Deceptive Advertising as to Sizes of Viewable Pictures Shown by Television Receiving Sets

FEDERAL TRADE COMMISSION

16 CFR Part 410

Deceptive Advertising as to Sizes of Viewable Pictures Shown by

Television Receiving Sets

AGENCY: Federal Trade Commission.

ACTION: Notice of final, non-substantive amendments.

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SUMMARY: The Federal Trade Commission (``Commission'') is issuing

final, non-substantive amendments to its Rule on Deceptive Advertising

as to Sizes of Viewable Pictures Shown by Television Receiving Sets,

known as the Picture Tube Rule. The Commission solicited comments on

the Rule as part of the agency's periodic review of rules and guides.

Having considered all of the issues raised during the comment period,

the Commission is amending the Rule. These amendments add the metric

equivalents for measurements stated in inches in the examples used in

the Rule, and clarify some of the illustrations.

EFFECTIVE DATE: The effective date of these non-substantive amendments

will be December 2, 1994.

ADDRESSES: Requests for copies of the regulations and the notice of

final, non-substantive amendments should be sent to Public Reference

Branch, room 130, Federal Trade Commission, 6th & Pennsylvania Ave.

NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:

Phillip Priesman, Attorney, Division of Advertising Practices, Federal

Trade Commission, 6th & Pennsylvania Ave. NW., Washington, DC 20580,

(202) 326-2484.

SUPPLEMENTARY INFORMATION:

I. Introduction

The Commission has determined, as part of its oversight

responsibilities, to review rules and guides periodically. These

reviews seek information about the costs and benefits of the

Commission's rules and guides and their regulatory and economic impact.

The information obtained assists the Commission in identifying rules

and guides that warrant modification or recision. On April 19, 1993,

the Commission published in the Federal Register a request for public

comments on its Trade Regulation Rule on Deceptive Advertising as to

Sizes of Viewable Pictures Shown by Television Receiving Sets, 16 CFR

part 410 (``The Picture Tube Rule'' or ``The Rule'').

This Rule, like the other trade regulation rules issued by the

Commission, ``define[s] with specificity acts or practices which are

unfair or deceptive acts or practices in or affecting commerce. Such

rules may include requirements prescribed for the purpose of preventing

such acts or practices. A violation of a rule shall constitute an

unfair or deceptive act or practice in violation of section 5(a)(1) of

(the Federal Trade Commission Act), unless the Commission otherwise

expressly provides in its rule.'' 16 CFR 1.8. The Commission may

initiate a trade regulation rule proceeding ``upon its own initiative

or pursuant to written petition filed with the Secretary by any

interested person stating reasonable grounds therefor,'' 16 CFR 1.9.

II. The Regulation

The Picture Tube Rule sets forth the appropriate means for

disclosing the method by which the dimensions of television screens are

measured, when the measurement is included in any advertisement or

promotional material for the television set. Under the Rule, the method

used to measure the size of a television screen must be clearly and

conspicuously disclosed in close proximity to the size designation.

However, the Rule provides a safe harbor for measurements based on the

horizontal dimensions, which may be given without disclosing that the

dimensions were measured horizontally. The Rule notes that the

measurement must not take into account any curvature of the tube.

Further, disclosing the method of measurement in a footnote rather than

in the body of the ad does not constitute a disclosure in close

proximity to the size designation.

The Rule includes examples of both proper and improper

representations of size descriptions. Previously, these examples were

expressed in terms of inches. Under Executive Order 12770 of July 25,

1991 (56 FR 35801), and the Metric Conversion Act, as amended by the

Omnibus Trade and Competitiveness Act, (15 U.S.C. 205) all federal

agencies are required to use the SI metric system of measurement in all

procurements, grants and other business-related activities (which

include rulemakings), except to the extent that such use is impractical

or is likely to cause significant inefficiencies or loss of markets to

United States firms. To comply with these provisions, the examples in

the Rule have been altered to include the metric equivalent in

parentheses beside the English measurements. Thus, the measurements in

the examples have been revised to read: 15 inches (38.10 cm); 19 inches

(48.26 cm); 20 inches (50.80 cm); 21 inches (53.34 cm); and 262 square

inches (1,690.32 sq. cm). This is a technical amendment to an

illustrative example in the Rule rather than a substantive amendment to

the Rule. It is not intended to create any new requirement under the

Rule to use metric measurements or to use them in any particular

fashion (for example, in hundredths of centimeters). A new note has

been added to the Rule providing that the metric measurements are

included for information purposes only, and are not required to be

included in any of the disclosures.

The Commission received five comments, four of which supported

retaining the Rule in its current form or with minor modifications, and

one which supported repeal of the Rule. Most of the comments indicated

that the Rule continues to provide a benefit to the industry and

consumers, while imposing no significant costs on the industry

members.\1\ The one comment opposing the regulation maintained that it

imposed an unreasonable burden on the Federal Trade Commission in

administering and enforcing the regulation.\2\ In the Federal Register

notice, the Commission requested public comments on the following

questions:

\1\Comments of the Consumer Electronics Group of the Electronic

Industries Association (Electronic Industries Association) at 2-3;

Zenith Electronics Corporation (Zenith) at 1-2; Chuck Cooper at 1.

\2\Comment of the American Association of Advertising Agencies,

Inc. (AAAA) at 1.

(1) Has this trade regulation rule had a significant impact

(cost or benefit) on entities subject to its requirements?

(2) Is there a continuing need for this rule?

(3) What burdens does adherence with this rule place on entities

subject to its requirements?

(4) What changes should be made to this rule to minimize the

economic effect on such entities?

(5) Does this rule overlap or conflict with other federal,

state, or local government laws or regulations?

(6) Have technology or economic conditions changed since this

rule was issued, and, if so, what effect do these changes have on

the rule?

The public comments on these six issues are discussed below.

1. Has This Trade Regulation Rule Had A Significant Impact (Cost or

Benefit) on Entities Subject to Its Requirements?

The majority of the comments indicated that the Picture Tube Rule

has provided significant benefits to the public and the consumer

electronics industry, and imposed very little costs on entities subject

to the Rule's requirements. One comment noted that the Rule did impose

economic costs on television manufacturers in 1966 when the Rule was

first promulgated.\3\ At that time, manufacturers had to prepare and

produce new advertising and promotional materials to comply with the

Rule. Further, the United States was, and is to this day, the only

country that requires screen measurements to be limited to the viewable

picture area.\4\ After the initial modifications, however, the Rule

does not appear to have imposed any further burdens on the industry.

One manufacturer noted that the Rule has had ``virtually no cost

impact'' on the company.\5\

\3\Comment of Electronic Industries Association at 2.

\4\The Commission is aware of an effort by the Canadian

government to adopt similar provisions concerning televisions

advertised for sale in Canada. Further, the Canadian television

industry is considering adopting a voluntary standard that would

provide for measurement of only the viewable area.

\5\Comment of Zenith at 1.

It appears that the Rule has also provided significant benefits.

The comments indicated that by establishing a uniform system of

measurement, the Rule enabled consumers to compare various products

from different manufacturers.\6\ One comment concluded, ``the rule and

industry standard have virtually eliminated the possibility of consumer

deception regarding television screen size.''\7\ The Rule's uniform

system of measurement has also served the consumer electronics

industry. A television manufacturer indicated that the rule has

provided a significant benefit to the company and the industry, and

created ``a legal framework in which a standard industry practice of

planar, diagonal-dimension measurement of the viewable screen area has

emerged.''\8\ After reviewing these comments, the Commission believes

the Rule has provided a clear public benefit, as well as a service to

the industry, while imposing minimal costs on the industry.

\6\Comments of Chuck Cooper at 1; Electronic Industries

Association at 2; Zenith at 1.

\7\Comment of Zenith at 1.

\8\Comment of Zenith at 1.

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2. Is There A Continuing Need for This Rule?

Just as the comments generally maintain that the Rule has provided

significant benefits, most of the comments also support retaining the

Rule. A trade association maintained that the Rule is still needed to

ensure the consistency in screen measurements that is relied upon by

both consumers and industry members.\9\ One manufacturer expressed

concern that if the Federal Trade Commission repealed the Rule, then

other manufacturers would return to using deceptive measurements in

their advertisements.\10\ Based upon these comments, the Commission

finds that there is a continuing need for the Picture Tube Rule.

\9\Comment of Electronic Industries Association at 3.

\10\Comment of Zenith at 1.

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3. What Burdens Does Adherence With This Rule Place on Entities Subject

to Its Requirements?

As noted above, while the Picture Tube may have imposed a burden on

advertisers and manufacturers when it was first promulgated, it appears

that the Rule does not impose any current significant burden on any

entities subject to the Rule. A trade association noted that the

industry has incorporated the regulation's requirements into common

business practice, and thus, the Rule is no longer a burden on industry

members.\11\ A manufacturer also indicated that the Rule ``places

virtually no burden whatsoever on entities subject to it.''\12\ One

comment, however, suggested that the Rule did impose a burden on the

Federal Trade Commission through administration and enforcement of the

Rule.\13\ The Commission has found that enforcing the Rule has entailed

relatively little administrative burden on the agency, given the

industry's general compliance with the Rule. Further, in seeking public

comment, the Commission was soliciting information concerning the

burden on other entities rather than the agency itself.

\11\Comment of Electronic Industries Association at 3.

\12\Comment of Zenith at 2.

\13\Comment of AAAA at 1.

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4. What Changes Should Be Made to This Rule to Minimize the Economic

Effect on Such Entities?

Although most of the comments supported preserving the Picture Tube

Rule, a few comments from industry members suggested changes to the

Rule. The Electronic Industries Association urged the Commission to

eliminate the horizontal dimension as the default measurement.\14\

Currently, the advertised dimensions must reflect the horizontal

measurement unless the alternative method of measurement is clearly and

conspicuously disclosed in close proximity to the size designation.

According to the Association, however, the prevailing practice within

the industry is to use the diagonal plane to measure the screen, and

this is the measurement that is most familiar to consumers. Thus, the

comment urges the Commission to amend the Rule to reflect current

industry practice. A manufacturer, however, recommended that the

Commission retain the existing provision concerning the disclosure of

the method of measurement, suggesting that methods of measuring picture

tubes are still not likely to be instinctively understood by

consumers.\15\

\14\Comment of the Electronic Industries Association at 3.

\15\Comment of Zenith at 1-2.

When the Commission initially promulgated the Picture Tube Rule in

1966, most television manufacturers measured the dimensions of their

sets diagonally, just as they do today. Thus, the horizontal dimension

was not chosen to be the default setting based on a belief that it was

the industry norm. Rather, the Commission found that almost all

rectangular objects, such as blankets and rugs, were measured

horizontally and vertically. Television screens were the only

rectangular-shaped commodities that were measured diagonally. Thus, the

Commission reasoned, if a rectangular screen was measured in the usual

manner for similarly-shaped objects, then no disclosure of the method

of measurement was necessary.\16\ Moreover, the television industry has

adopted the Rule's disclosure requirements as part of its routine

business practice. Reversing the provision, to require a disclosure

when a measurement other than the diagonal dimension is used, will

provide no tangible benefit, and may cause confusion in the industry

and among consumers. Finally, as one television manufacturer noted in

its comment, identifying the method of measurement is useful to

consumers because many would not instinctively understand the diagonal

measurement.\17\ Thus, the Commission sees no reason to revise the

Rule's disclosure requirements at this time.

\16\31 FR 3342 (March 3, 1966).

\17\Comment of Zenith at 1-2.

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Another comment suggested amending Note 2 of the Rule to provide

that a disclosure in a footnote or asterisk would constitute a

disclosure in ``close connection and conjunction'' to the measurement,

as required by the Rule.\18\ However, footnotes or other fine-print

disclosures separated from the body of an advertisement may not be

adequate to qualify statements in the text.\19\ Thus, the Commission

has declined to amend the Rule to allow the disclosure of the method of

measurement in a footnote or asterisk.

\18\Comment of Zenith at 3.

\19\See FTC's Deception Statement, 103 F.T.C. 110, 180 (1983).

See also Thompson Medical Co., 104 F.T.C. 648, 797-98 (1984), aff'd,

791 F.2d 189 (D.C. Cir. 1986), cert. denied, 488 U.S. 955 (1988);

Standard Oil Co. of California, 84 F.T.C. 1401, 1471 (1974), aff'd

as modified, 577 F.2d 653 (9th Cir. 1978).

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One comment urged the Commission to add an additional Note to the

text of the Rule providing that advertisers need not identify the

method of measurement every time an advertisement indicates a

television's dimensions, as long as the method is disclosed in close

connection to the most prominent indication of screen size in the given

advertisement.\20\ The Commission does not believe there is a

sufficient basis to justify this amendment. Many advertisements for

televisions promote multiple television sets of different sizes, and a

single disclosure of the method of measurement may not be noticed by

consumers. The commenter provided no evidence that multiple disclosures

were burdensome. Under the Rule, advertisers can comply simply by

stating ``X inches'' for picture tubes measured horizontally, or ``X

inches diagonal'' for diagonal measurements. Further, almost all of the

comments the Commission received indicated that the current provisions

of the Picture Tube Rule are not a burden to manufacturers or

advertisers. Thus, the Commission has decided not to adopt the proposed

Note, or otherwise provide exceptions to the requirement that the

method of measurement accompany each measurement other than a

horizontal description.

\20\Comment of Zenith at 3.

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In 1972, the staff of the Federal Trade Commission issued an

opinion letter to the Consumer Electronics Group of the Electronic

Industries Association concerning various methods of disclosing the

method of measurement used for television screens.\21\ In the letter,

staff approved a number of proposed disclosures, including ``20 inch

diagonal.'' One comment maintained that the staff opinion letter

approving the use ``20 inch diagonal'' is inconsistent with the Rule

listing the disclosure ``21 inch diagonal set'' as inappropriate.\22\

The examples in the Rule apply to a television screen measuring 19

inches horizontally, 15 inches vertically, and 20 inches diagonally.

Thus, the example states that the disclosure ``21 inch diagonal set''

is inappropriate not because of the description of the method of

measurement, but because the 21 inch measurement is not accurate for

the set used in the example. The disclosure approved in the opinion

letter used the correct 20 inch measurement. While the current Rule

would permit ``20 inch diagonal,'' that phrase is not included in the

list of permitted disclosures. While this list is intended to be

illustrative rather than exhaustive, the Commission has decided to

include this disclosure in the examples provided to remove any

uncertainly that may exist.

\21\Letter from Carthon A. Aldhizer, Attorney, Division of Rules

and Guides, Federal Trade Commission, to Mr. Jack Wyman, Staff Vice

President, Consumer Electronics Group of the Electronic Industries

Association (Feb. 2, 1972).

\22\Comment of Zenith at 3.

One comment suggested adding language to the text of the Rule that

introduces the examples of improper disclosures to provide that these

examples are only improper absent disclosures elsewhere in the

advertisement that clearly indicate the method of measurement utilized

to obtain the given dimensions.\23\ The Commission would be concerned

that combining improper and proper disclosures in the same

advertisement could engender consumer confusion or deception. Thus, the

Commission has determined not to amend the Rule as suggested by this

comment.

\23\Comment of Zenith at 3-4.

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One of the examples identified in the Rule as being unacceptable is

``21 inch over-all diagonal--262 square inch picture.'' One comment

suggested deleting the second half of the example that refers to square

inch measurements, so as to permit such measurements for wide-screen

televisions.\24\ While the Commission has no information on the

likelihood of manufacturers of wide-screen televisions using square

inch dimensions rather than the more traditional forms of measurement,

the Rule does not prohibit measurements based on square inches. Rather,

the example cited above is intended only to convey that the term,

``overall'' is inappropriate, regardless of whether it is accompanied

by the square inch dimensions of the viewable picture screen. To avoid

confusion and to emphasize the phrase that causes concern, the

Commission has determined to modify the example ``21 inch over-all

diagonal--262 square inch picture'' in the list of unacceptable

disclosures to read ``21 inch over-all diagonal.''

\24\Comment of Zenith at 4.

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5. Does This Rule Overlap or Conflict With Other Federal, State, or

Local Government Laws or Regulations?

None of the commenters were aware of any law or regulation that

conflicted or overlapped with the Picture Tube Rule.

6. Have Technology or Economic Conditions Changed Since This Rule Was

Issued, and, If So, What Effect Do These Changes Have on the Rule?

The Picture Tube Rule was first promulgated in 1966. Since then,

both technology and economic conditions have changed significantly. A

much greater percentage of households owns one or more televisions.

Television sets have become more complex and offer an array of

features. The television industry itself has expanded considerably,

with the advent of cable and satellite television, and the introduction

of interactive television combined with personal computers and

telecommunications. However, none of these changes require any

modification of the Picture Tube Rule.

The technological change with the closest nexus to the Picture Tube

Rule is the introduction of high definition television (HDTV), and the

new, wider screens used to display these enhanced digital pictures.

Most television screens today have horizontal/vertical dimensions in a

5:3 proportion, or aspect ratio, but the screens for the HDTV have a

16:9 aspect ratio.\25\ The new ratio, however, does not necessitate any

changes to the Rule, because the existing provisions can easily be

applied to the new screens. HDTVs may be advertised as ``46 inch

diagonal'' sets. Most consumers are familiar with this type of

measurement for televisions, and will be able to use this measurement

to compare different brands of HDTVs, as well as between high

definition and more traditional screens. TV Digest, a trade industry

publication, has suggested adding a ``W'' (for wide-screen) to the

diagonal measure of the new 16:9 television screens.\26\ Nothing in the

existing Rule would prohibit this designation. However, the Commission

does not believe the designation is necessary to avoid consumer

deception or confusion because the ``46 inch diagonal'' or any other

measurement allowed under the Rule should provide consumers with

adequate information as to the size of the HDTV. Consequently, no

additional designation such as ``W'' is required under the Rule for

wide-screen televisions.

\25\Comments of Electronic Industries Association at 2-3; Zenith

at 4-5.

\26\Comment of Zenith at 5.

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One commenter suggested that the Picture Tube Rule be expanded to

encompass video display terminals for computer monitors. He indicated

that he had purchased a monitor advertised as measuring 14 inches, but

discovered that the actual dimensions of the viewable area were 13

inches.\27\ Currently, the Rule is limited to ``television receiving

sets'' and does not encompass computer monitors. The Commission is

considering measurement problems with regard to computer monitors, but

has determined not to initiate a rulemaking proceeding to amend the

Picture Tube Rule at this time. Rather, the Commission is reviewing the

extent of problems in this area, and is exploring other possible

options for addressing such problems.

\27\Comment of Chuck Cooper at 1.

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III. Effective Date

These non-substantive amendments to the Rule will become effective

thirty days after publication in the Federal Register.

List of Subjects in 16 CFR Part 410

Advertising, Picture tubes, Television sets, Trade practices.

Accordingly, part 410 of 16 CFR is amended as follows:

PART 410--DECEPTIVE ADVERTISING AS TO SIZES OF VIEWABLE PICTURES

SHOWN BY TELEVISION RECEIVING SETS

1. The authority citation for part 410 continues to read as

follows:

Authority: 38 Stat. 717 as amended, 15 U.S.C. 41-58.

2. Section 410.1 is amended by revising the examples for Note 2,

and by adding Note 3 to read as follows:

Sec. 410.1 The rule.

* * * * *

Note 2: * * *

Examples of proper size descriptions when a television receiving

set shows a 20-inch picture measured diagonally, a 19-inch picture

measured horizontally, a 15-inch picture measured vertically, and a

picture area of 262 square inches include:

``20 inch (50.80 cm) picture measured diagonally'' or

``20 inch (50.80 cm) diagonal''

``19 inch x 15 inch (48.26 cm x 38.10 cm) picture'' or

``19 inch (48.26 cm) picture'' or

``19 inch (48.26 cm)'' or

``262 square inch (1,690.32 cm. sq.) picture.''

Examples of improper size descriptions of a television set showing

a picture of the size described above include:

``21 inch (53.34 cm) set'' or

``21 inch (53.34 cm) diagonal set'' or

``21 inch (53.34 cm) over-all diagonal'' or

``Brand Name 21.''

Note 3: The numbers in parentheses reflect the metric equivalent

of the English measurements. They are provided for information

purposes only, and are not required to be included in the

disclosures.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 94-27012 Filed 11-1-94; 8:45 am]

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