[Federal Register Volume 85, Number 149 (Monday, August 3, 2020)]
[Notices]
[Pages 46628-46630]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-16718]
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FEDERAL TRADE COMMISSION
Agency Information Collection Activities; Proposed Collection;
Comment Request; Extension
AGENCY: Federal Trade Commission.
ACTION: Notice.
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SUMMARY: In accordance with the Paperwork Reduction Act of 1995 (PRA),
the Federal Trade Commission (FTC or Commission) is seeking public
comment on its proposal to extend for an additional three years the
Office of Management and Budget (OMB) clearance for information
collection requirements in its Use of Prenotification Negative Option
Plans (``Negative Option Rule'' or ``Rule''). That clearance expires on
December 31, 2020.
DATES: Comments must be received on or before October 2, 2020.
ADDRESSES: Interested parties may file a comment online or on paper by
following the instructions in the Request for Comments part of the
SUPPLEMENTARY INFORMATION section below. Write ``Negative Option Rule;
PRA Comment: FTC File No. P072108'' on your comment, and file your
comment online at https://www.regulations.gov by following the
instructions on the web-based form. If you prefer to file your comment
on paper, mail your comment to the following address: Federal Trade
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite
CC-5610 (Annex J), Washington, DC 20580, or deliver your comment to the
following address: Federal Trade Commission, Office of the Secretary,
Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex
J), Washington, DC 20024.
FOR FURTHER INFORMATION CONTACT: Hampton Newsome, Attorney, Division of
Enforcement, Federal Trade Commission, Room CC-9528, 600 Pennsylvania
Avenue NW, Washington, DC 20580, (202) 326-2889.
SUPPLEMENTARY INFORMATION:
Title: Use of Prenotification Negative Option Plans (Negative
Option Rule or Rule), 16 CFR 425.\1\
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\1\ The Commission recently published an Advance Notice of
Proposed Rulemaking seeking comments on the need for amendments to
the current Rule. 84 FR 52393 (Oct. 2, 2019). The present PRA Notice
is not part of that proceeding and merely seeks comment on the
existing burden estimates for the current Rule, which applies only
to ``prenotification'' negative option plans.
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OMB Control Number: 3084-0104.
Type of Review: Extension of a currently approved collection.
Likely Respondents: Sellers of prenotification subscription plans.
Estimated Annual Hours Burden: 9,750 hours.
Estimated Annual Cost Burden: $572,300 (solely related to labor
costs).
Estimated Capital or Other Non-Labor Cost: $0 or de minimis.
Abstract: The Negative Option Rule governs the operation of
prenotification subscription plans. Under these types of plans--which
can include things such as a book of the month club, food of the month
club, or clothing items of the month club--a seller provides a consumer
with automatic shipments of merchandise unless the consumer
affirmatively notifies the seller they do not want the shipment. The
Rule requires that a seller notify a member that they will
automatically ship merchandise to the member and bill the member for
the merchandise if the subscriber fails to expressly reject the
merchandise beforehand within a prescribed time. The Rule protects
consumers by: (a) Requiring that promotional materials disclose the
terms of membership clearly and conspicuously; and (b) establishing
procedures for the administration of such ``negative option'' plans.
Under the PRA, 44 U.S.C. 3501-3521, the FTC is requesting that OMB
renew the clearance for the PRA burden associated with the proposed
collection.
Burden statement:
Estimated annual burden hours: 9,750.
[[Page 46629]]
Based on industry input, staff estimates that approximately 75
existing clubs each require annually about 100 hours to comply with the
Rule's disclosure requirements. Approximately 10 new clubs come into
being each year. Industry estimates of the number of existing clubs
have fluctuated significantly since the early 2000s.\2\ Industry
sources also report to the Commission that a substantial portion of the
existing clubs would make these disclosures absent the Rule because
they help foster long-term relationships with consumers.
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\2\ The industry estimates of existing firms subject to the
Rule's disclosure requirements range from 190 (2005), 158 (2008), 45
(2011), 35 (2014) and 75 (2017). Such fluctuations have most likely
derived from changes in the national economy and trends in the
specific industries subject to the Rule.
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Over the next three years, there will be an average 85 existing
firms per year (75 + 85 + 95 / 3). Thus, the average annual hours of
burden for existing firms is expected to be 8,500 hours (85 clubs x 100
hours). The estimated 10 new clubs entering the market per year require
approximately 125 hours to comply with the Rule, including start up-
time. Thus, the cumulative PRA burden for new clubs is about 1,250
hours (10 clubs x 125 hours). Combined with the estimated burden for
established clubs, the total annual burden is 9,750 hours.
Estimated annual cost burden: $572,300 (solely related to labor
costs).
Based on recent data from the Bureau of Labor Statistics,\3\ the
mean hourly wage for advertising managers is approximately $69 per
hour; compensation for office and administrative support personnel is
approximately $20 per hour. Assuming that managers perform the bulk of
the work, and clerical personnel perform associated tasks (e.g.,
placing advertisements and responding to inquiries about offerings or
prices), the total cost to the industry for the Rule's information
collection requirements would be approximately $572,300 [(80 hours
managerial time x 85 existing clubs x $69 per hour) + (20 hours
clerical time x 85 existing clubs x $20 per hour) + (90 hours
managerial time x 10 new clubs x $69 per hour) + (35 hours clerical
time x 10 new clubs x $20)].
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\3\ Occupational Employment And Wages--May 2019, Table 1, at
https://www.bls.gov/news.release/ocwage.t01.htm.
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Because the Rule has been in effect since 1974, the vast majority
of the negative option clubs have no current start-up costs. For the
new clubs that enter the market each year, the costs associated with
the Rule's disclosure requirements, beyond the additional labor costs
discussed above, are de minimis. Negative option clubs already have
access to the ordinary office equipment necessary to comply with the
Rule. Similarly, the Rule imposes few, if any, printing and
distribution costs. The required disclosures generally constitute only
a small addition to the advertising for negative option plans. Because
printing and distribution expenditures are incurred to market the
product regardless of the Rule, adding the required disclosures results
in marginal incremental expense.
Request for Comments
Pursuant to Section 3506(c)(2)(A) of the PRA, the FTC invites
comments on: (1) Whether the proposed collection of information is
necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility; (2) the
accuracy of the agency's estimate of the burden of the proposed
collection of information, including the validity of the methodology
and assumptions used; (3) ways to enhance the quality, utility, and
clarity of the information to be collected; and (4) ways to minimize
the burden of maintaining records and providing disclosures to
consumers. All comments must be received on or before October 2, 2020.
You can file a comment online or on paper. For the FTC to consider
your comment, we must receive it on or before October 2, 2020. Write
``Negative Option Rule; PRA Comment: FTC File No. P072108'' on your
comment. Your comment--including your name and your state--will be
placed on the public record of this proceeding, including the https://www.regulations.gov website.
Due to the public health emergency in response to the COVID-19
outbreak and the agency's heightened security screening, postal mail
addressed to the Commission will be subject to delay. We encourage you
to submit your comments online through the https://www.regulations.gov
website.
If you prefer to file your comment on paper, write ``Negative
Option Rule; PRA Comment: FTC File No. P072108'' on your comment and on
the envelope, and mail your comment to the following address: Federal
Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW,
Suite CC-5610 (Annex J), Washington, DC 20580; or deliver your comment
to the following address: Federal Trade Commission, Office of the
Secretary, Constitution Center, 400 7th Street SW, 5th Floor, Suite
5610 (Annex J), Washington, DC 20024. If possible, submit your paper
comment to the Commission by courier or overnight service.
Because your comment will become publicly available at https://www.regulations.gov, you are solely responsible for making sure that
your comment does not include any sensitive or confidential
information. In particular, your comment should not include any
sensitive personal information, such as your or anyone else's Social
Security number; date of birth; driver's license number or other state
identification number, or foreign country equivalent; passport number;
financial account number; or credit or debit card number. You are also
solely responsible for making sure that your comment does not include
any sensitive health information, such as medical records or other
individually identifiable health information. In addition, your comment
should not include any ``trade secret or any commercial or financial
information which . . . is privileged or confidential'' --as provided
by Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule
4.10(a)(2), 16 CFR 4.10(a)(2)--including in particular competitively
sensitive information such as costs, sales statistics, inventories,
formulas, patterns, devices, manufacturing processes, or customer
names.
Comments containing material for which confidential treatment is
requested must be filed in paper form, must be clearly labeled
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular,
the written request for confidential treatment that accompanies the
comment must include the factual and legal basis for the request, and
must identify the specific portions of the comment to be withheld from
the public record. See FTC Rule 4.9(c). Your comment will be kept
confidential only if the General Counsel grants your request in
accordance with the law and the public interest. Once your comment has
been posted publicly at www.regulations.gov, we cannot redact or remove
your comment unless you submit a confidentiality request that meets the
requirements for such treatment under FTC Rule 4.9(c), and the General
Counsel grants that request.
The FTC Act and other laws that the Commission administers permit
the collection of public comments to consider and use in this
proceeding, as appropriate. The Commission will consider all timely and
responsive public comments that it receives on or before October 2,
2020. For information on the Commission's privacy policy, including
routine uses permitted by the
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Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.
Josephine Liu,
Assistant General Counsel for Legal Counsel.
[FR Doc. 2020-16718 Filed 7-31-20; 8:45 am]
BILLING CODE 6750-01-P