Guides for the Decorative Wall Paneling Industry

FEDERAL TRADE COMMISSION

16 CFR PART 243

Guides for the Decorative Wall Paneling Industry

AGENCY: Federal Trade Commission.

ACTION: Rescission of the Guides for the Decorative Wall Paneling

Industry.

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SUMMARY: On March 27, 1998, the Commission published a Federal Register

notice initiating a regulatory review of the Federal Trade Commission's

(``Commission'') Guides for the Decorative Wall Paneling Industry

(``Decorative Wall Paneling Guides'' or ``the Guides''), 16 CFR Part

243, under the Commission's program to review all rules and guides. The

Commission has now completed its review and determined to rescind the

Guides.

EFFECTIVE DATE: December 21, 1998.

ADDRESS: Requests for copies of the Federal Register notice should be

sent to the Consumer Response Center, Room 130, Federal Trade

Commission, 600 Pennsylvania Ave., N.W., Washington, DC 20580. The

notice and news release announcing the rescission of the Guides are

available on the Internet at the Commission's website, ``http://

www.ftc.gov''.

FOR FURTHER INFORMATION CONTACT: Eric Nickerson, Investigator, Federal

Trade Commission, Denver Regional Office, 1961 Stout Street, Suite

1523, Denver, CO 80294, telephone number (303) 844-3584, E-mail

``[email protected]''.

SUPPLEMENTARY INFORMATION: The Decorative Wall Paneling Guides,

promulgated by the Commission on December 15, 1971, provide guidance to

manufacturers, retail distributors, and other suppliers (``sellers'')

of decorative wall panels with regard to labeling, advertising, and

promoting their products in a manner consistent with Section 5 of the

Federal Trade Commission Act, 15 U.S.C. 45. The Guides are designed to

protect purchasers from being misled by the appearance of a product, or

by deceptive descriptions, depictions, designations, or representations

in advertisements, labels, or other promotional materials.

The Guides provide examples of deceptive and non-deceptive

descriptions for wood and wood imitations to ensure that prospective

purchasers are not misled by a product's appearance. For example,

Section 243.2(a)(5) provides that ``[d]escribing a nonlumber product,

such as particleboard, hardboard, fiberboard, flakeboard, and products

of similar composition, as `wood' '' is a false representation. The

Guides also suggest that sellers affirmatively disclose the composition

and other attributes of the products being offered. Additionally, the

Guides provide for disclosure of material facts that would be helpful

to consumers in making purchase decisions. The Guides suggest that

affirmative disclosures be provided in advertising and labeling when:

(1) A wall panel's appearance could mislead purchasers as to its true

composition; or (2) a representation is made that is susceptible of at

least one misleading interpretation.

The Commission has determined, as part of its oversight

responsibilities, to review rules and industry 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. The

Commission solicited comments on the Decorative Wall Paneling Guides in

the Federal Register on March 27, 1998, 63 FR 14865. The Commission's

staff also mailed copies of the notice to approximately 100 industry

representatives to ensure that all interested parties would have an

opportunity to comment. The comment period ended May 26, 1998.

The Commission received one comment, from the Hardwood, Plywood &

Veneer Association (``HPVA''). The comment supported retaining the

Guides because ``[d]ecorative paneling still represents a significant

sector of the interior finish products market.'' 1 The

commenter stated that the Guides benefit sellers by ``establishing a

common basis of understanding and fair competition.'' The commenter

also noted, however, the existence of at least one recognized standard

for decorative wall panels. This voluntary industry standard, the

``American National Standard For Hardwood And Decorative Plywood'' or

``ANSI/HPVA HP-1-1994'' (hereafter referred to as the ``ANSI

standard''), became effective in 1994, superseding earlier versions

published in 1983 and 1993. Both the 1983 and 1994 versions of the

standard were the result of joint efforts of the American National

Standards Institute, Inc., and

[[Page 70334]]

the Hardwood, Plywood & Veneer Association.2 The ``ANSI

Canvass Method,'' in which industry members with an interest in

hardwood and decorative plywood were contacted, was used to achieve

consensus for the standard.3

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\1\ HPVA, #1.

\2\ Prior to January 1, 1993, HPVA was known as the Hardwood &

Plywood Manufacturers Association.

\3\ ANSI/HPVA HP-1-1994, at iv.

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The ANSI standard sets forth detailed product quality, labeling,

and testing requirements for a variety of wood- and veneer-finished

products. Specifically, the ANSI/HPVA publication's abstract states, in

part, that the ANSI Standard for Hardwood and Decorative Plywood:

[E]stablishes nationally recognized classifications, quality

criteria, test methods, definitions, and product marking and

designation practices for plywood produced primarily from hardwoods.

It is intended for voluntary use for reference in trade literature,

catalogs, sales contracts, building codes * * * to describe the

quality aspects of the product and the means to determine

conformance.

While, unlike the Guides, the ANSI standard does not expressly prohibit

sellers from misrepresenting the composition of a particular wood or

simulated wood product, it provides detailed classifications and

criteria for product advertising and labeling. The Commission believes

that the ANSI voluntary industry standard indeed provides an adequate

basis for a common understanding among industry members through its

highly specific descriptions of the qualities and characteristics of

hardwood and decorative plywood products.

Industry compliance with both the Guides and the ANSI standard

appears to be exemplary. In the 27 years since the Guides were issued,

the Commission has not received any complaints or initiated any

enforcement actions relating to these Guides. The existence of a strong

industry standard and the level of compliance it commands, viewed in

conjunction with the Commission's unfettered ability to pursue actions

against members of this industry for engaging in unfair and deceptive

acts and practices under section 5 of the FTC Act, 15 U.S.C. 45,

sufficiently ensures that sellers will not mislead consumers in the

future in the labeling, advertising, or sale of decorative wall

paneling. If, in the future, deceptive practices prove to be a problem

in this industry, however, the Commission may pursue enforcement

actions as needed on a case-by-case basis.

For the reasons explained in this notice, the Commission has

determined to rescind the Guides because they are no longer necessary.

List of Subjects in 16 CFR Part 243

Advertising, Forests and forest products, Labeling, Trade

practices, Wall paneling industry.

PART 243--[REMOVED]

The Commission, under authority of sections 5(a)(1) and 6(g) of the

Federal Trade Commission Act, 15 U.S.C. 45(a)(1) and 46(g), amends

Chapter I of Title 16 of the Code of Federal Regulations by removing

part 243.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 98-33705 Filed 12-18-98; 8:45 am]

BILLING CODE 6750-01-P