Rule Concerning Deceptive Advertising and Labeling as to Size of Tablecloths and Related Products

FEDERAL TRADE COMMISSION

16 CFR Part 404

Rule Concerning Deceptive Advertising and Labeling as to Size of

Tablecloths and Related Products

AGENCY: Federal Trade Commission.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The Federal Trade Commission (``Commission'') announces the

commencement of a rulemaking proceeding for the trade regulation rule

concerning Deceptive Advertising and Labeling as to Size of Tablecloths

and Related Products (``Tablecloth Rule'' or ``Rule''), 16 CFR Part

404. The proceeding will address whether or not the Tablecloth Rule

should be repealed. The Commission invites interested parties to submit

written data, views, and arguments on how the Rule has affected

consumers, businesses and others, and on whether there currently is a

need for the Rule. This notice includes a description of the procedures

to be followed, an invitation to submit written comments, a list of

questions and issues upon which the Commission particularly desires

[[Page 48068]]

comments, and instructions for prospective witnesses and other

interested persons who desire to participate in the proceeding.

DATES: Written comments must be submitted on or before October 18,

1995.

Notifications of interest in testifying must be submitted on or

before October 18, 1995. If interested parties request the opportunity

to present testimony, the Commission will publish a notice in the

Federal Register stating the time and place at which the hearings will

be held and describing the procedures that will be followed in

conducting the hearings. In addition to submitting a request to

testify, interested parties who wish to present testimony must submit,

on or before October 18, 1995, a written comment or statement that

describes the issues on which the party wishes to testify and the

nature of the testimony to be given.

ADDRESSES: Written comments and requests to testify should be submitted

to Office of the Secretary, Federal Trade Commission, Room H-159, Sixth

Street and Pennsylvania Avenue, N.W., Washington, DC 20580, telephone

number 202-326-2506. Comments and requests to testify should be

identified as ``16 CFR Part 404--Comment--Tablecloth Rule'' and ``16

CFR Part 404--Request to Testify--Tablecloth Rule,'' respectively. If

possible, submit comments both in writing and on a personal computer

diskette in Word Perfect or other word processing format (to assist in

processing, please identify the format and version used). Written

comments should be submitted, when feasible and not burdensome, in five

copies.

FOR FURTHER INFORMATION CONTACT:

John A. Crowley, Attorney, Bureau of Consumer Protection, Division of

Service Industry Practices, Room H-200, Sixth Street and Pennsylvania

Avenue, N.W., Washington, DC 20580, telephone number 202-326-3280.

SUPPLEMENTARY INFORMATION:

I. Introduction

On May 23, 1995 the Commission published an Advance Notice of

Proposed Rulemaking (``ANPR'') seeking comment on the proposed repeal

of the Tablecloth Rule, 60 FR 27242. In accordance with mandates of

section 18 of the Federal Trade Commission Act (``FTC Act''), 15 U.S.C.

47a, the ANPR was sent to the Chairman of the Committee on Commerce,

Science, and Transportation, United States Senate and the Chairman of

the Subcommittee on Commerce, Trade and Hazardous Materials, United

States House of Representatives. The ANPR comment period closed on June

22, 1995. The Commission received no public comments.

Pursuant to the FTC Act, 15 U.S.C. 41-58, and the Administrative

Procedure Act, 5 U.S.C. 551-59, 701-06, by this Notice of Proposed

Rulemaking (``NPR'') the Commission initiates a proceeding to consider

whether the Tablecloth Rule should be repealed or remain in effect, and

solicits public comments.\1\ The Commission is also interested in

comments on whether the Rule should be streamlined or otherwise

amended. If the Commission determines, based on the data,views and

arguments submitted, that the Commission should consider additional

alternatives, it will publish a supplemental notice of proposed

rulemaking and will request public comments on those alternatives.

\1\ In accordance with mandates of section 18 of the FTC Act, 15

U.S.C. 57a, the Commission submitted this NPR to the Chairman of the

Committee on Commerce, Science, and Transportation, United States

Senate and the Chairman of the Subcommittee on Commerce, Trade and

Hazardous Materials, United States House of Representatives 30 days

prior to publication of the NPR.

---------------------------------------------------------------------------

The Commission is undertaking this rulemaking proceeding as part of

the Commission's ongoing program of evaluating trade regulation rules

and industry guides to determine their effectiveness, impact, cost and

need. This proceeding also responds to President Clinton's National

Regulatory Reinvention Initiative, which, among other things, urges

agencies to eliminate obsolete or unnecessary regulations.

II. Background Information

The Tablecloth Rule regulates the advertising, labeling and marking

of the dimensions of tablecloths and related products. The Commission

had found that the practice of labeling tablecloths and related

products by the dimensions of the unfinished material used in their

construction (cut size) was misleading consumers about the actual size

of tablecloths and related products. To correct this misconception, the

Commission in 1964 promulgated the Tablecloth Rule which provides that

it is an unfair method of competition and an unfair and deceptive act

or practice to use the ``cut size'' of the materials from which a

tablecloth or related product is made to describe the size of a

tablecloth or related product unless:

(a) ``Such `cut size' dimensions are accompanied by the words `cut

size' ''; and

(b) ``The `cut size' is accompanied by a clear and conspicuous

disclosure of the dimensions of the finished products and by an

explanation that such dimensions constitute the finished size''.\2\

\2\ The rule then gives an example of proper size marking:

``Finished size 50'' x 68''; Cut size 52'' x 70''.''

---------------------------------------------------------------------------

The Commission, as part of its oversight responsibilities, reviews

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

rescission. Accordingly on April 19, 1993, the Commission published in

the Federal Register a request for public comments on its Trade

Regulation Rule on Deceptive Advertising and labeling as to Size of

Tablecloths and Related Products, 16 CFR 404 (``Rule'').

In its Request for Comment, the Commission asked commenters to

address the costs and benefits of the rule, whether there was a

continuing need for this regulation, the burdens placed on businesses

subject to this regulation, whether changes should be made, any

conflicts with other laws and whether changes in technology affected

the rule.

Only one specific comment relating to the Tablecloth Rule was

received, which generally supported a continuation of this regulation.

In addition to this specific comment, one general comment,

applicable to several rules being reviewed was received from an

advertising agency association. This organization recommended

rescission of the Tablecloth Rule, because the general prohibitions of

the FTC Act covering false and deceptive advertising apply to the

tablecloth and related products industry and the Rule creates

unnecessary administrative costs for the government, industry members

and consumers.

Commission staff also engaged in an informal review of industry

practices by examining the marking of dimensions on tablecloths and

other items subject to the rule available for retail sale at several

national chain stores. This informal review revealed no instances of

rule violations. In fact, it appeared from that limited review that

industry products were marked with only the finished size.

Additionally, the Commission has no record of receiving any complaint

regarding non-compliance with the rule or of initiating any law

enforcement actions alleging violations of the rule's requirements, 60

[[Page 48069]]

FR 27242. Finally, the Uniform Packaging and Labeling Regulation, which

has been adopted by 47 states, regulates the labeling of tablecloths

and related products, and appears to provide that these items must be

labeled with their finished size, 60 FR 27242.

On May 23, 1995, the Commission issued an Advance Notice of

Proposed Rulemaking (ANPR) based on a review of the submissions

received in response to the aforementioned request for comments. The

Commission determined that there may no longer be a need to continue

the Rule in light of the apparent changes in industry practices and the

existence of laws in nearly all of the states that appear to mandate

point-of-sale disclosures similar to those required by the Rule. No

comments were received in response to this request.

III. Rulemaking Procedures

The Commission finds that the public interest will be served by

using expedited procedures in this proceeding. First, there do not

appear to be any material issues of disputed fact to resolve in

determining whether to repeal the Rule. Second, the use of expedited

procedures will support the Commission's goal of eliminating obsolete

or unnecessary regulations without an undue expenditure of resources,

while ensuring that the public has an opportunity to submit data, views

and arguments on whether the Commission should repeal the Rule.

The Commission, therefore, has determined, pursuant to 16 CFR 1.20,

to use the procedures set forth in this notice. These procedures

include: (1) Publishing this Notice of Proposed Rulemaking; (2)

soliciting written comments on the Commission's proposal to repeal the

Rule; (3) holding an informal hearing, if requested by interested

parties; (4) obtaining a final recommendation from staff and (5)

announcing final Commission action in a notice published in the Federal

Register.

IV. Invitation to Comment and Questions for Comment

Interested persons are requested to submit written data, views or

arguments on any issue of fact, law or policy they believe may be

relevant to the Commission's decision on whether to repeal the Rule.

The Commission requests that commenters provide representative factual

data in support of their comments. Individual firms' experiences are

relevant to the extent they typify industry experience in general or

the experience of similar-sized firms. Commenters opposing the proposed

repeal of the Rule should explain the reasons they believe the Rule is

still needed and, if appropriate, suggest specific alternatives.

Proposals for alternative requirements should include reasons and data

that indicate why the alternatives would better protect consumers from

unfair or deceptive acts or practices under section 5 of the FTC Act,

15 U.S.C. 45.

Although the Commission welcomes comments on any aspect of the

proposed repeal of the Rule, the Commission is particularly interested

in comments on questions and issues raised in this Notice. All written

comments should state clearly the question or issue that the commenter

is addressing.

Before taking final action, the Commission will consider all

written comments timely submitted to the Secretary of the Commission

and testimony given on the record at any hearings scheduled in response

to requests to testify. Written comments submitted will be available

for public inspection in accordance with the Freedom of Information

Act, 5 U.S.C. 552, and Commission regulations, on normal business days

between the hours of 8:30 a.m. to 5:00 p.m. at the Federal Trade

Commission, Public Reference Room, Room H-130, Federal Trade

Commission, Sixth Street and Pennsylvania Avenue, NW., Washington, DC

20580, telephone number 202-326-2222.

Questions

(1) Do manufacturers and sellers of tablecloths currently use ``cut

size'' as a means of marking the size of their products for sale at

retail to customers?

(2) Does the fact that nearly all of the states have adopted the

Uniform Packaging and Labeling Regulation, which governs the labeling

of tablecloths, eliminate or greatly lessen the need for the Tablecloth

Rule?

(3) Are there other federal or state laws or regulations, or

private industry standards that eliminate a need for the Rule?

(4) What are the benefits and the costs of the Rule to consumers?

(5) What are the benefits and the costs of the Rule to firms

subject to the Rule's requirements?

(6) Does this Rule overlap or conflict with other federal, state,

or local government laws or regulations?

(7) Is there a continuing need for the Rule or should the Rule be

repealed?

V. Requests for Public Hearings

Because there does not appear to be any dispute as to the material

facts or issues raised by this proceeding and because written comments

appear adequate to present the views of all interested parties, a

public hearing has not been scheduled. If any person would like to

present testimony at a public hearing, he or she should follow the

procedures set forth in the DATES and ADDRESSES sections of this

Notice.

VI. Preliminary Regulatory Analysis

The Regulatory Flexibility Act (``RFA''), 5 U.S.C. 601-11, requires

an analysis of the anticipated impact of the proposed repeal of the

Rule on small businesses.\3\ The analysis must contain, as applicable,

a description of the reasons why action is being considered, the

objectives of and legal basis for the proposed action, the class and

number of small entities affected, the projected reporting,

recordkeeping and other compliance requirements being proposed, any

existing federal rules which may duplicate, overlap or conflict with

the proposed action, and any significant alternatives to the proposed

action that accomplish its objectives and, at the same time, minimize

its impact on small entities.

\3\ Section 22 of the FTC Act, 15 U.S.C. 57b-3, also requires

the Commission to perform ``regulatory impact analyses'' of a

proposed rule, but only if the rule will have certain

``significant'' economic or regulatory effects. The Commission has

determined that a preliminary regulatory analysis is not required by

section 22 in this proceeding because the Commission has no reason

to believe that repealing the Rule will have a ``significant''

economic or regulatory impact, either beneficial or detrimental,

upon persons subject to the Rule or upon consumers.

---------------------------------------------------------------------------

A description of the reasons why action is being considered and the

objectives of the proposed repeal of the Rule have been explained

elsewhere in this Notice. Repeal of the Rule would appear to have

little or no effect on any small business. The Commission is not aware

of any existing federal laws or regulations that would conflict with

repeal of the Rule.

In light of these reasons, the Commission certifies, pursuant to

section 605 of RFA, 5 U.S.C. 605, that if the Commission determines to

repeal the Rule that action will not have a significant impact on a

substantial number of small entities. To ensure that no substantial

economic impact is being overlooked, however, the Commission requests

comments on this issue. After reviewing any comments received, the

Commission will determine whether it is necessary to prepare a final

regulatory flexibility analysis.

VII. Paperwork Reduction Act

The Tablecloth Rule does not impose ``information collection

requirements'' under the Paperwork Reduction Act

[[Page 48070]]

(``PRA''), 44 U.S.C. 3501 et seq. The Rule, however, does contain

disclosure requirements, which specify that certain additional

information must be given whenever the words ``cut size'' are used to

describe the dimensions of a tablecloth or other product.\4\

Accordingly, repeal of the Rule would eliminate any burdens on the

public imposed by these disclosure requirements.

\4\ Under amendments to the P.R.A. in the Paperwork Reduction

Act of 1995 (Pub. L. 104-13, 109 Stat. 163, to be codified at 44

U.S.C. 3501-20), which will become effective on October 1, 1995,

these third-party disclosures may constitute a ``collection of

information'' for which OMB clearance must be sought.

---------------------------------------------------------------------------

VIII. Additional Information for Interested Persons

A. Motions or Petitions

Any motions or petitions in connection with this proceeding must be

filed with the Secretary of the Commission.

B. Communications by Outside Parties to Commissioners or Their Advisors

Pursuant to Rule 1.18(c) of the Commission's Rules of Practice, 16

CFR 1.18(c), communications with respect to the merits of this

proceeding from any outside party to any Commissioner or Commissioner's

advisor during the course of this rulemaking shall be subject to the

following treatment. Written communications, including written

communications from members of Congress, shall be forwarded promptly to

the Secretary for placement on the public record. Oral communications,

not including oral communications from members of Congress, are

permitted only when 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 are promptly

placed on the public record, together with any written communications

relating to such oral communications. Memoranda prepared by a

Commissioner or Commissioner's advisor setting forth the contents of

any oral communications from members of Congress shall be placed

promptly on the public record. If the communication with a member of

Congress is transcribed verbatim or summarized, the transcript or

summary will be placed promptly on the public record.

List of Subjects in 16 CFR Part 404

Advertising, Trade practices, Tablecloths and related products.

Authority: 15 U.S.C. 41-58.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 95-23042 Filed 9-15-95; 8:45 am]

BILLING CODE 6750-01-M