Deceptive Use of ``Leakproof,'' ``Guaranteed Leakproof,'' Etc., as Descriptive of Dry Cell Batteries

FEDERAL TRADE COMMISSION

16 CFR Part 403

Deceptive Use of ``Leakproof,'' ``Guaranteed Leakproof,'' Etc.,

as Descriptive of Dry Cell Batteries

AGENCY: Federal Trade Commission.

ACTION: Advance notice of proposed rulemaking.

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SUMMARY: The Federal Trade Commission (the ``FTC'' or ``Commission'')

proposes to commence a rulemaking proceeding to repeal its Trade

Regulation Rule on Deceptive Use of ``Leakproof,'' ``Guaranteed

Leakproof,'' Etc., as Descriptive of Dry Cell Batteries (``the Dry Cell

Battery Rule'' or ``the Rule''), 16 CFR Part 403. The Commission is

soliciting written comments, data, and arguments concerning this

proposal. The Commission also is requesting comments about the overall

costs and benefits of the Rule and its overall regulatory and economic

impact as a part of its systematic review of all current Commission

regulations and guides.

DATES: Written comments must be submitted on or before April 24, 1997.

ADDRESSES: Written comments should be identified as ``16 CFR Part 403

Comment'' and sent to Secretary, Federal Trade Commission, Room 159,

Sixth St. and Pennsylvania Ave., N.W., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Neil Blickman, Attorney, FTC, Bureau

of Consumer Protection, Division of Enforcement, Sixth St. and

Pennsylvania Ave., N.W., Washington, DC 20580, (202) 326-3038.

SUPPLEMENTARY INFORMATION:

Part A--Background Information

This notice is being published pursuant to Section 18 of the

Federal Trade Commission (``FTC'') Act, 15 U.S.C. 57a et seq., the

provisions of Part 1, Subpart B of the Commission's Rules of Practice,

16 CFR 1.7 et seq., and 5 U.S.C. et seq. This authority permits the

Commission to promulgate, modify, and repeal trade regulations rules

that define with specificity acts or practices that are unfair or

deceptive in or affecting commerce within the meaning of Section

5(a)(1) of the FTC Act, 15 U.S.C. 45(a)(1).

On May 20, 1964, the Commission promulgated a trade regulation rule

that states that in connection with the sale of dry cell batteries in

commerce, the use of the word ``leakproof,'' the term ``guaranteed

leakproof,'' or any other word or term of similar import, or any

abbreviation thereof, in advertising, labeling, marking or otherwise,

as descriptive of dry cell batteries, constitutes an unfair method of

competition and an unfair or deceptive act or practice in violation of

section 5 of the FTC Act (16 CFR 403.4). This Rule was based on the

Commission's finding that, despite efforts by dry cell battery

manufacturers to eliminate electrolyte leakage, battery leakage and

damage therefrom occurs from the use to which consumers ordinarily

subject dry cell batteries.

The Rule does not prohibit manufacturers or marketers from offering

or furnishing guarantees that provide for restitution in the event of

damage from battery leakage, provided no representation is made,

directly or indirectly, that dry cell batteries will not leak (16 CFR

403.5). The Rule further provides that in the event any person develops

a new dry cell battery that he believes is in fact leakproof, he may

apply to the Commission for an amendment to the Rule, or other

appropriate relief (16 CFR 403.6).

The Commission conducted an informal review of industry practices

by examining the advertising, labeling and marking of dry cell

batteries available for retail sale. The products, packaging and

advertising inspected contained no presentations that the batteries so

described were leakproof. The Commission's review, therefore, indicated

general compliance with the Rule's provisions. Moreover, the Commission

has no record of receiving any complaints regarding non-compliance with

the Rule, or of initiating any law enforcement actions alleging

violations of the Rule.

Additionally, the Commission's review indicated general voluntary

compliance by the industry with the requirements of American National

Standards Institute (``ANSI'') Standard C18.1M-1992 Dry Cells and

Batteries--Specifications. The ANSI standard contains specifications

for dry cell batteries, and requirements for labeling the products and

their packages. The ANSI standard requires the following information to

be printed on the outside of each battery (when necessary, the standard

permits some of this information to be applied to the unit package):

(1) The name or trade name of the manufacturer; (2) the ANSI/National

Electronic Distributors Association number, or some other identifying

designation; (3) year and month, week or day of manufacture, which may

be a code, or the expiration of a guarantee period, in a clear readable

form; (4) the nominal voltage; (5) terminal polarity; and (6) warnings

or cautionary notes where applicable.\1\

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\1\ See section 8.1 of ANSI Standard C18.1M-1992.

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The ANSI standard recommends that dry cell battery manufacturers

and sellers include on their products and packages several battery user

guidelines and warnings that are relevant to this proceeding. They are:

(1) although batteries basically are trouble-free products, conditions

of abuse or misuse can cause leakage; (2) failure to replace all

batteries in a unit at the same time may result in battery leakage; (3)

mixing batteries of various chemical systems, ages, applications, types

or manufacturers may result in poor device performance and battery

leakage; (4) attempting to recharge a non-rechargeable battery is

unsafe because it could cause leakage; (5) reverse insertion of

batteries may cause charging, which may result in leakage; (6) devices

that operate on either household current or battery power may subject

batteries to a charging current, which may cause leakage; (7) do not

store batteries or battery-powered equipment in high-temperature areas;

and (8) do not dispose of batteries in fire.\2\

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\2\ See section 7.5 of ANSI Standard C18.1M-1992.

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At a minimum, each dry cell battery and battery package inspected

by Commission staff informed consumers that the batteries may explode

or leak if recharged, inserted improperly, disposed of in fire, or

mixed with different battery types. Based on the foregoing, the

Commission has tentatively concluded that industry members that comply

with the standard's point-of-sale disclosure requirements, of

necessity, also are in compliance with the Rule.

Part B--Objectives

Based on the review described above, the Commission has tentatively

determined that the Rule is no longer necessary.\3\ the objective of

this notice is

[[Page 14051]]

to solicit comment on whether the Commission should initiate a

rulemaking proceeding to repeal the Dry Cell Battery Rule.

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\3\ Repealing the Dry Cell Battery Rule would eliminate the

Commission's ability to obtain civil penalties for any future

misrepresentations that dry cell batteries are leakproof. The

Commission, however, has tentatively determined that repealing the

Rule would not seriously jeopardize the Commission's ability to act

effectively. Any significant problems that might arise could be

addressed on a case-by-case basis under Section 5 of the FTC Act, 15

U.S.C. 45, either administratively or through Section 13(b) action,

15 U.S.C. 53(b), filed in federal district court. Prosecuting

serious misrepresentations in district court allows the Commission

to obtain injunctive relief as well as equitable remedies, such as

redress or disgorgement.

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Part C--Alternative Actions

The Commission is not considering any alternative other than the

possibility of repealing the Dry Cell Battery Rule.

Part D--Request for Comments

Members of the public are invited to comment on any issues or

concerns they believe are relevant or appropriate to the Commission's

review of the Dry Cell Battery Rule. The Commission requests that

factual data upon which the comments are based be submitted with the

comments. In this section, the Commission identifies the issues on

which it solicits public comments. The identification of issues is

designed to assist the public and should not be construed as a

limitation on the issues on which public comment may be submitted.

Questions

(1) Is there a continuing need for the Rule?

(a) What benefits has the Rule provided to purchasers of the

products affected by the Rule?

(b) Has the Rule imposed costs on purchasers?

(2) What changes, if any, should be made to the Rule to increase

the benefits of the Rule to purchasers?

(a) How would these changes affect the costs the Rule imposes on

firms subject to its requirements?

(3) What significant burdens or costs, including costs of

compliance, has the Rule imposed on firms subject to its requirements?

(a) Has the Rule provided benefits to such firms?

(4) What changes, if any, should be made to the Rule to reduce the

burdens or costs imposed on firms subject to its requirements?

(a) How would these changes affect the benefits provided by the

Rule?

(5) Does the Rule overlap or conflict with other federal, state, or

local laws or regulations?

(6) Since the Rule was issued, what effects, if any, have changes

in relevant technology or economic conditions had on the rule?

(7) Are ``leakproof'' or ``guaranteed leakproof'' representations

by manufacturers and marketers of dry cell batteries a significant

problem in the marketplace?

(8) Should the Rule, or any portion of it, be kept in effect, or

should it be repealed?

(9) How would repealing the Rule affect the benefits experienced by

consumers?

(10) How would repealing the Rule affect the benefits and burdens

experienced by firms subject to Rule's requirements?

(11) Does the existence of ANSI Standard C18.1M-1992 for Dry Cell

Batteries eliminate or greatly lessen the need for the Rule?

Authority: Section 18(d)(2)(B) of the Federal Trade Commission

Act, 15 U.S.C. 57a(d)(2)(B).

List of Subjects in 16 CFR Part 403

Advertising, Dry cell batteries, Labeling, Trade practices.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 97-7433 Filed 3-24-97; 8:45 am]

BILLING CODE 6750-01-M