.
A seller who makes payments or furnishes services that come under the Act should do so according to a plan. If there are many competing customers to be considered or if the plan is complex, the seller would be well advised to put the plan in writing. What the plan should include is described in more detail in the remainder of these Guides. Briefly, the plan should make payments or services functionally available to all competing customers on proportionally equal terms. (See § 240.9 of this part.) Alternative terms and conditions should be made available to customers who cannot, in a practical sense, take advantage of any of the plan’s offerings. The seller should inform competing customers of the plans available to them, in time for them to decide whether to participate. (See § 240.10 of this part.)
§ 240.9 Proportionally equal terms.
(a) Promotional services and allowances should be made available to all competing customers on proportionally equal terms. No single way to do this is prescribed by law. Any method that treats competing customers on proportionally equal terms may be used. Generally, this can be done most easily by basing the payments made or the services furnished on the dollar volume or on the quantity of the product purchased during a specified period. However, other methods that result in proportionally equal allowances and services being offered to all competing customers are acceptable.
(b) When a seller offers more than one type of service, or payments for more than one type of service, all the services or payments should be offered on proportionally equal terms. The seller may do this by offering all the payments or services at the same rate per unit or amount purchased. Thus, a seller might offer promotional allowances of up to 12 cents a case purchased for expenditures on either newspaper or Internet advertising or handbills.
§ 240.10 Availability to all competing customers.
(a) Functional availability. (1) The seller should take reasonable steps to ensure that services and facilities are useable in a practical sense by all competing customers. This may require offering alternative terms and conditions under which customers can participate. When a seller provides alternatives in order to meet the availability requirement, it should take reasonable steps to ensure that the alternatives are proportionally equal, and the seller should inform competing customers of the various alternative plans.
(2) The seller should insure that promotional plans or alternatives offered to retailers do not bar any competing retailers from participation, whether they purchase directly from the seller or through a wholesaler or other intermediary.
(3) When a seller offers to competing customers alternative services or allowances that are proportionally equal and at least one such offer is useable in a practical sense by all competing customers, and refrains from taking steps to prevent customers from participating, it has satisfied its obligation to make services and allowances “functionally available” to all customers. Therefore, the failure of any customer to participate in the program does not place the seller in violation of the Act.
(b) Notice of available services and allowance.: The seller has an obligation to take steps reasonably designed to provide notice to competing customers of the availability of promotional services and allowances. Such notification should include enough details of the offer in time to enable customers to make an informed judgment whether to participate. When some competing customers do not purchase directly from the seller, the seller must take steps reasonably designed to provide notice to such indirect customers. Acceptable notification may vary. The following is a non-exhaustive list of acceptable methods of notification:
(1) By providing direct notice to customers;
(2) When a promotion consists of providing retailers with display materials, by including the materials within the product shipping container;
(3) By including brochures describing the details of the offer in shipping containers;
(4) By providing information on shipping containers or product packages of the availability and essential features of an offer, identifying a specific source for further information;
(5) By placing at reasonable intervals in trade publications of general and widespread distribution announcements of the availability and essential features of promotional offers, identifying a specific source for further information; and
(6) If the competing customers belong to an identifiable group on a specific mailing list, by providing relevant information of promotional offers to customers on that list. For example, if a product is sold lawfully only under Government license (alcoholic beverages, etc.), the seller may inform only its customers holding licenses.
(c) A seller may contract with intermediaries or other third parties to provide notice. See § 240.11.
§ 240.11 Wholesaler or third party performance of seller’s obligations.
A seller may contract with intermediaries, such as wholesalers, distributors, or other third parties, to perform all or part of the seller’s obligations under sections 2(d) and (e). The use of intermediaries does not relieve a seller of its responsibility to comply with the law. Therefore, in contracting with an intermediary, a seller should ensure that its obligations under the law are in fact fulfilled.
§ 240.12 Checking customer’s use of payments.
The seller should take reasonable precautions to see that the services the seller is paying for are furnished and that the seller is not overpaying for them. The customer should expend the allowance solely for the purpose for which it was given. If the seller knows or should know that what the seller is paying for or furnishing is not being properly used by some customers, the improper payments or services should be discontinued.
§ 240.13 Customer’s and third party liability.
(a) Customer’s liability. Sections 2(d) and (e) apply to sellers and not to customers. However, where there is likely injury to competition, the Commission may proceed under section 5 of the Federal Trade Commission Act against a customer who knows, or should know, that it is receiving a discriminatory price through services or allowances not made available on proportionally equal terms to its competitors engaged in the resale of a seller’s product. Liability for knowingly receiving such a discrimination may result whether the discrimination takes place directly through payments or services, or indirectly through deductions from purchase invoices or other similar means. In addition, the giving or knowing inducement or receipt of proportionally unequal promotional allowances may be challenged under sections 2(a) and 2(f) of the Act, respectively, where no promotional services are performed in return for the payments, or where the payments are not reasonably related to the customer’s cost of providing the promotional services. See, e.g., American Booksellers Ass’n v. Barnes & Noble, 135 F. Supp. 2d 1031 (N.D. Cal. 2001); but see United Magazine Co. v. Murdoch Magazines Distrib., Inc. 2001 U.S. Dist. Lexis 20878 (S.D.N.Y. 2001). Sections 2(a) and 2(f) of the Act may be enforced by disfavored customers, among others.
(b) Third party liability. Third parties, such as advertising media, may violate section 5 of the Federal Trade Commission Act through double or fictitious rates or billing. An advertising medium, such as the Internet, a newspaper, broadcast station, or printer of catalogues, that publishes a rate schedule containing fictitious rates (or rates that are not reasonably expected to be applicable to a representative number of advertisers), may violate section 5 if the customer uses such deceptive schedule or invoice for a claim for an advertising allowance, payment or credit greater than that to which it would be entitled under the seller’s promotional offering. Similarly, an advertising medium that furnishes a customer with an invoice that does not reflect the customer’s actual net advertising cost may violate section 5 if the customer uses the invoice to obtain larger payments than it is entitled to receive.
§ 240.14 Meeting competition.
A seller charged with discrimination in violation of sections 2(d) and (e) may defend its actions by showing that particular payments were made or services furnished in good faith to meet equally high payments or equivalent services offered or supplied by a competing seller. This defense is available with respect to payments or services offered on an area-wide basis, to those offered to new as well as old customers, and regardless of whether the discrimination has been caused by a decrease or an increase in the payments or services offered. A seller must reasonably believe that its offers are necessary to meet a competitor’s offer.
§ 240.15 Cost justification.
It is no defense to a charge of unlawful discrimination in the payment of an allowance or the furnishing of a service for a seller to show that such payment or service could be justified through savings in the cost of manufacture, sale or delivery.
PART 251 – GUIDE CONCERNING USE OF THE WORD “FREE” AND SIMILAR REPRESENTATIONS
§ 251.1 The guide.
(a) General. (1) The offer of “Free” merchandise or service is a promotional device frequently used to attract customers. Providing such merchandise or service with the purchase of some other article or service has often been found to be a useful and valuable marketing tool.
(2) Because the purchasing public continually searches for the best buy, and regards the offer of “Free” merchandise or service to be a special bargain, all such offers must be made with extreme care so as to avoid any possibility that consumers will be misled or deceived. Representative of the language frequently used in such offers are “Free”, “Buy 1-Get 1 Free”, “2-for-1 Sale”, “50% off with purchase of Two”, “1¢ Sale”, etc. (Related representations that raise many of the same questions include “____ Cents-Off”, “Half-Price Sale”, “
(b) Meaning of “Free”. (1) The public understands that, except in the case of introductory offers in connection with the sale of a product or service (See paragraph (f) of this section), an offer of “Free” merchandise or service is based upon a regular price for the merchandise or service which must be purchased by consumers in order to avail themselves of that which is represented to be “Free”. In other words, when the purchaser is told that an article is “Free” to him if another article is purchased, the word “Free” indicates that he is paying nothing for that article and no more than the regular price for the other. Thus, a purchaser has a right to believe that the merchant will not directly and immediately recover, in whole or in part, the cost of the free merchandise or service by marking up the price of the article which must be purchased, by the substitution of inferior merchandise or service, or otherwise.
(2) The term regular when used with the term price, means the price, in the same quantity, quality and with the same service, at which the seller or advertiser of the product or service has openly and actively sold the product or service in the geographic market or trade area in which he is making a “Free” or similar offer in the most recent and regular course of business, for a reasonably substantial period of time, i.e., a 30-day period. For consumer products or services which fluctuate in price, the “regular” price shall be the lowest price at which any substantial sales were made during the aforesaid 30-day period. Except in the case of introductory offers, if no substantial sales were made, in fact, at the “regular” price, a “Free” or similar offer would not be proper.
(c) Disclosure of conditions. When making “Free” or similar offers all the terms, conditions and obligations upon which receipt and retention of the “Free” item are contingent should be set forth clearly and conspicuously at the outset of the offer so as to leave no reasonable probability that the terms of the offer might be misunderstood. Stated differently, all of the terms, conditions and obligations should appear in close conjunction with the offer of “Free” merchandise or service. For example, disclosure of the terms of the offer set forth in a footnote of an advertisement to which reference is made by an asterisk or other symbol placed next to the offer, is not regarded as making disclosure at the outset. However, mere notice of the existence of a “Free” offer on the main display panel of a label or package is not precluded provided that (1) the notice does not constitute an offer or identify the item being offered “Free”, (2) the notice informs the customer of the location, elsewhere on the package or label, where the disclosures required by this section may be found, (3) no purchase or other such material affirmative act is required in order to discover the terms and conditions of the offer, and (4) the notice and the offer are not otherwise deceptive.
(d) Supplier’s responsibilities. Nothing in this section should be construed as authorizing or condoning the illegal setting or policing of retail prices by a supplier. However, if the supplier knows, or should know, that a “Free” offer he is promoting is not being passed on by a reseller, or otherwise is being used by a reseller as an instrumentality for deception, it is improper for the supplier to continue to offer the product as promoted to such reseller. He should take appropriate steps to bring an end to the deception, inlcuding the withdrawal of the “Free” offer.
(e) Resellers’ participation in supplier’s offers. Prior to advertising a “Free” promotion, a supplier should offer the product as promoted to all competing resellers as provided for in the Commission’s “Guides for Advertising Allowances and Other Merchandising Payments and Services.” In advertising the “Free” promotion, the supplier should identify those areas in which the offer is not available if the advertising is likely to be seen in such areas, and should clearly state that it is available only through participating resellers, indicating the extent of participation by the use of such terms as “some”, “all”, “a majority”, or “a few”, as the case may be.
(f) Introductory offers. (1) No “Free” offer should be made in connection with the introduction of a new product or service offered for sale at a specified price unless the offeror expects, in good faith, to discontinue the offer after a limited time and to commence selling the product or service promoted, separately, at the same price at which it was promoted with the “Free” offer.
(2) In such offers, no representation may be made that the price is for one item and that the other is “Free” unless the offeror expects, in good faith, to discontinue the offer after a limited time and to commence selling the product or service promoted, separately, at the same price at which it was promoted with a “Free” offer.
(g) Negotiated sales. If a product or service usually is sold at a price arrived at through bargaining, rather than at a regular price, it is improper to represent that another product or service is being offered “Free” with the sale. The same representation is also improper where there may be a regular price, but where other material factors such as quantity, quality, or size are arrived at through bargaining.
(h) Frequency of offers. So that a “Free” offer will be special and meaningful, a single size of a product or a single kind of service should not be advertised with a “Free” offer in a trade area for more than 6 months in any 12-month period. At least 30 days should elapse before another such offer is promoted in the same trade area. No more than three such offers should be made in the same area in any 12-month period. In such period, the offeror’s sale in that area of the product in the size promoted with a “Free” offer should not exceed 50 percent of the total volume of his sales of the product, in the same size, in the area.
(i) Similar terms. Offers of “Free” merchandise or services which may be deceptive for failure to meet the provisions of this section may not be corrected by the substitution of such similar words and terms as “gift”, “given without charge”, “bonus”, or other words or terms which tend to convey the impression to the consuming public that an article of merchandise or service is “Free”.
PART 254 – GUIDES FOR PRIVATE VOCATIONAL AND DISTANCE EDUCATION SCHOOLS
§ 254.0 Scope and application.
(a) The Guides in this part apply to persons, firms, corporations, or organizations engaged in the operation of privately owned schools that offer resident or distance courses, training, or instruction purporting to prepare or qualify individuals for employment in any occupation or trade, or in work requiring mechanical, technical, artistic, business, or clerical skills, or that is for the purpose of enabling a person to improve his appearance, social aptitude, personality, or other attributes. These Guides do not apply to resident primary or secondary schools or institutions of higher education offering at least a 2-year program of accredited college level studies generally acceptable for credit toward a bachelor’s degree.
(b) These Guides represent administrative interpretations of laws administered by the Federal Trade Commission for the guidance of the public in conducting its affairs in conformity with legal requirements. These Guides specifically address the application of section 5 of the FTC Act (15 U.S.C. 45) to the advertising, promotion, marketing, and sale of, and the recruitment of students for, courses or programs of instruction offered by private vocational or distance education schools. The Guides provide the basis for voluntary compliance with the law by members of the industry. Practices inconsistent with these Guides may result in corrective action by the Commission under section 5 of the FTC Act if, after investigation, the Commission has reason to believe that the practices fall within the scope of conduct declared unlawful by the statute.
§ 254.1 Definitions.
(a) Accredited. A school or program of instruction that has been evaluated and found to meet established criteria by an accrediting agency or association recognized for such purposes by the U.S. Department of Education.
(b) Approved. A school or program of instruction that has been recognized by a State or Federal agency as meeting educational standards or other related qualifications as prescribed by that agency for the school or program of instruction to which the term is applied. The term is not and should not be used interchangeably with “Accredited.” The term “Approved” is not justified by the mere grant of a corporate charter to operate or license to do business as a school and should not be used unless the represented “approval” has been affirmatively required or authorized by State or Federal law.
(c) Industry member. Industry Members are the persons, firms, corporations, or organizations covered by these Guides, as explained in § 254.0(a).
§ 254.2 Deceptive trade or business names.
(a) It is deceptive for an Industry Member to misrepresent, directly or indirectly, expressly or by implication, the nature of the school, its Accreditation, programs of instruction, methods of teaching, or any other material fact through the use of any trade or business name, label, insignia, or designation, or in any other manner.
(b) It is deceptive for an Industry Member to deceptively conceal in any way the fact that it is a school or to misrepresent, directly or indirectly, expressly or by implication, through the use of a trade or business name or in any other manner that:
(1) It is a part of or connected with a branch, bureau, or agency of the U.S. Government, including, but not limited to, the U.S. Department of Education, or of any State, or civil service commission; or
(2) It is an employment agency or an employment agent or authorized training facility for any industry or business.
§ 254.3 Misrepresentation of extent or nature of accreditation or approval.
(a) It is deceptive for an Industry Member to misrepresent, directly or indirectly, expressly or by implication, the nature, extent, or purpose of any Approval by a State or Federal agency or Accreditation by an accrediting agency or association. For example, an Industry Member should not:
(1) Represent, without qualification, that its school is Accredited unless all courses and programs of instruction have been Accredited by an accrediting agency recognized by the U.S. Department of Education. If an Accredited school offers courses or programs of instruction that are not Accredited, all advertisements or promotional materials pertaining to those courses or programs, and making reference to the Accreditation of the school, should clearly and conspicuously disclose that those particular courses or programs are not Accredited.
(2) Represent that its school or program of instruction is Approved, unless the nature, extent, and purpose of that Approval are disclosed.
(3) Misrepresent the extent to which a student successfully completing a course or program of instruction will be able to transfer any credits the student earns to any other postsecondary institution.
(b) It is deceptive for an Industry Member to misrepresent, directly or indirectly, expressly or by implication, that a school or program of instruction has been Approved by a particular industry, or that successful completion of a course or program of instruction qualifies the student for admission to a labor union or similar organization or for receiving a State or Federal license to perform certain functions.
(c) It is deceptive for an Industry Member to misrepresent, directly or indirectly, expressly or by implication, that its courses or programs of instruction are recommended by vocational counselors, high schools, colleges, educational organizations, employment agencies, or members of a particular industry, or that it has been the subject of unsolicited testimonials or endorsements from former students. It is deceptive for an Industry Member to use testimonials or endorsements that do not accurately reflect current practices of the school or current conditions or employment opportunities in the industry or occupation for which students are being trained.
The Commission’s Guides Concerning Use of Endorsements and Testimonials in Advertising (part 255 of this chapter) provide further guidance in this area.
(d) It is deceptive for an Industry Member to misrepresent, directly or indirectly, expressly or by implication, that its courses or programs of instruction fulfill a requirement that must be completed prior to taking a licensing examination.
§ 254.4 Misrepresentation of facilities, services, qualifications of staff, status, and employment prospects for students after training.
(a) It is deceptive for an Industry Member to misrepresent, directly or indirectly, expressly or by implication, in advertising, promotional materials, recruitment sessions, or in any other manner, the size, location, services, facilities, curriculum, books and materials, or equipment of its school or the number or educational qualifications of its faculty and other personnel. For example, an Industry Member should not:
(1) Misrepresent the qualifications, credentials, experience, or educational background of its instructors, sales representatives, or other employees.
(2) Misrepresent, through statements or pictures, or in any other manner, the nature or efficacy of its courses, training devices, methods, or equipment.
(3) Misrepresent the availability of employment while the student is undergoing instruction or the role of the school in providing or arranging for such employment.
(4) Misrepresent the availability, amount, or nature of any financial assistance available to students, including any Federal student financial assistance. If the cost of training is financed in whole or in part by loans, students should be informed that loans must be repaid whether or not they are successful in completing the program and obtaining employment.
(5) Misrepresent that a private entity providing any financial assistance to the students is part of the Federal government or that loans from the private entity have the same interest rate or repayment terms as loans received from the U.S. Department of Education.
(6) Misrepresent the nature of any relationship between the school or its personnel and any government agency, or that students of the school will receive preferred consideration for employment with any government agency.
(7) Misrepresent that certain individuals or classes of individuals are members of its faculty or advisory board, have prepared instructional materials, or are otherwise affiliated with the school.
(8) Misrepresent the nature and extent of any personal instruction, guidance, assistance, or other service, including placement assistance and assistance overcoming language barriers or learning disabilities, it will provide students either during or after completion of a course.
(9) Misrepresent the extent to which a prospective student will receive credit for courses or a program of instruction already completed at other postsecondary institutions.
(10) Misrepresent the percentage of students who withdraw from a course or program of instruction, or the percentage of students who complete or graduate from a course or program of instruction.
(11) Misrepresent security policies or crime statistics that the school must maintain.
(b) It is deceptive for an Industry Member to misrepresent, directly or indirectly, expressly or by implication, that it is a nonprofit organization or that it is affiliated or otherwise connected with any public institution or private religious or charitable organization.
(c) It is deceptive for an Industry Member that conducts its instruction by correspondence, or other form of distance education, to fail to clearly and conspicuously disclose that fact in all promotional materials.
(d) It is deceptive for an Industry Member to misrepresent, directly or indirectly, expressly or by implication, that a course or program of instruction has been recently revised or instructional equipment is up-to-date, or misrepresent its ability to keep a course or program of instruction current and up-to-date.
(e) It is deceptive for an Industry Member, in promoting any course or program of instruction in its advertising, promotional materials, or in any other manner, to misrepresent, directly or indirectly, expressly or by implication, whether through the use of text, images, endorsements, or by other means, the availability of employment after graduation from a school or program of instruction, the specific type of employment available to a student after graduation from a school or program of instruction, the success that the Industry Member’s graduates have realized in obtaining such employment, including the percentage of graduates who have received employment, or the salary or salary range that the Industry Member’s graduates have received, or can be expected to receive, in such employment.
The Commission’s Guides Concerning Use of Endorsements and Testimonials in Advertising (part 255 of this chapter) provide further guidance in this area.
§ 254.5 Misrepresentations of enrollment qualifications or limitations.
(a) It is deceptive for an Industry Member to misrepresent, directly or indirectly, expressly or by implication, the nature or extent of any prerequisites or qualifications for enrollment in a school or program of instruction.
(b) It is deceptive for an Industry Member to misrepresent, directly or indirectly, expressly or by implication, that the lack of a high school education or prior training or experience is not an impediment to successful completion of a course or program of instruction or obtaining employment in the field for which the course or program of instruction provides training.
(c) It is deceptive for an Industry Member to misrepresent, directly or indirectly, expressly or by implication, the time required to complete a course or program of instruction.
(d) It is deceptive for an Industry Member to misrepresent, directly or indirectly, expressly or by implication, a student’s likelihood of success in a school or program of instruction, including, but not limited to, misrepresenting the student’s score on any admissions test.
§ 254.6 Deceptive use of diplomas, degrees, or certificates.
(a) It is deceptive for an Industry Member to issue a degree, diploma, certificate of completion, or any similar document, that misrepresents, directly or indirectly, expressly or by implication, the subject matter, substance, or content of the course or program of instruction or any other material fact concerning the course or program of instruction for which it was awarded or the accomplishments of the student to whom it was awarded.
(b) It is deceptive for an Industry Member to offer or confer an academic, professional, or occupational degree, if the award of such degree has not been Approved by the appropriate State educational agency or Accredited by a nationally recognized accrediting agency, unless it clearly and conspicuously discloses, in all advertising and promotional materials that contain a reference to such degree, that its award has not been Approved or Accredited by such an agency.
(c) It is deceptive for an Industry Member to offer or confer a high school diploma unless the program of instruction to which it pertains is substantially equivalent to that offered by a resident secondary school, and unless the student is informed, by a clear and conspicuous disclosure in writing prior to enrollment, that the Industry Member cannot guarantee or otherwise control the recognition that will be accorded the diploma by institutions of higher education, other schools, or prospective employers, and that such recognition is a matter solely within the discretion of those entities.
§ 254.7 Deceptive sales practices.
(a) It is deceptive for an Industry Member to use advertisements or promotional materials that misrepresent, directly or indirectly, expressly or by implication, that employment is being offered or that a talent hunt or contest is being conducted. For example, captions such as, “Men/women wanted to train for * * * ,” “Help Wanted,” “Employment,” “Business Opportunities,” and words or terms of similar import, may falsely convey that employment is being offered and therefore should be avoided.
(b) It is deceptive for an Industry Member to fail to disclose to a prospective student, prior to enrollment, the total cost of the program of instruction and the school’s refund policy if the student does not complete the program of instruction.
(c) It is deceptive for an Industry Member to fail to disclose to a prospective student, prior to enrollment, all requirements for successfully completing the course or program of instruction and the circumstances that would constitute grounds for terminating the student’s enrollment prior to completion of the program of instruction.
PART 255 – GUIDES CONCERNING USE OF ENDORSEMENTS AND TESTIMONIALS IN ADVERTISING
§ 255.0 Purpose and definitions.
(a) The Guides in this part represent administrative interpretations of laws enforced by the Federal Trade Commission for the guidance of the public in conducting its affairs in conformity with legal requirements. Specifically, the Guides address the application of Section 5 of the FTC Act (15 U.S.C. 45) to the use of endorsements and testimonials in advertising. The Guides provide the basis for voluntary compliance with the law by advertisers and endorsers. Practices inconsistent with these Guides may result in corrective action by the Commission under Section 5 if, after investigation, the Commission has reason to believe that the practices fall within the scope of conduct declared unlawful by the statute. The Guides set forth the general principles that the Commission will use in evaluating endorsements and testimonials, together with examples illustrating the application of those principles. The Guides do not purport to cover every possible use of endorsements in advertising. Whether a particular endorsement or testimonial is deceptive will depend on the specific factual circumstances of the advertisement at issue.
(b) For purposes of this part, an endorsement means any advertising message (including verbal statements, demonstrations, or depictions of the name, signature, likeness or other identifying personal characteristics of an individual or the name or seal of an organization) that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser, even if the views expressed by that party are identical to those of the sponsoring advertiser. The party whose opinions, beliefs, findings, or experience the message appears to reflect will be called the endorser and may be an individual, group, or institution.
(c) The Commission intends to treat endorsements and testimonials identically in the context of its enforcement of the Federal Trade Commission Act and for purposes of this part. The term endorsements is therefore generally used hereinafter to cover both terms and situations.
(d) For purposes of this part, the term product includes any product, service, company or industry.
(e) For purposes of this part, an expert is an individual, group, or institution possessing, as a result of experience, study, or training, knowledge of a particular subject, which knowledge is superior to what ordinary individuals generally acquire.
Assume that rather than purchase the dog food with her own money, the consumer gets it for free because the store routinely tracks her purchases and its computer has generated a coupon for a free trial bag of this new brand. Again, her posting would not be deemed an endorsement under the Guides.
Assume now that the consumer joins a network marketing program under which she periodically receives various products about which she can write reviews if she wants to do so. If she receives a free bag of the new dog food through this program, her positive review would be considered an endorsement under the Guides.
§ 255.1 General considerations.
(a) Endorsements must reflect the honest opinions, findings, beliefs, or experience of the endorser. Furthermore, an endorsement may not convey any express or implied representation that would be deceptive if made directly by the advertiser. [See § 255.2(a) and (b) regarding substantiation of representations conveyed by consumer endorsements.
(b) The endorsement message need not be phrased in the exact words of the endorser, unless the advertisement affirmatively so represents. However, the endorsement may not be presented out of context or reworded so as to distort in any way the endorser’s opinion or experience with the product. An advertiser may use an endorsement of an expert or celebrity only so long as it has good reason to believe that the endorser continues to subscribe to the views presented. An advertiser may satisfy this obligation by securing the endorser’s views at reasonable intervals where reasonableness will be determined by such factors as new information on the performance or effectiveness of the product, a material alteration in the product, changes in the performance of competitors’ products, and the advertiser’s contract commitments.
(c) When the advertisement represents that the endorser uses the endorsed product, the endorser must have been a bona fide user of it at the time the endorsement was given. Additionally, the advertiser may continue to run the advertisement only so long as it has good reason to believe that the endorser remains a bona fide user of the product. [See § 255.1(b) regarding the “good reason to believe” requirement.](d)Advertisers are subject to liability for false or unsubstantiated statements made through endorsements, or for failing to disclose material connections between themselves and their endorsers [see § 255.5]. Endorsers also may be liable for statements made in the course of their endorsements.
In order to limit its potential liability, the advertiser should ensure that the advertising service provides guidance and training to its bloggers concerning the need to ensure that statements they make are truthful and substantiated. The advertiser should also monitor bloggers who are being paid to promote its products and take steps necessary to halt the continued publication of deceptive representations when they are discovered.
§ 255.2 Consumer endorsements.
(a) An advertisement employing endorsements by one or more consumers about the performance of an advertised product or service will be interpreted as representing that the product or service is effective for the purpose depicted in the advertisement. Therefore, the advertiser must possess and rely upon adequate substantiation, including, when appropriate, competent and reliable scientific evidence, to support such claims made through endorsements in the same manner the advertiser would be required to do if it had made the representation directly, i.e., without using endorsements. Consumer endorsements themselves are not competent and reliable scientific evidence.
(b) An advertisement containing an endorsement relating the experience of one or more consumers on a central or key attribute of the product or service also will likely be interpreted as representing that the endorser’s experience is representative of what consumers will generally achieve with the advertised product or service in actual, albeit variable, conditions of use. Therefore, an advertiser should possess and rely upon adequate substantiation for this representation. If the advertiser does not have substantiation that the endorser’s experience is representative of what consumers will generally achieve, the advertisement should clearly and conspicuously disclose the generally expected performance in the depicted circumstances, and the advertiser must possess and rely on adequate substantiation for that representation.
Nonetheless, the Commission cannot rule out the possibility that a strong disclaimer of typicality could be effective in the context of a particular advertisement. Although the Commission would have the burden of proof in a law enforcement action, the Commission notes that an advertiser possessing reliable empirical testing demonstrating that the net impression of its advertisement with such a disclaimer is non-deceptive will avoid the risk of the initiation of such an action in the first instance.
(c) Advertisements presenting endorsements by what are represented, directly or by implication, to be “actual consumers” should utilize actual consumers in both the audio and video, or clearly and conspicuously disclose that the persons in such advertisements are not actual consumers of the advertised product.
The ad will also likely communicate that the endorsers’ experiences are representative of what new users of the product can generally expect. Therefore, even if the advertiser includes a disclaimer such as, “Notice: These testimonials do not prove our product works. You should not expect to have similar results,” the ad is likely to be deceptive unless the advertiser has adequate substantiation that new users typically will experience results similar to those experienced by the testimonialists.
If, in the alternative, the advertisement simply features “before” and “after” pictures of a woman who says “I lost 50 pounds in 6 months with WeightAway,” the ad is likely to convey that her experience is representative of what consumers will generally achieve. Therefore, if consumers cannot generally expect to achieve such results, the ad should clearly and conspicuously disclose what they can expect to lose in the depicted circumstances (e.g., “most women who use WeightAway for six months lose at least 15 pounds”).
If the ad features the same pictures but the testimonialist simply says, “I lost 50 pounds with WeightAway,” and WeightAway users generally do not lose 50 pounds, the ad should disclose what results they do generally achieve (e.g., “most women who use WeightAway lose 15 pounds”).
If the motion picture studio had approached these individuals outside the theater and offered them free tickets if they would talk about the movie on camera afterwards, that arrangement should be clearly and conspicuously disclosed. [See § 255.5.]
§ 255.3 Expert endorsements.
(a) Whenever an advertisement represents, directly or by implication, that the endorser is an expert with respect to the endorsement message, then the endorser’s qualifications must in fact give the endorser the expertise that he or she is represented as possessing with respect to the endorsement.
(b) Although the expert may, in endorsing a product, take into account factors not within his or her expertise (e.g., matters of taste or price), the endorsement must be supported by an actual exercise of that expertise in evaluating product features or characteristics with respect to which he or she is expert and which are relevant to an ordinary consumer’s use of or experience with the product and are available to the ordinary consumer. This evaluation must have included an examination or testing of the product at least as extensive as someone with the same degree of expertise would normally need to conduct in order to support the conclusions presented in the endorsement. To the extent that the advertisement implies that the endorsement was based upon a comparison, such comparison must have been included in the expert’s evaluation; and as a result of such comparison, the expert must have concluded that, with respect to those features on which he or she is expert and which are relevant and available to an ordinary consumer, the endorsed product is at least equal overall to the competitors’ products. Moreover, where the net impression created by the endorsement is that the advertised product is superior to other products with respect to any such feature or features, then the expert must in fact have found such superiority. [See § 255.1(d) regarding the liability of endorsers.]
§ 255.4 Endorsements by organizations.
Endorsements by organizations, especially expert ones, are viewed as representing the judgment of a group whose collective experience exceeds that of any individual member, and whose judgments are generally free of the sort of subjective factors that vary from individual to individual. Therefore, an organization’s endorsement must be reached by a process sufficient to ensure that the endorsement fairly reflects the collective judgment of the organization. Moreover, if an organization is represented as being expert, then, in conjunction with a proper exercise of its expertise in evaluating the product under § 255.3 (expert endorsements), it must utilize an expert or experts recognized as such by the organization or standards previously adopted by the organization and suitable for judging the relevant merits of such products. [See § 255.1(d) regarding the liability of endorsers.]
§ 255.5 Disclosure of material connections.
When there exists a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement (i.e., the connection is not reasonably expected by the audience), such connection must be fully disclosed. For example, when an endorser who appears in a television commercial is neither represented in the advertisement as an expert nor is known to a significant portion of the viewing public, then the advertiser should clearly and conspicuously disclose either the payment or promise of compensation prior to and in exchange for the endorsement or the fact that the endorser knew or had reason to know or to believe that if the endorsement favored the advertised product some benefit, such as an appearance on television, would be extended to the endorser. Additional guidance, including guidance concerning endorsements made through other media, is provided by the examples below.
Assume that instead of speaking about the clinic in a television interview, the tennis player touts the results of her surgery – mentioning the clinic by name – on a social networking site that allows her fans to read in real time what is happening in her life. Given the nature of the medium in which her endorsement is disseminated, consumers might not realize that she is a paid endorser. Because that information might affect the weight consumers give to her endorsement, her relationship with the clinic should be disclosed.
Assume that during that same television interview, the tennis player is wearing clothes bearing the insignia of an athletic wear company with whom she also has an endorsement contract. Although this contract requires that she wear the company’s clothes not only on the court but also in public appearances, when possible, she does not mention them or the company during her appearance on the show. No disclosure is required because no representation is being made about the clothes in this context.
Assume, in the alternative, that the advertiser had not posted a sign on the door of the restaurant, but had informed all interviewed customers of the “hidden camera” only after interviews were completed and the customers had no reason to know or believe that their response was being recorded for use in an advertisement. Even if patrons were also told that they would be paid for allowing the use of their opinions in advertising, these facts need not be disclosed.
PART 259 – GUIDE CONCERNING FUEL ECONOMY ADVERTISING FOR NEW AUTOMOBILES
§ 259.1 Purpose.
The Guide in this part contains administrative interpretations of laws enforced by the Federal Trade Commission. Specifically, the Guide addresses the application of Section 5 of the FTC Act (15 U.S.C. 45) to the use of fuel economy information in advertising for new automobiles. This guidance provides the basis for voluntary compliance with the law by advertisers and endorsers. Practices inconsistent with this Guide may result in corrective action by the Commission under Section 5 if, after investigation, the Commission has reason to believe that the practices fall within the scope of conduct declared unlawful by the statute. The Guide sets forth the general principles that the Commission will use in such an investigation together with examples illustrating the application of those principles. The Guide does not purport to cover every possible use of fuel economy in advertising. Whether a particular advertisement is deceptive will depend on the specific advertisement at issue.
§ 259.2 Definitions.
For the purposes of this part, the following definitions shall apply:
Alternative fueled vehicle. Any vehicle that qualifies as a covered vehicle under part 309 of this chapter.
Automobile. Any new passenger automobile, medium duty passenger vehicle, or light truck for which a fuel economy label is required under the Energy Policy and Conservation Act (42 U.S.C. 32901 et seq.) or rules promulgated thereunder, the equitable or legal title to which has never been transferred by a manufacturer, distributor, or dealer to an ultimate purchaser or lessee. For the purposes of this part, the terms “vehicle” and “car” have the same meaning as “automobile.”
Dealer. Any person located in the United States or any territory thereof engaged in the sale or distribution of new automobiles to the ultimate purchaser.
EPA. The U.S. Environmental Protection Agency.
EPA city fuel economy estimate. The city fuel economy determined in accordance with the city test procedure as defined and determined pursuant to 40 CFR part 600, subpart D.
EPA combined fuel economy estimate. The fuel economy value determined for a vehicle (or vehicles) by harmonically averaging the city and highway fuel economy values, weighted 0.55 and 0.45 respectively, determined pursuant to 40 CFR part 600, subpart D.
EPA driving range estimate. An estimate of the number of miles a vehicle will travel between refueling as defined and determined pursuant to 40 CFR part 600, subpart D.
EPA fuel economy estimate. The average number of miles traveled by an automobile per volume of fuel consumed (i.e., Miles-Per-Gallon (“MPG”) rating) as calculated under 40 CFR part 600, subpart D.
EPA highway fuel economy estimate. The highway fuel economy determined in accordance with the highway test procedure as defined and determined pursuant to 40 CFR part 600, subpart D.
Flexible fueled vehicle. Any motor vehicle (or motor vehicle engine) engineered and designed to be operated on any mixture of two or more different fuels.
Fuel. (1) Gasoline and diesel fuel for gasoline- or diesel-powered automobiles;
(2) Electricity for electrically-powered automobiles;
(3) Alcohol for alcohol-powered automobiles;
(4) Natural gas for natural gas-powered automobiles; or
(5) Any other fuel type used in a vehicle for which EPA requires a fuel economy label under 40 CFR part 600, subpart D.
Manufacturer. Any person engaged in the manufacturing or assembling of new automobiles, including any person importing new automobiles for resale and any person who acts for, and is under the control, of such manufacturer, assembler, or importer in connection with the distribution of new automobiles.
Model type. A unique combination of car line, basic engine, and transmission class as defined by 40 CFR part 600, subpart D.
Ultimate purchaser or lessee. The first person, other than a dealer purchasing in his or her capacity as a dealer, who in good faith purchases a new automobile for purposes other than resale or leases such vehicle for his or her personal use.
Vehicle configuration. The unique combination of automobile features, as defined in 40 CFR part 600.
§ 259.3 Qualifications and disclosures.
To prevent deceptive claims, qualifications and disclosures should be clear, prominent, and understandable. To make disclosures clear and prominent, marketers should use plain language and sufficiently large type for a person to see and understand them, should place disclosures in close proximity to the qualified claim, and should avoid making inconsistent statements or using distracting elements that could undercut or contradict the disclosure. The disclosures should also appear in the same format as the claim. For example, for television advertisements, if the fuel economy claim appears in the video, the disclosure recommended by this Guide should appear in the visual format; if the fuel economy claim is audio, the disclosure should be in audio.
§ 259.4 Advertising guidance.
(a) Misrepresentations. It is deceptive to misrepresent, directly or by implication, the fuel economy or driving range of an automobile.
(b) General fuel economy claims. General unqualified fuel economy claims, which do not reference a specific fuel economy estimate, likely convey a wide range of meanings about a vehicle’s fuel economy relative to other vehicles. Such claims, which inherently involve comparisons to other vehicles, can mislead consumers about the vehicle class included in the comparison, as well as the extent to which the advertised vehicle’s fuel economy differs from other models. Because it is highly unlikely that advertisers can substantiate all reasonable interpretations of these claims, advertisers making general fuel economy claims should disclose the advertised vehicle’s EPA fuel economy estimate in the form of the EPA MPG rating.
(c) Matching the EPA estimate to the claim. EPA fuel economy estimates should match the mode of driving claim appearing in the advertisement. If they do not, consumers are likely to associate the stated fuel economy estimate with a different type of driving. Specifically, if an advertiser makes a city or a highway fuel economy claim, it should disclose the corresponding EPA-estimated city or highway fuel economy estimate. If the advertiser makes both a city and a highway fuel economy claim, it should disclose both the EPA estimated city and highway fuel economy rating. If the advertiser makes a general fuel economy claim without specifically referencing city or highway driving, it should disclose the EPA combined fuel economy estimate, or, alternatively, both the EPA city and highway fuel economy estimates.
(d) Identifying fuel economy and driving range ratings as estimates. Advertisers citing EPA fuel economy or driving range figures should disclose that these numbers are estimates. Without such disclosures, consumers may incorrectly assume that they will achieve the mileage or range stated in the advertisement. In fact, their actual mileage or range will likely vary for many reasons, including driving conditions, driving habits, and vehicle maintenance. To address potential deception, advertisers may state that the values are “EPA estimate(s),” or use equivalent language that informs consumers that they will not necessarily achieve the stated MPG rating or driving range.
(e) Disclosing EPA test as source of fuel economy and driving range estimates. Advertisers citing any EPA fuel economy or driving range figures should identify EPA as the source of the test so consumers understand that the estimate is comparable to EPA estimates for competing models. Doing so prevents deception by ensuring that consumers do not associate the claimed ratings with a test other than the EPA-required procedures. Advertisers may avoid deception by stating that the values are “EPA estimate(s),” or equivalent language that identifies the EPA test as the source.
(f) Specifying driving modes for fuel economy estimates. If an advertiser cites an EPA fuel economy estimate, it should identify the particular type of driving associated with the estimate (i.e., estimated city, highway, or combined MPG). Advertisements failing to do so can deceive consumers who incorrectly assume the disclosure applies to a specific type of driving, such as combined or highway, which may not be the driving type the advertiser intended. Thus, such consumers may believe the model’s fuel economy rating is higher than it actually is.
(g) Within vehicle class comparisons. If an advertisement contains an express comparative fuel economy claim where the relevant comparison is to any group or class, other than all available automobiles, the advertisement should identify the group or class of vehicles used in the comparison. Without such qualifying information, many consumers are likely to assume that the advertisement compares the vehicle to all new automobiles.
(h) Comparing different model types. Fuel economy estimates are assigned to specific model types under 40 CFR part 600, subpart D (i.e., unique combinations of car line, basic engine, and transmission class). Therefore, advertisers citing MPG ratings for certain models should ensure that the rating applies to the model type depicted in the advertisement. It is deceptive to state or imply that a rated fuel economy figure applies to a vehicle featured in an advertisement if the estimate does not apply to vehicles of that model type.
(i) “Up to” claims. Advertisers should avoid using the term “up to” without adequate explanatory language if they intend to communicate that certain versions of a model (i.e., model types) are rated at a stated fuel economy estimate. A significant proportion of reasonable consumers are likely to interpret such claims to mean that the stated MPG can be achieved if the vehicle is driven under certain conditions. Therefore, to address the risk of deception, advertisers should qualify the claim by clearly and prominently disclosing the stated MPG applies to a particular vehicle model type.
(j) Claims for flexible-fueled vehicles. Advertisements for flexible-fueled vehicles should not mislead consumers about the vehicle’s fuel economy when operated with alternative fuel. If an advertisement for a flexible-fueled vehicle (other than a plug-in hybrid electric vehicle) mentions the vehicle’s flexible-fuel capability and makes a fuel economy claim, it should clearly and prominently qualify the claim to identify the type of fuel used. Without such qualification, consumers are likely to take away that the stated fuel economy estimate applies to both gasoline and alternative fuel operation.
(k) General driving range claims. General unqualified driving range claims, which do not reference a specific driving range estimate, are difficult for consumers to interpret and likely convey a wide range of meanings about a vehicle’s range relative to other vehicles. Such claims, which inherently involve comparisons to other vehicles, can mislead consumers about the vehicle class included in the comparison as well as the extent to which the advertised vehicle’s driving range differs from other models. Consumers may take away a range of reasonable interpretations from these claims. To avoid possible deception, advertisers making general driving range claims should disclose the advertised vehicle’s EPA driving range estimate.
(l) Use of non-EPA estimates – (1) Disclosure content. Given consumers’ exposure to EPA estimated fuel economy values over the last several decades, fuel economy and driving range estimates derived from non-EPA tests can lead to deception if consumers understand such estimates to be fuel economy ratings derived from EPA-required tests. Accordingly, advertisers should avoid such claims and disclose the EPA fuel economy or driving range estimates. However, if an advertisement includes a claim about a vehicle’s fuel economy or driving range based on a non-EPA estimate, advertisers should disclose the EPA estimate and disclose with substantially more prominence than the non-EPA estimate:
(i) That the fuel economy or driving range information is based on a non-EPA test;
(ii) The source of the non-EPA test;
(iii) The EPA fuel economy estimates or EPA driving range estimates for the vehicle; and
(iv) All driving conditions or vehicle configurations simulated by the non-EPA test that are different from those used in the EPA test. Such conditions and variables may include, but are not limited to, road or dynamometer test, average speed, range of speed, hot or cold start, temperature, and design or equipment differences.
(2) Disclosure format. The Commission regards the following as constituting “substantially more prominence”:
(i) For visual disclosures on television. If the fuel economy claims appear only in the visual portion, the EPA figures should appear in numbers twice as large as those used for any other estimate, and should remain on the screen at least as long as any other estimate. Each EPA figure should be broadcast against a solid color background that contrasts easily with the color used for the numbers when viewed on both color and black and white television.
(ii) For audio disclosures. For radio and television advertisements in which any other estimate is used only in the audio, equal prominence should be given to the EPA figures. The Commission will regard the following as constituting equal prominence: The EPA estimated city and/or highway MPG should be stated, either before or after each disclosure of such other estimate, at least as audibly as such other estimate.
(iii) For print and Internet disclosures. The EPA figures should appear in clearly legible type at least twice as large as that used for any other estimate. The EPA figures should appear against a solid color, and contrasting background. They may not appear in a footnote unless all references to fuel economy appear in a footnote.
PART 260 – GUIDES FOR THE USE OF ENVIRONMENTAL MARKETING CLAIMS
§ 260.1 Purpose, scope, and structure of the guides.
(a) These guides set forth the Federal Trade Commission’s current views about environmental claims. The guides help marketers avoid making environmental marketing claims that are unfair or deceptive under Section 5 of the FTC Act, 15 U.S.C. 45. They do not confer any rights on any person and do not operate to bind the FTC or the public. The Commission, however, can take action under the FTC Act if a marketer makes an environmental claim inconsistent with the guides. In any such enforcement action, the Commission must prove that the challenged act or practice is unfair or deceptive in violation of Section 5 of the FTC Act.
(b) These guides do not preempt federal, state, or local laws. Compliance with those laws, however, will not necessarily preclude Commission law enforcement action under the FTC Act.
(c) These guides apply to claims about the environmental attributes of a product, package, or service in connection with the marketing, offering for sale, or sale of such item or service to individuals. These guides also apply to business-to-business transactions. The guides apply to environmental claims in labeling, advertising, promotional materials, and all other forms of marketing in any medium, whether asserted directly or by implication, through words, symbols, logos, depictions, product brand names, or any other means.
(d) The guides consist of general principles, specific guidance on the use of particular environmental claims, and examples. Claims may raise issues that are addressed by more than one example and in more than one section of the guides. The examples provide the Commission’s views on how reasonable consumers likely interpret certain claims. The guides are based on marketing to a general audience. However, when a marketer targets a particular segment of consumers, the Commission will examine how reasonable members of that group interpret the advertisement. Whether a particular claim is deceptive will depend on the net impression of the advertisement, label, or other promotional material at issue. In addition, although many examples present specific claims and options for qualifying claims, the examples do not illustrate all permissible claims or qualifications under Section 5 of the FTC Act. Nor do they illustrate the only ways to comply with the guides. Marketers can use an alternative approach if the approach satisfies the requirements of Section 5 of the FTC Act. All examples assume that the described claims otherwise comply with Section 5. Where particularly useful, the Guides incorporate a reminder to this effect.
§ 260.2 Interpretation and substantiation of environmental marketing claims.
Section 5 of the FTC Act prohibits deceptive acts and practices in or affecting commerce. A representation, omission, or practice is deceptive if it is likely to mislead consumers acting reasonably under the circumstances and is material to consumers’ decisions. See FTC Policy Statement on Deception, 103 FTC 174 (1983). To determine if an advertisement is deceptive, marketers must identify all express and implied claims that the advertisement reasonably conveys. Marketers must ensure that all reasonable interpretations of their claims are truthful, not misleading, and supported by a reasonable basis before they make the claims. See FTC Policy Statement Regarding Advertising Substantiation, 104 FTC 839 (1984). In the context of environmental marketing claims, a reasonable basis often requires competent and reliable scientific evidence. Such evidence consists of tests, analyses, research, or studies that have been conducted and evaluated in an objective manner by qualified persons and are generally accepted in the profession to yield accurate and reliable results. Such evidence should be sufficient in quality and quantity based on standards generally accepted in the relevant scientific fields, when considered in light of the entire body of relevant and reliable scientific evidence, to substantiate that each of the marketing claims is true.
§ 260.3 General principles.
The following general principles apply to all environmental marketing claims, including those described in §§ 260.4 through 240.16. Claims should comport with all relevant provisions of these guides.
(a) Qualifications and disclosures. To prevent deceptive claims, qualifications and disclosures should be clear, prominent, and understandable. To make disclosures clear and prominent, marketers should use plain language and sufficiently large type, should place disclosures in close proximity to the qualified claim, and should avoid making inconsistent statements or using distracting elements that could undercut or contradict the disclosure.
(b) Distinction between benefits of product, package, and service. Unless it is clear from the context, an environmental marketing claim should specify whether it refers to the product, the product’s packaging, a service, or just to a portion of the product, package, or service. In general, if the environmental attribute applies to all but minor, incidental components of a product or package, the marketer need not qualify the claim to identify that fact. However, there may be exceptions to this general principle. For example, if a marketer makes an unqualified recyclable claim, and the presence of the incidental component significantly limits the ability to recycle the product, the claim would be deceptive.
(c) Overstatement of environmental attribute. An environmental marketing claim should not overstate, directly or by implication, an environmental attribute or benefit. Marketers should not state or imply environmental benefits if the benefits are negligible.
(d) Comparative claims. Comparative environmental marketing claims should be clear to avoid consumer confusion about the comparison. Marketers should have substantiation for the comparison.
§ 260.4 General environmental benefit claims.
(a) It is deceptive to misrepresent, directly or by implication, that a product, package, or service offers a general environmental benefit.
(b) Unqualified general environmental benefit claims are difficult to interpret and likely convey a wide range of meanings. In many cases, such claims likely convey that the product, package, or service has specific and far-reaching environmental benefits and may convey that the item or service has no negative environmental impact. Because it is highly unlikely that marketers can substantiate all reasonable interpretations of these claims, marketers should not make unqualified general environmental benefit claims.
(c) Marketers can qualify general environmental benefit claims to prevent deception about the nature of the environmental benefit being asserted. To avoid deception, marketers should use clear and prominent qualifying language that limits the claim to a specific benefit or benefits. Marketers should not imply that any specific benefit is significant if it is, in fact, negligible. If a qualified general claim conveys that a product is more environmentally beneficial overall because of the particular touted benefit(s), marketers should analyze trade-offs resulting from the benefit(s) to determine if they can substantiate this claim.
(d) Even if a marketer explains, and has substantiation for, the product’s specific environmental attributes, this explanation will not adequately qualify a general environmental benefit claim if the advertisement otherwise implies deceptive claims. Therefore, marketers should ensure that the advertisement’s context does not imply deceptive environmental claims.
§ 260.5 Carbon offsets.
(a) Given the complexities of carbon offsets, sellers should employ competent and reliable scientific and accounting methods to properly quantify claimed emission reductions and to ensure that they do not sell the same reduction more than one time.
(b) It is deceptive to misrepresent, directly or by implication, that a carbon offset represents emission reductions that have already occurred or will occur in the immediate future. To avoid deception, marketers should clearly and prominently disclose if the carbon offset represents emission reductions that will not occur for two years or longer.
(c) It is deceptive to claim, directly or by implication, that a carbon offset represents an emission reduction if the reduction, or the activity that caused the reduction, was required by law.
§ 260.6 Certifications and seals of approval.
(a) It is deceptive to misrepresent, directly or by implication, that a product, package, or service has been endorsed or certified by an independent third party.
(b) A marketer’s use of the name, logo, or seal of approval of a third-party certifier or organization may be an endorsement, which should meet the criteria for endorsements provided in the FTC’s Endorsement Guides, 16 CFR part 255, including Definitions (§ 255.0), General Considerations (§ 255.1), Expert Endorsements (§ 255.3), Endorsements by Organizations (§ 255.4), and Disclosure of Material Connections (§ 255.5).
(c) Third-party certification does not eliminate a marketer’s obligation to ensure that it has substantiation for all claims reasonably communicated by the certification.
(d) A marketer’s use of an environmental certification or seal of approval likely conveys that the product offers a general environmental benefit (see § 260.4) if the certification or seal does not convey the basis for the certification or seal, either through the name or some other means. Because it is highly unlikely that marketers can substantiate general environmental benefit claims, marketers should not use environmental certifications or seals that do not convey the basis for the certification.
(e) Marketers can qualify general environmental benefit claims conveyed by environmental certifications and seals of approval to prevent deception about the nature of the environmental benefit being asserted. To avoid deception, marketers should use clear and prominent qualifying language that clearly conveys that the certification or seal refers only to specific and limited benefits.
§ 260.7 Compostable Claims.
(a) It is deceptive to misrepresent, directly or by implication, that a product or package is compostable.
(b) A marketer claiming that an item is compostable should have competent and reliable scientific evidence that all the materials in the item will break down into, or otherwise become part of, usable compost (e.g., soil-conditioning material, mulch) in a safe and timely manner (i.e., in approximately the same time as the materials with which it is composted) in an appropriate composting facility, or in a home compost pile or device.
(c) A marketer should clearly and prominently qualify compostable claims to the extent necessary to avoid deception if:
(1) The item cannot be composted safely or in a timely manner in a home compost pile or device; or
(2) The claim misleads reasonable consumers about the environmental benefit provided when the item is disposed of in a landfill.
(d) To avoid deception about the limited availability of municipal or institutional composting facilities, a marketer should clearly and prominently qualify compostable claims if such facilities are not available to a substantial majority of consumers or communities where the item is sold.
§ 260.8 Degradable claims.
(a) It is deceptive to misrepresent, directly or by implication, that a product or package is degradable, biodegradable, oxo-degradable, oxo-biodegradable, or photodegradable. The following guidance for degradable claims also applies to biodegradable, oxo-degradable, oxo-biodegradable, and photodegradable claims.
(b) A marketer making an unqualified degradable claim should have competent and reliable scientific evidence that the entire item will completely break down and return to nature (i.e., decompose into elements found in nature) within a reasonably short period of time after customary disposal.
(c) It is deceptive to make an unqualified degradable claim for items entering the solid waste stream if the items do not completely decompose within one year after customary disposal. Unqualified degradable claims for items that are customarily disposed in landfills, incinerators, and recycling facilities are deceptive because these locations do not present conditions in which complete decomposition will occur within one year.
(d) Degradable claims should be qualified clearly and prominently to the extent necessary to avoid deception about:
(1) The product’s or package’s ability to degrade in the environment where it is customarily disposed; and
(2) The rate and extent of degradation.
§ 260.9 Free-of claims.
(a) It is deceptive to misrepresent, directly or by implication, that a product, package, or service is free of, or does not contain or use, a substance. Such claims should be clearly and prominently qualified to the extent necessary to avoid deception.
(b) A truthful claim that a product, package, or service is free of, or does not contain or use, a substance may nevertheless be deceptive if:
(1) The product, package, or service contains or uses substances that pose the same or similar environmental risks as the substance that is not present; or
(2) The substance has not been associated with the product category.
(c) Depending on the context, a free-of or does-not-contain claim is appropriate even for a product, package, or service that contains or uses a trace amount of a substance if:
(1) The level of the specified substance is no more than that which would be found as an acknowledged trace contaminant or background level
(2) The substance’s presence does not cause material harm that consumers typically associate with that substance; and
(3) The substance has not been added intentionally to the product.
§ 260.10 Non-toxic claims.
(a) It is deceptive to misrepresent, directly or by implication, that a product, package, or service is non-toxic. Non-toxic claims should be clearly and prominently qualified to the extent necessary to avoid deception.
(b) A non-toxic claim likely conveys that a product, package, or service is non-toxic both for humans and for the environment generally. Therefore, marketers making non-toxic claims should have competent and reliable scientific evidence that the product, package, or service is non-toxic for humans and for the environment or should clearly and prominently qualify their claims to avoid deception.
§ 260.11 Ozone-safe and ozone-friendly claims.
It is deceptive to misrepresent, directly or by implication, that a product, package, or service is safe for, or friendly to, the ozone layer or the atmosphere.
§ 260.12 Recyclable claims.
(a) It is deceptive to misrepresent, directly or by implication, that a product or package is recyclable. A product or package should not be marketed as recyclable unless it can be collected, separated, or otherwise recovered from the waste stream through an established recycling program for reuse or use in manufacturing or assembling another item.
(b) Marketers should clearly and prominently qualify recyclable claims to the extent necessary to avoid deception about the availability of recycling programs and collection sites to consumers.
(1) When recycling facilities are available to a substantial majority of consumers or communities where the item is sold, marketers can make unqualified recyclable claims. The term “substantial majority,” as used in this context, means at least 60 percent.
(2) When recycling facilities are available to less than a substantial majority of consumers or communities where the item is sold, marketers should qualify all recyclable claims. Marketers may always qualify recyclable claims by stating the percentage of consumers or communities that have access to facilities that recycle the item. Alternatively, marketers may use qualifications that vary in strength depending on facility availability. The lower the level of access to an appropriate facility is, the more strongly the marketer should emphasize the limited availability of recycling for the product. For example, if recycling facilities are available to slightly less than a substantial majority of consumers or communities where the item is sold, a marketer may qualify a recyclable claim by stating: “This product [package] may not be recyclable in your area,” or “Recycling facilities for this product [package] may not exist in your area.” If recycling facilities are available only to a few consumers, marketers should use stronger clarifications. For example, a marketer in this situation may qualify its recyclable claim by stating: “This product [package] is recyclable only in the few communities that have appropriate recycling facilities.”
(c) Marketers can make unqualified recyclable claims for a product or package if the entire product or package, excluding minor incidental components, is recyclable. For items that are partially made of recyclable components, marketers should clearly and prominently qualify the recyclable claim to avoid deception about which portions are recyclable.
(d) If any component significantly limits the ability to recycle the item, any recyclable claim would be deceptive. An item that is made from recyclable material, but, because of its shape, size, or some other attribute, is not accepted in recycling programs, should not be marketed as recyclable.
§ 260.13 Recycled content claims.
(a) It is deceptive to misrepresent, directly or by implication, that a product or package is made of recycled content. Recycled content includes recycled raw material, as well as used,
(b) It is deceptive to represent, directly or by implication, that an item contains recycled content unless it is composed of materials that have been recovered or otherwise diverted from the waste stream, either during the manufacturing process (pre-consumer), or after consumer use (post-consumer). If the source of recycled content includes pre-consumer material, the advertiser should have substantiation that the pre-consumer material would otherwise have entered the waste stream. Recycled content claims may – but do not have to – distinguish between pre-consumer and post-consumer materials. Where a marketer distinguishes between pre-consumer and post-consumer materials, it should have substantiation for any express or implied claim about the percentage of pre-consumer or post-consumer content in an item.
(c) Marketers can make unqualified claims of recycled content if the entire product or package, excluding minor, incidental components, is made from recycled material. For items that are partially made of recycled material, the marketer should clearly and prominently qualify the claim to avoid deception about the amount or percentage, by weight, of recycled content in the finished product or package.
(d) For products that contain used, reconditioned, or re-manufactured components, the marketer should clearly and prominently qualify the recycled content claim to avoid deception about the nature of such components. No such qualification is necessary where it is clear to reasonable consumers from context that a product’s recycled content consists of used, reconditioned, or re-manufactured components.
§ 260.14 Refillable claims.
It is deceptive to misrepresent, directly or by implication, that a package is refillable. A marketer should not make an unqualified refillable claim unless the marketer provides the means for refilling the package. The marketer may either provide a system for the collection and refill of the package, or offer for sale a product that consumers can purchase to refill the original package.
§ 260.15 Renewable energy claims.
(a) It is deceptive to misrepresent, directly or by implication, that a product or package is made with renewable energy or that a service uses renewable energy. A marketer should not make unqualified renewable energy claims, directly or by implication, if fossil fuel, or electricity derived from fossil fuel, is used to manufacture any part of the advertised item or is used to power any part of the advertised service, unless the marketer has matched such non-renewable energy use with renewable energy certificates.
(b) Research suggests that reasonable consumers may interpret renewable energy claims differently than marketers may intend. Unless marketers have substantiation for all their express and reasonably implied claims, they should clearly and prominently qualify their renewable energy claims. For instance, marketers may minimize the risk of deception by specifying the source of the renewable energy (e.g., wind or solar energy).
(c) It is deceptive to make an unqualified “made with renewable energy” claim unless all, or virtually all, of the significant manufacturing processes involved in making the product or package are powered with renewable energy or non-renewable energy matched by renewable energy certificates. When this is not the case, marketers should clearly and prominently specify the percentage of renewable energy that powered the significant manufacturing processes involved in making the product or package.
(d) If a marketer generates renewable electricity but sells renewable energy certificates for all of that electricity, it would be deceptive for the marketer to represent, directly or by implication, that it uses renewable energy.
§ 260.16 Renewable materials claims.
(a) It is deceptive to misrepresent, directly or by implication, that a product or package is made with renewable materials.
(b) Research suggests that reasonable consumers may interpret renewable materials claims differently than marketers may intend. Unless marketers have substantiation for all their express and reasonably implied claims, they should clearly and prominently qualify their renewable materials claims. For example, marketers may minimize the risk of unintended implied claims by identifying the material used and explaining why the material is renewable.
(c) Marketers should also qualify any “made with renewable materials” claim unless the product or package (excluding minor, incidental components) is made entirely with renewable materials.
§ 260.17 Source reduction claims.
It is deceptive to misrepresent, directly or by implication, that a product or package has been reduced or is lower in weight, volume, or toxicity. Marketers should clearly and prominently qualify source reduction claims to the extent necessary to avoid deception about the amount of the source reduction and the basis for any comparison.
SUBCHAPTER C – REGULATIONS UNDER SPECIFIC ACTS OF CONGRESS
PART 300 – RULES AND REGULATIONS UNDER THE WOOL PRODUCTS LABELING ACT OF 1939
Definitions
§ 300.1 Terms defined.
(a) The term Act means the Wool Products Labeling Act of 1939, 15 U.S.C. 68 et seq., as amended by Public Law 96-242, 94 Stat. 344, and Public Law 109-428, 120 Stat. 2913.
(b) The terms rule, rules, regulations and rules and regulations mean the rules and regulations prescribed by the Commission pursuant to the Act.
(c) The term ornamentation means any fibers or yarns imparting a visibly discernible pattern or design to a yarn or fabric.
(d) The term fiber trademark means a word or words used by a person to identify a particular fiber produced or sold by him and to distinguish it from fibers of the same generic class produced or sold by others. Such term shall not include any trademark, product mark, house mark, trade name or other name which does not identify a particular fiber.
(e) The terms required information or information required mean such information as is required to be disclosed on the required stamp, tag, label or other means of identification under the Act and regulations.
(f) The definitions of terms contained in section 2 of the Act shall be applicable also to such terms when used in rules promulgated under the Act.
(g) The term United States means the several States, the District of Columbia, and the territories and possessions of the United States.
(h) The terms mail order catalog and mail order promotional material mean any materials, used in the direct sale or direct offering for sale of wool products, that are disseminated to ultimate consumers in print or by electronic means, other than by broadcast, and that solicit ultimate consumers to purchase such wool products by mail, telephone, electronic mail, or some other method without examining the actual product purchased.
(i) The terms label, labels, labeled, and labeling mean the stamp, tag, label, or other means of identification, or authorized substitute therefore, required to be on or affixed to wool products by the Act or Regulations and on which the information required is to appear.
(j) The terms invoice and invoice or other document have the meaning set forth in § 303.1(h) of this chapter.
(k) The term trimmings has the meaning set forth in § 303.12 of this chapter.
Labeling
§ 300.2 General requirement.
Each and every wool product subject to the act shall be marked by a stamp, tag, label, or other means of identification, in conformity with the requirements of the act and the rules and regulations thereunder.
§ 300.3 Required label information.
(a) The marking of wool products under the Act shall be in the form of a stamp, tag, label or other means of identification, showing and displaying upon the product the required information legibly, conspicuously, and nondeceptively. The information required to be shown and displayed upon the product in the stamp, tag, label, or other mark of identification, shall be that which is required by the Act and the rules and regulations thereunder, including the following:
(1) The fiber content of the product specified in section 4(a)(2)(A) of the Act. The generic names and percentages by weight of the constituent fibers present in the wool product, exclusive of permissive ornamentation, shall appear on such label with any percentage of fiber or fibers designated as “other fiber” or “other fibers” as provided by section 4(a)(2)(A)(4) of the Act appearing last
(2) The maximum percentage of the total weight of the wool product of any nonfibrous loading, filling or adulterating matter as prescribed by section 4(a)(2)(B) of the Act.
(3) The name or registered identification number issued by the Commission of the manufacturer of the wool product or the name or registered identification number of one or more persons subject to section 3 of the Act with respect to such wool product.
(4) The name of the country where the wool product was processed or manufactured.
(b) In disclosing the constituent fibers in information required by the Act and regulations in this part or in any non-required information, no fiber present in the amount of less than 5 percent shall be designated by its generic name or fiber trademark but shall be designated as “other fiber,” except that the percentage of wool or recycled wool shall always be stated, in accordance with section 4(a)(2)(A) of the Act. When more than one of such fibers, other than wool or recycled wool, are present in amounts of less than 5 percent, they shall be designated in the aggregate as “other fibers.” Provided, however, that nothing in this section shall prevent the disclosure of any fiber present in the product which has a clearly established and definite functional significance when present in the amount stated, as for example:
§ 300.4 Registered identification numbers.
(a) A registered identification number assigned by the Federal Trade Commission under and in accordance with the provisions of this section may be used upon the stamp, tag, label, or other mark of identification required under the Act to be affixed to a wool product, as and for the name of the person to whom such number has been assigned.
(b) Any manufacturer of a wool product or person subject to section 3 of the Act with respect to such wool product, residing in the United States, may apply to the Federal Trade Commission for a registered identification number for use by the applicant on the stamp, tag, label, or other mark of identification required under the Act.
(c) Registered identification numbers shall be used only by the person or firm to whom they are issued, and such numbers are not transferable or assignable. Registered identification numbers shall be subject to cancellation whenever any such number was procured or has been used improperly or contrary to the requirements of the Acts administered by the Federal Trade Commission, and regulations in this part, or when otherwise deemed necessary in the public interest. Registered identification numbers shall be subject to cancellation if the Commission fails to receive prompt notification of any change in name, business address, or legal business status of a person or firm to whom a registered identification number has been assigned, by application duly executed in the form and manner set out in paragraph (e) of this section, reflecting the current name, business address, and legal business status of the person or firm.
(d) Registered identification numbers assigned under this section may be used on labels required in labeling products subject to the provisions of the Fur Products Labeling Act and Textile Fiber Products Identification Act, and numbers previously assigned by the Commission under such Acts may be used as and for the required name in labeling under this Act. When so used by the person or firm to whom assigned, the use of the numbers shall be construed as identifying and binding the applicant as fully and in all respects as though assigned under the specific Act for which it is used.
(e) Requests for a registered identification number, to update information pertaining to an existing number, or to cancel an existing number shall be made through the Commission’s Web site at https://rn.ftc.gov. Unless otherwise directed by the Commission or its designee, requests made by other means (including but not limited to email) will not be accepted and approved.
§ 300.5 Required label and method of affixing.
(a) A label is required to be affixed to each wool product and, where required, to its package or container in a secure manner. Such label shall be conspicuous and shall be of such durability as to remain attached to the product and its package throughout any distribution, sale, resale and until sold and delivered to the ultimate consumer.
(b) Each wool product with a neck must have a label disclosing the country of origin affixed to the inside center of the neck midway between the shoulder seams or in close proximity to another label affixed to the inside center of the neck. The fiber content and RN or name of the company may be disclosed on the same label as the country of origin or on another conspicuous and readily accessible label or labels on the inside or outside of the garment. On all other wool products, the required information shall be disclosed on a conspicuous and readily accessible label or labels on the inside or outside of the product. The country of origin disclosure must always appear on the front side of the label. Other required information may appear either on the front side or the reverse side of a label, provided that the information is conspicuous and readily accessible.
(c) In the case of hosiery products, this section does not require affixing a label to each hosiery product contained in a package if, (1) such hosiery products are intended for sale to the ultimate consumer in such package, (2) such package has affixed to it a label bearing the required information for the hosiery products contained in the package, and (3) the information on the label affixed to the package is equally applicable to each wool product contained therein.
§ 300.6 Labels to be avoided.
Stamps, tags, labels, or other marks of identification, which are insecurely attached, or which in the course of offering the product for sale, selling, reselling, transporting, marketing, or handling incident thereto are likely to become detached, indistinct, obliterated, illegible, mutilated, inaccessible, or inconspicuous, shall not be used.
§ 300.7 English language requirement.
All words, statements and other information required by or under authority of the Act and the rules and regulations thereunder to appear on the stamp, tag, label, or other mark of identification, shall appear in the English language. If the product bears any stamp, tag, label, or mark of identification which contains any of the required information in a language other than English, all of the required information shall appear both in such other language and in the English language.
§ 300.8 Use of fiber trademark and generic names.
(a) Except where another name is required or permitted under the Act or regulations, the respective common generic name of the fiber shall be used when naming fibers in the required information; as for example, “wool,” “recycled wool,” “cotton,” “rayon,” “silk,” “linen,” “acetate,” “nylon,” “polyester.”
(b) The generic names of manufactured fibers as heretofore or hereafter established in § 303.7 of this part (Rule 7) of the regulations promulgated under the Textile Fiber Products Identification Act (72 Stat. 1717; 15 U.S.C. 70) shall be used in setting forth the required fiber content information as to wool products.
(c) A non-deceptive fiber trademark may be used on a label in conjunction with the generic name of the fiber to which it relates. Where such a trademark is placed on a label in conjunction with the required information, the generic name of the fiber must appear in immediate conjunction therewith, and such trademark and generic name must appear in type or lettering of equal size and conspicuousness.
(d) Where a generic name or a fiber trademark is used on any label, whether required or non-required, a full fiber content disclosure with percentages shall be made in accordance with the Act and regulations. Where a generic name or a fiber trademark is used on any hang-tag attached to a wool product that has a label providing required information and the hang-tag provides non-required information, such as a hang-tag stating only a generic fiber name or trademark or providing information about a particular fiber’s characteristics, the hang-tag need not provide a full fiber content disclosure; however, if the wool product contains any fiber other than the fiber identified by the generic fiber name or trademark, the hang-tag must disclose clearly and conspicuously that it does not provide the product’s full fiber content; for example:
“This tag does not disclose the product’s full fiber content.” or
“See label for the product’s full fiber content.”
(e) If a fiber trademark is not used in the required information, but is used elsewhere on the label as nonrequired information, the generic name of the fiber shall accompany the fiber trademark in legible and conspicuous type or lettering the first time the trademark is used.
(f) No fiber trademark or generic name or word, coined word, symbol or depiction which connotes or implies any fiber trademark or generic name shall be used on any label or elsewhere on the product in such a manner as to be false, deceptive, or misleading as to fiber content, or to indicate directly or indirectly that a wool product is composed wholly or in part of a particular fiber, when such is not the case.
(g) The term fur fiber may be used to describe the hair or fur fiber or mixtures thereof of any animal or animals other than the sheep, lamb, Angora goat, Cashmere goat, camel, alpaca, llama and vicuna. If the name, symbol, or depiction of any animal producing the hair or fur fiber is used on the stamp, tag, label, or other means of identification applied or affixed to the wool product, the percentage by weight of such hair or fur fiber in the total fiber weight of the wool product shall be separately stated in the required fiber content disclosure: Provided, That no such name, symbol or depiction shall be used where such hair or fur fiber is present in the amount of less than five per centum of the total fiber weight. No such name, symbol or depiction shall be used in such a way as to imply in any manner that a wool product contains the fur or hair of an animal when the hair or fur fiber of such animal is not present in the product in the amount of five per centum or more of the total fiber weight. The following are examples of fiber content disclosures under this paragraph:
§ 300.9 Abbreviations, ditto marks, and asterisks.
(a) In disclosing required information, words or terms shall not be designated by ditto marks or appear in footnotes referred to by asterisks or other symbols in required information, and shall not be abbreviated.
(b) Where the generic name of a textile fiber is required to appear in immediate conjunction with a fiber trademark, a disclosure of the generic name by means of a footnote, to which reference is made by use of an asterisk or other symbol placed next to the fiber trademark, shall not be sufficient in itself to constitute compliance with the Act and regulations.
§ 300.10 Disclosure of information on labels.
(a) Subject to the provisions of § 300.5(b), the required information may appear on any label or labels attached to the product, including the care label required by 16 CFR part 423, provided all the pertinent requirements of the Act and regulations in this part are met and so long as the combination of required information and non-required information is not misleading. All parts of the required information shall be set forth in such a manner as to be clearly legible, conspicuous, and readily accessible to the prospective purchaser. All parts of the required fiber content information shall appear in type or lettering of equal size and conspicuousness.
(b) Subject to the provisions of § 300.8, any non-required information or representations placed on the product shall not minimize, detract from, or conflict with required information and shall not be false, deceptive, or misleading.
§ 300.11 Improper methods of labeling.
The stamp, tag, label, or other mark of identification required under the act, or the required information contained therein, shall not be minimized, rendered obscure or inconspicuous, or be so placed as likely to be unnoticed or unseen by purchasers and purchaser-consumers when the product is offered or displayed for sale or sold to purchasers or the consuming public, by reason of, among others:
(a) Small or indistinct type.
(b) Failure to use letters and numerals of equal size and conspicuousness in naming all fibers and percentages of such fibers as required by the act.
(c) Insufficient background contrast.
(d) Crowding, intermingling, or obscuring with designs, vignettes, or other written, printed or graphic matter.
§ 300.12 Labeling of pairs or products containing two or more units.
(a) Where a wool product consists of two or more parts, units, or items of different fiber content, a separate label containing the required information shall be affixed to each of such parts, units, or items showing the required information as to such part, unit, or item, provided that where such parts, units, or items, are marketed or handled as a single product or ensemble and are sold and delivered to the ultimate consumer as a single product or ensemble, the required information may be set out on a single label in such a manner as to separately show the fiber composition of each part, unit, or item.
(b) Where garments, wearing apparel, or other wool products are marketed or handled in pairs or ensembles of the same fiber content, only one unit of the pair or ensemble need be labeled with the required information when sold and delivered to the ultimate consumer.
(c) Where parts or units of wool products of the types referred to in paragraphs (a) and (b) of this section are sold separately, such parts or units shall be labeled with the information required by the Act and regulations.
§ 300.13 Name or other identification required to appear on labels.
(a) The name required by the Act to be used on labels shall be the name under which the manufacturer of the wool product or other person subject to section 3 of the Act with respect to such product is doing business. Trade names, trade marks or other names which do not constitute the name under which such person is doing business shall not be used for required identification purposes.
(b) Registered identification numbers, as provided for in § 300.4 of this part (Rule 4), may be used for identification purposes in lieu of the required name.
§ 300.14 Substitute label requirement.
When necessary to avoid deception, the name of any person other than the manufacturer of the product appearing on the stamp, tag, label, or other mark of identification affixed to such product shall be accompanied by appropriate words showing that the product was not manufactured by such person; as for example:
§ 300.15 Labeling of containers or packaging of wool products.
When wool products are marketed and delivered in a package which is intended to remain unbroken and intact until after delivery to the ultimate consumer, each wool product in the package, except hosiery, and the package shall be labeled with the required information. If the package is transparent to the extent it allows for a clear reading of the required information on the wool product, the package is not required to be labeled.
§ 300.16 Ornamentation.
(a) Where the wool product contains fiber ornamentation not exceeding 5 percent of the total fiber weight of the product and the stated percentages of fiber content of the product are exclusive of such ornamentation, the stamp, tag, label, or other means of identification shall contain a phrase or statement showing such fact; as for example:
(b) Where the fiber ornamentation exceeds five per centum it shall be included in the statement of required percentages of fiber content.
(c) Where the ornamentation constitutes a distinct section of the product, sectional disclosure may be made in accordance with § 300.23 of this part (Rule 23).
§ 300.17 Use of the term “all” or “100%.”
Where the fabric or product to which the stamp, tag, label, or mark of identification applies is composed wholly of one kind of fiber, either the word all or the term 100% may be used with the correct fiber name; as for example “100% Wool,” “All Wool,” “100% Recycled Wool,” “All Recycled Wool.” If any such product is composed wholly of one fiber with the exception of fiber ornamentation not exceeding 5%, such term “all” or “100%” as qualifying the name of the fiber may be used, provided it is immediately followed by the phrase “exclusive of ornamentation,” or by a phrase of like meaning; such as, for example:
§ 300.18 Use of name of specialty fiber.
(a) In setting forth the required fiber content of a product containing any of the specialty fibers named in Section 2(b) of the Act, the name of the specialty fiber present may be used in lieu of the word “wool,” provided the percentage of each named specialty fiber is given, and provided further that the name of the specialty fiber so used is qualified by the word “recycled” when the fiber referred to is “recycled wool” as defined in the Act. The following are examples of fiber content designation permitted under this rule:
(b) Where an election is made to use the name of a specialty fiber in lieu of the word “wool” in describing such specialty fiber, such name shall be used at any time reference is made to the specialty fiber either in required or nonrequired information. The name of the specialty fiber or any word, coined word, symbol or depiction connoting or implying the presence of such specialty fiber shall not be used in nonrequired information on the required label or on any secondary or auxiliary label attached to the wool product if the name of such specialty fiber does not appear in the required fiber content disclosure.
§ 300.19 Use of terms “mohair” and “cashmere.”
(a)(1) In setting forth the required fiber content of a wool product, the term “cashmere” may be used for such fiber content only if:
(i) Such fiber consists of the fine (dehaired) undercoat fibers produced by a cashmere goat (capra hircus laniger);
(ii) The average diameter of such cashmere fiber does not exceed 19 microns; and
(iii) The cashmere fibers in such wool product contain no more than 3 percent (by weight) of cashmere fibers with average diameters that exceed 30 microns.
(2) The average fiber diameter may be subject to a coefficient of variation around the mean that shall not exceed 24 percent.
(b) In setting forth the required fiber content of a product containing hair of the Angora goat known as mohair or containing cashmere (as defined in paragraph (a) of this section), the term “mohair” or “cashmere,” respectively, may be used for such fiber in lieu of the word “wool,” provided the respective percentage of each such fiber designated as “mohair” or “cashmere” is given, and provided further that such term “mohair” or “cashmere” where used is qualified by the word “recycled” when the fiber referred to is “recycled wool” as defined in the Act. The following are examples of fiber content designations permitted under this section:
(c) Where an election is made to use the term “mohair” or “cashmere” in lieu of the term “wool” as permitted by this section, the appropriate designation of “mohair” or “cashmere” shall be used at any time reference is made to such fiber in either required or nonrequired information. The term “mohair” or “cashmere” or any words, coined words, symbols or depictions connoting or implying the presence of such fibers shall not be used in non-required information on the required label or on any secondary or auxiliary label attached to the wool product if the term “mohair” or “cashmere,” as the case may be, does not appear in the required fiber content disclosure.
§ 300.20 Use of the terms “virgin” or “new.”
The terms “virgin” or “new” as descriptive of a wool product, or any fiber or part thereof, shall not be used when the product, fiber or part so described is not composed wholly of new or virgin fiber which has never been reclaimed from any spun, woven, knitted, felted, braided, bonded, or otherwise manufactured or used product.
§ 300.20a Labeling of very fine wool.
A wool product stamped, tagged, labeled, or otherwise identified in the manner described below is mislabeled:
(a) “Super 80’s” or “80’s,” if the average diameter of wool fiber of such wool product does not average 19.75 microns or finer;
(b) “Super 90’s” or “90’s,” if the average diameter of wool fiber of such wool product does not average 19.25 microns or finer;
(c) “Super 100’s” or “100’s,” if the average diameter of wool fiber of such wool product does not average 18.75 microns or finer;
(d) “Super 110’s” or “110’s,” if the average diameter of wool fiber of such wool product does not average 18.25 microns or finer;
(e) “Super 120’s” or “120’s,” if the average diameter of wool fiber of such wool product does not average 17.75 microns or finer;
(f) “Super 130’s” or “130’s,” if the average diameter of wool fiber of such wool product does not average 17.25 microns or finer;
(g) “Super 140’s” or “140’s,” if the average diameter of wool fiber of such wool product does not average 16.75 microns or finer;
(h) “Super 150’s” or “150’s,” if the average diameter of wool fiber of such wool product does not average 16.25 microns or finer;
(i) “Super 160’s” or “160’s,” if the average diameter of wool fiber of such wool product does not average 15.75 microns or finer;
(j) “Super 170’s” or “170’s,” if the average diameter of wool fiber of such wool product does not average 15.25 microns or finer;
(k) “Super 180’s” or “180’s,” if the average diameter of wool fiber of such wool product does not average 14.75 microns or finer;
(l) “Super 190’s” or “190’s,” if the average diameter of wool fiber of such wool product does not average 14.25 microns or finer;
(m) “Super 200’s” or “200’s,” if the average diameter of wool fiber of such wool product does not average 13.75 microns or finer;
(n) “Super 210’s” or “210’s,” if the average diameter of wool fiber of such wool product does not average 13.25 microns or finer;
(o) “Super 220’s” or “220’s,” if the average diameter of wool fiber of such wool product does not average 12.75 microns or finer;
(p) “Super 230’s” or “230’s,” if the average diameter of wool fiber of such wool product does not average 12.25 microns or finer;
(q) “Super 240’s” or “240’s,” if the average diameter of wool fiber of such wool product does not average 11.75 microns or finer; and
(r) “Super 250’s” or “250’s,” if the average diameter of wool fiber of such wool product does not average 11.25 microns or finer.
§ 300.21 Marking of samples, swatches or specimens.
Where samples, swatches or specimens of wool products subject to the act were used to promote or effect sales of such wool products in commerce, said samples, swatches and specimens, as well as the products themselves, shall be labeled or marked to show their respective fiber contents and other information required by law.
§ 300.22 Sectional disclosure of content.
(a) Permissive. Where a wool product is composed of two or more sections which are of different fiber composition, the required information as to fiber content may be separated on the same label in such manner as to show the fiber composition of each section.
(b) Mandatory. The disclosure as above provided shall be made in all instances where such form of marking is necessary to avoid deception.
§ 300.23 Linings, paddings, stiffening, trimmings and facings.
(a) In labeling or marking garments or articles of apparel which are wool products, the fiber content of any linings, paddings, stiffening, trimmings or facings of such garments or articles of apparel shall be given and shall be set forth separately and distinctly in the stamp, tag, label, or other mark of identification of the products.
(1) If such linings, trimmings or facings contain, purport to contain or are represented as containing wool, or recycled wool; or
(2) If such linings are metallically coated, or coated or laminated with any substance for warmth, or if such linings are composed of pile fabrics, or any fabrics incorporated for warmth or represented directly or by implication as being incorporated for warmth, which articles the Commission finds constitute a class of articles which is customarily accompanied by express or implied representations of fiber content; or
(3) If any express or implied representations of fiber content of any of such linings, paddings, stiffening, trimmings or facings are customarily made.
(b) In the case of garments which contain interlinings, the fiber content of such interlinings shall be set forth separately and distinctly as part of the required information on the stamp, tag, label, or other mark of identification of such garment. For purposes of this paragraph (b) the term interlining means any fabric or fibers incorporated into a garment or article of wearing apparel as a layer between an outershell and an inner lining.
(c) In the case of wool products which are not garments or articles of apparel, but which contain linings, paddings, stiffening, trimmings, or facings, the stamp, tag, label, or other mark of identification of the product shall show the fiber content of such linings, paddings, stiffening, trimmings or facings, set forth separately and distinctly in such stamp, tag, label, or other mark of identification.
(d) Wool products which are or have been manufactured for sale or sold for use as linings, interlinings, paddings, stiffening, trimmings or facings, but not contained in a garment, article of apparel, or other product, shall be labeled or marked with the required information as in the case of other wool products.
§ 300.24 Representations as to fiber content.
(a) Words, coined words, symbols, or depictions which constitute or imply the name or designation of a fiber which is not present in the product shall not appear on labels. Any word or coined word which is phonetically similar to the name or designation of a fiber or which is only a slight variation in spelling from the name or designation of a fiber shall not be used in such a manner as to represent or imply that such fiber is present in the product when the fiber is not present as represented.
(b) Where a word, coined word, symbol, or depiction which connotes or implies the presence of a fiber is used on any label, whether required or non-required, a full fiber content disclosure with percentages shall be made on such label in accordance with the Act and regulations. Where a word, coined word, symbol, or depiction which connotes or implies the presence of a fiber is used on any hang-tag attached to a wool product that has a label providing required information and the hang-tag provides non-required information, such as a hang-tag providing information about a particular fiber’s characteristics, the hang-tag need not provide a full fiber content disclosure; however, if the wool product contains any fiber other than the fiber identified on the hang-tag, the hang-tag must disclose clearly and conspicuously that it does not provide the product’s full fiber content; for example:
“This tag does not disclose the product’s full fiber content.” or
“See label for the product’s full fiber content.”
§ 300.25 Country where wool products are processed or manufactured.
(a) In addition to the other information required by the Act and Regulations:
(1) Each imported wool product shall be labeled with the name of the country where such imported product was processed or manufactured;
(2) Each wool product completely made in the United States of materials that were made in the United States shall be labeled using the term Made in U.S.A. or some other clear and equivalent term.
(3) Each wool product made in the United States, either in whole or in part of imported materials, shall contain a label disclosing these facts; for example:
(4) Each wool product partially manufactured in a foreign country and partially manufactured in the United States shall contain on a label the following information:
(i) The manufacturing process in the foreign country and in the USA; for example:
(ii) When the U.S. Customs Service requires an origin label on the unfinished product, the manufacturing processes as required in paragraph (a)(4)(i) of this section or the name of the foreign country required by Customs, for example:
(b) For the purpose of determining whether a product should be marked under paragraphs (a) (2), (3), or (4) of this section, a manufacturer needs to consider the origin of only those materials that are covered under the Act and that are one step removed from that manufacturing process. For example, a yarn manufacturer must identify fiber if it is imported, a cloth manufacturer must identify imported yarn and a household product manufacturer must identify imported cloth or imported yarn for household products made directly from yarn, or imported fiber used as filling for warmth.
(c) The term country means the political entity known as a nation. Except for the United States, colonies, possessions or protectorates outside the boundaries of the mother country shall be considered separate countries, and the name thereof shall be deemed acceptable in designating the country where the wool product was processed or manufactured unless the Commission shall otherwise direct.
(d) The country of origin of an imported wool product as determined under the laws and regulations enforced by United States Customs and Border Protection shall be considered to be the country where such wool product was processed or manufactured.
(e) The English name of the country where the imported wool product was processed or manufactured shall be used. The adjectival form of the name of the country will be accepted as the name of the country where the wool product was processed or manufactured, provided the adjectival form of the name does not appear with such other words so as to refer to a kind of species of product. Variant spellings which clearly indicate the English name of the country, such as Brasil for Brazil and Italie for Italy, are acceptable. Abbreviations which unmistakenly indicate the name of a country, such as Gt. Britain for Great Britain, are acceptable.
(f) Nothing in this rule shall be construed as limiting in any way the information required to be disclosed on labels under the provisions of any Tariff Act of the United States or regulations promulgated thereunder.
§ 300.25a Country of origin in mail order advertising.
When a wool product is advertised in any mail order catalog or mail order promotional material, the description of such product shall contain a clear and conspicuous statement that the product was either made in U.S.A., imported, or both. Other words or phrases with the same meaning may be used. The statement of origin required by this section shall not be inconsistent with the origin labeling of the product being advertised.
§ 300.26 Pile fabrics and products composed thereof.
The fiber content of pile fabrics or products made thereof may be stated in the label or mark of identification in such segregated form as will show the fiber content of the face or pile and of the back or base, with the percentages of the respective fibers as they exist in the face or pile and in the back or base: Provided, That in such disclosure the respective percentages of the face and the back be given in such manner as will show the ratio between the face and the back. Examples of the form of marking pile fabrics as to fiber content provided for in this section are as follows:
§ 300.27 Wool products containing superimposed or added fibers.
Where a wool product is made wholly of one fiber or a blend of fibers with the exception of an additional fiber in minor proportion superimposed or added in certain separate and distinct areas or sections for reinforcing or other useful purposes, the product may be designated according to the fiber content of the principal fiber or blend of fibers, with an excepting naming the superimposed or added fiber, giving the percentage thereof in relation to the total fiber weight of the principal fiber or blend of fibers, and indicating the area or section which contains the superimposed or added fiber. An example of this type of fiber content disclosure, as applied to products having reinforcing fibers added to a particular area or section, is as follows:
§ 300.28 Undetermined quantities of reclaimed fibers.
(a) Where a wool product is composed in part of various man-made fibers recovered from textile products containing underdetermined qualities of such fibers, the percentage content of the respective fibers recovered from such products may be disclosed on the required stamp, tag, or label, in aggregate form as “man-made fibers” followed by the naming of such fibers in the order of their predominance by weight, as for example:
(b) Where a wool product is composed in part of wool, or recycled wool and in part of unknown and, for practical purposes, undeterminable non-woolen fibers reclaimed from any spun, woven, knitted, felted, braided, bonded or otherwise manufactured or used product, the required fiber content disclosure may, when truthfully applicable, in lieu of the fiber content disclosure otherwise required by the Act and regulations, set forth (1) the percentages of wool or recycled wool, and (2) the generic names and the percentages of all other fibers whose presence is known or practically ascertainable and (3) the percentage of the unknown and undeterminable reclaimed fibers, designating such reclaimed fibers as “unknown reclaimed fibers” or “undetermined reclaimed fibers,” as for example:
(c) The terms unknown recycled fibers and undetermined recycled fibers may be used in describing the unknown and undeterminable reclaimed fibers referred to in paragraph (b) of this rule in lieu of the terms specified therein, provided, however, That the same standard is used in determining the applicability of the term recycled as is used in defining “recycled wool” in section 2(c) of the Act.
(d) For purposes of this rule undetermined or unascertained amounts of wool or recycled wool may be classified and designated as recycled wool.
(e) Nothing contained in this rule shall excuse a full and accurate disclosure of fiber content with correct percentages if the same is known or practically ascertainable, or permit a deviation from the requirements of section 4(a)(2)(A) of the Act with respect to products not labeled under the provisions of this rule or permit a higher classification of wool or recycled wool than that provided by Section 2 of the Act.
§ 300.29 Garments or products composed of or containing miscellaneous cloth scraps.
(a) For wool products which consist of, or are made from, miscellaneous cloth scraps comprising manufacturing by-products and containing various fibers of undetermined percentages, the following form of disclosure as to fiber content of such wool products, where truthfully appliable and with appropriate percentage figure inserted, may be used in the stamp, tag, label, or mark of identification of such product:
(1) Where the product contains chiefly cotton as well as woolen fibers in the minimum percentage designated for recycled wool:
(2) Where the product contains chiefly rayon as well as woolen fibers in the minimum percentage designated for recycled wool:
(3) Where the product is composed chiefly of a mixture of cotton and rayon as well as woolen fibers in the minimum percentage designated for recycled wool:
(4) Where the product contains chiefly woolen fibers with the balance of undetermined mixtures of cotton, rayon or other non-woolen fibers:
(b) Where the cotton or rayon content or the non-woolen fiber content mentioned in such forms of disclosure is not known to comprise as much as 50% of the fiber content of the product, the word “chiefly” in the respective form of disclosure specified in this section shall be omitted.
(c) The words “Contents are” may be used in the above-mentioned forms of marking in lieu of the words “Made of” where appropriate to the nature of the product.
(d) For purposes of this rule, undetermined or unascertained amounts of wool or recycled wool which may be contained in the product may be classified and designated as recycled wool.
§ 300.30 Deceptive labeling in general.
Products subject to the act shall not bear, nor have used in connection therewith, any stamp, tag, label, mark or representation which is false, misleading or deceptive in any respect.
Manufacturers’ Records
§ 300.31 Maintenance of records.
(a) Pursuant to the provisions of section 6 of the Act, every manufacturer of a wool product subject to the Act, irrespective of whether any guaranty has been given or received, shall maintain records showing the information required by the Act and Regulations with respect to all such wool products made by such manufacturer. Such records shall show:
(1) The fiber content of the product specified in section 4(a)(2)(A) of the Act.
(2) The maximum percentage of the total weight of the wool product of any non-fibrous loading, filling or adulterating matter as prescribed by section 4(a)(2)(B) of the Act.
(3) The name, or registered identification number issued by the Commission, of the manufacturer of the wool product or the name or registered identification number of one or more persons subject to section 3 of the Act with respect to such wool product.
(4) The name of the country where the wool product was processed or manufactured as prescribed by sections 300.25a and/or .25b.
(b) Any person substituting labels shall keep such records as will show the information on the label removed and the name or names of the person or persons from whom the wool product was received.
(c) The purpose of these records is to permit a determination that the requirements of the Act and Regulations have been met and to establish a traceable line of continuity from raw material through processing to finished product. The records shall be preserved for at least three years.
Guaranties
§ 300.32 Form of separate guaranty.
(a) The following are suggested forms of separate guaranties under section 9 of the Act which may be used by a guarantor residing in the United States on or as part of an invoice or other document relating to the marketing or handling of any wool products listed and designated therein and showing the date of such invoice or other document and the signature and address of the guarantor:
(1) General form.
“We guarantee that the wool products specified herein are not misbranded under the provisions of the Wool Products Labeling Act and rules and regulations thereunder.”
(2) Guaranty based on guaranty.
“Based upon a guaranty received, we guarantee that the wool products specified herein are not misbranded under the provisions of the Wool Products Labeling Act and rules and regulations thereunder.”
The printed name and address on the invoice or other document will suffice to meet the signature and address requirements.
(b) The mere disclosure of required information including the fiber content of wool products on a label or on an invoice or other document relating to its marketing or handling shall not be considered a form of separate guaranty.
§ 300.33 Continuing guaranty filed with Federal Trade Commission.
(a)(1) Under section 9 of the Act any person residing in the United States and marketing or handling wool products may file a continuing guaranty with the Federal Trade Commission.
(2) When filed with the Commission a continuing guaranty shall be fully executed in duplicate. Forms for use in preparing continuing guaranties will be supplied by the Commission upon request.
(3) Continuing guaranties filed with the Commission shall continue in effect until revoked. The guarantor shall promptly report any change in business status to the Commission.
(b) The prescribed form for a continuing guaranty is found in § 303.38(b) of this chapter. The form is available upon request from the Textile Section, Enforcement Division, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580.
(c) Any person who has a continuing guaranty on file with the Commission may, during the effective dates of the guaranty, give notice of such fact by setting forth on the invoice or other document covering the marketing or handling of the product guaranteed the following:
Continuing Guaranty under the Wool Products Labeling Act filed with the Federal Trade Commission.
(d) Any person who falsely represents that he has a continuing guaranty on file with the Federal Trade Commission shall be deemed to have furnished a false guaranty under section 9(b) of the Act.
§ 300.34 Reference to existing guaranty on labels not permitted.
No representation or suggestion that a wool product is guaranteed under the act by the Government, or any branch thereof shall be made on or in the stamp, tag, label, or other mark of identification, applied or affixed to wool products.
General
§ 300.35 Hearings under section 4(d) of the act.
Hearings under section 4(d) of the act will be held when deemed by the Commission to be in the public interest. Interested persons may file applications for such hearings. Such applications shall be filed in quadruplicate and shall contain a detailed technical description of the class or classes of articles or products regarding which applicant requests a determination and announcement by the Commission concerning express or implied representations of fiber content of articles or concerning insignificant or inconsequential textile content of products.
PART 301 – RULES AND REGULATIONS UNDER FUR PRODUCTS LABELING ACT
Name Guide
§ 301.0 Fur products name guide.
| Name | Order | Family | Genus-species |
|---|---|---|---|
| Alpaca | Artiodactyla | Camelidae | Lama pacos. |
| Antelope | Artiodactyla | Bovidae | Hippotragus niger and Antilope cervicapra. |
| Badger | Carnivora | Mustelidae | Taxida sp. and Meles sp. |
| Bassarisk | ……do | Procyonidae | Bassariscus astutus. |
| Bear | ……do | Ursidae | Ursus sp. |
| Bear, Polar | ……do | ……do | Ursus maritimus. |
| Beaver | Rodentia | Castoridae | Castor canadensis. |
| Burunduk | ……do | Sciuridae | Eutamias asiaticus. |
| Calf | Artiodactyla | Bovidae | Bos taurus. |
| Cat, Caracal | Carnivora | Felidae | Caracal caracal. |
| Cat, Domestic | ……do | ……do | Felis catus. |
| Cat, Leopard | ……do | ……do | Prionailurus bengalensis. |
| Cat, Lynx | ……do | ……do | Lynx rufus. |
| Cat, Manul | ……do | ……do | Felis manul. |
| Cat, Margay | ……do | ……do | Leopardus wiedii. |
| Cat, Spotted | ……do | ……do | Felis sp. (South America). |
| Cat, Wild | ……do | ……do | Felis catus and Felis lybica. |
| Cheetah | ……do | ……do | Acinonyx jubatus. |
| Chinchilla | Rodentia | Chinchillidae | Chinchilla chinchilla. |
| Chipmunk | ……do | Sciuridae | Tamias sp. |
| Civet | Carnivora | Viverridae | Viverra sp., Viverricula sp., Paradoxurus sp., and Paguma sp. |
| Desman | Soricomorpha | Talpidae | Desmana moschata and Galemys pyrenaicus. |
| Dog | Carnivora | Canidae | Canis familiaris. |
| Ermine | ……do | Mustelidae | Mustela erminea. |
| Fisher | ……do | ……do | Martes pennanti. |
| Fitch | ……do | ……do | Mustela putorius. |
| Fox | ……do | Canidae | Vulpes vulpes, Vulpes macrotis. |
| Fox, Blue | ……do | ……do | Vulpes lagopus. |
| Fox, Grey | ……do | ……do | Urocyon cinereoargenteus and Urocyon littoralis. |
| Fox, Kit | ……do | ……do | Vulpes velox. |
| Fox, White | Carnivora | Canidae | Vulpes lagopus. |
| Genet | ……do | Viverridae | Genetta genetta. |
| Goat | Artiodactyla | Bovidae | Capra hircus. |
| Guanaco, or its young, the Guanaquito | ……do | Camelidae | Lama guanicoe. |
| Hamster | Rodentia | Cricetidae | Cricetus cricetus. |
| Hare | ……do | Leporidae | Lepus sp. and Lepus europaeus occidentalis. |
| Jackal | Carnivora | Canidae | Canis aureus and Canis adustus. |
| Jackal, Cape | ……do | ……do | Canis mesomelas. |
| Jaguar | ……do | Felidae | Panthera onca. |
| Jaguarundi | ……do | ……do | Herpailurus yagouaroundi. |
| Kangaroo | Diprotodontia | Macropodidae | Marcopus sp. |
| Kangaroo-rat | ……do | Potoroidae | Bettongia sp. |
| Kid | Artiodactyla | Bovidae | Capra hircus. |
| Kinkajou | Carnivora | Procyonidae | Potos flavus. |
| Koala | Diprotodontia | Phascolarctidae .. | Phascolarctos cinereus. |
| Kolinsky | Carnivora | Mustelidae | Mustela sibirica. |
| Lamb | Artiodactyla | Bovidae | Ovis aries. |
| Leopard | Carnivora | Felidae | Panthera pardus. |
| Llama | Artiodactyla | Camelidae | Lama glama. |
| Lynx | Carnivora | Felidae | Lynx canadensis and Lynx lynx. |
| Marmot | Rodentia | Sciuridae | Marmota bobak. |
| Marten, American | Carnivora | Mustelidae | Martes americana and Martes caurina. |
| Marten, Baum | ……do | ……do | Martes martes. |
| Marten, Japanese | ……do | ……do | Martes melampus. |
| Marten, Stone | ……do | ……do | Martes foina. |
| Mink | ……do | ……do | Mustela vison and Mustela lutreola. |
| Mole | Soricomorpha | Talpidae | Talpa sp. |
| Monkey | Primates | Cercopithecidae | Colobus polykomos. |
| Muskrat | Rodentia | Muridae | Ondatra zibethicus. |
| Nutria | ……do | Myocastoridae | Myocastor coypus. |
| Ocelot | Carnivora | Felidae | Leopardus pardalis |
| Opossum | Didelphimorphia | Didelphidae | Didelphis sp. |
| Opossum, Australian | Diprotodontia | Phalangeridae | Trichosurus vulpecula. |
| Opossum, Ringtail | ……do | Pseudocheiridae | Pseudocheirus sp. |
| Opossum, South American | Didelphimorphia | Didelphidae | Lutreolina crassicaudata. |
| Opossum, Water | ……do | ……do | Chironectes minimus. |
| Otter | Carnivora | Mustelidae | Lontra canadensis, Pteronura brasiliensis, and Lutra lutra. |
| Otter, Sea | ……do | ……do | Enhydra lutris. |
| Pahmi | ……do | ……do | Helictis moschata and Helictis personata. |
| Panda | Carnivora | Ailuridae | Ailurus fulgens. |
| Peschanik | Rodentia | Sciuridae | Spermophilus fulvus. |
| Pony | Perissodactyla | Equidae | Equus caballus. |
| Rabbit | Lagomorpha | Leporidae | Oryctolagus cuniculus. |
| Raccoon | Carnivora | Procyonidae | Procyon lotor and Procyon cancrivorus. |
| Raccoon, Asiatic | ……do | Canidae | Nyctereutes procyonoides. |
| Raccoon, Mexican | ……do | Procyonidae | Nasua sp. |
| Reindeer | Artiodactyla | Cervidae | Rangifer tarandus. |
| Sable | Carnivora | Mustelidae | Martes zibellina. |
| Sable, American | ……do | ……do | Martes americana and Martes caurina. |
| Seal, Fur | Carnivora | Otariidae | Callorhinus ursinus. |
| Seal, Hair | ……do | Phocidae | Phoca sp. |
| Seal, Roc | ……do | Otariidae | Otaria flavescens. |
| Sheep | Artiodactyla | Bovidae | Ovis aries. |
| Skunk | Carnivora | Mephitidae | Mephitis mephitis, Mephitis macroura, Conepatus semistriatus and Conepatus sp. |
| Skunk, Spotted .. | ……do | ……do | Spilogale sp. |
| Squirrel | Rodentia | Sciuridae | Sciurus vulgaris. |
| Squirrel, Flying | ……do | ……do | Eupetaurus cinereus, Pteromys volans and Petaurista leucogenys. |
| Suslik | ……do | ……do | Spermophilus citellus, Spermophilus major rufescens and Spermophilus suslicus. |
| Vicuna | Artiodactyla | Camelidae | Vicugna vicugna. |
| Viscacha | Rodentia | Chinchillidae | Lagidium sp. |
| Wallaby | Diprotodontia | Macropodidae | Wallabia sp., Petrogale sp., and Thylogale sp. |
| Weasel | Carnivora | Mustelidae | Mustela frenata. |
| Weasel, Chinese | ……do | ……do | Mustela sibirica. |
| Weasel, Japanese | ……do | ……do | Mustela itatsi (also classified as Mustela sibirica itatsi). |
| Weasel, Manchurian | Carnivora | Mustelidae | Mustela altaica and Mustela nivalis rixosa. |
| Wolf | ……do | Canidae | Canis lupus. |
| Wolverine | ……do | Mustelidae | Gulo gulo. |
| Wombat | Diprotodontia | Vombatidae | Vombatus sp. |
| Woodchuck | Rodentia | Sciuridae | Marmota monax. |
Regulations
§ 301.1 Terms defined.
(a) As used in this part, unless the context otherwise specifically requires:
(1) The term act means the Fur Products Labeling Act (approved Aug. 8, 1951, Pub. L. 110, 82d Cong., 1st Sess.; 15 U.S.C.A. sec. 69; 65 Stat. 179).
(2) The terms rule, rules, regulations, and rules and regulations, mean the rules and regulations prescribed by the Commission pursuant to section 8 (b) of the act.
(3) The definitions of terms contained in section 2 of the act shall be applicable also to such terms when used in rules promulgated under the act.
(4) The terms Fur Products Name Guide and Name Guide mean the register of names of hair, fleece, and fur-bearing animals issued and amended by the Commission pursuant to the provisions of section 7 of the act.
(5) The terms required information and information required mean the information required to be disclosed on labels, invoices and in advertising under the act and rules and regulations, and such further information as may be permitted by the regulations, when and if used.
(6) The terms invoice and invoice or other document mean an account, order, memorandum, list, or catalog, which is issued to a purchaser, consignee, bailee, correspondent, agent, or any other person, electronically, in writing, or in some other form capable of being read and preserved in a form that is capable of being accurately reproduced for later reference, whether by transmission, printing, or otherwise, in connection with the marketing or handling of any fur or fur product transported or delivered to such person.
(b) The term wearing apparel as used in the definition of a fur product in section 2(d) of the Act means (1) Any articles of clothing or covering for any part of the body; and (2) shall include any assembled furs, used furs, or waste furs, in attached form, including mats, plates or garment shells or furs flat off the board, and furs which have been dyed, tip-dyed, bleached or artificially colored, intended for use as or in wearing apparel: Provided, however, That the provisions of section 4(2) of the Act shall not be applicable to those fur products set out in paragraph (b)(2) of this section.
§ 301.2 General requirements.
(a) Each and every fur product, except those exempted under § 301.39 of this part, shall be labeled and invoiced in conformity with the requirements of the act and rules and regulations.
(b) Each and every fur, except those exempted under § 301.39, shall be invoiced in conformity with the requirements of the act and rules and regulations.
(c) Any advertising of fur products or furs, except those exempted under § 301.39, shall be in conformity with the requirements of the act and rules and regulations.
§ 301.3 English language requirements.
All information required under the act and rules and regulations to appear on labels, invoices, and in advertising, shall be set out in the English language. If labels, invoices or advertising matter contain any of the required information in a language other than English, all of the required information shall appear also in the English language. The provisions of this section shall not apply to advertisements in foreign language newspapers or periodicals, but such advertising shall in all other respects comply with the act and regulations.
§ 301.4 Abbreviations or ditto marks prohibited.
In disclosing required information in labeling and advertising, words or terms shall not be abbreviated or designated by the use of ditto marks but shall be spelled out fully, and in invoicing the required information shall not be abbreviated but shall be spelled out fully.
§ 301.5 Use of Fur Products Name Guide.
(a) The Fur Products Name Guide (§ 301.0 of this part) is set up in four columns under the headings of Name, Order, Family and Genus-Species. The applicable animal name appearing in the column headed “Name” shall be used in the required information in labeling, invoicing and advertising of fur products and furs. The scientific names appearing under the columns headed Order, Family, and Genus-Species are furnished for animal identification purposes and shall not be used.
(b) Where the name of the animal appearing in the Name Guide consists of two separate words the second word shall precede the first in designating the name of the animal in the required information; as for example: “Fox, Black” shall be disclosed as “Black Fox.”
§ 301.6 Animals not listed in Fur Products Name Guide.
(a) All furs are subject to the act and regulations regardless of whether the name of the animal producing the fur appears in the Fur Products Name Guide.
(b) Where fur is obtained from an animal not listed in the Fur Products Name Guide it shall be designated in the required information by the true English name of the animal or in the absence of a true English name, by the name which properly identifies such animal in the United States.
§ 301.7 Describing furs by certain breed names prohibited.
If the fur of an animal is described in any manner by its breed, species, strain or coloring, irrespective of former usage, such descriptive matter shall not contain the name of another animal either in the adjective form or otherwise nor shall such description (subject to any exception contained in this part or animal names appearing in the Fur Products Name Guide) contain a name in an adjective form or otherwise which connotes a false geographic origin of the animal. For example, such designations as “Sable Mink,” “Chinchilla Rabbit,” and “Aleutian Mink” shall not be used.
§ 301.8 Use of terms “Persian Lamb,” “Broadtail Lamb,” and “Persian-broadtail Lamb” permitted.
(a) The term Persian Lamb may be used to describe the skin of the young lamb of the Karakul breed of sheep or top-cross breed of such sheep, having hair formed in knuckled curls.
(b) The term Broadtail Lamb may be used to describe the skin of the prematurely born, stillborn, or very young lamb of the Karakul breed of sheep or top-cross breed of such sheep, having flat light-weight fur with a moire pattern.
(c) The term Persian-broadtail Lamb may be used to describe the skin of the very young lamb of the Karakul breed of sheep or top-cross breed of such sheep, having hair formed in flattened knuckled curls with a moire pattern.
(d) The terms “Persian Lamb”, “Broadtail Lamb”, or “Persian-broadtail Lamb” shall not be used to describe: (1) The so-called Krimmer, Bessarabian, Rumanian, Shiraz, Salzfelle, Metis, Dubar, Meshed, Caracul, Iranian, Iraqi, Chinese, Mongolian, Chekiang, or Indian lamb skins, unless such lamb skins conform with the requirements set out in paragraph (a), (b), or (c) of this section respectively; or (2) any other lamb skins having hair in a wavy or open curl pattern.
§ 301.9 Use of terms “Mouton Lamb” and “Shearling Lamb” permitted.
(a) The term Mouton Lamb may be used to describe the skin of a lamb which has been sheared, the hair straightened, chemically treated, and thermally set to produce a moisture repellant finish; as for example:
(b) The term Shearling Lamb may be used to describe the skin of a lamb which has been sheared and combed.
§ 301.10 Use of term “Broadtail-processed Lamb” permitted.
The term Broadtail-processed Lamb may be used to describe the skin of a lamb which has been sheared, leaving a moire hair pattern on the pelt having the appearance of the true fur pattern of “Broadtail Lamb”; as for example:
§ 301.11 Fictitious or non-existing animal designations prohibited.
No trade names, coined names, nor other names or words descriptive of a fur as being the fur of an animal which is in fact fictitious or non-existent shall be used in labeling, invoicing or advertising of a fur or fur product.
§ 301.12 Country of origin of imported furs.
(a)(1) In the case of furs imported into the United States from a foreign country, the country of origin of such furs shall be set forth as a part of the information required by the act in invoicing and advertising.
(2) In the case of fur products imported into the United States from a foreign country, or fur products made from furs imported into the United States from a foreign country, the country of origin of the furs contained in such products shall be set forth as a part of the information required by the act in labeling, invoicing and advertising.
(b) The term country means the political entity known as a nation. Colonies, possessions or protectorates outside the boundaries of the mother country shall be considered separate countries and the name thereof shall be deemed acceptable in designating the “country of origin” unless the Commission shall otherwise direct.
(c) The country in which the animal producing the fur was raised, or if in a feral state, was taken, shall be considered the “country of origin.”
(d) When furs are taken within the territorial waters of a country, such country shall be considered the “country of origin.” Furs taken outside such territorial waters, or on the high seas, shall have as their country of origin the country having the nearest mainland.
(e)(1) The English name of the country of origin shall be used. Abbreviations which unmistakably indicate the name of a country, such as “Gt. Britain” for “Great Britain,” are acceptable. Abbreviations such as “N.Z.” for “New Zealand” are not acceptable.
(2) The name of the country of origin, when used as a part of the required information in labeling shall be preceded by the term fur origin; as for example:
(3) In addition to the required disclosure of country of origin the name of the country may also appear in adjective form in connection with the name of the animal; as for example:
(f) Nothing in this section shall be construed as limiting in any way the information required to be disclosed on labels under the provisions of any Tariff Act of the United States or regulations prescribed by the Secretary of the Treasury.
§ 301.13 Fur products having furs with different countries of origin.
When a fur product is composed of furs with different countries of origin the names of such countries shall be set forth in the required information in the order of predominance by surface areas of the furs in the fur product.
§ 301.14 Country of origin of used furs.
When the country of origin of used furs is unknown, and no representations are made directly or by implication with respect thereto, this fact shall be set out as a part of the required information in lieu of the country of origin as “Fur origin: Unknown.”
§ 301.15 Designation of section producing domestic furs permitted.
In the case of furs produced in the United States the name of the section or area producing the furs used in the fur product may be set out in connection with the name of the animal; as for example:
§ 301.16 Disclosure of origin of certain furs raised or taken in United States.
If the name of any animal set out in the Fur Products Name Guide or term permitted by the regulations to be used in connection therewith connotes foreign origin and such animal is raised or taken in the United States, furs obtained therefrom shall be described in disclosing the required information as having the United States as the country of origin; as for example:
§ 301.17 Misrepresentation of origin of furs.
No misleading nor deceptive statements as to the geographical or zoological origin of the animal producing a fur shall be used directly or indirectly in labeling, invoicing or advertising furs or fur products.
§ 301.18 Passing off domestic furs as imported furs prohibited.
No domestic furs nor fur products shall be labeled, invoiced or advertised in such a manner as to represent directly or by implication that they have been imported.
§ 301.19 Pointing, dyeing, bleaching or otherwise artificially coloring.
(a) Where a fur or fur product is pointed or contains or is composed of bleached, dyed or otherwise artificially colored fur, such facts shall be disclosed as a part of the required information in labeling, invoicing and advertising.
(b) The term pointing means the process of inserting separate hairs into furs or fur products for the purpose of adding guard hairs, either to repair damaged areas or to simulate other furs.
(c) The term bleaching means the process for producing a lighter shade of a fur, or removing off-color spots and stains by a bleaching agent.
(d) The term dyeing (which includes the processes known in the trade of tipping the hair or fur, feathering, and beautifying) means the process of applying dyestuffs to the hair or fur, either by immersion in a dye bath or by application of the dye by brush, feather, spray, or otherwise, for the purpose of changing the color of the fur or hair, or to accentuate its natural color. When dyestuff is applied by immersion in a dye bath or by application of the dye by brush, feather, or spray, it may respectively be described as “vat dyed”, “brush dyed”, “feather dyed”, or “spray dyed”, as the case may be. When dyestuff is applied only to the ends of the hair or fur, by feather or otherwise, it may also be described as “tip-dyed”. The application of dyestuff to the leather or the skin (known in the trade as “tipping”, as distinguished from tip-dyeing the hair or fur as above described) and which does not affect a change of, nor accentuate the natural color of the hair or fur, shall not be considered as “dyeing”. When fluorescent dye is applied to a fur or fur product it may be described as “brightener added”.
(e) The term artificial coloring means any change or improvement in color of a fur or fur product in any manner other than by pointing, bleaching, dyeing, or tip-dyeing, and shall be described in labeling, invoicing and advertising as “color altered” or “color added”.
(f) The term blended shall not be used as a part of the required information to describe the pointing, bleaching, dyeing, tip-dyeing, or otherwise artificially coloring of furs.
(g) Where a fur or fur product is not pointed, bleached, dyed, tip-dyed, or otherwise artificially colored it shall be described as “natural”.
(h) Where any fur or fur product is dressed, processed or treated with a solution or compound containing any metal and such compound or solution effects any change or improvement in the color of the hair, fleece or fur fiber, such fur or fur product shall be described in labeling, invoicing and advertising as “color altered” or “color added”.
(i)(1) Any person dressing, processing or treating a fur pelt in such a manner that it is required under paragraph (e) or (h) of this section to be described as “color altered” or “color added” shall place a black stripe at least one half inch (1.27 cm) in width across the leather side of the skin immediately above the rump or place a stamp with a solid black center in the form of either a two inch (5.08 cm) square or a circle at least two inches (5.08 cm) in diameter on the leather side of the pelt and shall use black ink for all other stamps or markings on the leather side of the pelt.
(2) Any person dressing, processing or treating a fur pelt which after processing is considered natural under paragraph (g) of this section shall place a white stripe at least one half inch (1.27 cm) in width across the leather side of the skin immediately above the rump or place a stamp with a solid white center in the form of either a two inch (5.08 cm) square or a circle at least two inches (5.08 cm) in diameter on the leather side of the pelt and shall use white ink for all other stamps or markings on the leather side of the pelt.
(3) Any person dressing, processing or treating a fur pelt in such a manner that it is considered dyed under paragraph (d) of this section shall place a yellow stripe at least one half inch (1.27 cm) in width across the leather side immediately above the rump or place a stamp with a solid yellow center in the form of either a two inch (5.08 cm) square or a circle at least two inches (5.08 cm) in diameter on the leather side of the pelt and shall use yellow ink for all other stamps or markings on the leather side of the pelt.
(4) In lieu of the marking or stamping otherwise required by paragraphs (i) (1), (2), and (3) of this section, any person dressing, processing or treating a fur pelt so as to be subject to the stamping or marking requirements of this paragraph may stamp the leather side of the pelt with the appropriate truthful designation “dyed”, “color altered”, “color added”, or “natural”, as the case may be, in such manner that the stamp will not be obliterated or mutilated by further processing and will remain clearly legible until the finished fur product reaches the ultimate consumer.
(5) Where, after assembling, fur garment shells, mats, plates or other assembled furs are processed or treated in such a manner as to fall within the stamping or marking provisions of this paragraph, such assembled furs, in lieu of the stamping or marking of each individual pelt or piece, may be appropriately stamped on the leather side as provided in this paragraph in such a manner that the stamp will remain on the finished fur product and clearly legible until it reaches the ultimate consumer and will not be mutilated or obliterated by further processing.
(j) Any person who shall process a fur pelt in such a manner that after such processing it is no longer considered as natural shall clearly, conspicuously and legibly stamp on the leather side of the pelt and on required invoices relating thereto a lot number or other identifying number which relates to such records of the processor as will show the source and disposition of the pelts and the details of the processing performed. Such person shall also stamp his name or registered identification number on the leather side of the pelt.
(k) Any person who possesses fur pelts of a type which are always considered as dyed under paragraph (d) of this section after processing or any person who processes fur pelts which are always natural at the time of sale to the ultimate consumer, which pelts for a valid reason cannot be marked or stamped as provided in this section, may file an affidavit with the Federal Trade Commission’s Bureau of Consumer Protection setting forth such facts as will show that the pelts are always dyed or natural as the case may be and that the stamping of such pelts cannot be reasonably accomplished. If the Bureau of Consumer Protection is satisfied that the public interest will be protected by the filing of the affidavit, it may accept such affidavit and advise the affiant that marking of the fur pelts themselves as provided in this section will be unnecessary until further notice. Any person filing such an affidavit shall promptly notify the Commission of any change in circumstances with respect to its operations.
(l) Any person subject to this section who incorrectly marks or fails to mark fur pelts as provided in paragraphs (i) and (j) of this section shall be deemed to have misbranded such products under section 4(l) of the Act. Any person subject to this section who furnishes a false or misleading affidavit under paragraph (k) of this section or fails to give the notice required by paragraph (k) of this section shall be deemed to have neglected and refused to maintain the records required by section 8(d) of the Act.
§ 301.20 Fur products composed of pieces.
(a) Where fur products, or fur mats and plates, are composed in whole or in substantial part of paws, tails, bellies, gills, ears, throats, heads, scrap pieces, or waste fur, such fact shall be disclosed as a part of the required information in labeling, invoicing, and advertising. Where a fur product is made of the backs of skins, such fact may be set out in labels, invoices, and advertising.
(b) Where fur products, or fur mats and plates, are composed wholly or substantially of two or more of the parts set out in paragraph (a) of this section or one or more of such parts and other fur, disclosure in respect thereto shall be made by naming such parts or other fur in order of predominance by surface area.
(c) The terms substantial part and substantially mean ten per centum (10 percent) or more in surface area.
(d) The term assembled shall not be used in lieu of the terms set forth in paragraph (a) of this section to describe fur products or fur mats and plates composed of such parts.
§ 301.21 Disclosure of used furs.
(a) When fur in any form has been worn or used by an ultimate consumer it shall be designated “used fur” as a part of the required information in invoicing and advertising.
(b) When fur products or fur mats and plates are composed in whole or in part of used fur, such fact shall be disclosed as a part of the required information in labeling, invoicing and advertising; as for example:
§ 301.22 Disclosure of damaged furs.
(a) The term damaged fur, as used in this part, means a fur, which, because of a known or patent defect resulting from natural causes or from processing, is of such a nature that its use in a fur product would decrease the normal life and durability of such product.
(b) When damaged furs are used in a fur product, full disclosure of such fact shall be made as a part of the required information in labeling, invoicing, or advertising such product; as for example:
§ 301.23 Second-hand fur products.
When a fur product has been used or worn by an ultimate consumer and is subsequently marketed in its original, reconditioned, or rebuilt form with or without the addition of any furs or used furs, the requirements of the act and regulations in respect to labeling, invoicing and advertising of such product shall be applicable thereto, subject, however, to the provisions of § 301.14 of this part as to country of origin requirement, and in addition, as a part of the required information such product shall be designated “Second-hand”, “Reconditioned-Second-hand”, or “Rebuilt-Second-hand”, as the case may be.
§ 301.24 Repairing, restyling and remodeling fur products for consumer.
When fur products owned by and to be returned to the ultimate-consumer are repaired, restyled or remodeled and used fur or fur is added thereto, labeling of the fur product shall not be required. However, the person adding such used fur or fur to the fur product, or who is responsible therefor, shall give to the owner an invoice disclosing the information required under the act and regulations respecting the used fur or fur added to the fur product, subject, however, to the provisions of § 301.14 of this part as to country of origin requirements.
§ 301.25 Name required to appear on labels and invoices.
The name required by the act to be used on labels and invoices shall be the full name under which the person is doing business, and no trade-mark, trade name nor other name which does not constitute such full name shall be used in lieu thereof.
§ 301.26 Registered identification numbers.
(a) Registered numbers for use as the required identification in lieu of the name on fur product labels as provided in section 4(2)(E) of the Act will be issued by the Commission to qualified persons residing in the United States upon receipt of an application duly executed on the Commission’s Web site at https://rn.ftc.gov or by such means as the Commission or its designee may direct.
(b)(1) Registered identification numbers shall be used only by the person or concern to whom they are issued, and such numbers are not transferable or assignable.
(2) Registered identification numbers shall be subject to cancellation if the Federal Trade Commission fails to receive prompt notification of any change in name, business address, or legal business status of a person or firm to whom a registered identification number has been assigned, by application duly executed in the form and manner set out in paragraph (d) of this section, reflecting the current name, business address, and legal business status of the person or firm.
(3) Registered identification numbers shall be subject to cancellation whenever any such number was procured or has been used improperly or contrary to the requirements of the act and regulations, or when otherwise deemed necessary in the public interest.
(c) Registered identification numbers assigned under this rule may be used on labels required in labeling products subject to the provisions of the Wool Products Labeling Act and Textile Fiber Products Identification Act, and numbers previously assigned or to be assigned by the Commission under such Acts may be used as and for the required name in labeling under this Act. When so used by the person or firm to whom assigned, the use of the numbers shall be construed as identifying and binding the applicant as fully and in all respects as though assigned under the specific Act for which it is used.
(d) Requests for a registered identification number, to update information pertaining to an existing number, or to cancel an existing number shall be made through the Commission’s Web site at https://rn.ftc.gov. Unless otherwise directed by the Commission or its designee, requests made by other means (including but not limited to email) will not be accepted and approved.
§ 301.27 Labels and method of affixing.
At all times during the marketing of a fur product the required label shall be conspicuous and of such durability as to remain attached to the product throughout any distribution, sale, or resale, and until sold and delivered to the ultimate consumer.
§ 301.28 [Reserved]
§ 301.29 Requirements in respect to disclosure on label.
(a) The required information shall be set forth in such a manner as to be clearly legible, conspicuous, and readily accessible to the prospective purchaser, and all parts of the required information shall be set out in letters of equal size and conspicuousness. All of the required information with respect to the fur product shall be set out on one side of the label. The label may include any nonrequired information which is true and non-deceptive and which is not prohibited by the act and regulations, but in all cases the animal name used shall be that set out in the Name Guide.
(b) The required information may be set out in hand printing provided it conforms to the requirements of paragraph (a) of this section, and is set out in indelible ink in a clear, distinct, legible and conspicuous manner. Handwriting shall not be used in setting out any of the required information on the label.
§ 301.30 [Reserved]
§ 301.31 Labeling of fur products consisting of two or more units.
(a) The label shall be attached to and appear upon each garment or separate article of wearing apparel subject to the act irrespective of whether two or more garments or articles may be sold or marketed together or in combination with each other.
(b) In the case of fur products that are marketed or handled in pairs or ensembles, only one label is required if all units in the pair or group are of the same fur and have the same country of origin. The information set out on the label must be applicable to each unit and supply the information required under the act and rules and regulations.
§ 301.32 Fur product containing material other than fur.
(a) Where a fur product contains a material other than fur the content of which is required to be disclosed on labels under other statutes administered by the Commission, such information may be set out on the same side of the label and in immediate conjunction with the information required under this Act; as for example:
(b) Information which may be desirable or necessary to fully inform the purchaser of other material content of a fur product may be set out on the same side of the label as used for disclosing the information required under the Act and rules and regulations; as for example:
§ 301.33 Labeling of samples.
Where samples of furs or fur products subject to the act are used to promote or effect sales of fur products, said samples, as well as the fur products purchased therefrom, shall be labeled to show the information required under the act and regulations.
§ 301.34 Misbranded or falsely invoiced fur products.
(a) If a person subject to section 3 of the Act with respect to a fur product finds that a fur product is misbranded he shall correct the label or replace same with a substitute containing the required information.
(b) If a person subject to section 3 of the Act with respect to a fur or fur product finds that the invoice issued to him is false or deceptive, he shall, in connection with any invoice issued by him in relation to such fur or fur product correctly set forth all of the information required by the Act and regulations in relation to such fur or fur product.
§ 301.35 Substitution of labels.
(a) Persons authorized under the provisions of section 3(e) of the act to substitute labels affixed to fur products may do so, provided the substitute label is complete and carries all the information required under the act and rules and regulations in the same form and manner as required in respect to the original label. The substitute label need not, however, show the name or registered number appearing on the original label if the name or registered number of the person who affixes the substitute appears thereon.
(b) The original label may be used as a substitute label provided the name or registered number of the person making the substitution is inserted thereon without interfering with or obscuring in any manner other required information. In connection with such substitution the name or registered number as well as any record numbers appearing on the original label may be removed.
(c) Persons substituting labels under the provision of this section shall maintain the records required under § 301.41 of this part.
§ 301.36 Sectional fur products.
(a) Where a fur product is composed of two or more sections containing different animal furs the required information with respect to each section shall be separately set forth in labeling, invoicing or advertising; as for example:
(b) The provisions of this section shall not be interpreted so as to require the disclosure of very small amounts of different animal furs added to complete a fur product or skin such as the ears, snoot, or under part of the jaw.
§ 301.37 Manner of invoicing furs and fur products.
(a) In the invoicing of furs and fur products, all of the required information shall be set out in a clear, legible, distinct and conspicuous manner. The invoice shall be issued at the time of the sale or other transaction involving furs or fur products, but the required information need not be repeated in subsequent periodic statements of account respecting the same furs or fur products.
(b) Non-required information or representations appearing in the invoicing of furs and fur products shall in no way be false or deceptive nor include any names, terms or representations prohibited by the act and regulations. Nor shall such information or representations be set forth or used in such manner as to interfere with the required information.
§ 301.38 Advertising of furs and fur products.
(a)(1) In advertising furs or fur products, all parts of the required information shall be stated in close proximity with each other and, if printed, in legible and conspicuous type of equal size.
(2) Non-required information or representations appearing in the advertising of furs and fur products shall in no way be false or deceptive nor include any names, terms or representations prohibited by the act and regulations. Nor shall such information or representations be set forth or used in such manner as to interfere with the required information.
(b)(1) In general advertising of a group of fur products composed in whole or in part of imported furs having various countries of origin, the disclosure of such countries of origin may, by reference, be made through the use of the following statement in the advertisement in a clear and conspicuous manner:
(2) The provisions of this paragraph shall not be applicable in the case of catalogue, mail order, or other types of advertising which solicit the purchase of fur products in such a manner that the purchaser or prospective purchaser would not have the opportunity of viewing the product and attached label prior to delivery thereof.
(c) In advertising of an institutional type referring only to the general nature or kind of business conducted or to the general classification of the types or kinds of furs or fur products manufactured or handled, and which advertising is not intended to aid, promote, or assist directly or indirectly in the sale or offering for sale of any specific fur products or furs, the required information need not be set forth: Provided, however, That if reference is made in the advertisement to a color of the fur which was caused by dyeing, bleaching or other artificial coloring, such facts shall be disclosed in the advertising, and provided further, that when animal names are used in such advertising, such names shall be those set forth in the Fur Products Name Guide. For example, the kind of advertising contemplated by this paragraph is as follows:
§ 301.39 Exempted fur products.
The requirements of the act and regulations in this part do not apply to fur products that consist of fur obtained from an animal through trapping or hunting and that are sold in a face-to-face transaction at a place such as a residence, craft fair, or other location used on a temporary or short-term basis, by the person who trapped or hunted the animal, where the revenue from the sale of apparel or fur products is not the primary source of income of such person.
§ 301.40 [Reserved]
§ 301.41 Maintenance of records.
(a) Pursuant to section 3(e) and section 8(d)(1), of the Act, each manufacturer or dealer in fur products or furs (including dressers, dyers, bleachers and processors), irrespective of whether any guaranty has been given or received, shall maintain records showing all of the required information relative to such fur products or furs in such manner as will readily identify each fur or fur product manufactured or handled. Such records shall show:
(1) That the fur product contains or is composed of natural, pointed, bleached, dyed, tip-dyed or otherwise artificially colored fur, when such is the fact;
(2) That the fur product contains used fur, when such is the fact;
(3) The name or names (as set forth in the Fur Products Name Guide) of the animal or animals that produced the fur;
(4) That the fur product is composed in whole or in substantial part of paws, tails, bellies, gills, ears, throats, heads, scrap pieces, or waste fur, when such is the fact;
(5) The name of the country of origin of any imported furs used in the fur products;
(6) The name, or other identification issued and registered by the Commission, of one or more of the persons who manufacture, import, sell, advertise, offer, transport or distribute the fur product in commerce.
(b) The purpose of the records is to permit a determination that the requirements of the Act and Regulations have been met and to establish a traceable line of continuity from raw material through processing to finished product. The records shall be preserved for at least three years.
§ 301.42 Deception as to nature of business.
When necessary to avoid deception, the name of any person other than the manufacturer of the fur product appearing on the label or invoice shall be accompanied by appropriate words showing that the fur product was not manufactured by such person; as for example:
§ 301.43 Use of deceptive trade or corporate names, trademarks or graphic representations prohibited.
No person shall use in labeling, invoicing or advertising any fur or fur product a trade name, corporate name, trademark or other trade designation or graphic representation which misrepresents directly or by implication to purchasers, prospective purchasers or the consuming public:
(a) The character of the product including method of construction;
(b) The name of the animal producing the fur;
(c) The method or manner of distribution; or
(d) The geographical or zoological origin of the fur.
§ 301.44 Misrepresentation of prices.
(a) No person shall, with respect to a fur or fur product, advertise such fur or fur product at alleged wholesale prices or at alleged manufacturers cost or less, unless such representations are true in fact; nor shall any person advertise a fur or fur product at prices purported to be reduced from what are in fact fictitious prices, nor at a purported reduction in price when such purported reduction is in fact fictitious.
(b) No person shall, with respect to a fur or fur product, advertise such fur or fur product with comparative prices and percentage savings claims except on the basis of current market values or unless the time of such compared price is given.
(c) No person shall, with respect to a fur or fur product, advertise such fur or fur product as being “made to sell for”, being “worth” or “valued at” a certain price, or by similar statements, unless such claim or representation is true in fact.
(d) No person shall, with respect to a fur or fur product, advertise such fur or fur product as being of a certain value or quality unless such claims or representations are true in fact.
(e) Persons making pricing claims or representations of the types described in paragraphs (a), (b), (c) and (d) of this section shall maintain full and adequate records disclosing the facts upon which such claims or representations are based.
(f) No person shall, with respect to a fur or fur product, advertise such fur or fur product by the use of an illustration which shows such fur or fur product to be a higher priced product than the one so advertised.
(g) No person shall, with respect to a fur or fur product, advertise such fur or fur product as being “bankrupt stock”, “samples”, “show room models”, “Hollywood Models”, “Paris Models”, “French Models”, “Parisian Creations”, “Furs Worn by Society Women”, “Clearance Stock”, “Auction Stock”, “Stock of a business in a state of liquidation”, or similar statements, unless such representations or claims are true in fact.
§ 301.45 Representations as to construction of fur products.
(a) No misleading nor deceptive statements as to the construction of fur products shall be used directly or indirectly in labeling, invoicing or advertising such products. (For example, a fur product made by the skin-on-skin method should not be represented as having been made by the letout method.)
(b) Where a fur product is made by the method known in the trade as letting-out, or is made of fur which has been sheared or plucked, such facts may be set out in labels, invoices and advertising.
§ 301.46 Reference to guaranty by Government prohibited.
No representation nor suggestion that a fur or fur product is guaranteed under the act by the Government, or any branch thereof, shall be made in the labeling, invoicing or advertising in connection therewith.
§ 301.47 Form of separate guaranty.
The following is a suggested form of separate guaranty under section 10 of the Act which may be used by a guarantor residing in the United States, on and as part of an invoice or other document in which the merchandise covered is listed and specified and which shows the date of such document and the signature and address of the guarantor:
We guarantee that the fur products or furs specified herein are not misbranded nor falsely nor deceptively advertised or invoiced under the provisions of the Fur Products Labeling Act and rules and regulations thereunder.
The printed name and address on the invoice or other document will suffice to meet the signature and address requirements.
§ 301.48 Continuing guaranties.
(a)(1) Under section 10 of the Act any person residing in the United States and handling fur or fur products may file a continuing guaranty with the Federal Trade Commission. When filed with the Commission a continuing guaranty shall be fully executed in duplicate. Forms for use in preparing continuing guaranties shall be supplied by the Commission upon request.
(2) Continuing guaranties filed with the Commission shall continue in effect until revoked. The guarantor shall promptly report any change in business status to the Commission.
(3) The prescribed form for a continuing guaranty is found in § 303.38(b) of this chapter. The form is available upon request from the Textile Section, Enforcement Division, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580.
(b) Any person who has a continuing guaranty on file with the Commission may, during the effective dates of the guaranty, give notice of such fact by setting forth on the invoice or other document covering the marketing or handling of the product guaranteed the following: “Continuing guaranty under the Fur Products Labeling Act filed with the Federal Trade Commission.”
(c) Any person who falsely represents in writing that he has a continuing guaranty on file with the Federal Trade Commission when such is not a fact shall be deemed to have furnished a false guaranty under section 10(b) of the Act.
§ 301.48a Guaranties not received in good faith.
A guaranty shall not be deemed to have been received in good faith within the meaning of section 10(a) of the Act:
(a) Unless the recipient of such guaranty shall have examined the required label, required invoice and advertisement relating to the fur product or fur so guaranteed;
(b) If the recipient of the guaranty has knowledge that the fur or fur product guaranteed is misbranded, falsely invoiced or falsely advertised.
§ 301.49 Deception in general.
No furs nor fur products shall be labeled, invoiced, or advertised in any manner which is false, misleading or deceptive in any respect.
PART 303 – RULES AND REGULATIONS UNDER THE TEXTILE FIBER PRODUCTS IDENTIFICATION ACT
§ 303.1 Terms defined.
As used in this part, unless the context otherwise specifically requires:
(a) The term Act means the Textile Fiber Products Identification Act (approved September 2, 1958, 85th Congress, 2d Sess.; 15 U.S.C. 70, 72 Stat. 1717).
(b) The terms rule, rules, regulations, and rules and regulations mean the rules and regulations prescribed by the Commission pursuant to section 7(c) of the Act.
(c) The definition of terms contained in section 2 of the Act shall be applicable also to such terms when used in rules promulgated under the Act.
(d) The term United States means the several States, the District of Columbia, and the Territories and possessions of the United States.
(e) The terms required information and information required mean such information as is required to be disclosed on labels or invoices and in advertising under the Act and regulations.
(f) The terms label, labels, labeled, and labeling mean the stamp, tag, label, or other means of identification, or authorized substitute therefor, required to be on or affixed to textile fiber products by the Act and regulations and on which the information required is to appear.
(g) The terms marketing or handling and marketed or handled, when applied to textile fiber products, mean any one or all of the transactions set forth in section 3 of the Act.
(h) The terms invoice and invoice or other document mean an account, order, memorandum, list, or catalog, which is issued to a purchaser, consignee, bailee, correspondent, agent, or any other person, electronically, in writing, or in some other form capable of being read and preserved in a form that is capable of being accurately reproduced for later reference, whether by transmission, printing, or otherwise, in connection with the marketing or handling of any textile fiber product transported or delivered to such person.
(i) The term outer coverings of furniture, mattresses, and box springs means those coverings as are permanently incorporated in such articles.
(j) The term wearing apparel means any costume or article of clothing or covering for any part of the body worn or intended to be worn by individuals.
(k) The term beddings means sheets, covers, blankets, comforters, pillows, pillowcases, quilts, bedspreads, pads, and all other textile fiber products used or intended to be used on or about a bed or other place for reclining or sleeping but shall not include furniture, mattresses or box springs.
(l) The term headwear means any textile fiber product worn exclusively on or about the head or face by individuals.
(m) The term backings, when applied to floor coverings, means that part of a floor covering to which the pile, face, or outer surface is woven, tufted, hooked, knitted, or otherwise attached, and which provides the structural base of the floor covering. The term backing shall also include fabrics attached to the structural base of the floor covering in such a way as to form a part of such structural base, but shall not include the pile, face, or outer surface of the floor covering or any part thereof.
(n) The term elastic material means a fabric composed of yarn consisting of an elastomer or a covered elastomer.
(o) The term coated fabric means any fabric which is coated, filled, impregnated, or laminated with a continuous-film-forming polymeric composition in such a manner that the weight added to the base fabric is at least 35 percent of the weight of the fabric before coating, filling, impregnation, or lamination.
(p) The term upholstered product means articles of furniture containing stuffing and shall include mattresses and box springs.
(q) The term ornamentation means any fibers or yarns imparting a visibly discernible pattern or design to a yarn or fabric.
(r) The term fiber trademark means a word or words used by a person to identify a particular fiber produced or sold by him and to distinguish it from fibers of the same generic class produced or sold by others. Such term shall not include any trade mark, product mark, house mark, trade name or other name which does not identify a particular fiber.
(s) The term wool means the fiber from the fleece of the sheep or lamb or hair of the Angora or Cashmere goat (and may include the so-called specialty fibers from the hair of the camel, alpaca, llama, and vicuna) which has never been reclaimed from any woven or felted wool product.
(t) The term recycled wool means (1) the resulting fiber when wool has been woven or felted into a wool product which, without ever having been utilized in any way by the ultimate consumer, subsequently has been made into a fibrous state, or (2) the resulting fiber when wool or reprocessed wool has been spun, woven, knitted, or felted into a wool product which, after having been used in any way by the ultimate consumer, subsequently has been made into a fibrous state.
(u) The terms mail order catalog and mail order promotional material mean any materials, used in the direct sale or direct offering for sale of textile products, that are disseminated to ultimate consumers in print or by electronic means, other than by broadcast, and that solicit ultimate consumers to purchase such textile products by mail, telephone, electronic mail, or some other method without examining the actual product purchased.
§ 303.2 General requirements.
(a) Each textile fiber product, except those exempted or excluded under section 12 of the Act, shall be labeled or invoiced in conformity with the requirements of the Act and regulations.
(b) Any advertising of textile fiber products subject to the Act shall be in conformity with the requirements of the Act and regulations.
(c) The requirements of the Act and regulations shall not be applicable to products required to be labeled under the Wool Products Labeling Act of 1939 (Pub. L. 76-850, 15 U.S.C. 68, 54 Stat. 1128).
(d) Any person marketing or handling textile fiber products who shall cause or direct a processor or finisher to label, invoice, or otherwise identify any textile fiber product with required information shall be responsible under the Act and regulations for any failure of compliance with the Act and regulations by reason of any statement or omission in such label, invoice, or other means of identification utilized in accordance with his direction: Provided, That nothing herein shall relieve the processor or finisher of any duty or liability to which he may be subject under the Act and regulations.
§ 303.3 Fibers present in amounts of less than 5 percent.
(a) Except as permitted in sections 4(b)(1) and 4(b)(2) of the Act, as amended, no fiber present in the amount of less than 5 percent of the total fiber weight shall be designated by its generic name or fiber trademark in disclosing the constituent fibers in required information, but shall be designated as “other fiber.” When more than one of such fibers are present in a product, they shall be designated in the aggregate as “other fibers.” Provided, however, that nothing in this section shall be construed as prohibiting the disclosure of any fiber present in a textile fiber product which has a clearly established and definite functional significance when present in the amount contained in such product, as for example:
(b) In making such disclosure, all of the provisions of the Act and regulations in this part setting forth the manner and form of disclosure of fiber content information, including the provisions of §§ 303.17 and 303.41 of this part relating to the use of generic names and fiber trademarks, shall be applicable.
§ 303.4 English language requirement.
All required information shall be set out in the English language. If the required information appears in a language other than English, it also shall appear in the English language. The provisions of this section shall not apply to advertisements in foreign language newspapers or periodicals, but such advertising shall in all other respects comply with the Act and regulations.
§ 303.5 Abbreviations, ditto marks, and asterisks prohibited.
(a) In disclosing required information, words or terms shall not be designated by ditto marks or appear in footnotes referred to by asterisks or other symbols in required information, and shall not be abbreviated except as permitted in § 303.33(e) of this part.
(b) Where the generic name of a textile fiber is required to appear in immediate conjunction with a fiber trademark in advertising, labeling, or invoicing, a disclosure of the generic name by means of a footnote, to which reference is made by use of an asterisk or other symbol placed next to the fiber trademark, shall not be sufficient in itself to constitute compliance with the Act and regulations.
§ 303.6 Generic names of fibers to be used.
(a) Except where another name is permitted under the Act and regulations, the respective generic names of all fibers present in the amount of 5 per centum or more of the total fiber weight of the textile fiber product shall be used when naming fibers in the required information; as for example: “cotton,” “rayon,” “silk,” “linen,” “nylon,” etc.
(b) Where a textile fiber product contains the hair or fiber of a fur-bearing animal present in the amount 5 per centum or more of the total fiber weight of the product, the name of the animal producing such fiber may be used in setting forth the required information, provided the name of such animal is used in conjunction with the words “fiber,” “hair,” or “blend;” as for example:
(c) The term fur fiber may be used to describe the hair or fur fiber or mixtures thereof of any animal or animals other than the sheep, lamb, Angora goat, Cashmere goat, camel, alpaca, llama or vicuna where such hair or fur fiber or mixture is present in the amount of 5 per centum or more of the total fiber weight of the textile fiber product and no direct or indirect representations are made as to the animal or animals from which the fiber so designated was obtained; as for example:
(d) Where textile fiber products subject to the Act contain (1) wool or (2) recycled wool in amounts of five per centum or more of the total fiber weight, such fibers shall be designated and disclosed as wool or recycled wool as the case may be.
§ 303.7 Generic names and definitions for manufactured fibers.
Pursuant to the provisions of section 7(c) of the Act, the Commission hereby establishes the generic names for manufactured fibers, together with their respective definitions, set forth in this section, and the generic names for manufactured fibers, together with their respective definitions, set forth in International Organization for Standardization (ISO) 2076:2013(E). ISO 2076:2013(E), “Textiles – Man-made fibres – Generic names,” Sixth edition, November 15, 2013, is incorporated by reference into this section with the approval of the Director of the Federal Register under 5 U.S.C. 552(a) and 1 CFR part 51.
To enforce any edition other than that specified in this section, the Federal Trade Commission must publish notice of change in the
(a) Acrylic. A manufactured fiber in which the fiber-forming substance is any long chain synthetic polymer composed of at least 85 percent by weight of acrylonitrile units
(b) Modacrylic. A manufactured fiber in which the fiber-forming substance is any long chain synthetic polymer composed of less than 85 percent but at least 35 percent by weight of acrylonitrile units
(c) Polyester. A manufactured fiber in which the fiber-forming substance is any long chain synthetic polymer composed of at least 85% by weight of an ester of a substituted aromatic carboxylic acid, including but not restricted to substituted terephthalate units,
(1) Where the fiber is formed by the interaction of two or more chemically distinct polymers (of which none exceeds 85% by weight), and contains ester groups as the dominant functional unit (at least 85% by weight of the total polymer content of the fiber), and which, if stretched at least 100%, durably and rapidly reverts substantially to its unstretched length when the tension is removed, the term elasterell-p may be used as a generic description of the fiber.
(2) Where the glycol used to form the ester consists of at least ninety mole percent 1,3-propanediol, the term “triexta” may be used as a generic description of the fiber.
(d) Rayon.A manufactured fiber composed of regenerated cellulose, as well as manufactured fibers composed of regenerated cellulose in which substituents have replaced not more than 15% of the hydrogens of the hydroxyl groups. Where the fiber is composed of cellulose precipitated from an organic solution in which no substitution of the hydroxyl groups takes place and no chemical intermediates are formed, the term lyocell may be used as a generic description of the fiber.
(e) Acetate. A manufactured fiber in which the fiber-forming substance is cellulose acetate. Where not less than 92 percent of the hydroxyl groups are acetylated, the term triacetate may be used as a generic description of the fiber.
(f) Saran. A manufactured fiber in which the fiber-forming substance is any long chain synthetic polymer composed of at least 80 percent by weight of vinylidene chloride units (-CH
(g) Azlon. A manufactured fiber in which the fiber-forming substance is composed of any regenerated naturally occurring proteins.
(h) Nytril. A manufactured fiber containing at least 85 percent of a long chain polymer of vinylidene dinitrile (-CH
(i) Nylon. A manufactured fiber in which the fiber-forming substance is a long-chain synthetic polyamide in which less than 85 percent of the amide
(j) Rubber. A manufactured fiber in which the fiber-forming substance is comprised of natural or synthetic rubber, including the following categories:
(1) A manufactured fiber in which the fiber-forming substance is a hydrocarbon such as natural rubber, polyisoprene, polybutadiene, copolymers of dienes and hydrocarbons, or amorphous (noncrystalline) polyolefins.
(2) A manufactured fiber in which the fiber-forming substance is a copolymer of acrylonitrile and a diene (such as butadiene) composed of not more than 50 percent but at least 10 percent by weight of acrylonitrile units
(3) A manufactured fiber in which the fiber-forming substance is a polychloroprene or a copolymer of chloroprene in which at least 35 percent by weight of the fiber-forming substance is composed of chloroprene units
(k) Spandex. A manufactured fiber in which the fiber-forming substance is a long chain synthetic polymer comprised of at least 85 percent of a segmented polyurethane.
(l) Vinal. A manufactured fiber in which the fiber-forming substance is any long chain synthetic polymer composed of at least 50 percent by weight of vinyl alcohol units (-CH
(m) Olefin. A manufactured fiber in which the fiber-forming substance is any long chain synthetic polymer composed of at least 85 percent by weight of ethylene, propylene, or other olefin units, except amorphous (noncrystalline) polyolefins qualifying under paragraph (j)(1) of this section [Rule 7]. Where the fiber-forming substance is a cross-linked synthetic polymer, with low but significant crystallinity, composed of at least 95 percent by weight of ethylene and at least one other olefin unit, and the fiber is substantially elastic and heat resistant, the term lastol may be used as a generic description of the fiber.
(n) Vinyon. A manufactured fiber in which the fiber-forming substance is any long chain synthetic polymer composed of at least 85 percent by weight of vinyl chloride units (-CH
(o) Metallic. A manufactured fiber composed of metal, plastic-coated metal, metal-coated plastic, or a core completely covered by metal.
(p) Glass. A manufactured fiber in which the fiber-forming substance is glass.
(q) Anidex. A manufactured fiber in which the fiber-forming substance is any long chain synthetic polymer composed of at least 50 percent by weight of one or more esters of a monohydric alcohol and acrylic acid, CH
(r) Novoloid. A manufactured fiber containing at least 85 percent by weight of a cross-linked novolac.
(s) Aramid. A manufactured fiber in which the fiber-forming substance is a long-chain synthetic polyamide in which at least 85 percent of the amide
(t) Sulfar. A manufactured fiber in which the fiber-forming substance is a long chain synthetic polysulfide in which at least 85% of the sulfide ( – S – ) linkages are attached directly to two (2) aromatic rings.
(u) PBI. A manufactured fiber in which the fiber-forming substance is a long chain aromatic polymer having reoccurring imidazole groups as an integral part of the polymer chain.
(v) Elastoester. A manufactured fiber in which the fiber-forming substance is a long-chain synthetic polymer composed of at least 50% by weight of aliphatic polyether and at least 35% by weight of polyester, as defined in paragraph (c) of this section.
(w) Melamine. A manufactured fiber in which the fiber-forming substance is a synthetic polymer composed of at least 50% by weight of a cross-linked melamine polymer.
(x) Fluoropolymer. A manufactured fiber containing at least 95% of a long-chain polymer synthesized from aliphatic fluorocarbon monomers.
(y) PLA. A manufactured fiber in which the fiber-forming substance is composed of at least 85% by weight of lactic acid ester units derived from naturally occurring sugars.
§ 303.8 Procedure for establishing generic names for manufactured fibers.
(a) Prior to the marketing or handling of a manufactured fiber for which no generic name has been established or otherwise recognized by the Commission, the manufacturer or producer thereof shall file a written application with the Commission, requesting the establishment of a generic name for such fiber, stating therein:
(1) The reasons why the applicant’s fiber should not be identified by one of the generic names established by the Commission in § 303.7 of this part;
(2) The chemical composition of the fiber, including the fiber-forming substances and respective percentages thereof, together with samples of the fiber;
(3) Suggested names for consideration as generic, together with a proposed definition for the fiber;
(4) Any other information deemed by the applicant to be pertinent to the application, including technical data in the form of test methods;
(5) The earliest date on which the application proposes to market or handle the fiber in commerce for other than developmental or testing purposes.
(b) Upon receipt of the application, the Commission will, within sixty (60) days, either deny the application or assign to the fiber a numerical or alphabetical symbol for temporary use during further consideration of such application.
(c) After taking the necessary procedure in consideration of the application, the Commission in due course shall establish a generic name or advise the applicant of its refusal to grant the application and designate the proper existing generic name for the fiber.
§ 303.9 Use of fur-bearing animal names and symbols prohibited.
(a) The advertising or the labeling of a textile fiber product shall not contain any names, words, depictions, descriptive matter, or other symbols which connote or signify a fur-bearing animal, unless such product or the part thereof in connection with which the names, words, depictions, descriptive matter, or other symbols are used is a fur product within the meaning of the Fur Products Labeling Act.
(b) Subject to the provisions of paragraph (a) of this section and § 303.6 of this part, a textile fiber product shall not be described or referred to in any manner in an advertisement or label with:
(1) The name or part of the name of a fur-bearing animal, whether as a single word or a combination word, or any coined word which is phonetically similar to a fur-bearing animal name, or which is only a slight variation in spelling of a fur-bearing animal name or part of the name. As for example, such terms as “Ermine,” “Mink,” “Persian,” “Broadtail,” “Beaverton,” “Marmink,” “Sablelon,” “Lam,” “Pershian,” “Minx,” or similar terms shall not be used.
(2) Any word or name symbolic of a fur-bearing animal by reason of conventional usage or by reason of its close relationship with fur-bearing animals. As for example, such terms as “guardhair,” “underfur,” and “mutation,” or similar terms, shall not be used.
(c) Nothing contained herein shall prevent:
(1) The nondeceptive use of animal names or symbols in referring to a textile fiber product where the fur of such animal is not commonly or commercially used in fur products, as that term is defined in the Fur Products Labeling Act, as for example “kitten soft”, “Bear Brand”, etc.
(2) The nondeceptive use of a trademark or trade name containing the name, symbol, or depiction of a fur-bearing animal unless:
(i) The textile fiber product in connection with which such trademark or trade name is used simulates a fur or fur product; or
(ii) Such trademark or trade name is used in any advertisement of a textile fiber product together with any depiction which has the appearance of a fur or fur product; or
(iii) The use of such trademark or trade name is prohibited by the Fur Products Labeling Act.
§ 303.10 Fiber content of special types of products.
(a) Where a textile product is made wholly of elastic yarn or material, with minor parts of non-elastic material for structural purposes, it shall be identified as to the percentage of the elastomer, together with the percentage of all textile coverings of the elastomer and all other yarns or materials used therein.
(b) Where drapery or upholstery fabrics are manufactured on hand-operated looms for a particular customer after the sale of such fabric has been consummated, and the amount of the order does not exceed 100 yards (91.44 m) of fabric, the required fiber content disclosure may be made by listing the fibers present in order of predominance by weight with any fiber or fibers required to be designated as “other fiber” or “other fibers” appearing last, as for example:
(c)(1) Where a manufactured textile fiber is essentially a physical combination or mixture of two or more chemically distinct constituents or components combined at or prior to the time of extrusion, which components if separately extruded would each fall within different existing definitions of textile fibers as set forth in § 303.7 of this part (Rule 7), the fiber content disclosure as to such fiber, shall for all purposes under the regulations in this part
(i) Disclose such fact in the required fiber content information by appropriate nondeceptive descriptive terminology, such as “biconstituent fiber” or “multiconstituent fiber,”
(ii) Set out the components contained in the fiber by the appropriate generic name specified in § 303.7 of this part (Rule 7) in the order of their predominance by weight, and
(iii) Set out the respective percentages of such components by weight.
(2) If the components of such fibers are of a matrix-fibril configuration, the term matrix-fibril fiber or matrix fiber may be used in setting forth the information required by this paragraph.
(3) Examples of proper fiber content designations under this paragraph are:
(4) All of the provisions as to fiber content disclosures contained in the Act and regulations, including the provisions relative to fiber content tolerances and disclosures of fibers present in amounts of less than 5 percentum of the total fiber weight, shall also be applicable to the designations and disclosures prescribed by this paragraph.
§ 303.11 Floor coverings containing backings, fillings, and paddings.
In disclosing the required fiber content information as to floor coverings containing exempted backings, fillings, or paddings, the disclosure shall be made in such manner as to indicate that it relates only to the face, pile, or outer surface of the floor covering and not to the backing, filling, or padding. Examples of the form of marking these types of floor coverings as to fiber content are as follows:
§ 303.12 Trimmings of household textile articles.
(a) Pursuant to section 12 of the Act, trimmings incorporated in articles of wearing apparel and other household textile articles are exempt from the Act and regulations, except for decorative trim, decorative patterns and designs, and elastic materials in findings exceeding the surface area thresholds described in paragraphs (a)(3) and (b) of this section. Trimmings may, among other forms of trim, include:
(1) Rickrack, tape, belting, binding, braid, labels (either required or non-required), collars, cuffs, wrist bands, leg bands, waist bands, gussets, gores, welts, and findings, including superimposed garters in hosiery, and elastic materials and threads inserted in or added to the basic product or garment in minor proportion for holding, reinforcing or similar structural purposes;
(2) Decorative trim, whether applied by embroidery, overlay, applique, or attachment; and
(3) Decorative patterns or designs which are an integral part of the fabric out of which the household textile article is made. Provided, that such decorative trim or decorative pattern or design, as specified in paragraphs (a)(2) and (3) of this section, does not exceed 15 percent of the surface area of the household textile article. If no representation is made as to the fiber content of the decorative trim or decoration, as provided for in paragraphs (a)(2) and (3) of this section, and the fiber content of the decorative trim or decoration differs from the fiber content designation of the basic fabric, the fiber content designation of the basic fabric shall be followed by the statement “exclusive of decoration.”
(b) The term findings may also include elastic material which constitutes a part of the basic fabric or material out of which the household textile article is made, where such elastic material does not exceed 20 percent of the surface area of the household textile article: Provided, That the required information as to fiber content of products subject to this paragraph is followed by the statement “exclusive of elastic.”
§ 303.13 Sale of remnants and products made of remnants.
(a) In disclosing the required fiber content information as to remnants of fabric which are for practical purposes of unknown or undeterminable fiber content:
(1) The fiber content disclosure of such remnants of fabrics may be designated in the required information as “remnants of undetermined fiber content.”
(2) Where such remnants of fabrics are displayed for sale at retail, a conspicuous sign may, in lieu of individual labeling, be used in immediate conjunction with such display, stating with respect to required fiber content disclosure that the goods are “remnants of undetermined fiber content.”
(3) Where textile fiber products are made of such remnants, the required fiber content information of the products may be disclosed as “made of remnants of undetermined fiber content.” If any representations as to fiber content are made with respect to such remnants, the provisions of this paragraph shall not apply.
(b) Where remnants of fabrics are marketed or handled in bales, bundles, or packages and are all of the same fiber content or are designated in the manner permitted by paragraph (a) of this section, the individual remnants need not be labeled if the bales, bundles, or packages containing such remnants are labeled with the required information including fiber content percentages or the designation permitted by paragraph (a) of this section.
(c) Where remnants of fabrics of the same fiber content are displayed for sale at retail, a conspicuous sign may, in lieu of individual labeling, be used in immediate conjunction with such display, stating the fiber content information with respect to such remnants; as for example: “remnants, 100 percent cotton,” “remnants, 50 percent rayon, 50 percent acetate,” etc.
§ 303.14 Products containing unknown fibers.
(a) Where a textile fiber product is made from miscellaneous scraps, rags, odd lots, secondhand materials, textile by-products, or waste materials of unknown, and for practical purposes, undeterminable fiber content, the required fiber content disclosure may, when truthfully applicable, in lieu of the fiber content disclosure otherwise required by the Act and regulations, indicate that such product is composed of miscellaneous scraps, rags, odd lots, textile by-products, secondhand materials (in case of secondhand materials, words of like import may be used) or waste materials, as the case may be, of unknown or undetermined fiber content, as for example:
(b) Where a textile fiber product is made in part from miscellaneous scraps, rags, odd lots, textile by-products, second-hand materials or waste materials of unknown and, for practical purposes, undeterminable fiber content together with a percentage of known or determinable fibers, the required fiber content disclosure may, when truthfully applicable, in lieu of the fiber content disclosure otherwise required by the Act and regulations, indicate the percentage of miscellaneous scraps, rags, odd lots, secondhand materials (in case of secondhand materials, words of like import may be used), textile by-products, or waste materials of unknown or undetermined fiber content and the percentage of known fibers, as for example:
(c) No representation as to fiber content shall be made as to any textile product or any portion of a textile fiber product designated as composed of unknown or undetermined fibers. If any such representation is made, a full and complete fiber content disclosure shall be required.
(d) Nothing contained in this section shall excuse a full disclosure as to fiber content if the same is known or practically ascertainable.
§ 303.15 Required label and method of affixing.
(a) A label is required to be affixed to each textile product and, where required, to its package or container in a secure manner. Such label shall be conspicuous and shall be of such durability as to remain attached to the product and its package throughout any distribution, sale, resale and until sold and delivered to the ultimate consumer.
(b) Each textile fiber product with a neck must have a label disclosing the country of origin affixed to the inside center of the neck midway between the shoulder seams or in close proximity to another label affixed to the inside center of the neck. The fiber content and RN or name of the company may be disclosed on the same label as the country of origin or on another conspicuous and readily accessible label or labels on the inside or outside of the garment. On all other textile products, the required information shall be disclosed on a conspicuous and readily accessible label or labels on the inside or outside of the product. The country of origin disclosure must always appear on the front side of the label. Other required information may appear either on the front side or the reverse side of a label, provided that the information is conspicuous and readily accessible.
(c) In the case of hosiery products, this section shall not be construed as requiring the affixing of a label to each hosiery product contained in a package if,
(1) Such hosiery products are intended for sale to the ultimate consumer in such package,
(2) Such package has affixed to it a label bearing the required information for the hosiery products contained in the package, and
(3) The information on the label affixed to the package is equally applicable to each textile fiber product contained therein.
(d) Socks provided for in subheading 6115.92.90, 6115.93.90, 6115.99.18, 6111.20.60, 6111.30.50, or 6111.90.50 of the Harmonized Tariff Schedule of the United States, as in effect on September 1, 2003, shall be marked, as legibly, indelibly, and permanently as the nature of the article or package will permit, to disclose the English name of the country of origin. This disclosure shall appear on the front of the package, adjacent to the size designation of the product, and shall be set forth in such a manner as to be clearly legible, conspicuous, and readily accessible to the ultimate consumer. Provided, however, any package that contains several different types of goods and includes socks classified under subheading 6115.92.90, 6115.93.90, 6115.99.18, 6111.20.60, 6111.30.50, or 6111.90.50 of the Harmonized Tariff Schedule of the United States, as in effect on September 1, 2003, shall not be subject to the requirements of this subsection.
§ 303.16 Arrangement and disclosure of information on labels.
(a) Subject to the provisions of § 303.15(b), information required by the Act and regulations in this part may appear on any label or labels attached to the textile fiber product, including the care label required by 16 CFR part 423, provided all the pertinent requirements of the Act and regulations in this part are met and so long as the combination of required information and non-required information is not misleading. The required information shall include the following:
(1) The generic names and percentages by weight of the constituent fibers present in the textile fiber product, excluding permissive ornamentation, in amounts of 5 percent or more and any fibers disclosed in accordance with § 303.3(a) shall appear in order of predominance by weight with any percentage of fiber or fibers required to be designated as “other fiber” or “other fibers” appearing last.
(2) The name, provided for in § 303.19, or registered identification number issued by the Commission, of the manufacturer or of one or more persons marketing or handling the textile fiber product.
(3) The name of the country where such product was processed or manufactured, as provided for in § 303.33.
(b) All parts of the required information shall be set forth in such a manner as to be clearly legible, conspicuous, and readily accessible to the prospective purchaser. All parts of the fiber content information shall appear in type or lettering of equal size and conspicuousness.
(c) Subject to the provisions of § 303.17, any non-required information or representations placed on the product shall not minimize, detract from, or conflict with required information and shall not be false, deceptive, or misleading.
(d) Non-deceptive terms which are properly and truthfully descriptive of a fiber may be used in conjunction with the generic name of such fiber; as for example: “100 percent cross-linked rayon,” “100 percent solution dyed acetate,” “100 percent combed cotton,” “100 percent nylon 66,” etc.
§ 303.17 Use of fiber trademarks and generic names on labels.
(a) A non-deceptive fiber trademark may be used on a label in conjunction with the generic name of the fiber to which it relates. Where such a trademark is placed on a label in conjunction with the required information, the generic name of the fiber must appear in immediate conjunction therewith, and such trademark and generic name must appear in type or lettering of equal size and conspicuousness.
(b) Where a generic name or a fiber trademark is used on any label providing required information, a full fiber content disclosure shall be made in accordance with the Act and regulations the first time the generic name or fiber trademark appears on the label. Where a fiber generic name or trademark is used on any hang-tag attached to a textile fiber product that has a label providing required information and the hang-tag provides non-required information, such as a hang-tag stating only a fiber generic name or trademark or providing information about a particular fiber’s characteristics, the hang-tag need not provide a full fiber content disclosure; however, if the textile fiber product contains any fiber other than the fiber identified by the fiber generic name or trademark, the hang-tag must disclose clearly and conspicuously that it does not provide the product’s full fiber content; for example:
(c) If a fiber trademark is not used in the required information, but is used elsewhere on the label as non-required information, the generic name of the fiber shall accompany the fiber trademark in legible and conspicuous type or lettering the first time the trademark is used.
(d) No fiber trademark or generic name shall be used in non-required information on a label in such a manner as to be false, deceptive, or misleading as to fiber content, or to indicate directly or indirectly that a textile fiber product is composed wholly or in part of a particular fiber, when such is not the case.
§ 303.18 Terms implying fibers not present.
Words, coined words, symbols or depictions, (a) which constitute or imply the name or designation of a fiber which is not present in the product, (b) which are phonetically similar to the name or designation of such a fiber, or (c) which are only a slight variation of spelling from the name or designation of such a fiber shall not be used in such a manner as to represent or imply that such fiber is present in the product.
§ 303.19 Name or other identification required to appear on labels.
(a) The name required by the Act to be used on labels shall be the name under which the person is doing business. Where a person has a word trademark, used as a house mark, registered in the United States Patent Office, such word trademark may be used on labels in lieu of the name otherwise required. No trademark, trade names, or other names except those provided for above shall be used for required identification purposes.
(b) Registered identification numbers, as provided for in § 303.20 of this part, may be used for identification purposes in lieu of the required name.
§ 303.20 Registered identification numbers.
(a) Registered numbers for use as the required identification in lieu of the name on textile fiber product labels, as provided in section 4(b)(3) of the Act, will be issued by the Commission to qualified persons residing in the United States upon receipt of an application duly executed on the Commission’s Web site at https://rn.ftc.gov or by such means as the Commission or its designee may direct.
(b)(1) Registered identification numbers shall be used only by the person or concern to whom they are issued, and such numbers are not transferable or assignable.
(2) Registered identification numbers shall be subject to cancellation whenever any such number was procured or has been used improperly or contrary to the requirements of the Acts administered by the Federal Trade Commission, and regulations promulgated thereunder, or when otherwise deemed necessary in the public interest.
(3) Registered identification numbers shall be subject to cancellation if the Commission fails to receive prompt notification of any change in name, business address, or legal business status of a person or firm to whom a registered identification number has been assigned, by application duly executed on the Commission’s Web site at https://rn.ftc.gov or by such means as the Commission or its designee may direct.
(c) Registered identification numbers assigned under this section may be used on labels required in labeling products subject to the provisions of the Wool Products Labeling Act and Fur Products Labeling Act, and numbers previously assigned by the Commission under such Acts may be used as and for the required name in labeling under this Act. When so used by the person or firm to whom assigned, the use of the numbers shall be construed as identifying and binding the applicant as fully and in all respects as though assigned under the specific Act for which it is used.
(d) Requests for a registered identification number, to update information pertaining to an existing number, or to cancel an existing number shall be made through the Commission’s Web site at https://rn.ftc.gov. Unless otherwise directed by the Commission or its designee, requests made by other means (including but not limited to email) will not be accepted and approved.
§ 303.21 Marking of samples, swatches, or specimens and products sold therefrom.
(a) Where samples, swatches, or specimens of textile fiber products subject to the Act are used to promote or effect sales of such textile fiber products, the samples, swatches, or specimens, as well as the products themselves, shall be labeled to show their respective fiber contents and other required information: Provided, That such samples, swatches or specimens need not be labeled:
(1) If the samples, swatches, or specimens are less than two square inches (12.9 cm
(2) If the samples, swatches, or specimens are keyed to a catalogue to which reference is necessary in order to complete the sale of the textile fiber products, and which catalogue at the necessary point of reference clearly, conspicuously, and non-deceptively discloses the information otherwise required to appear on the label in accordance with the Act and regulations; or
(3) If such samples, swatches, or specimens are not used to effect sales to ultimate consumers and are not in the form intended for sale or delivery to, or for use by, the ultimate consumer, and are accompanied by an invoice or other document showing the required information.
(b) Where properly labeled samples, swatches, or specimens are used to effect the sale of articles of wearing apparel or other household textile articles which are manufactured specifically for a particular customer after the sale is consummated, the articles of wearing apparel or other household textile articles need not be labeled if they are of the same fiber content as the samples, swatches, or specimens from which the sale was effected and an invoice or other document accompanies them showing the information otherwise required to appear on the label.
§ 303.22 Products containing linings, interlinings, fillings, and paddings.
In disclosing the required information as to textile fiber products, the fiber content of any linings, interlinings, fillings, or paddings shall be set forth separately and distinctly if such linings, interlinings, fillings, or paddings are incorporated in the product for warmth rather than for structural purposes, or if any express or implied representations are made as to their fiber content. Examples are as follows:
§ 303.23 Textile fiber products containing superimposed or added fibers.
Where a textile fiber product is made wholly of one fiber or a blend of fibers with the exception of an additional fiber in minor proportion superimposed or added in certain separate and distinct areas or sections for reinforcing or other useful purposes, the product may be designated according to the fiber content of the principal fiber or blend of fibers, with an exception naming the superimposed or added fiber, giving the percentage thereof in relation to the total fiber weight of the principal fiber or blend of fibers, and indicating the area or section which contains the superimposed or added fiber. Examples of this type of fiber content disclosure, as applied to products having reinforcing fibers added to a particular area or section, are as follows:
§ 303.24 Pile fabrics and products composed thereof.
The fiber content of pile fabrics or products composed thereof may be stated on the label in such segregated form as will show the fiber content of the face or pile and of the back or base, with percentages of the respective fibers as they exist in the face or pile and in the back or base: Provided, That in such disclosure the respective percentages of the face and back be given in such manner as will show the ratio between the face and the back. Examples of the form of marking pile fabric as to fiber content provided for in this section are as follows:
§ 303.25 Sectional disclosure of content.
(a) Permissive. Where a textile fiber product is composed of two or more sections which are of different fiber composition, the required information as to fiber content may be separated in the same label in such manner as to show the fiber composition of each section.
(b) Mandatory. The disclosure as above provided shall be made in all instances where such form of marking is necessary to avoid deception.
§ 303.26 Ornamentation.
(a)(1) Where the textile fiber product contains fiber ornamentation not exceeding five per centum of the total fiber weight of the product and the stated percentages of the fiber content are exclusive of such ornamentation, the label or any invoice used in lieu thereof shall contain a phrase or statement showing such fact; as for example:
(2) The fiber content of such ornamentation may be disclosed where the percentage of the ornamentation in relation to the total fiber weight of the principal fiber or blend of fibers is shown; as for example:
(b) Where the fiber ornamentation exceeds five per centum, it shall be included in the statement of required percentages of fiber content.
(c) Where the ornamentation constitutes a distinct section of the product, sectional disclosure may be made in accordance with § 303.25 of this part.
§ 303.27 Use of the term “All” or “100%.”
Where a textile fiber product or part thereof is comprised wholly of one fiber, other than any fiber ornamentation, decoration, elastic, or trimming as to which fiber content disclosure is not required, either the word All or the term 100% may be used in labeling, together with the correct generic name of the fiber and any qualifying phrase, when required; as for example: “100% Cotton,” “All Rayon, Exclusive of Ornamentation,” “100% Acetate, Exclusive of Decoration,” “All Nylon, Exclusive of Elastic,” etc.
§ 303.28 Products contained in packages.
When textile products are marketed and delivered in a package which is intended to remain unbroken and intact until after delivery to the ultimate consumer, each textile product in the package, except hosiery, and the package shall be labeled with the required information. If the package is transparent to the extent it allows for a clear reading of the required information on the textile product, the package is not required to be labeled.
§ 303.29 Labeling of pairs or products containing two or more units.
(a) Where a textile fiber product consists of two or more parts, units, or items of different fiber content, a separate label containing the required information shall be affixed to each of such parts, units or items showing the required information as to such part, unit, or item: Provided, That where such parts, units, or items are marketed or handled as a single product or ensemble and are sold and delivered to the ultimate consumer as a single product or ensemble, the required information may be set out on a single label in such a manner as to separately show the fiber composition of each part, unit, or item.
(b) Where garments, wearing apparel, or other textile fiber products are marketed or handled in pairs or ensembles of the same fiber content, only one unit of the pair or ensemble need be labeled with the required information when sold and delivered to the ultimate consumer.
§ 303.30 Textile fiber products in form for consumer.
A textile fiber product shall be considered to be in the form intended for sale or delivery to, or for use by, the ultimate consumer when the manufacturing or processing of the textile fiber product is substantially complete. The fact that minor or insignificant details of the manufacturing or processing have not been completed shall not excuse the labeling of such products as to the required information. For example, a garment must be labeled even though such matters as the finishing of a hem or cuff or the affixing of buttons thereto remain to be completed.
§ 303.31 Invoice in lieu of label.
Where a textile fiber product is not in the form intended for sale, delivery to, or for use by the ultimate consumer, an invoice or other document may be used in lieu of a label, and such invoice or other document shall show, in addition to the name and address of the person issuing the invoice or other document, the fiber content of such product as provided in the Act and regulations as well as any other required information.
§ 303.32 Products containing reused stuffing.
Any upholstered product, mattress, or cushion which contains stuffing which has been previously used as stuffing in any other upholstered product, mattress, or cushion shall have securely attached thereto a substantial tag or label, at least 2 inches (5.08 cm) by 3 inches (7.62 cm) in size, and statements thereon conspicuously stamped or printed in the English language and in plain type not less than
§ 303.33 Country where textile fiber products are processed or manufactured.
(a) In addition to the other information required by the Act and Regulations:
(1) Each imported textile fiber product shall be labeled with the name of the country where such imported product was processed or manufactured;
(2) Each textile fiber product completely made in the United States of materials that were made in the United States shall be labeled using the term Made in U.S.A. or some other clear and equivalent term.
(3) Each textile fiber product made in the United States, either in whole or in part of imported materials, shall contain a label disclosing these facts; for example:
and
(4) Each textile fiber product partially manufactured in a foreign country and partially manufactured in the United States shall contain on a label the following information:
(i) The manufacturing process in the foreign country and in the USA; for example:
(ii) When the U.S. Customs Service requires an origin label on the unfinished product, the manufacturing processes as required in paragraph (a)(4)(i) of this section or the name of the foreign country required by Customs, for example:
(b) For the purpose of determining whether a product should be marked under paragraphs (a) (2), (3), or (4) of this section, a manufacturer needs to consider the origin of only those materials that are covered under the Act and that are one step removed from that manufacturing process. For example, a yarn manufacturer must identify fiber if it is imported, a cloth manufacturer must identify imported yarn and a household product manufacturer must identify imported cloth or imported yarn for household products made directly from yarn, or imported fiber used as filling for warmth.
(c) The term country means the political entity known as a nation. Except for the United States, colonies, possessions or protectorates outside the boundaries of the mother country shall be considered separate countries, and the name thereof shall be deemed acceptable in designating the country where the textile fiber product was processed or manufactured unless the Commission shall otherwise direct.
(d) The country of origin of an imported textile fiber product as determined under the laws and regulations enforced by United States Customs and Border Protection shall be considered to be the country where such textile fiber product was processed or manufactured.
(e) The English name of the country where the imported textile fiber product was processed or manufactured shall be used. The adjectival form of the name of the country will be accepted as the name of the country where the textile fiber product was processed or manufactured, provided the adjectival form of the name does not appear with such other words so as to refer to a kind or species of product. Variant spellings which clearly indicate the English name of the country, such as Brasil for Brazil and Italie for Italy, are acceptable. Abbreviations which unmistakably indicate the name of a country, such as “Gt. Britain” for “Great Britain,” are acceptable.
(f) Nothing in this section shall be construed as limiting in any way the information required to be disclosed on labels under the provisions of any Tariff Act of the United States or regulations promulgated thereunder.
§ 303.34 Country of origin in mail order advertising.
When a textile fiber product is advertised in any mail order catalog or mail order promotional material, the description of such product shall contain a clear and conspicuous statement that the product was either made in U.S.A., imported, or both. Other words or phrases with the same meaning may be used. The statement of origin required by this section shall not be inconsistent with the origin labeling of the product being advertised.
§ 303.35 Use of terms “virgin” or “new.”
The terms virgin or new as descriptive of a textile fiber product, or any fiber or part thereof, shall not be used when the product, fiber or part so described is not composed wholly of new or virgin fiber which has never been reclaimed from any spun, woven, knitted, felted, bonded, or similarly manufactured product.
§ 303.36 Form of separate guaranty.
(a) The following are suggested forms of separate guaranties under section 10 of the Act which may be used by a guarantor residing in the United States on or as part of an invoice or other document relating to the marketing or handling of any textile fiber products listed and designated therein, and showing the date of such invoice or other document and the signature and address of the guarantor.
(1) General form. We guarantee that the textile fiber products specified herein are not misbranded nor falsely nor deceptively advertised or invoiced under the provisions of the Textile Fiber Products Identification Act and rules and regulations thereunder.
(2) Guaranty based on guaranty. Based upon a guaranty received, we guaranty that the textile fiber products specified herein are not misbranded nor falsely nor deceptively advertised or invoiced under the provisions of the Textile Fiber Products Identification Act and rules and regulations thereunder.
The printed name and address on the invoice or other document will suffice to meet the signature and address requirements.
(b) The mere disclosure of required information including the fiber content of a textile fiber product on a label or on an invoice or other document relating to its marketing or handling shall not be considered a form of separate guaranty.
§ 303.37 Form of continuing guaranty from seller to buyer.
Under section 10 of the Act, a seller residing in the United States may give a buyer a continuing guaranty to be applicable to all textile fiber products sold or to be sold. The following is the prescribed form of continuing guaranty from seller to buyer:
We, the undersigned, guaranty that all textile fiber products now being sold or which may hereafter be sold or delivered to ________________ are not, and will not be misbranded or falsely or deceptively advertised or invoiced under the provisions of the Textile Fiber Products Identification Act and rules and regulations thereunder. We acknowledge that furnishing a false guaranty is an unlawful unfair and deceptive act or practice pursuant to the Federal Trade Commission Act, and certify that we will actively monitor and ensure compliance with the Textile Fiber Products Identification Act and rules and regulations thereunder during the duration of this guaranty.
Dated, signed, and certified this ____ day of ____, 20__, at ________________ (City), ________________ (State or Territory) ________________ (name under which business is conducted.)
I certify that the information supplied in this form is true and correct.
§ 303.38 Continuing guaranty filed with Federal Trade Commission.
(a)(1) Under section 10 of the act any person residing in the United States and marketing or handling textile fiber products may file a continuing guaranty with the Federal Trade Commission. When filed with the Commission a continuing guaranty shall be fully executed in duplicate. Forms for use in preparing continuing guaranties will be supplied by the Commission upon request.
(2) Continuing guaranties filed with the Commission shall continue in effect until revoked. The guarantor shall promptly report any change in business status to the Commission.
(b) Prescribed form for a continuing guaranty:
(c) Any person who has a continuing guaranty on file with the Commission may, during the effective dates of the guaranty, give notice of such fact by setting forth on the invoice or other document covering the marketing or handling of the product guaranteed the following: Continuing guaranty under the Textile Fiber Products Identification Act filed with the Federal Trade Commission.
(d) Any person who falsely represents in writing that he has a continuing guaranty on file with the Federal Trade Commission when such is not a fact shall be deemed to have furnished a false guaranty under section 10(b) of the Act.
§ 303.39 Maintenance of records.
(a) Pursuant to the provisions of section 6 of the Act, every manufacturer of a textile fiber product subject to the Act, irrespective of whether any guaranty has been given or received, shall maintain records showing the information required by the Act and Regulations with respect to all such textile fiber products made by such manufacturer. Such records shall show:
(1) The generic names and percentages by weight of the constituent fibers present in the textile fiber product, exclusive of permissive ornamentation, in amounts of five per centum or more.
(2) The name, provided for in § 303.19, or registered identification number issued by the Commission, of the manufacturer or of one or more persons marketing or handling the textile fiber product.
(3) The name of the country where such product was processed or manufactured as provided for in § 303.33.
(b) Any person substituting a stamp, tag, label, or other identification pursuant to section 5(b) of the Act shall keep such records as will show the information set forth on the stamp, tag, label, or other identification that he removed and the name or names of the person or persons from whom such textile fiber product was received.
(c) The records required to be maintained pursuant to the provisions of this rule shall be preserved for at least three years.
§ 303.40 Use of terms in written advertisements that imply presence of a fiber.
The use of terms in written advertisements, including advertisements disseminated through the Internet and similar electronic media, that are descriptive of a method of manufacture, construction, or weave, and that by custom and usage are also indicative of a textile fiber or fibers, or the use of terms in such advertisements that constitute or connote the name or presence of a fiber or fibers, shall be deemed to be an implication of fiber content under section 4(c) of the Act, except that the provisions of this section shall not be applicable to non-deceptive shelf or display signs in retail stores indicating the location of textile fiber products and not intended as advertisements.
§ 303.41 Use of fiber trademarks and generic names in advertising.
(a) In advertising textile fiber products, the use of a fiber trademark or a generic fiber name shall require a full disclosure of the fiber content information required by the Act and regulations in at least one instance in the advertisement.
(b) Where a fiber trademark is used in advertising textile fiber products containing more than one fiber, other than permissible ornamentation, such fiber trademark and the generic name of the fiber must appear in the required fiber content information in immediate proximity and conjunction with each other in plainly legible type or lettering of equal size and conspicuousness.
(c) Where a fiber trademark is used in advertising textile fiber products containing only one fiber, other than permissive ornamentation, such fiber trademark and the generic name of the fiber must appear in immediate proximity and conjunction with each other in plainly legible and conspicuous type or lettering at least once in the advertisement.
(d) Where a fiber trademark or generic name is used in non-required information in advertising, such fiber trademark or generic name, shall not be used in such a manner as to be false, deceptive, or misleading as to fiber content, or to indicate, directly or indirectly, that a textile fiber product is composed wholly or in part of a particular fiber, when such is not the case.
§ 303.42 Arrangement of information in advertising textile fiber products.
(a) Where a textile fiber product is advertised in such manner as to require disclosure of the information required by the Act and regulations, all parts of the required information shall be stated in immediate conjunction with each other in legible and conspicuous type or lettering of equal size and prominence. In making the required disclosure of the fiber content of the product, the generic names of fibers present in an amount 5 percent or more of the total fiber weight of the product, together with any fibers disclosed in accordance with § 303.3(a), shall appear in order of predominance by weight, to be followed by the designation “other fiber” or “other fibers” if a fiber or fibers required to be so designated are present. The advertisement need not state the percentage of each fiber.
(b) Non-required information or representations shall in no way be false, deceptive, or misleading as to fiber content and shall not include any names, terms, or representations prohibited by the Act and regulations. Such non-required information or representations shall not be set forth or so used as to interfere with, minimize, or detract from the required information.
(c) Non-deceptive terms which are properly and truthfully descriptive of a fiber may be used in conjunction with the generic name of such fiber; as for example: “cross-linked rayon,” “solution dyed acetate,” “combed cotton,” “nylon 66,” etc.
§ 303.43 Fiber content tolerances.
(a) A textile fiber product which contains more than one fiber shall not be deemed to be misbranded as to fiber content percentages if the percentages by weight of any fibers present in the total fiber content of the product, exclusive of permissive ornamentation, do not deviate or vary from the percentages stated on the label in excess of 3 percent of the total fiber weight of the product. For example, where the label indicates that a particular fiber is present in the amount of 40 percent, the amount of such fiber present may vary from a minimum of 37 percent of the total fiber weight of such product to a maximum of 43 percent of the total fiber weight of such product.
(b) Where the percentage of any fiber or fibers contained in a textile fiber product deviates or varies from the percentage stated on the label by more than the tolerance or variation provided in paragraph (a) of this section, such product shall be misbranded unless the person charged proves that the entire deviation or variation from the fiber content percentages stated on the label resulted from unavoidable variations in manufacture and despite the exercise of due care.
(c) Where representations are made to the effect that a textile fiber product is composed wholly of one fiber, the tolerance provided in section 4(b)(2) of the Act and paragraph (a) of this section shall not apply, except as to permissive ornamentation where the textile fiber product is represented to be composed of one fiber “exclusive of ornamentation.”
§ 303.44 Products not intended for uses subject to the Act.
Textile fiber products intended for uses not within the scope of the Act and regulations or intended for uses in other textile fiber products which are exempted or excluded from the Act shall not be subject to the labeling and invoicing requirements of the Act and regulations: Provided, an invoice or other document covering the marketing or handling of such products is given, which indicates that the products are not intended for uses subject to the Textile Fiber Products Identification Act.
§ 303.45 Coverage and exclusions from the Act.
(a) The following textile fiber products are subject to the Act and regulations in this part, unless excluded from the Act’s requirements in paragraph (b) of this section:
(1) Articles of wearing apparel;
(2) Handkerchiefs;
(3) Scarfs;
(4) Beddings;
(5) Curtains and casements;
(6) Draperies;
(7) Tablecloths, napkins, and doilies;
(8) Floor coverings;
(9) Towels;
(10) Wash cloths and dish cloths;
(11) Ironing board covers and pads;
(12) Umbrellas and parasols;
(13) Batts;
(14) Products subject to section 4(h) of the Act;
(15) Flags with heading or more than 216 square inches (13.9 dm
(16) Cushions;
(17) All fibers, yarns and fabrics (including narrow fabrics except packaging ribbons);
(18) Furniture slip covers and other covers or coverlets for furniture;
(19) Afghans and throws;
(20) Sleeping bags;
(21) Antimacassars and tidies;
(22) Hammocks; and
(23) Dresser and other furniture scarfs.
(b) Pursuant to section 12(b) of the Act, all textile fiber products other than those identified in paragraph (a) of this section, and the following textile fiber products, are excluded from the Act’s requirements:
(1) Belts, suspenders, arm bands, permanently knotted neckties, garters, sanitary belts, diaper liners, labels (either required or non-required) individually and in rolls, looper clips intended for handicraft purposes, book cloth, artists’ canvases, tapestry cloth, and shoe laces.
(2) All textile fiber products manufactured by the operators of company stores and offered for sale and sold exclusively to their own employees as ultimate consumers.
(3) Coated fabrics and those portions of textile fiber products made of coated fabrics.
(4) Secondhand household textile articles which are discernibly secondhand or which are marked to indicate their secondhand character.
(5) Non-woven products of a disposable nature intended for one-time use only.
(6) All curtains, casements, draperies, and table place mats, or any portions thereof otherwise subject to the Act, made principally of slats, rods, or strips, composed of wood, metal, plastic, or leather.
(7) All textile fiber products in a form ready for the ultimate consumer procured by the military services of the United States which are bought according to specifications, but shall not include those textile fiber products sold and distributed through post exchanges, sales commissaries, or ship stores; provided, however, that if the military services sell textile fiber products for nongovernmental purposes the information with respect to the fiber content of such products shall be furnished to the purchaser thereof who shall label such products in conformity with the Act and regulations before such products are distributed for civilian use.
(8) All hand woven rugs made by Navajo Indians which have attached thereto the “Certificate of Genuineness” supplied by the Indian Arts and Crafts Board of the United States Department of Interior. The term Navajo Indian means any Indian who is listed on the register of the Navajo Indian Tribe or is eligible for listing thereon.
(c) The exclusions provided for in paragraph (b) of this section shall not be applicable:
(1) if any representations as to the fiber content of such products are made on any label or in any advertisement without making a full and complete fiber content disclosure on such label or in such advertisement in accordance with the Act and regulations in this part with the exception of those products excluded by paragraph (b)(5) of this section; or
(2) If any false, deceptive, or misleading representations are made as to the fiber content of such products.
(d) The exclusions from the Act provided in paragraph (b) of this section are in addition to the exemptions from the Act provided in section 12(a) of the Act and shall not affect or limit such exemptions.
PART 304 – RULES AND REGULATIONS UNDER THE HOBBY PROTECTION ACT
§ 304.1 Terms defined.
(a) Act means the Hobby Protection Act (approved November 29, 1973; Pub. L. 93-167, 87 Stat. 686, (15 U.S.C. 2101 et seq.)).
(b) Commerce has the same meanings as such term has under the Federal Trade Commission Act.
(c) Commission means the Federal Trade Commission.
(d) Imitation numismatic item means an item which purports to be, but in fact is not, an original numismatic item or which is a reproduction, copy, or counterfeit of an original numismatic item. Such term includes an original numismatic item which has been altered or modified in such a manner that it could reasonably purport to be an original numismatic item other than the one which was altered or modified. The term shall not include any re-issue or re-strike of any original numismatic item by the United States or any foreign government.
(e) Imitation political item means an item which purports to be, but in fact is not, an original political item, or which is a reproduction, copy or counterfeit of an original item.
(f) Original numismatic item means anything which has been a part of a coinage or issue which has been used in exchange or has been used to commemorate a person, object, place, or event. Such term includes coins, tokens, paper money, and commemorative medals.
(g) Original political item means any political button, poster, literature, sticker, or any advertisement produced for use in any political cause.
(h) Person means any individual, group, association, partnership, or any other business entity.
(i) Regulations means any or all regulations prescribed by the Federal Trade Commission pursuant to the Act.
(j) United States means the States, the District of Columbia, and the Commonwealth of Puerto Rico.
(k) Diameter of a reproduction means the length of the longest possible straight line connecting two points on the perimeter of the reproduction.
§ 304.2 General requirement.
Imitation political or numismatic items subject to the Act shall be marked in conformity with the requirements of the Act and the regulations promulgated thereunder. Any violation of these regulations shall constitute a violation of the Act and of the Federal Trade Commission Act.
§ 304.3 Applicability.
Any person engaged in the manufacturing, or importation into the United States for introduction into or distribution in commerce, of imitation political or imitation numismatic items shall be subject to the requirements of the Act and the regulations promulgated thereunder. Any person engaged in the sale in commerce of imitation numismatic items shall be subject to the requirements of the Act and the regulations promulgated thereunder. It shall be a violation of the Act and the regulations promulgated thereunder for a person to provide substantial assistance or support to any manufacturer, importer, or seller of imitation numismatic items, or to any manufacturer or importer of imitation political items, if that person knows or should have known that the manufacturer, importer, or seller is engaged in any practice that violates the Act and the regulations promulgated thereunder.
§ 304.4 Application of other law or regulation.
The provisions of these regulations are in addition to, and not in substitution for or limitation of, the provisions of any other law or regulation of the United States (including the existing statutes and regulations prohibiting the reproduction of genuine currency) or of the law or regulation of any State.
§ 304.5 Marking requirements for imitation political items.
(a) An imitation political item which is manufactured in the United States, or imported into the United States for introduction into or distribution in commerce, shall be plainly and permanently marked with the calendar year in which such item was manufactured.
(b) The calendar year shall be marked upon the item legibly, conspicuously and nondeceptively, and in accordance with the further requirements of these regulations.
(1) The calendar year shall appear in arabic numerals, shall be based upon the Gregorian calendar and shall consist of four digits.
(2) The calendar year shall be marked on either the obverse or the reverse surface of the item. It shall not be marked on the edge of the item.
(3) An imitation political item of incusable material shall be incused with the calendar year in sans-serif numerals. Each numeral shall have a vertical dimension of not less than two millimeters (2.0 mm) and a minimum depth of three-tenths of one millimeter (0.3 mm) or one-half (
(4) An imitation political button, poster, literature, sticker, or advertisement composed of nonincusable material shall be imprinted with the calendar year in sans-serif numerals. Each numeral shall have a vertical dimension of not less than two millimeters (2.0 mm). The minimum total horizontal dimension of the four numerals composing the calendar year shall be six millimeters (6.0 mm).
§ 304.6 Marking requirements for imitation numismatic items.
(a) An imitation numismatic item which is manufactured in the United States, or imported into the United States for introduction into or distribution in commerce, shall be plainly and permanently marked “COPY”.
(b) The word “COPY” shall be marked upon the item legibly, conspicuously, and nondeceptively, and in accordance with the further requirements of these regulations.
(1) The word “COPY” shall appear in capital letters, in the English language.
(2) The word “COPY” shall be marked on either the obverse or the reverse surface of the item. It shall not be marked on the edge of the item.
(3) An imitation numismatic item of incusable material shall be incused with the word “COPY” in sans-serif letters having a vertical dimension of not less than two millimeters (2.0 mm) or not less than one-sixth of the diameter of the reproduction, and a minimum depth of three-tenths of one millimeter (0.3 mm) or to one-half (
(4) An imitation numismatic item composed of nonincusable material shall be imprinted with the word “COPY” in sans-serif letters having a vertical dimension of not less than two millimeters (2.0 mm) or not less than one-sixth of the diameter of the reproduction. The minimum total horizontal dimension of the word “COPY” shall be six millimeters (6.0 mm) or not less than one-half of the diameter of the reproduction.
PART 305 – ENERGY AND WATER USE LABELING FOR CONSUMER PRODUCTS UNDER THE ENERGY POLICY AND CONSERVATION ACT (“ENERGY LABELING RULE”)
Scope
§ 305.1 Scope of the regulations in this part.
The rule in this part establishes requirements for consumer appliance products, as hereinafter described, in commerce, as “commerce” is defined in the Energy Policy and Conservation Act, 42 U.S.C. 6291, with respect to:
(a) Labeling and/or marking the products with information required by this part indicating their operating cost (or different useful measure of energy consumption) and related information, disclosing their water use rate and related information, or stating their compliance with applicable standards under section 325 of the Energy Policy and Conservation Act, 42 U.S.C. 6295;
(b) Including in printed matter displayed or distributed at the point of sale of such products, or including in any catalog from which the products may be purchased, information concerning their water use or their energy consumption;
(c) Including on the labels, separately attaching to the products, or shipping with the products, additional information relating to energy consumption, energy efficiency, or energy cost; and
(d) Making representations, in writing or in broadcast advertising, respecting the water use, energy consumption, or energy efficiency of the products, or the cost of water used or energy consumed by the products.
Definitions
§ 305.2 Definitions.
(a) Act means the Energy Policy and Conservation Act (Pub. L. 94-163), and amendments thereto.
(b) ANSI means the American National Standards Institute and, as used herein, is the prefix for national standards and codes adopted by ANSI.
(c) ASME means the American Society of Mechanical Engineers and, as used herein, is the prefix for national standards and codes adopted by ASME.
(d) Average lamp efficacy means the lamp efficacy readings taken over a statistically significant period of manufacture with the readings averaged over that period.
(e) Ballast efficacy factor means the relative light output divided by the power input of a fluorescent lamp ballast, as measured under test conditions specified in American National Standards Institute (ANSI) standard C82.2-1984, or as may be prescribed by the Secretary of Energy. Copies of ANSI standard C82.2-1984 may be obtained from the American National Standards Institute, 11 West 42nd St., New York, NY 10036.
(f) Base for lamps means the portion of the lamp which screws into the socket.
(g) Bulb shape means the shape of the lamp, especially the glass portion.
(h) Catalog means printed material, including material disseminated over the Internet, which contains the terms of sale, retail price, and instructions for ordering, from which a retail consumer can order a covered product.
(i) Color rendering index or CRI for lamps means the measure of the degree of color shift objects undergo when illuminated by a light source as compared with the color of those same objects when illuminated by a reference source of comparable color temperature.
(j) Commission means the Federal Trade Commission.
(k) Consumer product means any article (other than an automobile, as “automobile” is defined in 15 U.S.C. 2001(1) [sec. 501(1) of the Motor Vehicle Information and Cost Savings Act]) of a type –
(1) Which in operation consumes, or is designed to consume, energy or, with respect to showerheads, faucets, water closets, and urinals, water; and
(2) Which, to any significant extent, is distributed in commerce for personal use or consumption by individuals; without regard to whether such article or such type is in fact distributed in commerce for personal use or consumption by an individual, except that such term includes fluorescent lamp ballasts, metal halide lamp fixtures, general service fluorescent lamps, medium base compact fluorescent lamps, general service incandescent lamps (including incandescent reflector lamps), showerheads, faucets, water closets, and urinals distributed in commerce for personal or commercial use or consumption.
(l) Consumer appliance product means any of the following consumer products, excluding those products designed solely for use in recreational vehicles and other mobile equipment:
(1) Refrigerators, refrigerator-freezers, and freezers that can be operated by alternating current electricity, excluding –
(i) Any type designed to be used without doors; and
(ii) Any type which does not include a compressor and condenser unit as an integral part of the cabinet assembly.
(2) Dishwashers.
(3) Water heaters.
(4) Room air conditioners.
(5) Clothes washers.
(6) Clothes dryers.
(7) Central air conditioners and central air conditioning heat pumps.
(8) Furnaces.
(9) Direct heating equipment.
(10) Pool heaters.
(11) Kitchen ranges and ovens.
(12) Television sets.
(13) Fluorescent lamp ballasts.
(14) General service fluorescent lamps.
(15) Medium base compact fluorescent lamps.
(16) General service incandescent lamps, including incandescent reflector lamps.
(17) Showerheads.
(18) Faucets.
(19) Water closets.
(20) Urinals.
(21) Metal halide lamp fixtures.
(22) Ceiling fans.
(23) Portable air conditioners.
(24) Any other type of consumer product that the Department of Energy classifies as a covered product under section 322(b) of the Act (42 U.S.C. 6292).
(m) Correlated color temperature for lamps means the absolute temperature of a blackbody whose chromaticity most nearly resembles that of the light source.
(n) Covered product means any consumer product or consumer appliance product described in § 305.3, § 305.4, § 305.5, or § 305.6 of this part.
(o) Distributor means a person (other than a manufacturer or retailer) to whom a consumer appliance product is delivered or sold for purposes of distribution in commerce.
(p) Energy efficiency rating means the following product-specific energy usage descriptors: Annual fuel utilization efficiency (AFUE) for furnaces; combined energy efficiency ratio (CEER) for room and portable air conditioners; seasonal energy efficiency ratio 2 (SEER2) for the cooling function of central air conditioners and heat pumps; heating seasonal performance factor 2 (HSPF2) for the heating function of heat pumps; airflow efficiency for ceiling fans; and, thermal efficiency (TE) for pool heaters, as these descriptors are determined in accordance with tests prescribed under section 323 of the Act (42 U.S.C. 6293). These product-specific energy usage descriptors shall be used in satisfying all the requirements of this part.
(q) Estimated annual energy consumption and estimated annual operating or energy cost – (1) Estimated annual energy consumption means the energy or (for plumbing products) water that is likely to be consumed annually in representative use of a consumer product, as determined in accordance with tests prescribed under section 323 of the Act (42 U.S.C. 6293).
(i) Kilowatt-hour use per year, or kWh/yr., means estimated annual energy consumption expressed in kilowatt-hours of electricity.
(ii) Therm use per year, or therms/yr., means estimated annual energy consumption expressed in therms of natural gas.
(iii) Gallon use per year, or gallons/yr., means estimated annual energy consumption expressed in gallons of propane or No. 2 heating oil.
(2) Estimated annual operating or energy cost means the aggregate retail cost of the energy that is likely to be consumed annually in representative use of a consumer product, as determined in accordance with tests prescribed under section 323 of the Act (42 U.S.C. 6293).
(r) Flow restricting or controlling spout end device means an aerator used in a faucet.
(s) Flushometer valve means a valve attached to a pressured water supply pipe and so designed that, when actuated, it opens the line for direct flow into the fixture at a rate and quantity to operate properly the fixture, and then gradually closes to provide trap reseal in the fixture in order to avoid water hammer. The pipe to which this device is connected is in itself of sufficient size that, when opened, will allow the device to deliver water at a sufficient rate of flow for flushing purposes.
(t) IES means the Illuminating Engineering Society of North America and, as used herein, is the prefix for test procedures adopted by IES.
(u) Lamp efficacy means the light output of a lamp divided by its wattage, expressed in lumens per watt (LPW).
(v) Lamp type means all lamps designated as having the same electrical and lighting characteristics and made by one manufacturer.
(w) Life and lifetime for lamps mean length of operating time of a statistically large group of lamps between first use and failure of 50 percent of the group.
(x) Light output for lamps means the total luminous flux (power) of a lamp in lumens.
(y) Luminaire means a complete lighting unit consisting of a fluorescent lamp or lamps, together with parts designed to distribute the light, to position and protect such lamps, and to connect such lamps to the power supply through the ballast.
(z) Manufacturer means any person who manufactures, produces, assembles, or imports a consumer appliance product. Assembly operations which are solely decorative are not included.
(aa) New covered product means a covered product the title of which has not passed to a purchaser who buys the product for purposes other than resale or leasing for a period in excess of one year.
(bb) Private labeler means an owner of a brand or trademark on the label of a consumer appliance product which bears a private label.
(cc) Range of comparability means a group of models within a class of covered products, each model of which satisfies approximately the same consumer needs.
(dd) Range of energy efficiency ratings means the range of energy efficiency ratings for all models within a designated range of comparability.
(ee) Range of estimated annual energy cost means the range of estimated annual energy cost per year of all models within a designated range of comparability.
(ff) Retailer means a person to whom a consumer appliance product is delivered or sold, if such delivery or sale is for purposes of sale or distribution in commerce to purchasers who buy such product for purposes other than resale. The term retailer includes purchasers of appliances who install such appliances in newly constructed or newly rehabilitated housing, or mobile homes, with the intent to sell the covered appliances as part of the sale of such housing or mobile homes.
(gg) Water use means the quantity of water flowing through a showerhead, faucet, water closet, or urinal at point of use, determined in accordance with test procedures under section 323 of the Act, 42 U.S.C. 6293.
(hh) Wattage for lamps means the total electrical power consumed by a lamp in watts, after an initial seasoning period and including, for fluorescent lamps, arc watts plus cathode watts.
§ 305.3 Description of appliances and consumer electronics.
(a) Refrigerators and refrigerator-freezers – (1) Electric refrigerator means a cabinet designed for the refrigerated storage of food, designed to be capable of achieving storage temperatures above 32 °F (0 °C) and below 39 °F (3.9 °C), and having a source of refrigeration requiring single phase, alternating current electric energy input only. An electric refrigerator may include a compartment for the freezing and storage of food at temperatures below 32 °F (0 °C), but does not provide a separate low temperature compartment designed for the freezing and storage of food at temperatures below 8 °F (−13.3 °C).
(2) Electric refrigerator-freezer means a cabinet which consists of two or more compartments with at least one of the compartments designed for the refrigerated storage of food and designed to be capable of achieving storage temperatures above 32 °F (0 °C) and below 39 °F (3.9 °C), and with at least one of the compartments designed for the freezing and storage of food at temperatures below 8 °F (−13.3 °C) which may be adjusted by the user to a temperature of 0 °F (−17.8 °C) or below. The source of refrigeration requires single phase, alternating current electric energy input only.
(b) Freezer means a cabinet designed as a unit for the freezing and storage of food at temperatures of 0 °F or below, and having a source of refrigeration requiring single phase, alternating current electric energy input only.
(c) Dishwasher means a cabinet-like appliance which, with the aid of water and detergent, washes, rinses, and dries (when a drying process is included) dishware, glassware, eating utensils and most cooking utensils by chemical, mechanical, and/or electrical means and discharges to the plumbing drainage system.
(1) Water heating dishwasher means a dishwasher which is designed for heating cold inlet water (nominal 50 °F) or a dishwasher for which the manufacturer recommends operation with a nominal inlet water temperature of 120 °F and may operate at either of these inlet water temperatures by providing internal water heating to above 120 °F in at least one wash phase of the normal cycle.
(2) [Reserved]
(d) Water heater means a product which utilizes oil, gas, or electricity to heat potable water for use outside the heater upon demand, including –
(1) Storage type units which heat and store water at a thermostatically controlled temperature, including gas storage water heaters with an input of 75,000 Btu per hour or less, oil storage water heaters with an input of 105,000 Btu per hour or less, and electric storage water heaters with an input of 12 kilowatts or less;
(2) Instantaneous type units that heat water but contain no more than one gallon of water per 4,000 Btu per hour of input, including gas instantaneous water heaters with an input of 200,000 Btu per hour or less, oil instantaneous water heaters with an input of 210,000 Btu per hour or less, and electric instantaneous water heaters with an input of 12 kilowatts or less; and
(3) Heat pump type units, with a maximum current rating of 24 amperes at a voltage no greater than 250 volts, which are products designed to transfer thermal energy from one temperature level to a higher temperature level for the purpose of heating water, including all ancillary equipment such as fans, storage tanks, pumps, or controls necessary for the device to perform its function.
(e) Room air conditioner means a consumer product, other than a packaged terminal air conditioner, which is powered by a single phase electric current and which is an encased assembly designed as a unit for mounting in a window or through the wall for the purpose of providing delivery of conditioned air to an enclosed space. It includes a prime source of refrigeration and may include a means for ventilating and heating.
(f) Clothes washer means a consumer product designed to clean clothes, utilizing a water solution of soap and/or detergent and mechanical agitation or other movement, and must be one of the following classes: Automatic clothes washers, semi-automatic clothes washers, and other clothes washers.
(1) Automatic clothes washer means a class of clothes washer which has a control system capable of scheduling a pre-selected combination of operations, such as regulation of water fill level, and performance of wash, rinse, drain and spin functions, without the need for the user to intervene subsequent to the initiation of machine operation. Some models may require user intervention to initiate these different segments of the cycle after the machine has begun operation, but they do not require the user to intervene to regulate the water temperature by adjusting the external water faucet valves.
(2) Semi-automatic clothes washer means a class of clothes washer that is the same as an automatic clothes washer except that the user must intervene to regulate the water temperature by adjusting the external water faucet valves.
(3) Other clothes washer means a class of clothes washer that is not an automatic or semi-automatic clothes washer.
(g) Ceiling fan means a nonportable device that is suspended from a ceiling for circulating air via the rotation of fan blades, excluding large-diameter and high-speed small diameter fans as defined in appendix U of subpart B of 10 CFR part 430. The requirements of this part are otherwise limited to those ceiling fans for which the Department of Energy has adopted and published test procedures for measuring energy usage.
(h) Television means a product that is designed to produce dynamic video, contains an internal TV tuner encased within the product housing, and is capable of receiving dynamic visual content from wired or wireless sources including but not limited to: Broadcast and similar services for terrestrial, cable, satellite, and/or broadband transmission of analog and/or digital signals; and/or display-specific data connections, such as HDMI, Component video, S-video, Composite video; and/or media storage devices such as a USB flash drive, memory card, or a DVD; and/or network connections, usually using internet Protocol, typically carried over Ethernet or Wi-Fi. The requirements of this part are limited to those televisions for which the Department of Energy has adopted and published test procedures for measuring energy use.
(i) Pool heater means an appliance designed for heating nonpotable water contained at atmospheric pressure, including heating water in swimming pools, spas, hot tubs and similar applications.
(j) Portable air conditioner means a portable encased assembly, other than a packaged terminal air conditioner, room air conditioner, or dehumidifier, that delivers cooled, conditioned air to an enclosed space, and is powered by single-phase electric current. It includes a source of refrigeration and may include additional means for air circulation and heating.
General
§ 305.4 Description of furnaces and central air conditioners.
(a) Furnaces – (1) Furnace means a product that utilizes only single-phase electric current, or single-phase electric current or DC current in conjunction with natural gas, propane, or home heating oil, and which –
(i) Is designed to be the principal heating source for the living space of a residence;
(ii) Is not contained within the same cabinet with a central air conditioner whose rated cooling capacity is above 65,000 Btu per hour;
(iii) Is an electric central furnace, electric boiler, forced-air central furnace, gravity central furnace, or low pressure steam or hot water boiler; and
(iv) Has a heat input rate of less than 300,000 Btu per hour for electric boilers and low pressure steam or hot water boilers and less than 225,000 Btu per hour for forced-air central furnaces, gravity central furnaces, and electric central furnaces.
(2) Electric central furnace means a furnace designed to supply heat through a system of ducts with air as the heating medium, in which heat is generated by one or more electric resistance heating elements and the heated air is circulated by means of a fan or blower.
(3) Forced air central furnace means a gas or oil burning furnace designed to supply heat through a system of ducts with air as the heating medium. The heat generated by combustion of gas or oil is transferred to the air within a casing by conduction through heat exchange surfaces and is circulated through the duct system by means of a fan or blower.
(4) Gravity central furnace means a gas fueled furnace which depends primarily on natural convection for circulation of heated air and which is designed to be used in conjunction with a system of ducts.
(5) Electric boiler means an electrically powered furnace designed to supply low pressure steam or hot water for space heating application. A low pressure steam boiler operates at or below 15 pounds per square inch gauge (psig) steam pressure; a hot water boiler operates at or below 160 psig water pressure and 250 °F water temperature.
(6) Low pressure steam or hot water boiler means an electric, gas or oil burning furnace designed to supply low pressure steam or hot water for space heating application. A low pressure steam boiler operates at or below 15 pounds psig steam pressure; a hot water boiler operates at or below 160 psig water pressure and 250 °F water temperature.
(7) Outdoor furnace or boiler is a furnace or boiler normally intended for installation out-of-doors or in an unheated space (such as an attic or a crawl space).
(8) Weatherized warm air furnace or boiler means a furnace or boiler designed for installation outdoors, approved for resistance to wind, rain, and snow, and supplied with its own venting system.
(b) Central air conditioner means a product, other than a packaged terminal air conditioner, which is powered by single phase electric current, air cooled, rated below 65,000 Btu per hour, not contained within the same cabinet as a furnace, the rated capacity of which is above 225,000 Btu per hour, and is a heat pump or a cooling only unit.
(1) Condenser-evaporator coil combination means a condensing unit made by one manufacturer and one of several evaporator coils, either manufactured by the same manufacturer or another manufacturer, intended to be combined with that particular condensing unit.
(2) Condensing unit means a component of a “central air conditioner” which is designed to remove heat absorbed by the refrigerant and to transfer it to the outside environment, and which consists of an outdoor coil, compressor(s), and air moving device.
(3) Evaporator coil means a component of a central air conditioner that is designed to absorb heat from an enclosed space and transfer the heat to a refrigerant.
(4) Single package unit means any central air conditioner in which all the major assemblies are enclosed in one cabinet.
(5) Split system means any central air conditioner in which one or more of the major assemblies are separate from the others.
(c) Heat pump means a product, other than a packaged terminal heat pump, which consists of one or more assemblies, powered by single phase electric current, rated below 65,000 Btu per hour, utilizing an indoor conditioning coil, compressor, and refrigerant-to-outdoor air heat exchanger to provide air heating, and may also provide air cooling, dehumidifying, humidifying, circulating, and air cleaning.
§ 305.5 Description of lighting products.
(a) Fluorescent lamp ballast means a device which is used to start and operate fluorescent lamps by providing a starting voltage and current and limiting the current during normal operation.
(b) Fluorescent lamp means:
(1) A low pressure mercury electric-discharge source in which a fluorescing coating transforms some of the ultra-violet energy generated by the mercury discharge into light, including only the following:
(i) Any straight-shaped lamp (commonly referred to as 4-foot medium bi-pin lamps) with medium bi-pin bases of nominal overall length of 48 inches and rated wattage of 28 or more;
(ii) Any U-shaped lamp (commonly referred to as 2-foot U-shaped lamps) with medium bi-pin bases of nominal overall length between 22 and 25 inches and rated wattage of 28 or more;
(iii) Any rapid start lamp as defined at 42 U.S.C. 6291(30)(A)(iii); and
(iv) Any instant start lamp as defined at 42 U.S.C. 6291(30)(A)(iv); but
(2) Fluorescent lamp does not mean any lamp excluded by the Department of Energy, by rule, as a result of a determination that standards for such lamp would not result in significant energy savings because such lamp is designed for special applications or has special characteristics not available in reasonably substitutable lamp types; and
(3) General service fluorescent lamp means a fluorescent lamp which can be used to satisfy the majority of fluorescent applications, but does not mean any lamp designed and marketed for the following nongeneral lighting applications:
(i) Fluorescent lamps designed to promote plant growth;
(ii) Fluorescent lamps specifically designed for cold temperature installations;
(iii) Colored fluorescent lamps;
(iv) Impact-resistant fluorescent lamps;
(v) Reflectorized or aperture lamps;
(vi) Fluorescent lamps designed for use in reprographic equipment;
(vii) Lamps primarily designed to produce radiation in the ultra-violet region of the spectrum; and
(viii) Lamps with a color rendering index of 82 or greater.
(c) General service lamp means:
(1) A lamp that is:
(i) A medium base compact fluorescent lamp;
(ii) A general service incandescent lamp;
(iii) A general service light-emitting diode (LED or OLED) lamp; or
(iv) Any other lamp that the Secretary of Energy determines is used to satisfy lighting applications traditionally served by general service incandescent lamps.
(2) Exclusions: The term general service lamp does not include –
(i) Any lighting application or bulb shape described in paragraphs (e)(3)(ii)(A) through (T) of this section; and
(ii) Any general service fluorescent lamp.
(d) Medium base compact fluorescent lamp means an integrally ballasted fluorescent lamp with a medium screw base, a rated input voltage range of 115 to 130 volts and which is designed as a direct replacement for a general service incandescent lamp; however, the term does not include –
(1) Any lamp that is:
(i) Specifically designed to be used for special purpose applications; and
(ii) Unlikely to be used in general purpose applications, such as the applications described in the definition of “General Service Incandescent Lamp” in paragraph (e)(3)(ii) of this section; or
(2) Any lamp not described in the definition of “General Service Incandescent Lamp” in this section and that is excluded by the Department of Energy, by rule, because the lamp is –
(i) Designed for special applications; and
(ii) Unlikely to be used in general purpose applications.
(e) Incandescent lamp means:
(1) A lamp in which light is produced by a filament heated to incandescence by an electric current, including only the following:
(i) Any lamp (commonly referred to as lower wattage nonreflector general service lamps, including any tungsten halogen lamp) that has a rated wattage between 30 and 199 watts, has an E26 medium screw base, has a rated voltage or voltage range that lies at least partially within 115 and 130 volts, and is not a reflector lamp;
(ii) Any lamp (commonly referred to as a reflector lamp) which is not colored or designed for rough or vibration service applications, that contains an inner reflective coating on the outer bulb to direct the light, an R, PAR, ER, BR, BPAR, or similar bulb shapes with E26 medium screw bases, a rated voltage or voltage range that lies at least partially within 115 and 130 volts, a diameter which exceeds 2.25 inches, and has a rated wattage that is 40 watts or higher;
(iii) Any general service incandescent lamp (commonly referred to as a high- or higher-wattage lamp) that has a rated wattage above 199 watts (above 205 watts for a high wattage reflector lamp); but
(2) Incandescent lamp does not mean any lamp excluded by the Secretary of Energy, by rule, as a result of a determination that standards for such lamp would not result in significant energy savings because such lamp is designed for special applications or has special characteristics not available in reasonably substitutable lamp types;
(3) General service incandescent lamp means:
(i) In general, a standard incandescent, halogen, or reflector type lamp that –
(A) Is intended for general service applications;
(B) Has a medium screw base;
(C) Has a lumen range of not less than 310 lumens and not more than 2,600 lumens; and
(D) Is capable of being operated at a voltage range at least partially within 110 and 130 volts.
(ii) Exclusions. The term “general service incandescent lamp” does not include the following incandescent lamps:
(A) An appliance lamp as defined at 42 U.S.C. 6291(30);
(B) A black light lamp;
(C) A bug lamp;
(D) A colored lamp as defined at 42 U.S.C. 6291(30);
(E) An infrared lamp;
(F) A left hand thread lamp;
(G) A marine lamp;
(H) A marine signal service lamp;
(I) A mine service lamp;
(J) A plant light lamp;
(K) A rough service lamp as defined at 42 U.S.C. 6291(30);
(L) A shatter resistant lamp (including a shatter-proof lamp and a shatter-protected lamp);
(M) A sign service lamp;
(N) A silver bowl lamp;
(O) A showcase lamp;
(P) A traffic signal lamp;
(Q) A vibration service lamp as defined at 42 U.S.C. 6291(30);
(R) A G shape lamp as defined at 42 U.S.C. 6291(30)(D)(ii)(XX);
(S) A T shape lamp as defined at 42 U.S.C. 6291(30)(D)(ii)(XXI); or
(T) A B, BA, CA, F, G16-1/2, G-25, G-30, S, or M-14 lamp as defined at 42 U.S.C. 6291(30)(D)(ii)(XXII).
(4) Incandescent reflector lamp means a lamp described in paragraph (e)(1)(ii) of this section; and
(5) Tungsten halogen lamp means a gas filled tungsten filament incandescent lamp containing a certain proportion of halogens in an inert gas.
(f) Light emitting diode (LED) means a p-n junction solid state device the radiated output of which is a function of the physical construction, material used, and exciting current of the device. The output of a light emitting diode may be in –
(1) The infrared region;
(2) The visible region; or
(3) The ultraviolet region.
(g) Organic light emitting diode (OLED) means a thin-film light-emitting device that typically consists of a series of organic layers between 2 electrical contacts (electrodes).
(h) General service light-emitting diode (LED or OLED) lamp means any light emitting diode (LED or OLED) lamp that:
(1) Is a consumer product;
(2) Is intended for general service applications;
(3) Has a medium screw base;
(4) Has a lumen range of not less than 310 lumens and not more than 2,600 lumens; and
(5) Is capable of being operated at a voltage range at least partially within 110 and 130 volts.
(i) Metal halide lamp fixture means a light fixture for general lighting application that is designed to be operated with a metal halide lamp and a ballast for a metal halide lamp and that is subject to and complies with Department of Energy efficiency standards issued pursuant to 42 U.S.C. 6295.
(1) Metal halide ballast means a ballast used to start and operate metal halide lamps.
(2) Metal halide lamp means a high intensity discharge lamp in which the major portion of the light is produced by radiation of metal halides and their products of dissociation, possibly in combination with metallic vapors.
(j) Specialty consumer lamp means:
(1) Any lamp that:
(i) Is not included under the definition of general service lamp in this part;
(ii) Has a lumen range between 310 lumens and no more than 2,600 lumens or a rated wattage between 30 and 199;
(iii) Has one of the following bases:
(A) A medium screw base;
(B) A candelabra screw base;
(C) A GU-10 base; or
(D) A GU-24 base; and
(iv) Is capable of being operated at a voltage range at least partially within 110 and 130 volts.
(2) Inclusions: The term specialty consumer lamp includes, but is not limited to, the following lamps if such lamps meet the conditions listed in paragraph (1):
(i) Vibration-service lamps as defined at 42 U.S.C. 6291(30)(AA);
(ii) Rough service lamps as defined at 42 U.S.C. 6291(30)(X);
(iii) Appliance lamps as defined at 42 U.S.C. 6291(30)(T); and
(iv) Shatter resistant lamps (including a shatter proof lamp and a shatter protected lamp) as defined in 42 U.S.C. 6291(30)(Z).
(3) Exclusions: The term specialty consumer lamp does not include:
(i) A black light lamp;
(ii) A bug lamp;
(iii) A colored lamp;
(iv) An infrared lamp;
(v) A left-hand thread lamp;
(vi) A marine lamp;
(vii) A marine signal service lamp;
(viii) A mine service lamp;
(ix) A sign service lamp;
(x) A silver bowl lamp;
(xi) A showcase lamp;
(xii) A traffic signal lamp;
(xiii) A G-shape lamp with diameter of 5 inches or more;
(xiv) A C7, M-14, P, RP, S, or T shape lamp;
(xv) A intermediate screw-base lamp; and
(xvi) A plant light lamp.
§ 305.6 Description of plumbing products.
(a) Showerhead means a component or set of components distributed in commerce for attachment to a single supply fitting, for spraying water onto a bather, typically from an overhead position, excluding safety shower showerheads.
(b) Faucet means a lavatory faucet, kitchen faucet, metering faucet, or replacement aerator for a lavatory or kitchen faucet.
(c) Water closet means a plumbing fixture having a water-containing receptor which receives liquid and solid body waste and, upon actuation, conveys the waste through an exposed integral trap seal into a gravity drainage system, except such term does not include fixtures designed for installation in prisons.
(d) Urinal means a plumbing fixture that receives only liquid body waste and, on demand, conveys the waste through a trap seal into a gravity drainage system, except such term does not include fixtures designed for installation in prisons.
§ 305.7 Prohibited acts.
(a) It shall be unlawful and subject to the enforcement penalties of section 333 of the Act, as adjusted for inflation pursuant to § 1.98 of this chapter, for each unit of any new covered product to which the part applies:
(1) For any manufacturer or private labeler knowingly to distribute in commerce any new covered product unless such covered product is marked and/or labeled in accordance with this part with a marking, label, hang tag, or energy fact sheet which conforms to the provisions of the Act and this part.
(2) For any manufacturer, distributor, retailer, or private labeler knowingly to remove or render illegible any marking or label required to be provided with such product by this part.
(3) For any manufacturer or private labeler knowingly to distribute in commerce any new covered product, if there is not included (i) on the label, (ii) separately attached to the product, or (iii) shipped with the product, additional information relating to energy consumption or energy efficiency which conforms to the requirements in this part.
(b) Subject to enforcement penalties assessed per model per day of violation pursuant to 42 U.S.C. 6303 and adjusted for inflation by § 1.98 of this chapter, it shall be unlawful for any manufacturer or private labeler knowingly to:
(1) Refuse a request by the Commission or its designated representative for access to, or copying of, records required to be supplied under this part.
(2) Refuse to make reports or provide upon request by the Commission or its designated representative any information required to be supplied under this part.
(3) Refuse upon request by the Commission or its designated representative to permit a representative designated by the Commission to observe any testing required by this part while such testing is being conducted or to inspect the results of such testing. This section shall not limit the Commission from requiring additional testing under this part.
(4) Refuse, when requested by the Commission or its designated representative, to supply at the manufacturer’s expense, no more than two of each model of each covered product to any laboratory designated by the Commission for the purpose of ascertaining whether the information in catalogs or set out on the label or marked on the product as required by this part is accurate. This action will be taken only after review of a manufacturer’s testing records and an opportunity to revalidate test data has been extended to the manufacturer.
(5) Distribute in commerce any catalog containing a listing for a covered product without the information required by § 305.27 of this part. This subsection shall also apply to distributors and retailers.
(6) Fail to make a label for a covered product available on a publicly accessible Web site in accordance with § 305.9. This provision applies only to manufacturers.
(c) Pursuant to section 333(c) of the Act, it shall be an unfair or deceptive act or practice in violation of section 5(a)(1) of the Federal Trade Commission Act (15 U.S.C. 45(a)(1)) for any manufacturer, distributor, retailer, or private labeler in or affecting commerce to display or distribute at point of sale any printed material applicable to a covered product under this rule if such printed material does not contain the information required by § 305.26. This requirement does not apply to any broadcast advertisement or to any advertisement in a newspaper, magazine, or other periodical.
(d)(1) It shall be an unfair or deceptive act or practice in violation of section 5(a)(1) of the Federal Trade Commission Act, 15 U.S.C. 45(a)(1), for any manufacturer, distributor, retailer or private labeler to make any representation in or affecting commerce, in writing (including a representation on a label) or in any broadcast advertisement, with respect to the energy use or efficiency or, in the case of showerheads, faucets, water closets, and urinals, water use of a covered product to which a test procedure is applicable under section 323 of the Act, 42 U.S.C. 6293, or the cost of energy consumed by such product, unless such product has been tested in accordance with such test procedure and such representation fairly discloses the results of such testing.
(2) Effective 180 days after an amended or new test procedure applicable to a covered product is prescribed or established under section 323(b) of the Act, 42 U.S.C. 6293(b), it shall be an unfair or deceptive act or practice in violation of section 5(a)(1) of the Federal Trade Commission Act, 15 U.S.C. 45(a)(1), for any manufacturer, distributor, retailer or private labeler to make any representation in or affecting commerce, in writing (including a representation on a label) or in any broadcast advertisement, with respect to the energy use or efficiency or, in the case of showerheads, faucets, water closets and urinals, water use of such product, or cost of energy consumed by such product, unless the product has been tested in accordance with such amended or new test procedures and such representation fairly discloses the results of such testing. This requirement is not limited to consumer appliance products covered by the labeling requirements of this part.
(e) This part shall not apply to:
(1) Any covered product if it is manufactured, imported, sold, or held for sale for export from the United States, so long as such product is not in fact distributed in commerce for use in the United States, and such covered product or the container thereof bears a stamp or label stating that such covered product is intended for export.
(2) Televisions manufactured before May 10, 2011.
(3) The requirements of this part shall not apply to any portable air conditioner produced before October 1, 2022.
(f) As used in paragraphs (a) and (b) of this section, the term knowingly means:
(1) The having of actual knowledge, or
(2) The presumed having of knowledge deemed to be possessed by a reasonable person who acts in the circumstances, including knowledge obtainable upon the exercise of due care.
Testing
§ 305.8 Determinations of estimated annual energy consumption, estimated annual operating cost, and energy efficiency rating, water use rate, and other required disclosure content.
(a) Unless otherwise stated in paragraphs (b) and (c) of this section, the content of any disclosures required by this part must be determined in accordance with the testing and sampling provisions required by the Department of Energy as set forth in subpart B to 10 CFR part 430, 10 CFR part 431, and 10 CFR 429.11.
(b) For any representations required by this part but not subject to Department of Energy requirements and not otherwise specified in this section, manufacturers and private labelers of any covered product must possess and rely upon a reasonable basis consisting of competent and reliable scientific tests and procedures substantiating the representation.
(c) Representations for ceiling fans under § 305.21 and televisions under § 305.25 must be derived from applicable procedures in 10 CFR parts 429, 430, and 431.
§ 305.9 Duty to provide labels on websites.
For each covered product required by this part to bear an EnergyGuide or Lighting Facts label, the manufacturer must make a copy of the label available on a publicly accessible website in a manner that allows catalog sellers to hyperlink to the label or download it for use in websites or paper catalogs. The label for each specific model must remain on the website for six months after production of that model ceases.
§ 305.10 Determinations of capacity.
The capacity of covered products shall be determined as follows:
(a) Refrigerators and refrigerator-freezers. The capacity shall be the total refrigerated volume (VT) in cubic feet, rounded to the nearest one-tenth of a cubic foot, as determined according to appendix A to 10 CFR part 430, subpart B.
(b) Freezers. The capacity shall be the total refrigerated volume (VT) in cubic feet, rounded to the nearest one-tenth of a cubic foot, as determined according to appendix B to 10 CFR part 430, subpart B.
(c) Dishwashers. The capacity shall be the place-setting capacity, determined according to appendix C to 10 CFR part 430, subpart B.
(d) Water heaters. The capacity shall be the rated storage volume and first hour rating (for storage-type models), and gallons per minute (for instantaneous-type models), as determined according to appendix E to 10 CFR part 430, subpart B.
(e) Pool heaters. The capacity shall be the heating capacity in Btu’s per hour, rounded to the nearest 1,000 Btu’s per hour, as determined according to appendix P to 10 CFR part 430, subpart B.
(f) Room air conditioners and portable air conditioners. The capacity for room air conditioners and portable air conditioners shall be determined according to 10 CFR part 430, subpart B, with rounding determined in accordance with 10 CFR part 430.
(g) Clothes washers. The capacity shall be the tub capacity as determined according to Department of Energy test procedures in 10 CFR part 430, subpart B, expressed in terms of “Capacity (tub volume)” in cubic feet, rounded to the nearest one-tenth of a cubic foot, and the capacity class designations “standard” or “compact.”
(h) Furnaces. The capacity shall be the heating capacity in Btu’s per hour, rounded to the nearest 1,000 Btu’s per hour, as determined according to appendix N to 10 CFR part 430, subpart B.
(i) Central air conditioners, cooling. The capacity shall be the cooling capacity in Btu’s per hour, as determined according to appendix M to 10 CFR part 430, subpart B, rounded to the nearest 100 Btu’s per hour for capacities less than 20,000 Btu’s per hour; to the nearest 200 Btu’s per hour for capacities between 20,000 and 37,999 Btu’s per hour; and to the nearest 500 Btu’s per hour for capacities between 38,000 and 64,999 Btu’s per hour.
(j) Central air conditioners, heating. The capacity shall be the heating capacity in Btu’s per hour, as determined according to appendix M to 10 CFR part 430, subpart B, rounded to the nearest 100 Btu’s per hour for capacities less than 20,000 Btu’s per hour; to the nearest 200 Btu’s per hour for capacities between 20,000 and 37,999 Btu’s per hour; and to the nearest 500 Btu’s per hour for capacities between 38,000 and 64,999 Btu’s per hour.
(k) Fluorescent lamp ballasts. The capacity shall be the ballast input voltage, as determined according to appendix Q to 10 CFR part 430, subpart B.
(l) Ceiling fans. The capacity shall be the airflow in cubic feet per minute as determined according to appendix U of 10 CFR part 430, subpart B.
§ 305.11 Submission of data.
(a)(1) Except as provided in paragraphs (a)(2) through (4) of this section, each manufacturer of a covered product subject to the disclosure requirements of this part and subject to Department of Energy certification requirements in 10 CFR part 429 shall submit annually a report for each model in current production containing the same information that must be submitted to the Department of Energy pursuant to 10 CFR part 429 for that product, and that the Department has identified as public information pursuant to 10 CFR part 429. In lieu of submitting the required information to the Commission as required by this section, manufacturers may submit such information to the Department of Energy via the CCMS at https://regulations.doe.gov/ccms as provided by 10 CFR 429.12.
(2) Manufacturers of ceiling fans shall submit annually a report containing the brand name, model number, diameter (in inches), wattage excluding any lights, airflow (capacity) for each basic model in current production, and starting serial number, date code or other means of identifying the date of manufacture with the first submission for each basic model. In lieu of submitting the required information to the Commission as required by this section, manufacturers may submit such information to the Department of Energy via the Compliance and Certification Management System (CCMS) at https://regulations.doe.gov/ccms as provided by 10 CFR 429.12.
(3) Manufacturers of televisions shall submit annually a report containing the brand name; model number; screen size (diagonal in inches); power (in watts) consumed in on mode, standby-passive mode, in standby-active mode, low mode, and off mode; and annual energy consumption (kWh/year) for each basic model in current production. The report should also include a starting serial number, date code, or other means of identifying the date of manufacture with the first submission for each basic model. In lieu of submitting the required information to the Commission as required by this section, manufacturers may submit such information to the Department of Energy via the Compliance and Certification Management System (CCMS) at https://regulations.doe.gov/ccms as provided by 10 CFR 429.12.
(4) This section does not require reports for general service light-emitting diode (LED or OLED) lamps or specialty consumer lamps.
(5) Manufacturers must submit a website address for the online EnergyGuide labels covered by § 305.9 in new model and annual reports required by this section. Manufacturers may accomplish this by either submitting a specific link to a URL for each label, a link to a PDF download for each label, or a link to a website that takes users directly to a searchable database of the covered labels from which the label image or download may be accessed using the model number as certified to DOE pursuant to 10 CFR part 429 and the model number advertised in product literature. Such label information must be submitted either at the time the model is certified to DOE pursuant to 10 CFR part 429 or at some time on or before the annual report date immediately following such certification. In lieu of submitting the required information to the Commission, manufacturers may submit such information to the Department of Energy via the CCMS at https://regulations.doe.gov/ccms as provided by 10 CFR 429.12. The requirements in this paragraph do not apply to Lighting Facts labels.
(b)(1) All data required by paragraph (a) of this section except serial numbers shall be submitted to the Commission annually, on or before the following dates:
Table 1 to § 305.11(
| Product category | Deadline for data submission |
|---|---|
| Refrigerators | Aug. 1. |
| Refrigerators-freezers | Aug. 1. |
| Freezers | Aug. 1. |
| Central air conditioners | July 1. |
| Heat pumps | July 1. |
| Dishwashers | June 1. |
| Water heaters | May 1. |
| Room air conditioners | July 1. |
| Portable air conditioners | Feb. 1. |
| Furnaces | May 1. |
| Pool heaters | May 1. |
| Clothes washers | Oct. 1. |
| Fluorescent lamp ballasts | Mar. 1. |
| Showerheads | Mar. 1. |
| Faucets | Mar. 1. |
| Water closets | Mar. 1. |
| Ceiling fans | Mar. 1. |
| Urinals | Mar. 1. |
| Metal halide lamp fixtures | Sept. 1. |
| General service fluorescent lamps | Mar. 1. |
| Medium base compact fluorescent lamps | Mar. 1. |
| General service incandescent lamps | Mar. 1. |
| Televisions | June 1. |
(2) All revisions to such data (both additions to and deletions from the preceding data) shall be submitted to the Commission as part of the next annual report period.
(c) All information required by paragraphs (a)(1) through (3) of this section must be submitted for new models prior to any distribution of such model. Models subject to design or retrofit alterations which change the data contained in any annual report shall be reported in the manner required for new models. Models which are discontinued shall be reported in the next annual report.
§ 305.12 Ranges of comparability on the required labels.
(a) Range of estimated annual energy costs or energy efficiency ratings. The range of estimated annual operating costs or energy efficiency ratings for each covered product (except televisions, ceiling fans, fluorescent lamp ballasts, lamps, metal halide lamp fixtures, showerheads, faucets, water closets, and urinals) shall be taken from the appropriate appendix to this part in effect at the time the labels are affixed to the product. The Commission shall publish revised ranges in the
(b) Representative average unit energy cost. The Representative Average Unit Energy Cost to be used on labels as required by §§ 305.14 through 305.19 and disclosures as required by § 305.27 are listed in appendices K1 and K2 to this part. The Commission shall publish revised Representative Average Unit Energy Cost figures in the
(c) Operating costs or efficiency ratings outside current range. When the estimated annual operating cost or energy efficiency rating of a given model of a product covered by this section falls outside the limits of the current range for that product, which could result from the introduction of a new or changed model, the manufacturer shall:
(1) Omit placement of such product on the scale appearing on the label, and
(2) Add one of the two sentences below, as appropriate, in the space just below the scale on the label, as follows:
The estimated yearly energy cost of this model was not available at the time the range was published.
The energy efficiency rating of this model was not available at the time the range was published.
(3) For refrigerator and refrigerator-freezer labels:
(i) If the model’s energy cost falls outside of either or both ranges on the label, include the language in paragraph (c)(2) of this section.
(ii) If the model’s energy cost only falls outside of the range for models with similar features, but is within the range for all models, include the product on the scale and place a triangle below the dollar value.
(iii) If the model’s energy cost falls outside of both ranges of comparability, omit the triangle beneath the yearly operating cost value.
§ 305.13 Layout, format, and placement of labels for refrigerators, refrigerator-freezers, freezers, dishwashers, clothes washers, water heaters, room air conditioners, portable air conditioners, and pool heaters.
(a) Coverage. The requirements of this section apply to labels for refrigerators, refrigerator-freezers, freezers, dishwashers, clothes washers, water heaters, room air conditioners, and pool heaters.
(b) Layout. Energy labels shall use one size, similar colors, and typefaces with consistent positioning of headline, copy, and charts to maintain uniformity for immediate consumer recognition and readability. Trim size dimensions for the labels shall be as follows: Width must be between 5
(c) Type style and setting. The Arial series typeface or equivalent shall be used exclusively on the label. Specific sizes and faces to be used are indicated on the prototype labels. No hyphenation should be used in setting headline or copy text. Positioning and spacing should follow the prototypes closely. Generally, text must be set flush left with two points leading except where otherwise indicated. See the prototype labels for specific directions.
(d) Colors. Except as indicated in paragraph (e)(3) of this section, the basic colors of all labels covered by this section shall be process yellow or equivalent and process black. The label shall be printed full bleed process yellow. All type and graphics shall be print process black.
(e) Label types. Except as indicated in paragraph (e)(3) of this section, the labels must be affixed to the product in the form of an adhesive label for any product covered by this section, or in the form of a hang tag for refrigerators, refrigerator-freezers, freezers, dishwashers, and clothes washers, as follows:
(1) Adhesive labels. All adhesive labels should be applied so they can be easily removed without the use of tools or liquids, other than water, but should be applied with an adhesive with an adhesion capacity sufficient to prevent their dislodgment during normal handling throughout the chain of distribution to the retailer or consumer. The paper stock for pressure-sensitive or other adhesive labels shall have a basic weight of not less than 58 pounds per 500 sheets (25″ x 38″) or equivalent, exclusive of the release liner and adhesive. A minimum peel adhesion capacity for the adhesive of 12 ounces per square inch is suggested, but not required if the adhesive can otherwise meet the above standard. In lieu of a label with adhesive backing, manufacturers may adhere the label with adhesive tape, provided the tape is affixed along the entire top and bottom of the label.
(2) Hang tags. Labels may be affixed to the product interior in the form of a hang tag using cable ties or double strings connected through reinforced punch holes, or with attachment and label material of equivalent or greater strength and durability. If paper stock is used for hang tags, it shall have a basic weight of not less than 110 pounds per 500 sheets (25
(3) Package labels for certain products. Labels for electric instantaneous water heaters shall be printed on or affixed to the product’s packaging in a conspicuous location. Labels for room air conditioners produced on or after October 1, 2019 and portable air conditioners, shall be printed on or affixed to the principal display panel of the product’s packaging. The labels for electric instantaneous water heaters, room air conditioners, and portable air conditioners shall be black type and graphics on a process yellow or other neutral contrasting background.
(f) Placement – (1) Adhesive labels. Manufacturers shall affix adhesive labels to the covered products in such a position that it is easily read by a consumer examining the product. The label should be generally located on the upper-right-front corner of the product’s front exterior. However, some other prominent location may be used as long as the label will not become dislodged during normal handling throughout the chain of distribution to the retailer or consumer. The top of the label should not exceed 74 inches from the base of taller products. The label can be displayed in the form of a flap tag adhered to the top of the appliance and bent (folded at 90°) to hang over the front, as long as this can be done with assurance that it will be readily visible.
(2) Hang tags. A hang tag shall be affixed to the interior of the product in such a position that it can be easily read by a consumer examining the product. A hang tag can be affixed in any position that meets this requirement as long as the label will not become dislodged during normal handling throughout the chain of distribution to the retailer or consumer. Hang tags may only be affixed in refrigerators, refrigerator-freezers, freezers, dishwashers, and clothes washers.
§ 305.14 Label content for refrigerators, refrigerator-freezers, and freezers.
(a) Label content. (1) Headlines and texts, as illustrated in the prototype and sample labels in appendix L to this part, are standard for all labels.
(2) Name of manufacturer or private labeler shall, in the case of a corporation, be deemed to be satisfied only by the actual corporate name, which may be preceded or followed by the name of the particular division of the corporation. In the case of an individual, partnership, or association, the name under which the business is conducted shall be used. Inclusion of the name of the manufacturer or private labeler is optional at the discretion of the manufacturer or private labeler.
(3) Model number(s) will be the designation given by the manufacturer or private labeler.
(4) Capacity or size is that determined in accordance with this part. The capacity provided on the label shall be the model’s total refrigerated volume (VT) as determined in accordance with this part and the model description must be consistent with the categories described in Appendices A and B to this part.
(5) Unless otherwise indicated in this paragraph, estimated annual operating costs must be determined in accordance with this part. Labels for dual-mode refrigerator-freezers that can operate as either a refrigerator or a freezer must reflect the estimated energy cost of the model’s most energy intensive configuration.
(6) Unless otherwise indicated in this paragraph, ranges of comparability for estimated annual operating costs are found in the appropriate appendices accompanying this part.
(7) Placement of the labeled product on the scale shall be proportionate to the lowest and highest estimated annual operating costs.
(8) Labels must contain the model’s estimated annual energy consumption as determined in accordance with this part and as indicated on the sample labels in appendix L.
(9) Labels must contain statements as illustrated in the prototype labels in appendix L and specified as follows by product type:
(i) Labels for refrigerators, refrigerator-freezers, and freezers shall contain the text and graphics illustrated in sample labels of appendix L, including the statement:
Compare ONLY to other labels with yellow numbers.
Labels with yellow numbers are based on the same test procedures.
(ii) Labels for refrigerators and refrigerator-freezers must contain a statement as illustrated in the prototype labels in appendix L and specified as follows (fill in the blanks with the appropriate energy cost figure):
Your cost will depend on your utility rates and use.
Both cost ranges based on models of similar size capacity.
[Insert statement required by paragraph (a)(9)(iii) of this section].
Estimated energy cost based on a national average electricity cost of ____ cents per kWh.
ftc.gov/energy.
(iii) Labels for refrigerators and refrigerator-freezers shall include the following as part of the statement required by paragraph (a)(9)(ii) of this section:
(A) For models covered under appendix A1 to this part, the sentence shall read:
Models with similar features have automatic defrost and no freezer.
(B) For models covered under appendix A2 to this part, the sentence shall read:
Models with similar features have manual defrost.
(C) For models covered under appendix A3 to this part, the sentence shall read:
Models with similar features have partial automatic defrost.
(D) For models covered under appendix A4 to this part, the sentence shall read:
Models with similar features have automatic defrost, top-mounted freezer, and no through-the-door ice.
(E) For models covered under appendix A5 to this part, the sentence shall read:
Models with similar features have automatic defrost, side-mounted freezer, and no through-the-door ice.
(F) For models covered under appendix A6 to this part, the sentence shall read:
Models with similar features have automatic defrost, bottom-mounted freezer, and no through-the-door ice.
(G) For models covered under appendix A7 to this part, the sentence shall read:
Models with similar features have automatic defrost, bottom-mounted freezer and through-the-door ice.
(H) For models covered under appendix A8 to this part, the sentence shall read:
Models with similar features have automatic defrost, side-mounted freezer, and through-the-door ice.
(iv) Labels for freezers must contain a statement as illustrated in the prototype labels in appendix L and specified as follows (fill in the blanks with the appropriate energy cost figure):
Your cost will depend on your utility rates and use.
[Insert statement required by paragraph (a)(10)(v) of this section].
Estimated energy cost based on a national average electricity cost of ____cents per kWh.
ftc.gov/energy.
(v) For freezers, the following sentence shall be included as part of the statement required by paragraph (a)(9)(iv) of this section:
(A) For models covered under appendix B1 to this part, the sentence shall read:
Cost range based only on upright freezer models of similar capacity with manual defrost.
(B) For models covered under appendix B2 to this part, the sentence shall read:
Cost range based only on upright freezer models of similar capacity with automatic defrost.
(C) For models covered under appendix B3 to this part, the sentence shall read:
Cost range based only on chest and other freezer models of similar capacity.
(10) The following statement shall appear on each label as illustrated in the prototype and sample labels in appendix L to this part:
Federal law prohibits removal of this label before consumer purchase.
(b) Additional information. No marks or information other than that specified in this part shall appear on or directly adjoining this label except that:
(1) A part or publication number identification may be included on this label, as desired by the manufacturer. If a manufacturer elects to use a part or publication number, it must appear in the lower right-hand corner of the label and be set in 12-point type or smaller.
(2) The energy use disclosure labels required by the governments of Canada or Mexico may appear directly adjoining this label, as desired by the manufacturer.
(3) The manufacturer or private labeler may include the ENERGY STAR logo on the bottom right corner of the label for certified products. The logo must be 1 inch by 1 inch in size. Only manufacturers that have signed a Memorandum of Understanding with the Department of Energy or the Environmental Protection Agency may add the ENERGY STAR logo to labels on certified covered products; such manufacturers may add the ENERGY STAR logo to labels only on those covered products that are contemplated by the Memorandum of Understanding.
§ 305.15 Label content for clothes washers.
(a) Label content. (1) Headlines and texts, as illustrated in the prototype and sample labels in appendix L to this part, are standard for all labels.
(2) Name of manufacturer or private labeler shall, in the case of a corporation, be deemed to be satisfied only by the actual corporate name, which may be preceded or followed by the name of the particular division of the corporation. In the case of an individual, partnership, or association, the name under which the business is conducted shall be used. Inclusion of the name of the manufacturer or private labeler is optional at the discretion of the manufacturer or private labeler.
(3) Model number(s) will be the designation given by the manufacturer or private labeler.
(4) Capacity or size is that determined in accordance with this part.
(5) Estimated annual operating costs are as determined in accordance with this part. Labels must disclose estimated annual operating cost for both electricity and natural gas as illustrated in the sample labels in appendix L to this part.
(6) Unless otherwise indicated in this paragraph, ranges of comparability for estimated annual operating costs are found in the appropriate appendices accompanying this part.
(7) Placement of the labeled product on the scale shall be proportionate to the lowest and highest estimated annual operating costs.
(8) Labels must contain the model’s estimated annual energy consumption as determined in accordance with this part and as indicated on the sample labels in appendix L.
(9) The label shall contain the text and graphics illustrated in the sample labels in appendix L, including the statement:
Compare ONLY to other labels with yellow numbers.
Labels with yellow numbers are based on the same test procedures.
(10) Labels must contain a statement as illustrated in the prototype labels in appendix L and specified as follows (fill in the blanks with the appropriate capacity and energy cost figures):
Your costs will depend on your utility rates and use.
Cost range based only on [compact/standard] capacity models.
Estimated energy cost is based on six wash loads a week and a national average electricity cost of ____ cents per kWh and natural gas cost of $ ____ per therm.
ftc.gov/energy.
(11) The following statement shall appear on each label as illustrated in the prototype and sample labels in appendix L:
Federal law prohibits removal of this label before consumer purchase.
(b) Additional information. No marks or information other than that specified in this part shall appear on or directly adjoining this label except that:
(1) A part or publication number identification may be included on this label, as desired by the manufacturer. If a manufacturer elects to use a part or publication number, it must appear in the lower right-hand corner of the label and be set in 12-point type or smaller.
(2) The energy use disclosure labels required by the governments of Canada or Mexico may appear directly adjoining this label, as desired by the manufacturer.
(3) The manufacturer or private labeler may include the ENERGY STAR logo on the bottom right corner of the label for certified products. The logo must be 1 inch by 1 inch in size. Only manufacturers that have signed a Memorandum of Understanding with the Department of Energy or the Environmental Protection Agency may add the ENERGY STAR logo to labels on certified covered products; such manufacturers may add the ENERGY STAR logo to labels only on those covered products that are contemplated by the Memorandum of Understanding.
§ 305.16 Label content for dishwashers.
(a) Label content. (1) Headlines and texts, as illustrated in the prototype and sample labels in appendix L to this part, are standard for all labels.
(2) Name of manufacturer or private labeler shall, in the case of a corporation, be deemed to be satisfied only by the actual corporate name, which may be preceded or followed by the name of the particular division of the corporation. In the case of an individual, partnership, or association, the name under which the business is conducted shall be used. Inclusion of the name of the manufacturer or private labeler is optional at the discretion of the manufacturer or private labeler.
(3) Model number(s) will be the designation given by the manufacturer or private labeler.
(4) Capacity or size is that determined in accordance with this part.
(5) Estimated annual operating costs are as determined in accordance with this part. Labels must disclose estimated annual operating cost for both electricity and natural gas as illustrated in the sample labels in appendix L to this part.
(6) Unless otherwise indicated in this paragraph, ranges of comparability for estimated annual operating costs are found in the appropriate appendices accompanying this part.
(7) Placement of the labeled product on the scale shall be proportionate to the lowest and highest estimated annual operating costs.
(8) Labels must contain the model’s estimated annual energy consumption as determined in accordance with this part and as indicated on the sample labels in appendix L.
(9) Labels must contain a statement as illustrated in the prototype labels in appendix L and specified as follows (fill in the brackets with the appropriate capacity and the energy cost figures):
Your costs will depend on your utility rates and use.
Cost range based only on [compact/standard] capacity models.
Estimated energy cost is based on four wash loads a week, and a national average electricity cost of [____] cents per kWh and natural gas cost of $[____] per therm.
For more information, visit www.ftc.gov/energy.
(10) The following statement shall appear on each label as illustrated in the prototype and sample labels in appendix L to this part:
Federal law prohibits removal of this label before consumer purchase.
(b) Additional information. No marks or information other than that specified in this part shall appear on or directly adjoining this label except that:
(1) A part or publication number identification may be included on this label, as desired by the manufacturer. If a manufacturer elects to use a part or publication number, it must appear in the lower right-hand corner of the label and be set in 12-point type or smaller.
(2) The energy use disclosure labels required by the governments of Canada or Mexico may appear directly adjoining this label, as desired by the manufacturer.
(3) The manufacturer or private labeler may include the ENERGY STAR logo on the bottom right corner of the label for certified products. The logo must be 1 inch by 1 inch in size. Only manufacturers that have signed a Memorandum of Understanding with the Department of Energy or the Environmental Protection Agency may add the ENERGY STAR logo to labels on certified covered products; such manufacturers may add the ENERGY STAR logo to labels only on those covered products that are contemplated by the Memorandum of Understanding.
§ 305.17 Label content for water heaters.
(a) Label content. (1) Headlines and texts, as illustrated in the prototype and sample labels in appendix L to this part, are standard for all labels.
(2) Name of manufacturer or private labeler shall, in the case of a corporation, be deemed to be satisfied only by the actual corporate name, which may be preceded or followed by the name of the particular division of the corporation. In the case of an individual, partnership, or association, the name under which the business is conducted shall be used. Inclusion of the name of the manufacturer or private labeler is optional at the discretion of the manufacturer or private labeler.
(3) Model number(s) will be the designation given by the manufacturer or private labeler.
(4) Capacity or size is that determined in accordance with this part. Capacity for storage water heaters shall be presented in both rated storage volume (“tank size (storage capacity)”) and first hour rating as indicated on the sample label in appendix L to this part.
(5) Estimated annual operating costs are as determined in accordance with this part.
(6) Unless otherwise indicated in this paragraph, ranges of comparability for estimated annual operating costs are found in the appropriate appendices accompanying this part.
(7) Placement of the labeled product on the scale shall be proportionate to the lowest and highest estimated annual operating costs.
(8) Labels must contain the model’s estimated annual energy consumption as determined in accordance with this part and as indicated on the sample labels in appendix L to this part.
(9) Labels must contain a statement as illustrated in the prototype labels in appendix L to this part and specified as follows by product type:
(i) For water heaters covered by appendices D1, D2, and D3 to this part, the statement will read as follows (fill in the blanks with the appropriate fuel type, and energy cost figures):
Your costs will depend on your utility rates and use.
Cost range based only on models fueled by [natural gas, oil, propane, or electricity] with a [very small, low, medium, or high] first hour rating [fewer than 18 gallons, 18-50.9 gallons, 51-74.9 gallons, or 75 gallons or more].
Estimated energy cost is based on a national average [electricity, natural gas, propane, or oil] cost of [____ cents per kWh or $____ per therm or gallon].
Estimated yearly energy use: ____ [kWh or therms].
ftc.gov/energy.
(ii) For instantaneous water heaters, the statement will read as follows (fill in the blanks with the appropriate model type, and the energy cost figures):
Your costs will depend on your utility rates and use.
Cost range based only on [electric models or models fueled by natural gas or models fueled by propane] with a [very small, low, medium, or high] gallons per minute rating [0 to 1.6, 1.7 to 2.7, 2.8 to 3.9, or 4.0 or more].
Estimated energy cost is based on a national average [electricity, natural gas, or propane] cost of [____ cents per kWh or $____ per therm or gallon].
Estimated yearly energy use: ____ [kWh or therms].
ftc.gov/energy.
(10) The following statement shall appear on each label as illustrated in the prototype and sample labels in appendix L:
Federal law prohibits removal of this label before consumer purchase.
(b) Additional information. No marks or information other than that specified in this part shall appear on or directly adjoining this label except that:
(1) A part or publication number identification may be included on this label, as desired by the manufacturer. If a manufacturer elects to use a part or publication number, it must appear in the lower right-hand corner of the label and be set in 12-point type or smaller.
(2) The energy use disclosure labels required by the governments of Canada or Mexico may appear directly adjoining this label, as desired by the manufacturer.
(3) The manufacturer or private labeler may include the ENERGY STAR logo on the bottom right corner of the label for certified products. The logo must be 1 inch by 1 inch in size. Only manufacturers that have signed a Memorandum of Understanding with the Department of Energy or the Environmental Protection Agency may add the ENERGY STAR logo to labels on certified covered products; such manufacturers may add the ENERGY STAR logo to labels only on those covered products that are contemplated by the Memorandum of Understanding.
§ 305.18 Label content for room air conditioners and portable air conditioners.
(a) Label content. (1) Headlines and texts, as illustrated in the prototype and sample labels in appendix L to this part, are standard for all labels.
(2) Name of manufacturer or private labeler shall, in the case of a corporation, be deemed to be satisfied only by the actual corporate name, which may be preceded or followed by the name of the particular division of the corporation. In the case of an individual, partnership, or association, the name under which the business is conducted shall be used. Inclusion of the name of the manufacturer or private labeler is optional at the discretion of the manufacturer or private labeler.
(3) Model number(s) will be the designation given by the manufacturer or private labeler.
(4) Capacity or size is that determined in accordance with this part.
(5) Estimated annual operating costs are as determined in accordance with this part.
(6) Unless otherwise indicated in this paragraph, ranges of comparability for estimated annual operating costs are found in the appropriate appendices accompanying this part.
(7) Placement of the labeled product on the scale shall be proportionate to the lowest and highest estimated annual operating costs.
(8) Labels must contain the model’s estimated annual energy consumption as determined in accordance with this part and as indicated on the sample labels in appendix L. Labels must contain the model’s energy efficiency rating, as applicable, as determined in accordance with this part and as indicated on the sample labels in appendix L to this part.
(9) Labels must contain a statement as illustrated in the prototype labels in appendix L of this part and specified as follows (fill in the blanks with the appropriate model type, year, energy type, and energy cost figure):
Your costs will depend on your utility rates and use.
Cost range based only on models [of similar capacity; of similar capacity without reverse cycle and with louvered sides; of similar capacity without reverse cycle and without louvered sides; with reverse cycle and with louvered sides; or with reverse cycle and without louvered sides].
Estimated annual energy cost is based on a national average electricity cost of ____ cents per kWh and a seasonal use of 8 hours use per day over a 3-month period.
For more information, visit www.ftc.gov/energy.
(10) The following statement shall appear on each label as illustrated in the prototype and sample labels in appendix L:
Federal law prohibits removal of this label before consumer purchase.
(b) Additional information. No marks or information other than that specified in this part shall appear on or directly adjoining this label except that:
(1) A part or publication number identification may be included on this label, as desired by the manufacturer. If a manufacturer elects to use a part or publication number, it must appear in the lower right-hand corner of the label and be set in 12-point type or smaller.
(2) The energy use disclosure labels required by the governments of Canada or Mexico may appear directly adjoining this label, as desired by the manufacturer.
(3) The manufacturer or private labeler may include the ENERGY STAR logo on the bottom right corner of the label for certified products. The logo must be 1 inch by 1 inch in size. Only manufacturers that have signed a Memorandum of Understanding with the Department of Energy or the Environmental Protection Agency may add the ENERGY STAR logo to labels on certified covered products; such manufacturers may add the ENERGY STAR logo to labels only on those covered products that are contemplated by the Memorandum of Understanding.
§ 305.19 Label content for pool heaters.
(a) Label content. (1) Headlines and texts, as illustrated in the prototype and sample labels in appendix L to this part, are standard for all labels.
(2) Name of manufacturer or private labeler shall, in the case of a corporation, be deemed to be satisfied only by the actual corporate name, which may be preceded or followed by the name of the particular division of the corporation. In the case of an individual, partnership, or association, the name under which the business is conducted shall be used. Inclusion of the name of the manufacturer or private labeler is optional at the discretion of the manufacturer or private labeler.
(3) Model number(s) will be the designation given by the manufacturer or private labeler.
(4) Capacity or size is that determined in accordance with this part.
(5) Thermal efficiencies are as determined in accordance with this part.
(6) Unless otherwise indicated in this paragraph, ranges of comparability for thermal efficiencies are found in the appropriate appendices accompanying this part.
(7) Placement of the labeled product on the scale shall be proportionate to the lowest and highest thermal efficiencies.
(8) Labels must contain the model’s energy efficiency rating or thermal efficiency, as applicable, as determined in accordance with this part and as indicated on the sample labels in appendix L to this part.
(9) Labels must contain a statement as illustrated in the prototype labels in appendix L and specified as follows:
Efficiency range based only on models fueled by [natural gas or oil].
For more information, visit www.ftc.gov/energy.
(10) The following statement shall appear on each label as illustrated in the prototype and sample labels in appendix L to this part:
Federal law prohibits removal of this label before consumer purchase.
(b) Additional information. No marks or information other than that specified in this part shall appear on or directly adjoining this label except that:
(1) A part or publication number identification may be included on this label, as desired by the manufacturer. If a manufacturer elects to use a part or publication number, it must appear in the lower right-hand corner of the label and be set in 12-point type or smaller.
(2) The energy use disclosure labels required by the governments of Canada or Mexico may appear directly adjoining this label, as desired by the manufacturer.
(3) The manufacturer or private labeler may include the ENERGY STAR logo on the bottom right corner of the label for certified products. The logo must be 1 inch by 1 inch in size. Only manufacturers that have signed a Memorandum of Understanding with the Department of Energy or the Environmental Protection Agency may add the ENERGY STAR logo to labels on certified covered products; such manufacturers may add the ENERGY STAR logo to labels only on those covered products that are contemplated by the Memorandum of Understanding.
Required Disclosures
§ 305.20 Labeling for central air conditioners, heat pumps, and furnaces.
(a) Layout. All energy labels for central air conditioners, heat pumps, and furnaces (including boilers) shall use one size, similar colors, and typefaces with consistent positioning of headline, copy, and charts to maintain uniformity for immediate consumer recognition and readability. Trim size dimensions for all labels shall be as follows: width must be between 5
(b) Type style and setting. The Arial series typeface or equivalent shall be used exclusively on the label. Specific sizes and faces to be used are indicated on the prototype labels. No hyphenation should be used in setting headline or copy text. Positioning and spacing should follow the prototypes closely. Generally, text must be set flush left with two points leading except where otherwise indicated. See the prototype labels for specific directions.
(c) Colors. The basic colors of all labels covered by this section shall be process yellow or equivalent and process black. The label shall be printed full bleed process yellow. All type and graphics shall be print process black.
(d) Label type. The labels must be affixed in the form of an adhesive label, unless otherwise indicated by this section. All adhesive labels should be applied with an adhesive with an adhesion capacity sufficient to prevent their dislodgment during normal handling throughout the chain of distribution to the retailer or consumer. The paper stock for pressure-sensitive or other adhesive labels shall have a basic weight of not less than 58 pounds per 500 sheets (25”x38”) or equivalent, exclusive of the release liner and adhesive. A minimum peel adhesion capacity for the adhesive of 12 ounces per square inch is suggested, but not required if the adhesive can otherwise meet the above standard.
(e) Placement. (1) Manufacturers shall affix adhesive labels to the covered products in such a position that they are easily read by persons examining the products. The labels should be generally located on the upper-right-front corner of each product’s front exterior. However, other prominent locations may be used as long as labels will not become dislodged during normal handling throughout the chain of distribution to retailers or consumers. Tops of the labels should not exceed 74 inches from the base of taller products. Labels can be displayed in the form of a flap tag adhered to the top of the appliance and bent (folded at 90°) to hang over the front, as long as this can be done with assurance that it will be readily visible. Labels for split-system central air conditioners should be affixed to the condensing unit.
(2) In addition to the requirements of paragraph (e)(1), for split-system and single-package central air conditioners, and all non-weatherized and mobile home furnaces manufactured on or after the compliance date of regional efficiency standards issued by the Department of Energy for those products in 10 CFR part 430, manufacturers shall affix labels to covered product packages or the products themselves in positions that allow persons examining the packaged products to read the labels easily. Labels on packaging must be affixed via adhesive or another means sufficient to prevent their dislodgment during normal handling throughout the chain of distribution to the retailer or consumer. Labels for split-system central air conditioners should be affixed to condensing units’ packages or condensing units consistent with this paragraph.
(f) Content of furnace labels: Content of labels for non-weatherized furnaces, weatherized furnaces, mobile home furnaces, electric furnaces, and boilers. (1) Headlines and texts, as illustrated in the prototype and sample labels in appendix L to this part.
(2) Name of manufacturer or private labeler shall, in the case of a corporation, be deemed to be satisfied only by the actual corporate name, which may be preceded or followed by the name of the particular division of the corporation. In the case of an individual, partnership, or association, the name under which the business is conducted shall be used. Inclusion of the name of the manufacturer or private labeler is optional at the discretion of the manufacturer or private labeler.
(3) The model’s basic model number. The label may include multiple model numbers on a single label for models as long as the models share the same efficiency ratings and capacities and the presentation of such information is clear and prominent.
(4) The model’s capacity. Inclusion of capacity is optional at the discretion of the manufacturer or private labeler.
(5) The annual fuel utilization efficiency (AFUE) for furnace models as determined in accordance with this part.
(6) Ranges of comparability consisting of the lowest and highest annual fuel utilization efficiency (AFUE) ratings for all furnaces of the model’s type consistent with the sample labels in appendix L.
(7) Placement of the labeled product on the scale shall be proportionate to the lowest and highest annual fuel utilization efficiency ratings forming the scale.
(8) The following statement shall appear in bold print on furnace labels adjacent to the range(s) as illustrated in the sample labels in appendix L:
(9) The following statement shall appear at the top of the label as illustrated in the sample labels in appendix L to this part:
(10) No marks or information other than that specified in this part shall appear on or directly adjoining this label except that:
(i) A part or publication number identification may be included on this label, as desired by the manufacturer. If a manufacturer elects to use a part or publication number, it must appear in the lower right-hand corner of the label and be set in 12-point type or smaller.
(ii) The energy use disclosure labels required by the governments of Canada or Mexico may appear directly adjoining this label, as desired by the manufacturer.
(iii) The manufacturer may include the ENERGY STAR logo on the label for certified products in a location consistent with the sample labels in appendix L to this part. The logo must be no larger than 1 inch by 3 inches in size. Only manufacturers that have signed a Memorandum of Understanding with the Department of Energy or the Environmental Protection Agency may add the ENERGY STAR logo to labels on qualifying covered products; such manufacturers may add the ENERGY STAR logo to labels only on those covered products that are contemplated by the Memorandum of Understanding.
(11) Manufacturers of boilers shipped with more than one input nozzle to be installed in the field must label such boilers with the AFUE of the system when it is set up with the nozzle that results in the lowest AFUE rating.
(12) Manufacturers that ship out boilers that may be set up as either steam or hot water units must label the boilers with the AFUE rating derived by conducting the required test on the boiler as a hot water unit.
(13) Manufacturers of oil furnaces must label their products with the AFUE rating associated with the furnace’s input capacity set by the manufacturer at shipment. The oil furnace label may also contain a chart, as illustrated in sample label 9B in appendix L to this part, indicating the efficiency rating at up to three additional input capacities offered by the manufacturer. Consistent with paragraph (f)(10)(iii) of this section, labels for oil furnaces may include the ENERGY STAR logo only if the model qualifies for that program on all input capacities displayed on the label.
(14) Manufacturers of models that qualify as both furnaces and central air conditioners or heat pumps under DOE requirements may combine the disclosures required by this section on one label for models that meet all applicable DOE regional efficiency standards.
(g) Content of central air conditioner labels: Content of labels for central air conditioners and heat pumps. (1) Headlines and texts, as illustrated in the prototype and sample labels in appendix L to this part.
(2) Name of manufacturer or private labeler shall, in the case of a corporation, be deemed to be satisfied only by the actual corporate name, which may be preceded or followed by the name of the particular division of the corporation. In the case of an individual, partnership, or association, the name under which the business is conducted shall be used. Inclusion of the name of the manufacturer or private labeler is optional at the discretion of the manufacturer or private labeler.
(3) The model’s basic model number. The label may include multiple model numbers on a single label for models as long as the models share the same efficiency ratings and capacities and the presentation of such information is clear and prominent.
(4) The model’s capacity. Inclusion of capacity is optional at the discretion of the manufacturer or private labeler for all models except split-system labels, which may not disclose capacity.
(5) The seasonal energy efficiency ratio 2 (SEER2) for the cooling function of central air conditioners as determined in accordance with this part. For the heating function, the heating seasonal performance factor 2 (HSPF2) shall be calculated for heating Region IV for the standardized design heating requirement nearest the capacity measured in the High Temperature Test in accordance with this part. In addition, as illustrated in the sample labels in appendix L to this part, the ratings for any split-system air conditioner condenser evaporator coil combinations shall be the minimum rating of all condenser-evaporator coil combinations certified to the Department of Energy pursuant to 10 CFR part 430. The ratings for any split-system heat pump condenser-evaporator coil combinations shall include the low and high ratings of all condenser-evaporator coil combinations certified to the Department of Energy pursuant to 10 CFR part 430.
(6)(i) Each cooling-only central air conditioner label shall contain a range of comparability consisting of the lowest and highest SEER2 for all cooling-only central air conditioners consistent with sample label 7 in appendix L to this part.
(ii) Each heat pump label, except as noted in paragraph (g)(6)(iii) of this section, shall contain two ranges of comparability. The first range shall consist of the lowest and highest seasonal energy efficiency ratios for the cooling side of all heat pumps consistent with sample label 8 in appendix L to this part. The second range shall consist of the lowest and highest heating seasonal performance factors for the heating side of all heat pumps consistent with sample label 8 in appendix L to this part.
(iii) Each heating-only heat pump label shall contain a range of comparability consisting of the lowest and highest heating seasonal performance factors for all heating-only heat pumps following the format of sample label 8 in appendix L to this part.
(7) Placement of the labeled product on the scale shall be proportionate to the lowest and highest efficiency ratings forming the scale.
(8) The following statement shall appear on the label in bold print as indicated in the sample labels in appendix L to this part.
For energy cost info, visit productinfo.energy.gov.
(9) All labels on split-system condenser units must contain one of the following three statements:
(i) For labels disclosing only the seasonal Energy Efficiency Ratio 2 for cooling, the statement should read:
* Your air conditioner’s efficiency rating may be better depending on the coil your contractor installs.
(ii) For labels disclosing both the seasonal Energy Efficiency Ratio 2 for cooling and the heating seasonal performance factor 2 for heating, the statement should read:
This system’s efficiency ratings depend on the coil your contractor installs with this unit. The heating efficiency rating varies slightly in different geographic regions. Ask your contractor for details.
(iii) For labels disclosing only the heating seasonal performance factor 2 for heating, the statement should read:
This system’s efficiency rating depends on the coil your contractor installs with this unit. The efficiency rating varies slightly in different geographic regions. Ask your contractor for details.
(10) The following statement shall appear at the top of the label as illustrated in the sample labels in appendix L of this part:
Federal law prohibits removal of this label before consumer purchase.
(11) For any single-package air conditioner with a minimum Energy Efficiency Ratio 2 (EER2) of at least 10.6, any split system central air conditioner with a rated cooling capacity of at least 45,000 Btu/h and minimum efficiency ratings of at least 13.8 SEER2 and 11.2 EER2 or at least 15.2 SEER2 and 9.8 EER2, and any split-system central air conditioners with a rated cooling capacity less than 45,000 Btu/h and minimum efficiency ratings of at least 14.3 SEER2 and 11.7 EER2 or at least 15.2 SEER2 and 9.8 EER2, the label must contain the following regional standards information:
(i) A statement that reads:
Notice
Federal law allows this unit to be installed in all U.S. states and territories.
(ii) For split systems, a statement that reads:
Energy Efficiency Ratio 2 (EER2): The installed system’s minimum EER2 is ____.
(iii) For single-package air conditioners, a statement that reads:
Energy Efficiency Ratio 2 (EER2): This model’s EER2 is [____].
(12) For any split system central air conditioner with a rated cooling capacity of at least 45,000 Btu/h and minimum efficiency ratings of at least 13.8 SEER2 but lower than 11.2 EER2 or at least 15.2 SEER2 but lower than 9.8 EER2, and any split-system central air conditioners with a rated cooling capacity less than 45,000 Btu/h and minimum efficiency ratings of at least 14.3 SEER2 but lower than 11.7 EER2 or at least 15.2 SEER2 but lower than 9.8 EER2, the label must contain the following regional standards information:
(i) A statement that reads:
Notice
Federal law allows this unit to be installed only in: AK, AL, AR, CO, CT, DC, DE, FL, GA, HI, ID, IL, IA, IN, KS, KY, LA, MA, ME, MD, MI, MN, MO, MS, MT, NC, ND, NE, NH, NJ, NY, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VA, VT, WA, WV, WI, WY and U.S. territories. Federal law prohibits installation of this unit in other states.
(ii) A map appropriate for the model and accompanying text as illustrated in the sample label 7 in appendix L of this part.
(iii) A statement that reads:
Energy Efficiency Ratio 2 (EER2): The installed system’s minimum EER2 is ____.
(13) For any split system central air conditioner with a rated cooling capacity of at least 45,000 Btu/h and a minimum rated efficiency rating less than 13.8 SEER2, and any split-system central air conditioners with a rated cooling capacity less than 45,000 Btu/h and minimum efficiency ratings of less than 14.3 SEER2, the label must contain the following regional standards information:
(i) A statement that reads:
Notice
Federal law allows this unit to be installed only in: AK, CO, CT, ID, IL, IA, IN, KS, MA, ME, MI, MN, MO, MT, ND, NE, NH, NJ, NY, OH, OR, PA, RI, SD, UT, VT, WA, WV, WI, and WY. Federal law prohibits installation of this unit in other states.
(ii) A map appropriate for the model and accompanying text as illustrated in the sample label 7 in appendix L of this part.
(iii) A statement that reads:
Energy Efficiency Ratio 2 (EER2): The installed system’s minimum EER2 is ____.
(14) For any single-package air conditioner with a minimum EER2 below 10.6, the label must contain the following regional standards information:
(i) A statement that reads:
Notice
Federal law allows this unit to be installed only in: AK, AL, AR, CO, CT, DC, DE, FL, GA, HI, ID, IL, IA, IN, KS, KY, LA, MA, ME, MD, MI, MN, MO, MS, MT, NC, ND, NE, NH, NJ, NY, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VA, VT, WA, WV, WI, WY and U.S. territories. Federal law prohibits installation of this unit in other states.
(ii) A map appropriate for the model and accompanying text as illustrated in the sample label 7 in appendix L of this part.
(15) No marks or information other than that specified in this part shall appear on or directly adjoining this label except that:
(i) A part or publication number identification may be included on this label, as desired by the manufacturer. If a manufacturer elects to use a part or publication number, it must appear in the lower right-hand corner of the label and be set in 12-point type or smaller.
(ii) The energy use disclosure labels required by the governments of Canada or Mexico may appear directly adjoining this label, as desired by the manufacturer.
(iii) The manufacturer may include the ENERGY STAR logo on the label for certified products in a location consistent with the sample labels in appendix L to this part. The logo must be no larger than 1 inch by 3 inches in size. Only manufacturers that have signed a Memorandum of Understanding with the Department of Energy or the Environmental Protection Agency may add the ENERGY STAR logo to labels on qualifying covered products; such manufacturers may add the ENERGY STAR logo to labels only on those covered products that are contemplated by the Memorandum of Understanding.
§ 305.21 Labeling for ceiling fans.
(a) Ceiling fans – (1) Content. Any covered product that is a ceiling fan, except for large diameter and high-speed small diameter fans as defined in 10 CFR part 430, shall be labeled clearly and conspicuously on the package’s principal display panel with the following information on the label consistent with the sample label in appendix L to this part:
(i) Headlines, including the title “EnergyGuide,” and text as illustrated in the sample label in appendix L to this part;
(ii) The product’s estimated yearly energy cost based on 6.4 hours use per day and 12 cents per kWh;
(iii) The product’s airflow expressed in cubic feet per minute and determined pursuant to § 305.8;
(iv) The product’s energy use expressed in watts and determined pursuant to § 305.8 as indicated in the sample label in appendix L of this part;
(v) The statement “Based on 12 cents per kWh and 6.4 hours use per day”;
(vi) The statement “Your cost depends on rates and use”;
(vii) The statement “All estimates based on typical use, excluding lights”;
(viii) The statement “The higher the airflow, the more air the fan will move”;
(ix) The statement “Airflow Efficiency: ____Cubic Feet Per Minute Per Watt”;
(x) The address ftc.gov/energy;
(xi) For fans less than 19 inches in diameter, the label shall display a cost range of $10 to $50 along with the statement underneath the range “Cost Range of Similar Models (18″ or smaller)”;
(xii) For fans from 19 or more inches and less than or equal to 84 inches in diameter, the label shall display a cost range of $3 to $34 along with the statement underneath the range “Cost Range of Similar Models (19″-84″).
(xiii) Placement of the labeled product on the scale proportionate to the lowest and highest estimated annual energy costs as illustrated in the Sample Labels in appendix L. When the estimated annual energy cost of a given model falls outside the limits of the current range for that product, the manufacturer shall place the product at the end of the range closest to the model’s energy cost.
(xiv) The ENERGY STAR logo as illustrated on the ceiling fan label illustration in Appendix L for qualified products, if desired by the manufacturer. Only manufacturers that have signed a Memorandum of Understanding with the Department of Energy or the Environmental Protection Agency may add the ENERGY STAR logo to labels on qualifying covered products; such manufacturers may add the ENERGY STAR logo to labels only on those products that are covered by the Memorandum of Understanding;
(2) Label size, color, and text font. The label shall be four inches wide and three inches high. The label colors shall be black text on a process yellow or other neutral contrasting background. The text font shall be Arial or another equivalent font. The label’s text size, format, content, and the order of the required disclosures shall be consistent with the ceiling fan label illustration of appendix L of this part.
(3) Placement. The ceiling fan label shall be printed on or affixed to the principal display panel of the product’s packaging.
(4) Additional information. No marks or information other than that specified in this part shall appear on this label, except a model name, number, or similar identifying information.
(5) Labeling for “multi-mount” fans. For “multi-mount” fan models that can be installed either extended from the ceiling or flush with the ceiling, the label content must reflect the lowest efficiency (cubic feet per minute per watt) configuration. Manufacturers may provide a second label depicting the efficiency at the other configuration.
(b) [Reserved]
§ 305.22 Energy information disclosures for heating and cooling equipment.
The following provisions apply to any covered central air conditioner, heat pump, or furnace.
(a) Manufacturer duty to provide labels. For any covered central air conditioner, heat pump, or furnace model that a manufacturer distributes in commerce, the manufacturer must make a copy of the EnergyGuide label available on a publicly accessible Web site in a manner that allows catalog sellers and consumers to hyperlink to the label or download it for their use. The labels must remain on the Web site for six months after the manufacturer ceases the model’s production.
(b) Distribution. (1) Manufacturers and private labelers must provide to distributors and retailers, including assemblers, EnergyGuide labels for covered central air conditioners, heat pumps, and furnaces (including boilers) they sell to them. The label may be provided in paper or electronic form (including Internet-based access). Distributors must give this information to retailers, including assemblers, they supply.
(2) Retailers, including assemblers, who sell covered central air conditioners, heat pumps, and furnaces (including boilers) to consumers must show the labels for the products they offer to customers and let them read the labels before the customers agree to purchase the product. For example, the retailer may display labeled units in their store or direct consumers to the labels in a binder or computer at a counter or service desk.
(3) Retailers, including installers and assemblers, who negotiate or make sales at a place other than their regular places of business, including sales over the telephone or through electronic communications, must show the labels for the products they offer to customers and let them read the labels before the customers agree to purchase the product. If the labels are on a Web site, retailers, including assemblers, who negotiate or make sales at a place other than their regular places of business, may choose to provide customers with instructions to access such labels in lieu of showing them a paper version of the information. Retailers who choose to use the Internet for the required label disclosures must provide customers the opportunity to read such information prior to sale of the product.
(c) Oil furnace labels. If an installer installs an oil furnace with an input capacity different from that set by the manufacturer and the manufacturer identifies alternative capacities on the label, the installer must permanently mark the appropriate box on the EnergyGuide label displaying the installed input capacity and the associated AFUE as illustrated in Sample Labels in appendix L to this part.
§ 305.23 Labeling for lighting products.
(a) Fluorescent lamp ballasts and luminaires – (1) Contents. Fluorescent lamp ballasts that are “covered products,” as defined in this part, and to which standards are applicable under section 325 of the Act, shall be marked conspicuously, in color-contrasting ink, with a capital letter “E” printed within a circle. Packaging for such fluorescent lamp ballasts, as well as packaging for luminaires into which they are incorporated, shall also be marked conspicuously with a capital letter “E” printed within a circle. For purposes of this section, the encircled capital letter “E” will be deemed “conspicuous,” in terms of size, if it is as large as either the manufacturer’s name or another logo, such as the “UL,” “CBM” or “ETL” logos, whichever is larger, that appears on the fluorescent lamp ballast, the packaging for such ballast or the packaging for the luminaire into which the covered ballast is incorporated, whichever is applicable for purpose of labeling.
(2) Product labeling. The encircled capital letter “E” on fluorescent lamp ballasts must appear conspicuously, in color-contrasting ink, (i.e., in a color that contrasts with the background on which the encircled capital letter “E” is placed) on the surface that is normally labeled. It may be printed on the label that normally appears on the fluorescent lamp ballast, printed on a separate label, or stamped indelibly on the surface of the fluorescent lamp ballast.
(3) Package labeling. For purposes of labeling under this section, packaging for such fluorescent lamp ballasts and the luminaires into which they are incorporated consists of the plastic sheeting, or “shrink-wrap,” covering pallet loads of fluorescent lamp ballasts or luminaires as well as any containers in which such fluorescent lamp ballasts or the luminaires into which they are incorporated are marketed individually or in small numbers. The encircled capital letter “E” on packages containing fluorescent lamp ballasts or the luminaires into which they are incorporated must appear conspicuously, in color-contrasting ink, on the surface of the package on which printing or a label normally appears. If the package contains printing on more than one surface, the label must appear on the surface on which the product inside the package is described. The encircled capital letter “E” may be printed on the surface of the package, printed on a label containing other information, printed on a separate label, or indelibly stamped on the surface of the package. In the case of pallet loads containing fluorescent lamp ballasts or the luminaires into which they are incorporated, the encircled capital letter “E” must appear conspicuously, in color-contrasting ink, on the plastic sheeting, unless clear plastic sheeting is used and the encircled capital letter “E” is legible underneath this packaging. The encircled capital letter “E” must also appear conspicuously on any documentation that would normally accompany such a pallet load. The encircled capital letter “E” may appear on a label affixed to the sheeting or may be indelibly stamped on the sheeting. It may be printed on the documentation, printed on a separate label that is affixed to the documentation or indelibly stamped on the documentation.
(b) General service lamps. Except as provided in paragraph (f) of this section, any covered product that is a general service lamp shall be labeled as follows:
(1) Principal display panel content. The principal display panel of the product package shall be labeled clearly and conspicuously with the following information:
(i) The light output of each lamp included in the package, expressed as “Brightness” in average initial lumens rounded to the nearest five; and
(ii) The estimated annual energy cost of each lamp included in the package, expressed as “Estimated Energy Cost” in dollars and based on usage of 3 hours per day and 11 cents ($0.11) per kWh.
(2) Principal display panel format. The light output (brightness) and energy cost shall appear in that order and with equal clarity and conspicuousness on the principal display panel of the product package. The format, terms, specifications, and minimum sizes shall follow the specifications and minimum sizes displayed in Prototype Label 5 in appendix L of this part.
(3) Lighting Facts label content. The side or rear display panel of the product package shall be labeled clearly and conspicuously with a Lighting Facts label that contains the following information in the following order:
(i) The light output of each lamp included in the package, expressed as “Brightness” in average initial lumens rounded to the nearest five;
(ii) The estimated annual energy cost of each lamp included in the package based on the average initial wattage, a usage rate of 3 hours per day and 11 cents ($0.11) per kWh and explanatory text as illustrated in Prototype Label 6 in appendix L of this part;
(iii) The life, as defined in this part, of each lamp included in the package, expressed in years rounded to the nearest tenth (based on 3 hours operation per day);
(iv) The correlated color temperature of each lamp included in the package, as measured in degrees Kelvin and expressed as “Light Appearance” and by a number and a marker in the form of a scale as illustrated in Prototype Label 6 to appendix L of this part placed proportionately on the scale where the left end equals 2,600 K and the right end equals 6,600 K;
(v) The wattage, as defined in this part, for each lamp included in the package, expressed as energy used in average initial wattage;
(vi) The ENERGY STAR logo as illustrated in Prototype Label 6 to appendix L of this part for certified products, if desired by the manufacturer or private labeler. Only manufacturers or private labelers that have signed a Memorandum of Understanding with the Department of Energy or the Environmental Protection Agency may add the ENERGY STAR logo to labels on certified covered products; such manufacturers or private labelers may add the ENERGY STAR logo to labels only on those products that are covered by the Memorandum of Understanding;
(vii) The design voltage of each lamp included in the package, if other than 120 volts;
(viii) For any general service lamp containing mercury, the following statement: “Contains Mercury For more on clean up and safe disposal, visit epa.gov/cfl.” The manufacturer may also print an “Hg[Encircled]” symbol on the label after the term “Contains Mercury”; and
(ix) No marks or information other than that specified in this part shall appear on the Lighting Facts label.
(4) Standard Lighting Facts label format. Except as provided in paragraph (b)(5) of this section, information specified in paragraph (b)(3) of this section shall be presented on covered lamp packages in the format, terms, explanatory text, specifications, and minimum sizes as shown in Prototype Labels 6 in appendix L of this part and consistent in format and orientation with Sample Labels 10, 11, or 12 in appendix L. The text and lines shall be all black or one color type, printed on a white or other neutral contrasting background whenever practical.
(i) The Lighting Facts information shall be set off in a box by use of hairlines and shall be all black or one color type, printed on a white or other neutral contrasting background whenever practical.
(ii) All information within the Lighting Facts label shall utilize:
(A) Arial or an equivalent type style;
(B) Upper and lower case letters;
(C) Leading as indicated in Prototype Label 6 in appendix L of this part;
(D) Letters that never touch;
(E) The box and hairlines separating information as illustrated in Prototype Labels 6 in appendix L of this part; and
(F) The minimum font sizes and line thicknesses as illustrated in Prototype Label 6 in appendix L of this part.
(5) Lighting Facts format for small packages. If the total surface area of the product package available for labeling is less than 24 square inches and the package shape or size cannot accommodate the standard label required by paragraph (b)(4) of this section, manufacturers may provide the information specified in paragraph (b)(3) of this section using a smaller, linear label following the format, terms, explanatory text, specifications, and minimum sizes illustrated in Prototype Label 7 in appendix L of this part.
(6) Bilingual labels. The information required by paragraphs (b)(1) through (5) of this section may be presented in a second language either by using separate labels for each language or in a bilingual label with the English text in the format required by this section immediately followed by the text in the second language. Sample Label 13 in appendix L of this part provides an example of a bilingual Lighting Facts label. All required information must be included in both languages. Numeric characters that are identical in both languages need not be repeated.
(7) Product labeling. Any general service lamp shall be labeled legibly on the product with the following information:
(i) The lamp’s average initial lumens, expressed as a number rounded to the nearest five, adjacent to the word “lumens,” both provided in minimum 8 point font; and
(ii) For general service lamps containing mercury, the following statement: “Mercury disposal: epa.gov/cfl” in minimum 8 point font.
(c) Specialty consumer lamps. (1) Any specialty consumer lamp that is a vibration-service lamp as defined at 42 U.S.C. 6291, rough service lamp as defined at 42 U.S.C. 6291(30), appliance lamp as defined at 42 U.S.C. 6291(30); or shatter resistant lamp (including a shatter proof lamp and a shatter protected lamp) must be labeled pursuant to the requirements in paragraphs (b)(1) through (7) of this section.
(2) Specialty consumer lamp Lighting Facts label content. All specialty consumer lamps not covered by paragraph (c)(1) of this section shall be labeled pursuant to the requirements of paragraphs (b)(1) through (7) of this section or as follows:
(i) The principal display panel of the product package shall be labeled clearly and conspicuously with the following information consistent with the Prototype Labels in Appendix L:
(A) The light output of each lamp included in the package, expressed as “Brightness” in average initial lumens rounded to the nearest five;
(B) The estimated annual energy cost of each lamp included in the package, expressed as “Estimated Energy Cost” in dollars and based on usage of 3 hours per day and 11 cents ($0.11) per kWh; and
(C) The life, as defined in this part, of each lamp included in the package, expressed in years rounded to the nearest tenth (based on 3 hours operation per day).
(ii)(A) If the lamp contains mercury, the principal display panel shall contain the following statement in minimum 10 point font:
“Contains Mercury For more on clean up and safe disposal, visit epa.gov/cfl.”
(B) The manufacturer may also print an “Hg[Encircled]” symbol on package after the term “Contains Mercury.”
(iii) If the lamp contains mercury, the lamp shall be labeled legibly on the product with the following statement: “Mercury disposal: epa.gov/cfl” in minimum 8 point font.
(iv) If the required disclosures for a lamp covered by paragraph (c)(2) of this section will not be legible on the front panel of a single-card, blister package due to the small size of the panel, the manufacturer or private labeler may print the statement “Lighting Facts see back” on the principal display panel consistent with the sample label in Appendix L as long as the Lighting Facts label required by paragraph (b)(3) of this section appears on the rear panel.
(v) No marks or information other than that specified in this part shall appear on the Lighting Facts label.
(3) Specialty Lighting Facts label format. Information specified in paragraph (c)(2) of this section shall be presented on covered lamp packages in the format, terms, explanatory text, specifications, and minimum sizes as shown in the Prototype Labels of appendix L and consistent in format and orientation with Sample Labels in Appendix L of this part. The text and lines shall be all black or one color type, printed on a white or other neutral contrasting background whenever practical.
(i) The Lighting Facts information shall be set off in a box by use of hairlines and shall be all black or one color type, printed on a white or other neutral contrasting background whenever practical.
(ii) All information within the Lighting Facts label shall utilize:
(A) Arial or an equivalent type style;
(B) Upper and lower case letters;
(C) Leading as indicated in the Prototype Labels in Appendix L of this part;
(D) Letters that never touch;
(E) The box and hairlines separating information as illustrated in the Prototype Labels in appendix L of this part; and
(F) The minimum font sizes and line thicknesses as illustrated in Prototype Labels in Appendix L of this part.
(iii) For small package labels covered by (c)(2)(iv) of this section, the words “Lighting Facts see back” shall appear on the primary display panel in a size and format specified in appendix L of this part.
(4) Bilingual labels. The information required by paragraph (c) of this section may be presented in a second language either by using separate labels for each language or in a bilingual label with the English text in the format required by this section immediately followed by the text in the second language. All required information must be included in both languages. Numeric characters that are identical in both languages need not be repeated.
(d) For lamps that do not meet the definition of general service lamp or specialty consumer lamp, manufacturers and private labelers have the discretion to label with the Lighting Facts label as long as they comply with all requirements applicable to specialty consumer lamps in this part.
(e)(1) Any covered incandescent lamp that is subject to and does not comply with the January 1, 2012 or January 1, 2013 efficiency standards specified in 42 U.S.C. 6295 or the DOE standards at 10 CFR 430.32(n)(5) effective July 14, 2012 shall be labeled clearly and conspicuously on the principal display panel of the product package with the following information in lieu of the labeling requirements specified in paragraph (b):
(2) The light output, energy usage and life ratings of any product covered by paragraph (c)(1) of this section shall appear in that order and with equal clarity and conspicuousness on the product’s principal display panel. The light output, energy usage and life ratings shall be disclosed in terms of “lumens,” “watts,” and “hours” respectively, with the lumens, watts, and hours rating numbers each appearing in the same type style and size and with the words “lumens,” “watts,” and “hours” each appearing in the same type style and size. The words “light output,” “energy used,” and “life” shall precede and have the same conspicuousness as both the rating numbers and the words “lumens,” “watts,” and “hours,” except that the letters of the words “lumens,” “watts,” and “hours” shall be approximately 50% of the sizes of those used for the words “light output,” “energy used,” and “life,” respectively.
(f)(1) The required disclosures of any covered product that is a general service lamp or specialty consumer lamp shall be measured at 120 volts, regardless of the lamp’s design voltage. If a lamp’s design voltage is 125 volts or 130 volts, the disclosures of the wattage, light output, energy cost, and life ratings shall in each instance be:
(i) At 120 volts and followed by the phrase “at 120 volts.” In such case, the labels for such lamps also may disclose the lamp’s wattage, light output, energy cost, and life at the design voltage (e.g., “Light Output 1710 Lumens at 125 volts”); or
(ii) At the design voltage and followed by the phrase “at (125 volts/130 volts)” if the ratings at 120 volts are disclosed clearly and conspicuously on another panel of the package, and if all panels of the package that contain a claimed light output, energy cost, wattage or lifeclearly and conspicuously identify the lamp as “(125 volt/130 volt),” and if the principal display panel clearly and conspicuously discloses the following statement:
(2) For any covered product that is an incandescent reflector lamp, the required disclosures of light output shall be given for the lamp’s total forward lumens.
(3) For any covered product that is a compact fluorescent lamp, the required light output disclosure shall be measured at a base-up position; but, if the manufacturer or private labeler has reason to believe that the light output at a base-down position would be more than 5% different, the label also shall disclose the light output at the base-down position or, if no test data for the base-down position exist, the fact that at a base-down position the light output might be more than 5% less.
(4) For any covered product that is a general service lamp or specialty consumer lamp and operates at discrete, multiple light levels (e.g., 800, 1600, and 2500 lumens), the light output, energy cost, and wattage disclosures required by this section must be provided at each of the lamp’s levels of light output and the lamp’s life provided on the basis of the shortest lived operating mode. The multiple numbers shall be separated by a “/” (e.g., 800/1600/2500 lumens) if they appear on the same line on the label.
(5) A manufacturer or private labeler who distributes general service fluorescent lamps, general service lamps, or specialty consumer lamp without labels attached to the lamps or without labels on individual retail-sale packaging for one or more lamps may meet the package disclosure requirements of this section by making the required disclosures, in the manner and form required by those paragraphs, on the bulk shipping cartons that are to be used to display the lamps for retail sale.
(6) Any manufacturer or private labeler who makes any representation, other than those required by this section, on a package of any covered product that is a general service fluorescent lamp, general service lamp, or specialty consumer lamp regarding the cost of operation or life of such lamp shall clearly and conspicuously disclose in close proximity to such representation the assumptions upon which it is based, including, e.g., purchase price, unit cost of electricity, hours of use, patterns of use. If those assumptions differ from those required for the cost and life information on the Lighting Facts label (11 cents per kWh and 3 hours per day), the manufacturer or private labeler must also disclose, with equal clarity and conspicuousness and in close proximity to, the same representation based on the assumptions for cost and life required on the Lighting Facts label.
(g)(1) Any covered product that is a general service fluorescent lamp or an incandescent reflector lamp shall be labeled clearly and conspicuously with a capital letter “E” printed within a circle and followed by an asterisk. The label shall also clearly and conspicuously disclose, either in close proximity to that asterisk or elsewhere on the label, the following statement:
(i) If the statement is not disclosed on the principal display panel, the asterisk shall be followed by the following statement:
(ii) For purposes of this paragraph, the encircled capital letter “E” shall be clearly and conspicuously disclosed in color-contrasting ink on the label of any covered product that is a general service fluorescent lamp and will be deemed “conspicuous,” in terms of size, if it appears in typeface at least as large as either the manufacturer’s name or logo or another logo disclosed on the label, such as the “UL” or “ETL” logos, whichever is larger.
(2) Instead of labeling any covered product that is a general service fluorescent lamp with the encircled “E” and with the statement described in paragraph (e)(1) of this section, a manufacturer or private labeler who would not otherwise put a label on such a lamp may meet the disclosure requirements of that paragraph by permanently marking the lamp clearly and conspicuously with the encircled “E.”
(3) Any cartons in which any covered products that are general service fluorescent lamps and general service lamps are shipped within the United States or imported into the United States shall disclose clearly and conspicuously the following statement:
(h) Metal halide lamp fixtures and metal halide ballasts – (1) Contents. Metal halide ballasts contained in a metal halide lamp fixture covered by this Part shall be marked conspicuously, in color-contrasting ink, with a capital letter “E” printed within a circle. Packaging for metal halide lamp fixtures covered by this part shall also be marked conspicuously with a capital letter “E” printed within a circle. For purposes of this section, the encircled capital letter “E” will be deemed “conspicuous,” in terms of size, if it is as large as either the manufacturer’s name or another logo, such as the “UL,” “CBM” or “ETL” logos, whichever is larger, that appears on the metal halide ballast, or the packaging for the metal halide lamp fixture, whichever is applicable for purposes of labeling.
(2) Product labeling. The encircled capital letter “E” on metal halide ballasts must appear conspicuously, in color-contrasting ink (i.e., in a color that contrasts with the background on which the encircled capital letter “E” is placed) on the surface that is normally labeled. It may be printed on the label that normally appears on the metal halide ballast, printed on a separate label, or stamped indelibly on the surface of the metal halide ballast.
(3) Package labeling. For purposes of labeling under this section, packaging for metal halide lamp fixtures consists of the plastic sheeting, or “shrink-wrap,” covering pallet loads of metal halide lamp fixtures as well as any containers in which such metal halide lamp fixtures are marketed individually or in small numbers. The encircled capital letter “E” on packages containing metal halide lamp fixtures must appear conspicuously, in color-contrasting ink, on the surface of the package on which printing or a label normally appears. If the package contains printing on more than one surface, the label must appear on the surface on which the product inside the package is described. The encircled capital letter “E” may be printed on the surface of the package, printed on a label containing other information, printed on a separate label, or indelibly stamped on the surface of the package. In the case of pallet loads containing metal halide lamp fixtures, the encircled capital letter “E” must appear conspicuously, in color-contrasting ink, on the plastic sheeting, unless clear plastic sheeting is used and the encircled capital letter “E” is legible underneath this packaging.
§ 305.24 Labeling and marking for plumbing products.
(a) Showerheads and faucets. Showerheads and faucets shall be marked and labeled as follows:
(1) Each showerhead and flow restricting or controlling spout end device shall bear a permanent legible marking indicating the flow rate, expressed in gallons per minute (gpm) or gallons per cycle (gpc), and the flow rate value shall be the actual flow rate or the maximum flow rate specified by the standards established in subsection (j) of section 325 of the Act, 42 U.S.C. 6295(j). Except where impractical due to the size of the fitting, each flow rate disclosure shall also be given in liters per minute (L/min) or liters per cycle (L/cycle). For purposes of this section, the marking indicating the flow rate will be deemed “legible,” in terms of placement, if it is located in close proximity to the manufacturer’s identification marking.
(2) Each showerhead and faucet shall bear a permanent legible marking to identify the manufacturer. This marking shall be the trade name, trademark, or other mark known to identify the manufacturer. Such marking shall be located where it can be seen after installation.
(3) The package for each showerhead and faucet shall disclose the manufacturer’s name and the model number.
(4) The package or any label attached to the package for each showerhead or faucet shall contain at least the following: The flow rate expressed in gallons per minute (gpm) or gallons per cycle (gpc), and the flow rate value shall be the actual flow rate or the maximum flow rate specified by the standards established in subsection (j) of section 325 of the Act, 42 U.S.C. 6295(j). Each flow rate disclosure shall also be given in liters per minute (L/min) or liters per cycle (L/cycle).
(b) Water closets and urinals. Water closets and urinals shall be marked and labeled as follows:
(1) Each such fixture (and flushometer valve associated with such fixture) shall bear a permanent legible marking indicating the flow rate, expressed in gallons per flush (gpf), and the water use value shall be the actual water use or the maximum water use specified by the standards established in subsection (k) of section 325 of the Act, 42 U.S.C. 6295(k). Except where impractical due to the size of the fixture, each flow rate disclosure shall also be given in liters per flush (Lpf). For purposes of this section, the marking indicating the flow rate will be deemed “legible,” in terms of placement, if it is located in close proximity to the manufacturer’s identification marking.
(2) Each water closet (and each component of the water closet if the fixture is comprised of two or more components) and urinal shall be marked with the manufacturer’s name or trademark or, in the case of private labeling, the name or registered trademark of the customer for whom the unit was manufactured. This mark shall be legible, readily identified, and applied so as to be permanent. The mark shall be located so as to be visible after the fixture is installed, except for fixtures built into or for a counter or cabinet.
(3) The package, and any labeling attached to the package, for each water closet and urinal shall disclose the flow rate, expressed in gallons per flush (gpf), and the water use value shall be the actual water use or the maximum water use specified by the standards established in subsection (k) of section 325 of the Act, 42 U.S.C. 6295(k). Each flow rate disclosure shall also be given in liters per flush (Lpf).
(c) Annual operating cost claims for covered plumbing products. Until such time as the Commission has prescribed a format and manner of display for labels conveying estimated annual operating costs of covered showerheads, faucets, water closets, and urinals or ranges of estimated annual operating costs for the types or classes of such plumbing products, the Act prohibits manufacturers from making such representations on the labels of such covered products. 42 U.S.C. 6294(c)(8). If, before the Commission has prescribed such a format and manner of display for labels of such products, a manufacturer elects to provide for any such product a label conveying such a claim, it shall submit the proposed claim to the Commission so that a format and manner of display for a label may be prescribed.
§ 305.25 Television labeling.
(a) Layout. All energy labels for televisions shall use one of three shapes: a vertical rectangle, a horizontal rectangle, and a triangle as detailed in Prototype Labels in appendix L. All label size, positioning, spacing, type sizes, positioning of headline, copy, and line widths must be consistent with the prototype and sample labels in appendix L. The minimum label size for the vertical rectangle label is 1.5″ × 5.5″. The minimum size for the horizontal rectangle label is 1.5″ × 5.23″. The minimum size for the triangle label is 4.5″ × 4.5″ (right angle sides).
(b) Type style and setting. The Arial series typeface or equivalent shall be used exclusively on the label. Prototype Labels in appendix L contain specific directions for type style and setting and indicate the specific sizes, leading, faces, positioning, and spacing to be used. No hyphenations should be used in setting headline or copy text.
(c) Colors. The basic colors of all labels and icons covered by this section shall be process yellow or equivalent and process black. The label shall be printed full bleed process yellow. All type and graphics shall be printed process black.
(d) Label types. Except as provided in paragraph (i), the labels must be affixed to the product in the form of either an adhesive label, cling label, or alternative label as follows:
(1) Adhesive label. All adhesive labels shall be applied so they can be easily removed without the use of tools or liquids, other than water, but shall be applied with an adhesive with an adhesion capacity sufficient to prevent their dislodgment during normal handling throughout the chain of distribution to the retailer and consumer. The paper stock for pressure-sensitive or other adhesive labels shall have a basic weight of not less than 58 pounds per 500 sheets (25 × 38) or equivalent, exclusive of the release liner and adhesive. A minimum peel adhesion capacity for the adhesive of 12 ounces per square inch is suggested, but not required if the adhesive can otherwise meet the above standard.
(2) Cling label. Labels may be affixed, using the screen’s static charge, to the product in the form of a cling label. The cling label shall be affixed in a manner that prevents dislodgment during normal handling throughout the chain of distribution to the retailer and consumer.
(3) Alternative label. In lieu of an adhesive or cling label, labels may be affixed using an alternative method to secure the label to the product as long as the method will prevent dislodgment during normal handling throughout the chain of distribution to the retailer and consumer. The label may not be affixed using a hang tag as described in § 305.13(e)(2). The label shall consist of paper stock having a basic weight of not less than 110 pounds per 500 sheets (25
(e) Placement – (1) In general. Except as provided in paragraph (i), all labels must be clear and conspicuous to consumers viewing the television screen from the front.
(2) Adhesive label. The adhesive label shall be in the shape of a horizontal or vertical rectangle and shall be located on the bezel in the bottom right-hand corner of the television. The horizontal rectangular label shall be located on the far right of the bottom bezel and the vertical rectangular label shall be located on the bottom of the right-hand bezel. Another location on the bezel may be used if the television’s configuration prevents such placement.
(3) Cling label. The cling label shall be in the shape of a triangle and shall be located in the bottom right-hand corner of the screen.
(4) Alternative label. The alternative label shall be in the shape of either a horizontal rectangle, vertical rectangle, or triangle. It shall be visible from the front of the television and located in the bottom right-hand corner of the television. Another prominent location visible from the front of the television may be used if the television’s configuration or the mechanism to secure the alternative label prevents such placement.
(f) Label content. The television label shall contain the following information:
(1) Headlines, texts, and statements as illustrated in the prototype and sample labels in appendix L to this part.
(2) Name of manufacturer or private labeler. This requirement shall, in the case of a corporation, be satisfied only by the actual corporate name, which may be preceded or followed by the name of a particular division of the corporation. In the case of an individual, partnership, or association, the name under which the business is conducted shall be used.
(3) Model number(s) as designated by the manufacturer or private labeler.
(4) Estimated annual energy costs determined in accordance with this part and based on a usage rate of 5 hours in on mode and 19 hours in standby (sleep) mode per day and an electricity cost rate of 12 cents per kWh.
(5) The applicable ranges of comparability for estimated annual energy costs based on the labeled product’s diagonal screen size, according to the following table:
| Screen size (diagonal) | Annual energy cost ranges for televisions | |
|---|---|---|
| Low | High | |
| 16-20″ (16.0 to 20.49″) | $3 | $4 |
| 21-23″ (20.5 to 23.49″) | 4 | 5 |
| 24-29″ (23.5 to 29.49″) | 4 | 7 |
| 30-34″ (29.5 to 34.49″) | 6 | 13 |
| 35-39″ (34.5 to 39.49″) | 7 | 13 |
| 40-44″ (39.5 to 44.49″) | 5 | 21 |
| 45-49″ (44.5 to 49.49″) | 6 | 24 |
| 50-54″ (49.5 to 54.49″) | 8 | 34 |
| 55-59″ (54.5 to 59.49″) | 8 | 34 |
| 60-64″ (59.5 to 64.49″) | 12 | 48 |
| 65-69″ (64.5 to 69.49″) | 10 | 51 |
| 69.5″ or greater | 15 | 97 |
(6) Placement of the labeled product on the scale proportionate to the lowest and highest estimated annual energy costs as illustrated in Prototype and Sample Labels in appendix L. When the estimated annual energy cost of a given television model falls outside the limits of the current range for that product, the manufacturer shall place the product at the end of the range closest to the model’s energy cost.
(7) The model’s estimated annual energy consumption as determined in accordance with this part and based on a usage rate of 5 hours in on mode and 19 hours in sleep (standby) mode per day.
(8) No marks or information other than that specified in this part shall appear on or directly adjoining this label except that:
(i) A manufacturer may include a part or publication number identification on the label, as long as it appears in the lower right-hand corner of the label and is set in 6-point type or smaller.
(ii) The manufacturer may include the ENERGY STAR logo on the label as illustrated in Sample Labels in appendix L. The logo must be 0.375″ wide. Only manufacturers that have signed a Memorandum of Understanding with the Department of Energy or the Environmental Protection Agency covering the televisions to be labeled may add the ENERGY STAR logo to those labels.
(g) Distribution of labels. Consistent with § 305.9 of this part, for each covered television that a manufacturer distributes in commerce which is required by this part to bear an EnergyGuide label, the manufacturer must make a copy of the label available on a publicly accessible Web site in a manner that allows catalog sellers to hyperlink to the label or download it for use in Web sites or paper catalogs. The label for each specific model must remain on the Web site for six months after production of the model ceases.
§ 305.26 Promotional material displayed or distributed at point of sale.
(a)(1) Any manufacturer, distributor, retailer or private labeler who prepares printed material for display or distribution at point of sale concerning a covered product (except fluorescent lamp ballasts, metal halide lamp fixtures, general service fluorescent lamps, general service lamps, showerheads, faucets, water closets or urinals) shall clearly and conspicuously include in such printed material the following required disclosure:
Before purchasing this appliance, read important information about its estimated annual energy consumption, yearly operating cost, or energy efficiency rating that is available from your retailer.
(2) Any manufacturer, distributor, retailer or private labeler who prepares printed material for display or distribution at point of sale concerning a covered product that is a fluorescent lamp ballast or metal halide lamp fixture to which standards are applicable under section 325 of the Act, shall disclose conspicuously in such printed material, in each description of such product, an encircled capital letter “E”.
(3) Any manufacturer, distributer, retailer, or private labeler who prepares printed material for display or distribution at point of sale concerning a covered product that is a general service fluorescent lamp, general service lamps, and who makes any representation in such promotional material regarding the cost of operation of such lamp shall clearly and conspicuously disclose in close proximity to such representation the assumptions upon which it is based, including, e.g., purchase price, unit cost of electricity, hours of use, and patterns of use.
(4) Any manufacturer, distributor, retailer, or private labeler who prepares printed material for display or distribution at point-of-sale concerning a covered product that is a showerhead, faucet, water closet, or urinal shall clearly and conspicuously include in such printed material the product’s water use, expressed in gallons and liters per minute (gpm and L/min) or per cycle (gpc and L/cycle) or gallons and liters per flush (gpf and Lpf) as specified in this part.
(b) This section shall not apply to:
(1) Written warranties.
(2) Use and care manuals, installation instructions, or other printed material containing primarily post-purchase information for the purchaser.
(3) Printed material containing only the identification of a covered product, pricing information and/or non-energy related representations concerning that product.
(4) Any printed material distributed prior to the effective date listed in § 305.7(e).
§ 305.27 Paper catalogs and websites.
(a) Covered products offered for sale on the Internet. Any manufacturer, distributor, retailer, or private labeler who advertises a covered product on an Internet Web site in a manner that qualifies as a catalog under this Part shall disclose energy information as follows:
(1) Content. – (i) Products required to bear EnergyGuide or Lighting Facts labels. All websites advertising covered refrigerators, refrigerator-freezers, freezers, room air conditioners, portable air conditioners, clothes washers, dishwashers, ceiling fans, pool heaters, water heaters, central air conditioners, heat pumps, furnaces, general service lamps, specialty consumer lamps (for products offered for sale after May 2, 2018), and televisions must display, for each model, a recognizable and legible image of the label required for that product by this part. The website may hyperlink to the image of the label using the sample EnergyGuide and Lighting Facts icons depicted in appendix L of this part. The website must hyperlink the image in a way that does not require consumers to save the hyperlinked image to view it.
(ii) Products not required to bear EnergyGuide or Lighting Facts labels. All Web sites advertising covered showerheads, faucets, water closets, urinals, general service fluorescent lamps, fluorescent lamp ballasts, and metal halide lamp fixtures must include the following disclosures for each covered product. For plumbing products, the Web site may hyperlink to the disclosures using a prominent link labeled “Water Usage” or a similar description which facilitates the disclosure of the covered product’s rated water usage.
(A) Showerheads, faucets, water closets, and urinals. The product’s water use, expressed in gallons and liters per minute (gpm and L/min) or per cycle (gpc and L/cycle) or gallons and liters per flush (gpf and Lpf) as specified in this part.
(B) General service fluorescent lamps, fluorescent lamp ballasts, and metal halide lamp fixtures. A capital letter “E” printed within a circle.
(2) Format. The required Web site disclosures, whether label image, icon, or text, must appear clearly and conspicuously and in close proximity to the covered product’s price on each Web page that contains a detailed description of the covered product and its price. The label and hyperlink icon must conform to the prototypes in appendix L, but may be altered in size to accommodate the Web page’s design, as long as they remain clear and conspicuous to consumers viewing the page.
(b) Covered products offered for sale in paper catalogs. Any manufacturer, distributor, retailer, or private labeler that advertises a covered product in a paper publication that qualifies as a catalog under this Part shall disclose energy information as follows:
(1) Content. (i) Products required to bear EnergyGuide or Lighting Facts labels. All paper catalogs advertising covered products required by this part to bear EnergyGuide or Lighting Facts labels illustrated in appendix L of this part (refrigerators, refrigerator-freezers, freezers, room air conditioners, portable air conditioners, clothes washers, dishwashers, ceiling fans, pool heaters, central air conditioners, heat pumps, furnaces, general service fluorescent lamps, general service lamps, and televisions) must either display an image of the full label prepared in accordance with this part, or make a text disclosure as follows:
(A) Refrigerator, refrigerator-freezer, and freezer. The capacity of the model determined in accordance with this part, the estimated annual operating cost determined in accordance with this part, and a disclosure stating “Your energy cost depends on your utility rates and use. The estimated cost is based on ____ cents per kWh. For more information, visit www.ftc.gov/energy.”
(B) Room air conditioners, portable air conditioners, and water heaters. The capacity of the model determined in accordance with this part, the estimated annual operating cost determined in accordance with this part, and a disclosure stating “Your operating costs will depend on your utility rates and use. The estimated operating cost is based on a [electricity, natural gas, propane, or oil] cost of [$ ____per kWh, therm, or gallon]. For more information, visit www.ftc.gov/energy.”
(C) Clothes washers and dishwashers. The capacity of the model for clothes washers determined in accordance with this part and the estimated annual operating cost for clothes washers and dishwashers determined in accordance with this part, and a disclosure stating “Your energy cost depends on your utility rates and use. The estimated cost is based on [4 washloads a week for dishwashers, or 8 washloads a week for clothes washers] and __ cents per kWh for electricity and $__ per therm for natural gas. For more information, visit www.ftc.gov/energy.”
(D) General service fluorescent lamps or general service lamps. All the information concerning that lamp required by § 305.23 of this part to be disclosed on the lamp’s package, and, for general service lamps, a disclosure stating “Your energy cost depends on your utility rates and use. The estimated cost and life is based on 11 cents per kWh and 3 hours of use per day. For more information, visit www.ftc.gov/energy.” For the “Light Appearance” disclosure required by § 305.23(b)(3)(iv), the catalog need only disclose the lamp’s correlated color temperature in Kelvin (e.g., 2700 K). General service fluorescent lamps or incandescent reflector lamps must also include a capital letter “E” printed within a circle and the statement described in § 305.23(g)(1).
(E) Ceiling fans. All the information required by § 305.21.
(F) Televisions. The estimated annual operating cost determined in accordance with this part and a disclosure stating “Your energy cost depends on your utility rates and use. The estimated cost is based on 12 cents per kWh and 5 hours of use per day. For more information, visit www.ftc.gov/energy.”
(G) Central air conditioners, heat pumps, and furnaces (including boilers), and pool heaters. The capacity of the model determined in accordance with this part and the energy efficiency or thermal efficiency ratings determined in accordance with this part on each page that lists the covered product.
(ii) Products not required to bear EnergyGuide or Lighting Facts labels. All paper catalogs advertising covered products not required by this part to bear labels with specific design characteristics illustrated in appendix L (showerheads, faucets, water closets, urinals, fluorescent lamp ballasts, and metal halide lamp fixtures) must make a text disclosure for each covered product identical to those required for Internet disclosures under § 305.27(a)(1)(ii).
(2) Format. The required disclosures, whether text, label image, or icon, must appear clearly and conspicuously on each page that contains a detailed description of the covered product and its price. If a catalog displays an image of the full label, the size of the label may be altered to accommodate the catalog’s design, as long as the label remains clear and conspicuous to consumers. For text disclosures made pursuant to § 305.27(b)(1)(i) and (ii), the required disclosure may be displayed once per page per type of product if the catalog offers multiple covered products of the same type on a page, as long as the disclosure remains clear and conspicuous.
Additional Requirements
§ 305.28 Test data records.
(a) Test data shall be kept on file by the manufacturer of a covered product for a period of two years after production of that model has been terminated.
(b) Upon notification by the Commission or its designated representative, a manufacturer or private labeler shall provide, within 30 days of the date of such request, the underlying test data from which the water use or energy consumption rate, the energy efficiency rating, the estimated annual cost of using each basic model, or the light output, energy usage, correlated color temperature, and life ratings and, for fluorescent lamps, the color rendering index, for each basic model or lamp type were derived.
§ 305.29 Required testing by designated laboratory.
Upon notification by the Commission or its designated representative, a manufacturer of a covered product shall supply, at the manufacturer’s expense, no more than two of each model of each product to a laboratory, which will be identified by the Commission or its designated representative in the notice, for the purpose of ascertaining whether the estimated annual energy consumption, the estimated annual operating cost, or the energy efficiency rating, or the light output, energy usage and life ratings or, for general service fluorescent lamps, the color rendering index, disclosed on the label or fact sheet or in an industry directory, or, as required in a catalog, or the representation made by the label that the product is in compliance with applicable standards in section 325 of the Act, 42 U.S.C. 6295, is accurate. Such a procedure will only be followed after the Commission or its staff has examined the underlying test data provided by the manufacturer as required by § 305.28(b) and after the manufacturer has been afforded the opportunity to reverify test results from which the estimated annual energy consumption, the estimated annual operating cost, or the energy efficiency rating for each basic model was derived, or the light output, energy usage and life ratings or, for general service fluorescent lamps, the color rendering index, for each basic model or lamp type was derived. A representative designated by the Commission shall be permitted to observe any reverification procedures required by this part, and to inspect the results of such reverification. The Commission will pay the charges for testing by designated laboratories.
Effect of This Part
§ 305.30 Effect on other law.
This regulation supersedes any State regulation to the extent required by section 327 of the Act. Pursuant to the Act, all State regulations that require the disclosure for any covered product of information with respect to energy consumption, other than the information required to be disclosed in accordance with this part, are superseded.
§ 305.31 Stayed or invalid parts.
If any section or portion of a section of this part is stayed or held invalid, the remainder of the part will not be affected.
§ 305.32 [Reserved]
Appendix A1 to Part 305 – Refrigerators With Automatic Defrost
Range Information
| Manufacturer’s rated total refrigerated volume in cubic feet | Range of estimated annual
energy costs (dollars/year) | |
|---|---|---|
| Low | High | |
| Less than 10.5 | $20 | 45 |
| 10.5 to 12.4 | 28 | 40 |
| 12.5 to 14.4 | 33 | 47 |
| 14.5 to 16.4 | 33 | 46 |
| 16.5 to 18.4 | 38 | 52 |
| 18.5 to 20.4 | 42 | 50 |
| 20.5 to 22.4 | 35 | 57 |
| 22.5 to 24.4 | 51 | 59 |
| 24.5 to 26.4 | (*) | (*) |
| 26.5 to 28.4 | (*) | (*) |
| 28.5 and over | (*) | (*) |
(*) No data.
Appendix A2 to Part 305 – Refrigerators and Refrigerator-Freezers With Manual Defrost
Range Information
| Manufacturer’s rated total refrigerated volume in cubic feet | Range of estimated annual
energy costs (dollars/year) | |
|---|---|---|
| Low | High | |
| Less than 10.5 | $11 | $46 |
| 10.5 to 12.4 | (*) | (*) |
| 12.5 to 14.4 | (*) | (*) |
| 14.5 to 16.4 | (*) | (*) |
| 16.5 to 18.4 | (*) | (*) |
| 18.5 to 20.4 | (*) | (*) |
| 20.5 to 22.4 | (*) | (*) |
| 22.5 to 24.4 | (*) | (*) |
| 24.5 to 26.4 | (*) | (*) |
| 26.5 to 28.4 | (*) | (*) |
| 28.5 and over | (*) | (*) |
(*) No data.
Appendix A3 to Part 305 – Refrigerator-Freezers With Partial Automatic Defrost
Range Information
| Manufacturer’s rated total refrigerated volume in cubic feet | Range of estimated annual
energy costs (dollars/year) | |
|---|---|---|
| Low | High | |
| Less than 10.5 | $27 | $55 |
| 10.5 to 12.4 | (*) | (*) |
| 12.5 to 14.4 | (*) | (*) |
| 14.5 to 16.4 | (*) | (*) |
| 16.5 to 18.4 | 53 | 53 |
| 18.5 to 20.4 | 48 | 55 |
| 20.5 to 22.4 | (*) | (*) |
| 22.5 to 24.4 | (*) | (*) |
| 24.5 to 26.4 | (*) | (*) |
| 26.5 to 28.4 | (*) | (*) |
| 28.5 and over | (*) | (*) |
(*) No data.
Appendix A4 to Part 305 – Refrigerator-Freezers With Automatic Defrost With Top-Mounted Freezer No Through-The-Door Ice
Range Information
| Manufacturer’s rated total refrigerated volume in cubic feet | Range of estimated annual
energy costs (dollars/year) | |
|---|---|---|
| Low | High | |
| Less than 10.5 | $40 | $62 |
| 10.5 to 12.4 | 43 | 61 |
| 12.5 to 14.4 | 44 | 64 |
| 14.5 to 16.4 | 45 | 66 |
| 16.5 to 18.4 | 49 | 70 |
| 18.5 to 20.4 | 48 | 72 |
| 20.5 to 22.4 | 51 | 76 |
| 22.5 to 24.4 | 58 | 78 |
| 24.5 to 26.4 | 66 | 81 |
| 26.5 to 28.4 | (*) | (*) |
| 28.5 and over | (*) | (*) |
(*) No data.
Appendix A5 to Part 305 – Refrigerator-Freezers With Automated Defrost With Side-Mounted Freezer No Through-The-Door Ice
Range Information
| Manufacturer’s rated total refrigerated volume in cubic feet | Range of estimated annual
energy costs (dollars/year) | |
|---|---|---|
| Low | High | |
| Less than 10.5 | $54 | $82 |
| 10.5 to 12.4 | (*) | (*) |
| 12.5 to 14.4 | 39 | 40 |
| 14.5 to 16.4 | 49 | 65 |
| 16.5 to 18.4 | 69 | 70 |
| 18.5 to 20.4 | 66 | 70 |
| 20.5 to 22.4 | 70 | 101 |
| 22.5 to 24.4 | 78 | 105 |
| 24.5 to 26.4 | 80 | 109 |
| 26.5 to 28.4 | 91 | 113 |
| 28.5 and over | 84 | 118 |
(*) No data.
Appendix A6 to Part 305 – Refrigerator-Freezers With Automatic Defrost With Bottom-Mounted Freezer No Through-The-Door Ice
Range Information
| Manufacturer’s rated total refrigerated volume in cubic feet | Range of estimated annual
energy costs (dollars/year) | |
|---|---|---|
| Low | High | |
| Less than 10.5 | $42 | $73 |
| 10.5 to 12.4 | 47 | 79 |
| 12.5 to 14.4 | 50 | 77 |
| 14.5 to 16.4 | $53 | $84 |
| 16.5 to 18.4 | 60 | 86 |
| 18.5 to 20.4 | 60 | 91 |
| 20.5 to 22.4 | 62 | 94 |
| 22.5 to 24.4 | 65 | 98 |
| 24.5 to 26.4 | 74 | 96 |
| 26.5 to 28.4 | 67 | 95 |
| 28.5 and over | 91 | 101 |
(*) No data.
Appendix A7 to Part 305 – Refrigerator-Freezers With Automatic Defrost With Bottom-Mounted Freezer With Through-The-Door Ice Service
Range Information
| Manufacturer’s rated total refrigerated volume in cubic feet | Range of estimated annual
energy costs (dollars/year) | |
|---|---|---|
| Low | High | |
| Less than 10.5 | (*) | (*) |
| 10.5 to 12.4 | (*) | (*) |
| 12.5 to 14.4 | (*) | (*) |
| 14.5 to 16.4 | (*) | (*) |
| 16.5 to 18.4 | $80 | $90 |
| 18.5 to 20.4 | 83 | 98 |
| 20.5 to 22.4 | 91 | 103 |
| 22.5 to 24.4 | 77 | 106 |
| 24.5 to 26.4 | 89 | 109 |
| 26.5 to 28.4 | 83 | 112 |
| 28.5 and over | 90 | 113 |
(*) No data.
Appendix A8 to Part 305 – Refrigerator-Freezers With Automatic Defrost With Side-Mounted Freezer With Through-The-Door Ice Service
Range Information
| Manufacturer’s rated total refrigerated volume in cubic feet | Range of estimated annual
energy costs (dollars/year) | |
|---|---|---|
| Low | High | |
| Less than 10.5 | (*) | (*) |
| 10.5 to 12.4 | (*) | (*) |
| 12.5 to 14.4 | (*) | (*) |
| 14.5 to 16.4 | (*) | (*) |
| 16.5 to 18.4 | $87 | $88 |
| 18.5 to 20.4 | 78 | 110 |
| 20.5 to 22.4 | 72 | 109 |
| 22.5 to 24.4 | 76 | 115 |
| 24.5 to 26.4 | 81 | 116 |
| 26.5 to 28.4 | 89 | 122 |
| 28.5 and over | 104 | 124 |
(*) No data.
Appendix A9 to Part 305 – All Refrigerators and Refrigerator-Freezers
Range Information
| Manufacturer’s rated total refrigerated volume in cubic feet | Range of estimated annual
energy costs (dollars/year) | |
|---|---|---|
| Low | High | |
| Less than 10.5 | $11 | $82 |
| 10.5 to 12.4 | 28 | 79 |
| 12.5 to 14.4 | 33 | 77 |
| 14.5 to 16.4 | 33 | 84 |
| 16.5 to 18.4 | 38 | 90 |
| 18.5 to 20.4 | 42 | 110 |
| 20.5 to 22.4 | 35 | 109 |
| 22.5 to 24.4 | 51 | 115 |
| 24.5 to 26.4 | 66 | 116 |
| 26.5 to 28.4 | 67 | 122 |
| 28.5 and over | 84 | 124 |
(*) No data.
Appendix B1 to Part 305 – Upright Freezers With Manual Defrost
Range Information
| Manufacturer’s rated total refrigerated volume in cubic feet | Range of estimated annual
energy costs (dollars/year) | |
|---|---|---|
| Low | High | |
| Less than 5.5 | $18 | $43 |
| 5.5 to 7.4 | 35 | 47 |
| 34 | 40 | |
| 7.5 to 9.4 | 36 | 36 |
| 9.5 to 11.4 | (*) | (*) |
| 11.5 to 13.4 | 42 | 47 |
| 13.5 to 15.4 | 49 | 51 |
| 15.5 to 17.4 | (*) | (*) |
| 17.5 to 19.4 | 49 | 56 |
| 19.5 to 21.4 | (*) | (*) |
| 21.5 to 23.4 | (*) | (*) |
| 23.5 to 25.4 | (*) | (*) |
| 25.5 to 27.4 | (*) | (*) |
| 27.5 to 29.4 | (*) | (*) |
| 29.5 and over | ||
(*) No data.
Appendix B2 To Part 305 – Upright Freezers With Automatic Defrost
Range Information
| Manufacturer’s rated total refrigerated volume in cubic feet | Range of estimated annual
energy costs (dollars/year) | |
|---|---|---|
| Low | High | |
| Less than 5.5 | $37 | $63 |
| 5.5 to 7.4 | (*) | (*) |
| 44 | 69 | |
| 7.5 to 9.4 | 44 | 68 |
| 9.5 to 11.4 | 54 | 79 |
| 11.5 to 13.4 | 54 | 85 |
| 13.5 to 15.4 | 58 | 89 |
| 15.5 to 17.4 | 62 | 84 |
| 17.5 to 19.4 | 63 | 91 |
| 19.5 to 21.4 | 101 | 104 |
| 21.5 to 23.4 | (*) | (*) |
| 23.5 to 25.4 | (*) | (*) |
| 25.5 to 27.4 | (*) | (*) |
| 27.5 to 29.4 | (*) | (*) |
| 29.5 and over | ||
(*) No data.
Appendix B3 To Part 305 – Chest Freezers and All Other Freezers
Range Information
| Manufacturer’s rated total refrigerated volume in cubic feet | Range of estimated annual
energy costs (dollars/year) | |
|---|---|---|
| Low | High | |
| Less than 5.5 | $19 | $32 |
| 5.5 to 7.4 | 31 | 36 |
| 27 | 37 | |
| 7.5 to 9.4 | 28 | 35 |
| 9.5 to 11.4 | 35 | $38 |
| 11.5 to 13.4 | 39 | 42 |
| 13.5 to 15.4 | 38 | 46 |
| 15.5 to 17.4 | 46 | 47 |
| 17.5 to 19.4 | 50 | 53 |
| 19.5 to 21.4 | 48 | 55 |
| 21.5 to 23.4 | 59 | 59 |
| 23.5 to 25.4 | (*) | (*) |
| 25.5 to 27.4 | (*) | (*) |
| 27.5 to 29.4 | (*) | (*) |
| 29.5 and over | ||
(*) No data.
Appendix C1 to Part 305 – Compact Dishwashers
“Compact” includes countertop dishwasher models with a capacity of fewer than eight (8) place settings. Place settings shall be in accordance with appendix C to 10 CFR part 430, subpart B. Load patterns shall conform to the operating normal for the model being tested.
| Capacity | Range of estimated annual
energy costs (dollars/year) | |
|---|---|---|
| Low | High | |
| Compact | $14 | $32 |
Appendix C2 to Part 305 – Standard Dishwashers
“Standard” includes dishwasher models with a capacity of eight (8) or more place settings. Place settings shall be in accordance with appendix C to 10 CFR part 430, subpart B. Load patterns shall conform to the operating normal for the model being tested.
| Capacity | Range of estimated annual
energy costs (dollars/year) | |
|---|---|---|
| Low | High | |
| Standard | $28 | $43 |
Appendix D1 To Part 305 – Water Heaters – Gas
Range Information
| Capacity (first hour rating in gallons) | Range of estimated annual energy costs (dollars/year) | |||
|---|---|---|---|---|
| Natural gas ($/year) | Propane ($/year) | |||
| Low | High | Low | High | |
| “Very Small” – less than 18 | (*) | (*) | (*) | (*) |
| “Low” – 18 to 50.9 | 162 | 172 | (*) | (*) |
| “Medium” – 51 to 74.9 | 179 | 235 | 361 | 476 |
| “High” – 75 and over | 227 | 336 | 460 | 679 |
(*) No data.
Appendix D2 to Part 305 – Water Heaters – Electric
Range Information
| Capacity | Range of estimated annual energy costs (dollars/year) | |
|---|---|---|
| First hour rating | Low | High |
| “Very Small” – less than 18 | (*) | (*) |
| “Low” – 18 to 50.9 | 90 | 357 |
| “Medium” – 51 to 74.9 | 121 | 494 |
| “High” – 75 and over | 173 | 747 |
(*) No data.
Appendix D3 to Part 305 – Water Heaters – Oil
Range Information
| Capacity | Range of estimated annual energy costs (dollars/year) | |
|---|---|---|
| First hour rating | Low | High |
| “Very Small” – less than 18 | (*) | (*) |
| “Low” – 18 to 50.9 | (*) | (*) |
| “Medium” – 51 to 74.9 | (*) | (*) |
| “High” – 75 and over | 625 | 686 |
(*) No data.
Appendix D4 to Part 305 – Water Heaters – Instantaneous – Gas
Range Information
| Capacity | Range of estimated annual energy costs (dollars/year) | |||
|---|---|---|---|---|
| Capacity (maximum flow rate); gallons per minute (gpm) | Natural gas ($/year) | Propane ($/year) | ||
| Low | High | Low | High | |
| “Very Small” – less than 1.6 | 24 | 30 | 50 | 61 |
| “Low” – 1.7 to 2.7 | (*) | (*) | (*) | (*) |
| “Medium” – 2.8 to 3.9 | 144 | 170 | 291 | 343 |
| “High” – 4.0 and over | 210 | 253 | 427 | 511 |
(*) No data.
Appendix D5 to Part 305 – Water Heaters – Instantaneous – Electric
Range Information
| Capacity | Range of estimated annual energy costs (dollars/year) | |
|---|---|---|
| Capacity (maximum flow rate); gallons per minute (gpm) | Low | High |
| “Very Small” – less than 1.6 | 82 | 90 |
| “Low” – 1.7 to 2.7 | (*) | (*) |
| “Medium” – 2.8 to 3.9 | (*) | (*) |
| “High” – 4.0 and over | (*) | (*) |
(*) No data.
Appendix E1 to Part 305 – Room Air ConditionersRoom Air Conditioners
| Manufacturer’s rated cooling capacity in Btu’s/hr | Range of estimated annual energy costs (dollars/year) | |
|---|---|---|
| Low | High | |
| Without Reverse Cycle and with Louvered Sides: | ||
| Less than 6,000 Btu | $40 | $53 |
| 6,000 to 7,999 Btu | 48 | 72 |
| 8,000 to 13,999 Btu | 65 | 127 |
| 14,000 to 19,999 Btu | 115 | 182 |
| 20,000 and more Btu | 189 | 386 |
| Without Reverse Cycle and without Louvered Sides: | ||
| Less than 6,000 Btu | (*) | (*) |
| 6,000 to 7,999 Btu | 58 | 80 |
| 8,000 to 13,999 Btu | 69 | 147 |
| 14,000 to 19,999 Btu | 117 | 158 |
| 20,000 and more Btu | (*) | (*) |
| With Reverse Cycle and with Louvered Sides | 68 | 238 |
| With Reverse Cycle, without Louvered Sides | (*) | (*) |
* No sufficient data submitted.
Appendix E2 to Part 305 – Portable Air Conditioners
Range Information
| Seasonally adjusted cooling capacity range (Btu/h) | Range of estimated annual energy costs (dollars/year) | |
|---|---|---|
| Low | High | |
| Less than 6,000 Btu | $48 | $98 |
| 6,000 to 7,999 Btu | 87 | 120 |
| 8,000 or greater Btu | 104 | 135 |
Appendix F1 to Part 305 – Standard Clothes Washers
“Standard” includes all household clothes washers with a tub capacity of 1.6 cu. ft. or more.
| Capacity | Range of estimated annual
energy costs (dollars/year) | |
|---|---|---|
| Low | High | |
| Standard | $4 | $48 |
Appendix F2 to Part 305 – Compact Clothes Washers
“Compact” includes all household clothes washers with a tub capacity of less than 1.6 cu. ft.
| Capacity | Range of estimated annual
energy costs (dollars/year) | |
|---|---|---|
| Low | High | |
| Compact | $2 | $14 |
(*) No data.
Appendix G1 to Part 305 – Furnaces – Gas
| Furnace type | Range of annual fuel utilization efficiencies
(AFUEs) | |
|---|---|---|
| Low | High | |
| Non-Weatherized Gas Furnaces – All Capacities | 80.0 | 99.0 |
| Weatherized Gas Furnaces – All Capacities | 81.0 | 95.0 |
Appendix G2 to Part 305 – Furnaces – Electric
| Furnace type | Range of annual fuel utilization efficiencies
(AFUEs) | |
|---|---|---|
| Low | High | |
| Electric Furnaces – All Capacities | 100.0 | 100.0 |
Appendix G3 to Part 305 – Furnaces – Oil
| Type | Range of annual fuel utilization efficiencies
(AFUEs) | |
|---|---|---|
| Low | High | |
| Non-Weatherized Oil Furnaces – All Capacities | 83.0 | 96.7 |
| Weatherized Oil Furnaces – All Capacities | (*) | (*) |
(*) No data.
Appendix G4 to Part 305 – Mobile Home Furnaces – Gas
| Type | Range of annual fuel utilization efficiencies
(AFUEs) | |
|---|---|---|
| Low | High | |
| Mobile Home Gas Furnaces – All Capacities | 80.0 | 97.3 |
Appendix G5 to Part 305 – Mobile Home Furnaces – Oil
| Type | Range of annual fuel utilization efficiencies
(AFUEs) | |
|---|---|---|
| Low | High | |
| Mobile Home Oil Furnaces – All Capacities | 80.0 | 87.0 |
Appendix G6 to Part 305 – Boilers (Gas)
| Type | Range of annual fuel utilization efficiencies
(AFUEs) | |
|---|---|---|
| Low | High | |
| Gas Boilers (except steam) – All Capacities | 84 | 96.4 |
| Gas Boilers (steam) – All Capacities | 82 | 83.4 |
Appendix G7 to Part 305 – Boilers (Oil)
| Type | Range of annual fuel utilization efficiencies
(AFUEs) | |
|---|---|---|
| Low | High | |
| Oil Boilers – All Capacities | 85 | 88.2 |
Appendix G8 to Part 305 – Boilers (Electric)
| Type | Range of annual fuel utilization efficiencies
(AFUEs) | |
|---|---|---|
| Low | High | |
| Electric Boilers – All Capacities | 100 | 100 |
Appendix H to Part 305 – Cooling Performance for Central Air Conditioners
| Manufacturer’s rated cooling capacity (btu’s/hr) | Range of SEER2’s | |
|---|---|---|
| Low | High | |
| Central Air Conditioners (Cooling Only): All capacities | 13.4 | 19 |
| Heat Pumps (Cooling Function): All capacities | 13.4 | 19 |
| Central Air Conditioner models allowed only in northern states (listed in § 305.20(g)(13)) (Cooling Only): All capacities | 13.4 | 27 |
| Central Air Conditioner models allowed in all states (Cooling Only): | ||
| All capacities | 13.8 | 27 |
| Heat Pumps (Cooling Function): All capacities | 14.3 | 42 |
| Small-duct, high-velocity Systems | 12 | 15 |
| Central Air Conditioners (Cooling Only): All capacities | 11.7 | 13.7 |
| Heat Pumps (Cooling Function): All capacities | 11.9 | 13.8 |
Appendix I to Part 305 – Heating Performance and Cost for Central Air Conditioners
| Manufacturer’s rated heating capacity (btu’s/hr) | Range of HSPF2’s | |
|---|---|---|
| Low | High | |
| Heat Pumps (Heating Function): All capacities | 6.7 | 8.4 |
| Heat Pumps (Heating Function): All capacities | 7.5 | 14.6 |
| Small-duct, high-velocity Systems | 6.1 | 7.5 |
| Heat Pumps (Heating Function): All capacities | 6.3 | 6.5 |
Appendix J1 to Part 305 – Pool Heaters – Gas
Range Information
| Manufacturer’s rated heating capacities | Range of thermal efficiencies
(percent) | |||
|---|---|---|---|---|
| Natural gas | Propane | |||
| Low | High | Low | High | |
| All capacities | 82.0 | 95.0 | 82.0 | 95.0 |
Appendix J2 to Part 305 – Pool Heaters – Oil
Range Information
| Manufacturer’s rated heating capacities | Range of thermal efficiencies
(percent) | |
|---|---|---|
| Low | High | |
| All capacities | (*) | (*) |
(*) No data.
Appendix K1 to Part 305 – Representative Average Unit Energy Costs for Refrigerators, Refrigerator-Freezers, Freezers, Clothes Washers, Dishwashers, and Water Heater Labels
This table contains the representative unit energy costs that must be utilized to calculate estimated annual energy cost disclosures required under this part for refrigerators, refrigerator-freezers, freezers, clothes washers, dishwashers, and water heaters. This table is based on information published by the U.S. Department of Energy in 2022.
| Type of energy | In commonly used terms | As required by DOE test procedure |
|---|---|---|
| Electricity | ¢14/kWh 1 2 | $.1400/kWh. |
| Natural Gas | $1.21/therm 3 $12.6/MCF | $0.00001209/Btu. 4 |
| No. 2 Heating Oil | $3.45/gallon 7 | $0.00002511/Btu. |
| Propane | $2.23/gallon 8 | $0.00002446/Btu. |
1 kWh stands for kiloWatt hour.
2 1 kWh = 3,412 Btu.
3 1 therm = 100,000 Btu. Natural gas prices include taxes.
4 Btu stands for British thermal unit.
5 MCF stands for 1,000 cubic feet.
6 For the purposes of this table, 1 cubic foot of natural gas has an energy equivalence of 1,039 Btu.
7 For the purposes of this table, one gallon of No. 2 heating oil has an energy equivalence of 13,738 Btu.
8 For the purposes of this table, one gallon of liquid propane has an energy equivalence of 91,333 Btu.
9 For the purposes of this table, one gallon of kerosene has an energy equivalence of 135,000 Btu.
Appendix K2 to Part 305 – Representative Average Unit Energy Costs for Room Air Conditioner and Portable Air Conditioner Labels
This table contains the representative unit energy costs that must be utilized to calculate estimated annual energy cost disclosures required under this part for room air conditioners and portable air conditioners. This table is based on information published by the U.S. Department of Energy in 2017.
| Type of energy | In commonly used terms | As required by DOE test procedure |
|---|---|---|
| Electricity | ¢13/kWh 1 | $.1300/kWh. |
1 kWh stands for kilowatt hour.
Appendix L to Part 305 – Sample Labels
PART 306 – AUTOMOTIVE FUEL RATINGS, CERTIFICATION AND POSTING
General
§ 306.0 Definitions.
As used in this part:
(a) Octane rating means the rating of the anti-knock characteristics of a grade or type of gasoline as determined by dividing by 2 the sum of the research octane number plus the motor octane number.
(b) Research octane number and motor octane number. These terms have the meanings given such terms in the specifications of ASTM D4814-15a, Standard Specification for Automotive Spark-Ignition Engine Fuel, (incorporated by reference, see § 306.13) and, with respect to any grade or type of gasoline, are determined in accordance with one of the following test methods or protocols:
(1) ASTM D2699-15a, Standard Test Method for Research Octane Number of Spark-Ignition Engine Fuel, and ASTM D2700-14, Standard Test Method for Motor Octane Number of Spark-Ignition Engine Fuel, (both incorporated by reference, see § 306.13) or
(2) ASTM D2885-13, Standard Test Method for Determination of Octane Number of Spark-Ignition Engine Fuels by On-Line Direct Comparison Technique, (incorporated by reference, see § 306.13).
(c) Refiner means any person engaged in the production or importation of automotive fuel.
(d) Producer means any person who purchases component elements and combines them to produce and market automotive fuel.
(e) Distributor means any person who receives automotive fuel and distributes such automotive fuel to another person other than the ultimate purchaser.
(f) Retailer means any person who markets automotive fuel to the general public for ultimate consumption.
(g) Ultimate purchaser means, with respect to any item, the first person who purchases such item for purposes other than resale.
(h) Person, for purposes of applying any provision of the Federal Trade Commission Act, 15 U.S.C. 41 et seq., with respect to any provision of this part, includes a partnership and a corporation.
(i) Automotive fuel means liquid fuel of a type distributed for use as a fuel in any motor vehicle, and the term includes, but is not limited to:
(1) Gasoline, an automotive spark-ignition engine fuel, which includes, but is not limited to, gasohol (generally a mixture of approximately 90 percent unleaded gasoline and 10 percent ethanol) and fuels developed to comply with the Clean Air Act, 42 U.S.C. 7401 et seq., such as reformulated gasoline and oxygenated gasoline; and
(2) Alternative liquid automotive fuels, including, but not limited to:
(i) Methanol, denatured ethanol, and other alcohols;
(ii) Mixtures containing 85 percent or more by volume of methanol and/or other alcohols (or such other percentage, as provided by the Secretary of the United States Department of Energy, by rule), with gasoline or other fuels;
(iii) Ethanol flex fuels;
(iv) Liquefied natural gas;
(v) Liquefied petroleum gas;
(vi) Coal-derived liquid fuels;
(vii) Biodiesel;
(viii) Biomass-based diesel;
(ix) Biodiesel blends containing more than 5 percent biodiesel by volume; and
(x) Biomass-based diesel blends containing more than 5 percent biomass-based diesel by volume.
(3) Biodiesel blends and biomass-based diesel blends that contain less than or equal to 5 percent biodiesel by volume and less than or equal to 5 percent biomass-based diesel by volume, and that meet ASTM D975-07b, Standard Specification for Diesel Fuel Oils (incorporated by reference, see § 306.13), are not automotive fuels covered by the requirements of this part.
Provided, however, that biodiesel blends and biomass-based diesel blends that contain less than or equal to 5 percent biodiesel by volume and less than or equal to 5 percent biomass-based diesel by volume, and that meet ASTM D975-09b, Standard Specification for Diesel Fuel Oils (incorporated by reference, see § 306.13), are not automotive fuels covered by the requirements of this part.
(j) Automotive fuel rating means –
(1) For gasoline, the octane rating.
(2) For an alternative liquid automotive fuel other than biodiesel, biomass-based diesel, biodiesel blends, biomass-based diesel blends, and ethanol flex fuels, the commonly used name of the fuel with a disclosure of the amount, expressed as the minimum percentage by volume, of the principal component of the fuel. A disclosure of other components, expressed as the minimum percentage by volume, may be included, if desired.
(3) For biomass-based diesel, biodiesel, biomass-based diesel blends with more than 5 percent biomass-based diesel, and biodiesel blends with more than 5 percent biodiesel, a disclosure of the biomass-based diesel or biodiesel component, expressed as the percentage by volume.
(4) For ethanol flex fuels, a disclosure of the ethanol component, expressed as the percentage by volume and the text “Use Only in Flex-Fuel Vehicles/May Harm Other Engines.”
(k) Biomass-based diesel means a diesel fuel substitute produced from nonpetroleum renewable resources that meets the registration requirements for fuels and fuel additives established by the Environmental Protection Agency under 42 U.S.C. 7545, and includes fuel derived from animal wastes, including poultry fats and poultry wastes, and other waste materials, or from municipal solid waste and sludges and oils derived from wastewater and the treatment of wastewater, except that the term does not include biodiesel as defined in this part.
(l) Biodiesel means the monoalkyl esters of long chain fatty acids derived from plant or animal matter that meet: The registration requirements for fuels and fuel additives under 40 CFR part 79; and the requirements of ASTM D6751-10, Standard Specification for Biodiesel Fuel Blend Stock (B100) for Middle Distillate Fuels, (incorporated by reference, see § 306.13).
(m) Biodiesel blend means a blend of petroleum-based diesel fuel with biodiesel.
(n) Biomass-based diesel blend means a blend of petroleum-based diesel fuel with biomass-based diesel.
(o) Ethanol flex fuels means a mixture of gasoline and ethanol containing more than 10 percent but not greater than 83 percent ethanol by volume.
§ 306.1 What this rule does.
This rule deals with the certification and posting of automotive fuel ratings in or affecting commerce as “commerce” is defined in the Federal Trade Commission Act, 15 U.S.C. 41 et seq. It applies to persons, partnerships, and corporations. If you are covered by this regulation, breaking any of its rules is an unfair or deceptive act or practice under section 5 of that Act. You can be fined up to $10,000 (plus an adjustment for inflation, under § 1.98 of this chapter) each time you break a rule.
§ 306.2 Who is covered.
You are covered by this rule if you are a refiner, importer, producer, distributor, or retailer of automotive fuel.
§ 306.3 Stayed or invalid parts.
If any part of this rule is stayed or held invalid, the rest of it will stay in force.
§ 306.4 Preemption.
The Petroleum Marketing Practices Act (“PMPA”), 15 U.S.C. 2801 et seq., as amended, is the law that directs the FTC to enact this rule. Section 204 of PMPA, 15 U.S.C. 2824, provides:
(a) To the extent that any provision of this title applies to any act or omission, no State or any political subdivision thereof may adopt or continue in effect, except as provided in subsection (b), any provision of law or regulation with respect to such act or omission, unless such provision of such law or regulation is the same as the applicable provision of this title.
(b) A State or political subdivision thereof may provide for any investigative or enforcement action, remedy, or penalty (including procedural actions necessary to carry out such investigative or enforcement actions, remedies, or penalties) with respect to any provision of law or regulation permitted by subsection (a).
Duties of Refiners, Importers and Producers
§ 306.5 Automotive fuel rating.
If you are a refiner, importer, or producer, you must determine the automotive fuel rating of all automotive fuel before you transfer it. You can do that yourself or through a testing lab.
(a) To determine the automotive fuel rating of gasoline, add the research octane number and the motor octane number and divide by two, as explained by ASTM D4814-15a, Standard Specifications for Automotive Spark-Ignition Engine Fuel, (incorporated by reference, see § 306.13). To determine the research octane and motor octane numbers, you may do one of the following:
(1) Use ASTM D2699-15a, Standard Test Method for Research Octane Number of Spark-Ignition Engine Fuel (incorporated by reference, see § 306.13), to determine the research octane number, and ASTM D2700-14, Standard Test Method for Motor Octane Number of Spark-Ignition Engine Fuel (incorporated by reference, see § 306.13), to determine the motor octane number; or
(2) Use the test method set forth in ASTM D2885-13, Standard Test Method for Determination of Octane Number of Spark-Ignition Engine Fuels by On-Line Direct Comparison Technique (incorporated by reference, see § 306.13).
(b) To determine automotive fuel ratings for alternative liquid automotive fuels other than ethanol flex fuels, biodiesel blends, and biomass-based diesel blends, you must possess a reasonable basis, consisting of competent and reliable evidence, for the percentage by volume of the principal component of the alternative liquid automotive fuel that you must disclose. In the case of biodiesel blends, you must possess a reasonable basis, consisting of competent and reliable evidence, for the percentage of biodiesel contained in the fuel. In the case of biomass-based diesel blends, you must possess a reasonable basis, consisting of competent and reliable evidence, for the percentage of biomass-based diesel contained in the fuel. In the case of ethanol flex fuels, you must possess a reasonable basis, consisting of competent and reliable evidence, for the percentage of ethanol contained in the fuel. You also must have a reasonable basis, consisting of competent and reliable evidence, for the minimum percentages by volume of other components that you choose to disclose.
§ 306.6 Certification.
In each transfer you make to anyone who is not a consumer, you must certify the automotive fuel rating of the automotive fuel consistent with your determination. You can do this in either of two ways:
(a) Include a delivery ticket or other paper with each transfer of automotive fuel. It may be an invoice, bill of lading, bill of sale, terminal ticket, delivery ticket, or any other written proof of transfer. It must contain at least these four items:
(1) Your name;
(2) The name of the person to whom the automotive fuel is transferred;
(3) The date of the transfer;
(4) The automotive fuel rating. Octane rating numbers may be rounded off to a whole or half number equal to or less than the number determined by you.
(b) Give the person a letter or other written statement. This letter must include the date, your name, the other person’s name, and the automotive fuel rating of any automotive fuel you will transfer to that person from the date of the letter onwards. Octane rating numbers may be rounded to a whole or half number equal to or less than the number determined by you. This letter of certification will be good until you transfer automotive fuel with a lower automotive fuel rating, except that a letter certifying the fuel rating of biomass-based diesel, biodiesel, a biomass-based diesel blend, a biodiesel blend, or an ethanol flex fuel will be good only until you transfer those fuels with a different automotive fuel rating, whether the rating is higher or lower. When this happens, you must certify the automotive fuel rating of the new automotive fuel either with a delivery ticket or by sending a new letter of certification.
(c) When you transfer automotive fuel to a common carrier, you must certify the automotive fuel rating of the automotive fuel to the common carrier, either by letter or on the delivery ticket or other paper.
§ 306.7 Recordkeeping.
You must keep records of how you determined automotive fuel ratings for one year. They must be available for inspection by Federal Trade Commission and Environmental Protection Agency staff members, or by people authorized by FTC or EPA.
Duties of Distributors
§ 306.8 Certification.
If you are a distributor, you must certify the automotive fuel rating of the automotive fuel in each transfer you make to anyone who is not a consumer.
(a) In the case of gasoline, if you do not blend the gasoline with other gasoline, you must certify the gasoline’s octane rating consistent with the octane rating certified to you. If you blend the gasoline with other gasoline, you must certify consistent with your determination of the average, weighted by volume, of the octane ratings certified to you for each gasoline in the blend, or consistent with the lowest octane rating certified to you for any gasoline in the blend. Whether you blend gasoline or not, you may choose to certify the octane rating of the gasoline consistent with your determination of the octane rating according to the method in § 306.5. In cases involving gasoline, the octane rating may be rounded to a whole or half number equal to or less than the number certified to you or determined by you.
(b) If you do not blend alternative liquid automotive fuels, you must certify consistent with the automotive fuel rating certified to you. If you blend alternative liquid automotive fuels, you must possess a reasonable basis, consisting of competent and reliable evidence, for the automotive fuel rating that you certify for the blend.
(c) You may certify either by using a delivery ticket with each transfer of automotive fuel, as outlined in § 306.6(a), or by using a letter of certification, as outlined in § 306.6(b).
(d) When you transfer automotive fuel to a common carrier, you must certify the automotive fuel rating of the automotive fuel to the common carrier, either by letter or on the delivery ticket or other paper. When you receive automotive fuel from a common carrier, you also must receive from the common carrier a certification of the automotive fuel rating of the automotive fuel, either by letter or on the delivery ticket or other paper.
§ 306.9 Recordkeeping.
You must keep for one year any delivery tickets or letters of certification on which you based your automotive fuel rating certifications. You must also keep for one year records of any automotive fuel rating determinations you made according to § 306.5. They must be available for inspection by Federal Trade Commission and Environmental Protection Agency staff members, or by persons authorized by FTC or EPA.
Duties of Retailers
§ 306.10 Automotive fuel rating posting.
(a) If you are a retailer, you must post the automotive fuel rating of all automotive fuel you sell to consumers. You must do this by putting at least one label on each face of each dispenser through which you sell automotive fuel. If you are selling two or more kinds of automotive fuel with different automotive fuel ratings from a single dispenser, you must put separate labels for each kind of automotive fuel on each face of the dispenser. Provided, however, that you do not need to post the automotive fuel rating of a mixture of gasoline and ethanol containing more than 10 but not more than 15 percent ethanol if the face of the dispenser is labeled in accordance with 40 CFR 1090.1510.
(b)(1) The label, or labels, must be placed conspicuously on the dispenser so as to be in full view of consumers and as near as reasonably practical to the price per unit of the automotive fuel.
(2) You may petition for an exemption from the placement requirements. You must state the reasons that you want the exemption. Petitions for exemptions will be handled pursuant to the procedures prescribed in § 1.31 of this chapter.
(c) In the case of gasoline, if you do not blend the gasoline with other gasoline, you must post the octane rating of the gasoline consistent with the octane rating certified to you. If you blend the gasoline with other gasoline, you must post consistent with your determination of the average, weighted by volume, of the octane ratings certified to you for each gasoline in the blend, or consistent with the lowest octane rating certified to you for any gasoline in the blend. Whether you blend gasoline or not, you may choose to post the octane rating of the gasoline consistent with your determination of the octane rating according to the method in § 306.5. In cases involving gasoline, the octane rating must be shown as a whole or half number equal to or less than the number certified to you or determined by you.
(d) If you do not blend alternative liquid automotive fuels, you must post consistent with the automotive fuel rating certified to you. If you blend alternative liquid automotive fuels, you must possess a reasonable basis, consisting of competent and reliable evidence, for the automotive fuel rating that you post for the blend.
(e)(1) You must maintain and replace labels as needed to make sure consumers can easily see and read them.
(2) If the labels you have are destroyed or are unusable or unreadable for some unexpected reason, you can satisfy the law by posting a temporary label as much like the required label as possible. You must still get and post the required label without delay.
(f) The following examples of automotive fuel rating disclosures for some presently available alternative liquid automotive fuels are meant to serve as illustrations of compliance with this part, but do not limit the Rule’s coverage to only the mentioned fuels:
(1) “Methanol/Minimum ____% Methanol”
(2) “____% Ethanol/Use Only in Flex-Fuel Vehicles/May Harm Other engines”
(3) “M85/Minimum ____% Methanol”
(4) “LPG/Minimum ____% Propane” or “LPG/Minimum ____% Propane and ____% Butane”
(5) “LNG/Minimum ____% Methane”
(6) “B20 Biodiesel Blend/contains biomass-based diesel or biodiesel in quantities between 5 percent and 20 percent”
(7) “20% Biomass-Based Diesel Blend/contains biomass-based diesel or biodiesel in quantities between 5 percent and 20 percent”
(8) “B100 Biodiesel/contains 100 percent biodiesel”
(9) “100% Biomass-Based Diesel/contains 100 percent biomass-based diesel”
(g) When you receive automotive fuel from a common carrier, you also must receive from the common carrier a certification of the automotive fuel rating of the automotive fuel, either by letter or on the delivery ticket or other paper.
§ 306.11 Recordkeeping.
You must keep for one year any delivery tickets or letters of certification on which you based your posting of automotive fuel ratings. You also must keep for one year records of any automotive fuel rating determinations you made according to § 306.5. These records may be kept at the retail outlet or at another, reasonably close location. They must be available for inspection by Federal Trade Commission and Environmental Protection Agency staff members or by persons authorized by FTC or EPA.
Label Specifications
§ 306.12 Labels.
All labels must meet the following specifications:
(a) Layout – (1) For gasoline labels. The label is 3 inches (7.62 cm) wide × 2
(2) For alternative liquid automotive fuel labels (one principal component), other than biodiesel, biomass-based diesel, biodiesel blends, or biomass-based diesel blends. The label is 3 inches (7.62 cm) wide × 2
(3) For alternative liquid automotive fuel labels (two components). The label is 3 inches (7.62 cm) wide × 2