2020-00314. Adjustments to Civil Penalty Amounts  

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    AGENCY:

    Federal Trade Commission.

    ACTION:

    Final rule.

    SUMMARY:

    The Federal Trade Commission (“FTC” or “Commission”) is implementing adjustments to the civil penalty amounts within its jurisdiction to account for inflation, as required by law.

    DATES:

    Effective January 14, 2020.

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    FOR FURTHER INFORMATION CONTACT:

    Kenny A. Wright, Attorney, Office of the General Counsel, FTC, 600 Pennsylvania Avenue NW, Washington, DC 20580, (202-326-2907), kwright@ftc.gov.

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    SUPPLEMENTARY INFORMATION:

    The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 [1] directs agencies to adjust the civil penalty maximums under their jurisdiction for inflation every January. Accordingly, the Commission issues annual adjustments to the maximum civil penalty amounts under its jurisdiction.[2]

    Commission Rule § 1.98 sets forth the applicable civil penalty amounts for violations of certain laws enforced by the Commission.[3] As directed by the FCPIAA, the Commission is issuing adjustments to increase these maximum civil penalty amounts to address inflation since its prior 2019 adjustment. The following adjusted amounts will take effect on January 14, 2020:

    • Section 7A(g)(1) of the Clayton Act, 15 U.S.C. 18a(g)(1) (premerger filing notification violations under the Hart-Scott-Rodino Improvements Act)—Increase from $42,530 to $43,280;
    • Section 11(l) of the Clayton Act, 15 U.S.C. 21(l) (violations of cease and desist orders issued under Clayton Act section 11(b))—Increase from $22,595 to $22,994;
    • Section 5(l) of the FTC Act, 15 U.S.C. 45(l) (unfair or deceptive acts or practices)—Increase from $42,530 to $43,280;
    • Section 5(m)(1)(A) of the FTC Act, 15 U.S.C. 45(m)(1)(A) (unfair or deceptive acts or practices)—Increase from $42,530 to $43,280;
    • Section 5(m)(1)(B) of the FTC Act, 15 U.S.C. 45(m)(1)(B) (unfair or deceptive acts or practices)—Increase from $42,530 to $43,280;
    • Section 10 of the FTC Act, 15 U.S.C. 50 (failure to file required reports)—Increase from $559 to $569;
    • Section 5 of the Webb-Pomerene (Export Trade) Act, 15 U.S.C. 65 (failure by associations engaged solely in export Start Printed Page 2015trade to file required statements)—Increase from $559 to $569;
    • Section 6(b) of the Wool Products Labeling Act, 15 U.S.C. 68d(b) (failure by wool manufacturers to maintain required records)—Increase from $559 to $569;
    • Section 3(e) of the Fur Products Labeling Act, 15 U.S.C. 69a(e) (failure to maintain required records regarding fur products)—Increase from $559 to $569;
    • Section 8(d)(2) of the Fur Products Labeling Act, 15 U.S.C. 69f(d)(2) (failure to maintain required records regarding fur products)—Increase from $559 to $569;
    • Section 333(a) of the Energy Policy and Conservation Act, 42 U.S.C. 6303(a) (knowing violations of EPCA sec. 332, including labeling violations)—Increase from $460 to $468;
    • Section 525(a) of the Energy Policy and Conservation Act, 42 U.S.C. 6395(a) (recycled oil labeling violations)—Increase from $22,595 to $22,994;
    • Section 525(b) of the Energy Policy and Conservation Act, 42 U.S.C. 6395(b) (willful violations of recycled oil labeling requirements)—Increase from $42,530 to $43,280;
    • Section 621(a)(2) of the Fair Credit Reporting Act, 15 U.S.C. 1681s(a)(2) (knowing violations of the Fair Credit Reporting Act)—Increase from $3,993 to $4,063;
    • Section 1115(a) of the Medicare Prescription Drug Improvement and Modernization Act of 2003, Pub. L. 108-173, as amended by Pub. L. 115-263, 21 U.S.C. 355 note (failure to comply with filing requirements)—Increase from $15,036 to $15,301; and
    • Section 814(a) of the Energy Independence and Security Act of 2007, 42 U.S.C. 17304 (violations of prohibitions on market manipulation and provision of false information to federal agencies)—Increase from $1,210,340 to $1,231,690.

    Calculation of Inflation Adjustments

    The FCPIAA, as amended, directs federal agencies to adjust each civil monetary penalty under their jurisdiction for inflation in January of each year pursuant to a cost-of-living adjustment.[4] The cost-of-living adjustment is based on the percent change between the U.S. Department of Labor's Consumer Price Index for all-urban consumers (“CPI-U”) for the month of October preceding the date of the adjustment, and the CPI-U for October of the prior year.[5] Based on that formula, the cost-of-living adjustment multiplier for 2020 is 1.01764. The FCPIAA also directs that these penalty level adjustments should be rounded to the nearest dollar. Agencies do not have discretion over whether to adjust a maximum civil penalty, or the method used to determine the adjustment.

    The following chart illustrates the application of these adjustments to the civil monetary penalties under the Commission's jurisdiction.

    Calculation of Adjustments to Maximum Civil Monetary Penalties

    CitationDescription2019 penalty levelAdjustment multiplier2020 penalty level (rounded to the nearest dollar)
    16 CFR 1.98(a): 15 U.S.C. 18a(g)(1)Premerger filing notification violations$42,5301.01764$43,280
    16 CFR 1.98(b): 15 U.S.C. 21(l)Violations of cease and desist orders22,5951.0176422,994
    16 CFR 1.98(c): 15 U.S.C. 45(l)Unfair or deceptive acts or practices42,5301.0176443,280
    16 CFR 1.98(d): 15 U.S.C. 45(m)(1)(A)Unfair or deceptive acts or practices42,5301.0176443,280
    16 CFR 1.98(e): 15 U.S.C. 45(m)(1)(B)Unfair or deceptive acts or practices42,5301.0176443,280
    16 CFR 1.98(f): 15 U.S.C. 50Failure to file required reports5591.01764569
    16 CFR 1.98(g): 15 U.S.C. 65Failure to file required statements5591.01764569
    16 CFR 1.98(h): 15 U.S.C. 68d(b)Failure to maintain required records5591.01764569
    16 CFR 1.98(i): 15 U.S.C. 69a(e)Failure to maintain required records5591.01764569
    16 CFR 1.98(j): 15 U.S.C. 69f(d)(2)Failure to maintain required records5591.01764569
    16 CFR 1.98(k): 42 U.S.C. 6303(a)Knowing violations4601.01764468
    16 CFR 1.98(l): 42 U.S.C. 6395(a)Recycled oil labeling violations22,5951.0176422,994
    16 CFR 1.98(l): 42 U.S.C. 6395(b)Willful violations42,5301.0176443,280
    16 CFR 1.98(m): 15 U.S.C. 1681s(a)(2)Knowing violations3,9931.017644,063
    16 CFR 1.98(n): 21 U.S.C. 355 noteNon-compliance with filing requirements15,0361.0176415,301
    16 CFR 1.98(o): 42 U.S.C. 17304Market manipulation or provision of false information to federal agencies1,210,3401.017641,231,690

    Effective Dates of New Penalties

    These new penalty levels apply to civil penalties assessed after the effective date of the applicable adjustment, including civil penalties whose associated violation predated the effective date.[6] These adjustments do not retrospectively change previously assessed or enforced civil penalties that the FTC is actively collecting or has collected.

    Procedural Requirements

    The FCPIAA, as amended, directs agencies to adjust civil monetary penalties through rulemaking and to publish the required inflation adjustments in the Federal Register, notwithstanding section 553 of title 5, United States Code. Pursuant to this congressional mandate, prior public notice and comment under the APA and a delayed effective date are not required. For this reason, the requirements of the Regulatory Flexibility Act (“RFA”) also do not apply.[7] Further, this rule does not contain any collection of information requirements as defined by the Paperwork Reduction Act of 1995 as amended. 44 U.S.C. 3501 et seq.

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), the Office of Information and Regulatory Affairs Start Printed Page 2016designated this rule as not a “major rule,” as defined by 5 U.S.C. 804(2).

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    List of Subjects for 16 CFR Part 1

    • Administrative practice and procedure
    • Penalties
    • Trade practices
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    Text of Amendments

    For the reasons set forth in the preamble, the Federal Trade Commission amends title 16, chapter I, subchapter A, of the Code of Federal Regulations, as follows:

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    PART 1—GENERAL PROCEDURES

    Subpart L—Civil Penalty Adjustments Under the Federal Civil Penalties Inflation Adjustment Act of 1990, as Amended

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    1. The authority citation for part 1, subpart L, continues to read as follows:

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    Authority: 28 U.S.C. 2461 note.

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    2. Revise § 1.98 to read as follows:

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    Adjustment of civil monetary penalty amounts.

    This section makes inflation adjustments in the dollar amounts of civil monetary penalties provided by law within the Commission's jurisdiction. The following maximum civil penalty amounts apply only to penalties assessed after January 14, 2020, including those penalties whose associated violation predated January 14, 2020.

    (a) Section 7A(g)(1) of the Clayton Act, 15 U.S.C. 18a(g)(1)-$43,280;

    (b) Section 11(l) of the Clayton Act, 15 U.S.C. 21(l)-$22,994;

    (c) Section 5(l) of the FTC Act, 15 U.S.C. 45(l)-$43,280;

    (d) Section 5(m)(1)(A) of the FTC Act, 15 U.S.C. 45(m)(1)(A)-$43,280;

    (e) Section 5(m)(1)(B) of the FTC Act, 15 U.S.C. 45(m)(1)(B)-$43,280;

    (f) Section 10 of the FTC Act, 15 U.S.C. 50-$569;

    (g) Section 5 of the Webb-Pomerene (Export Trade) Act, 15 U.S.C. 65-$569;

    (h) Section 6(b) of the Wool Products Labeling Act, 15 U.SC. 68d(b)-$569;

    (i) Section 3(e) of the Fur Products Labeling Act, 15 U.S.C. 69a(e)-$569;

    (j) Section 8(d)(2) of the Fur Products Labeling Act, 15 U.S.C. 69f(d)(2)-$569;

    (k) Section 333(a) of the Energy Policy and Conservation Act, 42 U.S.C. 6303(a)-$468;

    (l) Sections 525(a) and (b) of the Energy Policy and Conservation Act, 42 U.S.C. 6395(a) and (b), respectively-$22,994 and $43,280, respectively;

    (m) Section 621(a)(2) of the Fair Credit Reporting Act, 15 U.S.C. 1681s(a)(2)-$4,063;

    (n) Section 1115(a) of the Medicare Prescription Drug Improvement and Modernization Act of 2003, Public Law 108-173, as amended by Public Law 115-263, 21 U.S.C. 355 note-$15,301;

    (o) Section 814(a) of the Energy Independence and Security Act of 2007, 42 U.S.C. 17304-$1,231,690; and

    (p) Civil monetary penalties authorized by reference to the Federal Trade Commission Act under any other provision of law within the jurisdiction of the Commission—refer to the amounts set forth in paragraphs (c), (d), (e), and (f) of this section, as applicable.

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    By direction of the Commission.

    April J. Tabor,

    Acting Secretary.

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    Footnotes

    1.  Public Law 114-74, sec. 701, 129 Stat. 599 (2015). The Act amends the Federal Civil Penalties Inflation Adjustment Act (“FCPIAA”), Public Law 101-410, 104 Stat. 890 (codified at 28 U.S.C. 2461 note).

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    2.  81 FR 42476 (June 30, 2016); 82 FR 8135 (2017); 83 FR 2902 (2018); 84 FR 3980 (2019).

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    5.  Id. (3), (5)(b); Office of Management and Budget, Memorandum M-20-05, Implementation of Penalty Inflation Adjustments for 2020, Pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (December 16, 2019), available at: https://www.whitehouse.gov/​wp-content/​uploads/​2019/​12/​M-20-05.pdf.

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    7.  A regulatory flexibility analysis under the RFA is required only when an agency must publish a notice of proposed rulemaking for comment. See 5 U.S.C. 603.

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    [FR Doc. 2020-00314 Filed 1-13-20; 8:45 am]

    BILLING CODE 6750-01-P

Document Information

Effective Date:
1/14/2020
Published:
01/14/2020
Department:
Federal Trade Commission
Entry Type:
Rule
Action:
Final rule.
Document Number:
2020-00314
Dates:
Effective January 14, 2020.
Pages:
2014-2016 (3 pages)
Topics:
Administrative practice and procedure, Penalties, Trade practices
PDF File:
2020-00314.Pdf
CFR: (1)
16 CFR 1.98