[Federal Register Volume 61, Number 36 (Thursday, February 22, 1996)]
[Proposed Rules]
[Pages 6801-6803]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-4004]
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FEDERAL TRADE COMMISSION
16 CFR Part 305
Rule Concerning Disclosures Regarding Energy Consumption and
Water Use of Certain Home Appliances and Other Products Required Under
the Energy Policy and Conservation Act (``Appliance Labeling Rule'')
AGENCY: Federal Trade Commission.
ACTION: Proposed rule and request for comments.
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SUMMARY: The Federal Trade Commission (``Commission'') proposes to
amend its Appliance Labeling Rule (``the Rule''), 16 CFR Part 305
(1995), to permit the placement of energy use labels required by the
Canadian and Mexican governments in a local ``directly adjoining'' the
Rule's required ``EnergyGuide'' label. Currently, the Rule prohibits
the affixation of non-required information ``on or directly adjoining''
the EnergyGuide. The relaxation of this prohibition would further the
goal of the North American Free Trade Agreement (``NAFTA'') to make
compatible the standards-related measures of the signatories to
facilitate trade in a good or service among the parties. Moreover, the
amendment would result in considerable savings for the appliance
manufacturing industry. The Commission seeks written data, views, and
arguments concerning this proposal.
DATES: Written comments must be submitted on or before April 8, 1996.
ADDRESSES: Written comments should be submitted to the Office of the
Secretary, Federal Trade Commission, Room 159, Washington, D.C. 20580,
202-326-2506, and should be submitted, when feasible and not
burdensome, in five copies. Envelops and comments should be marked:
``Appliance Labeling Rule comment.''
FOR FURTHER INFORMATION CONTACT: James G. Mills, Attorney, Division of
Enforcement, Federal Trade Commission, Washington, D.C. 20580 (202-326-
3035).
SUPPLEMENTARY INFORMATION: In a letter to the Commission's staff, the
Whirlpool Corporation (``Whirlpool'') requested permission to use hang
tag EnergyGuide labels that have the corresponding ``EnerGuide''
appliance energy use label required by Canada printed on the reverse
side. Whirlpool also asked to use a ``same side'' approach, which a
Whirlpool representative clarified as meaning a single stick-on or hang
tag label consisting of the Commission's EnergyGuide immediately next
to (or above) the appropriately corresponding Canadian EnerGuide, or
the appliance energy use label required by Mexico, or both labels.
In support of its request, Whirlpool stated that the continued
existence of separate appliance labeling requirements among U.S.,
Canada, and Mexico represents an obstacle to free trade among the
signatories to NAFTA. Whirlpool contended that the consolidation of the
labels required by the different countries onto a single piece of label
stock would eliminate that obstacle. Whirlpool also stated that using
such labels would save Whirlpool significant resources by reducing the
number of separate U.S. and Canadian models of appliances that
Whirlpool produces and by reducing labeling expenses.
Section 305.11(a)(5)(i)(K) of the Rule, 16 CFR
305.11(a)(5)(i)(K), states that: No marks or information other than
that specified in this Part shall appear on or directly adjoining
[the EnergyGuide] label except for a part or publication number
identification, as desired by the manufacturer. * * * [emphasis
added]
The language in this section pertains to labels for refrigerators,
refrigerator-freezers, freezers, dishwashers, clothes washers, water
heaters, and room air conditions. Identical language appears in two
other sections relating to labels for furnaces and pool heaters (16 CFR
305.11(a)(5)(ii)(I) and central air conditioners (16 CFR
305.11(a)(5)(iii)(H)(1)). The purpose of this prohibition was to avoid
having other information detract from the EnergyGuide label. The
prohibition was not specifically directed at labels required by other
countries.\1\
\1\ Although this language prohibits the types of labeling
practices that Whirlpool has asked permission to use, manufacturers,
of course, can place the appliance energy labels of other countries,
or any other labels, in locations on their products that are not
``on or directly adjoining'' the EnergyGuide.
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The Commission is considering whether permitting side-by-side or
back-to-back labeling would be confusing to consumers, and thereby
reduce the effectiveness of the EnergyGuide. For example, three labels
side by side might create information overload, resulting in consumers
ignoring the information. But, the Commission believes that consumers
may realize that only one label is pertinent to U.S. consumers (because
the Canadian label is in English and French, and the Mexican label is
in Spanish \2\). The Commission's label also says in two places that
the information on the label is derived from U.S. government standard
tests and utility costs. Further, unlike in the past, the U.S. and
Canada, and, to a slightly lesser extent, Mexico, now use compatible
test procedures for identifying energy use, and require information to
be reported in terms of kilowatt-hour use per year. Thus, the
information being disclosed on each country's label is similar and this
may make the possibility of confusion less likely.\3\ Moreover, U.S.
consumers are already seeing Canadian labels on some appliances
(especially in the northern states), and possibly Mexican labels,
although not directly adjoining the EnergyGuide. And, on many packages,
instruction manuals, and labels, it is common to see information
presented in more than one language because the products are shipped to
multiple countries. The Commission believes that, in this increasingly
global marketplace, consumers may not be confused or misled by the
presence of multiple appliance energy use labels, as long as they can
clearly distinguish
[[Page 6802]]
which one is intended for the U.S. audience.
\2\ To extent that U.S. residents speak and read only Spanish,
the Mexican labels may convey useful information about energy
consumption comparable to what is provided on the U.S. label.
\3\ As amended, the Commission's Rule now requires labels that
show a primary energy use disclosure of kilowatt-hour use per year
for all the products for which it formerly required the disclosure
of estimated annual operating cost (refrigerators, freezers, clothes
washers, dishwashers, and water heaters). And, the regulations of
the three countries require disclosure of an energy efficiency
number for room air conditioners. Thus, the appliance labeling
regulations of all three NAFTA signatories now require the same
primary descriptors of energy use. This reduces the possibility for
consumers confusion resulting from labels on the same product that
show energy use in different terms.
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Accordingly, the Commission believes that it may be beneficial to
permit appliance manufacturers to combine the appliance energy labels
required by the U.S., Canada, and Mexico. First, allowing the use of a
single label consisting of two (or three) labels printed on the same
label stock, would be consistent with the NAFTA goal of removing
unnecessary impediments to trade.\4\ Second, multi-national labels
could enable the appliance manufacturing industry to comply with the
Commission's Rule and the appliance labeling rules of Canada and Mexico
at considerably less expense. Therefore, the Commission proposes
amending the Rule to permit energy use labels required by the other
NAFTA signatories to adjoin the EnergyGuide directly. Manufacturers
would still be prohibited from placing other information on or directly
adjoining the EnergyGuide.
\4\ The Commission has worked closely with representatives of
the Canadian EnerGuide program over the past two years to explore
regulatory harmonization under NAFTA. Canada, like the Commission,
has been reviewing its appliance labeling rule, and each country has
considered the research and changes being considered by the other.
More recently, representatives of the Mexican government have joined
in this dialogue. Although the Commission intends to continue this
cooperative pursuit of tri-lateral harmonization to determine
whether a single label can be designed that effectively fulfills the
requirements of all three countries, amending the Rule now to
provide manufacturers greater flexibility in labeling practices is
an interim step for facilitating trade.
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Section A--Regulatory Flexibility Act
The provisions of the Regulatory Flexibility Act relating to an
initial Regulatory Flexibility Act analysis (5 U.S.C. 603-604) are not
applicable to this document because the Commission presently believes
that the amendments, if promulgated, ``will not have a significant
economic impact on a substantial number of small entities'' (5 U.S.C.
605).
Because the amendments are not likely to have a significant impact
on a substantial number of small entities within the meaning of the
Regulatory Flexibility Act and the rules implementing it, the
Commission concludes, based on the information presently available,
that a regulatory analysis is not now necessary. The Commission
requests, however, information on whether the proposed amendments would
have a significant impact on a substantial number of small entities.
After reviewing any comments received on this subject, the Commission
will decide whether the preparation of a final regulatory flexibility
analysis is appropriate.
In light of the above, the Commission certifies, under Section 605
of the Regulatory Flexibility Act (5 U.S.C. 605(b)), that the
amendments proposed today would not, if promulgated, have a significant
impact on a substantial number of small entities.
Section B--Paperwork Reduction Act
The proposed amendments would not expand the Appliance Labeling
Rule's existing recordkeeping and reporting requirements. Because there
would be no increase in burden hours, the Commission is not requesting
that the Office of Management and Budget adjust the existing clearance
for the Appliance Labeling Rule (OMB No. 3084-0069) under the Paper
Reduction Act (44 U.S.C. 3501 et seq.). To substantiate the accuracy of
its reporting burden estimate, however, the Commission requests comment
on the extent of the reporting burden associated with these amendments.
Section C--Invitation To Comment
Interested persons are hereby notified that they may comment on any
issue of fact, law or policy that may bear upon the proposed
amendments. Although the Commission welcomes comments on any aspect of
the proposed amendments, the Commission is particularly interested in
comments on the questions in Section D, below. All comments should be
referenced specifically to either the Commission's questions or the
section of the proposed rules being discussed.
The Commission requests the commenters provide representative
factual data. Individual firms' experiences are relevant to the extent
they typify industry experience, in general, or that of similar-sized
forms. Comments opposing the proposed amendments should, if possible,
suggest a specific alternative. Proposals for alternative regulations
should include reasons and data that indicate why the alternatives
would better serve the purposes of the proposed amendments. Comments
should be supported by a full discussion of all the relevant facts and/
or be based directly on firsthand knowledge, personal experience or
general understanding of the particular issues addressed by the
proposed rules.
Before adopting these proposed amendments as final, the Commission
will give consideration to any written comments timely submitted to the
Secretary. 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. and 5 p.m. at the Public Reference Room (Room 130), Federal
Trade Commission, 5th Street and Pennsylvania Ave., NW., Washington, DC
20580.
Section D--Questions and Issues
Interested persons are invited to address any questions of fact,
law or policy that they believe may bear upon the proposed amendments.
The questions concerning issues upon which the Commission particularly
desires comment, however, are listed below.
1. Would allowing energy use labels required by the Canadian or
Mexican governments to be placed next to the U.S. EnergyGuide be likely
to detract from the effectiveness of the EnergyGuide or cause consumer
confusion?
2. Should the Commission limit the information that the amendments
would permit to be placed ``directly adjoining'' the EnergyGuide only
to energy use disclosures required by the governments of Canada and
Mexico? For example, should the amendments permit additional
information required by the governments of Canada and Mexico, such as
environmental or safety-related information, also to be placed
``directly adjoining'' the EnergyGuide?
3. Should the Commission limit the amendments to apply to energy
use (or other) information required only by the governments of Canada
and Mexico, or should the amendments permit energy use (or other)
information required by the governments of all other nations?
Section E--Proposed Amendments
For the reasons discussed above, the Commission proposes the
amendments below to sections 305.11(a)(5)(i)(K) (16 CFR
305.11(a)(5)(i)(K)), 305.11(a)(5)(ii)(I) (16 CFR 305.11(a)(5)(ii)(I)),
and 305.11(a)(5)(iii)(H)(1) (16 CFR 305.11(a)(5)(iii)(H)(1)) of the
Rule to permit (but not require) appliance manufacturers to place the
energy use disclosure labels required by the governments of Canada and
Mexico in a location directly adjoining the Commission's Energy Guide.
List of Subjects in 16 CFR Part 305
Advertising, Energy conservation, Household appliances, Labeling,
Reporting and recordkeeping requirements.
PART 305--[AMENDED]
1. The authority citation for Part 305 continues to read as
follows:
[[Page 6803]]
Authority: 42 U.S.C. 6294.
2. It is proposed that section 305.11(a)(5)(i)(K) be revised to
read as follows:
Sec. 305.11 Labeling for covered products.
(a) * * *
(5) * * *
(i) * * *
(K) No marks or information other than that specified in this part
shall appear on or directly adjoining this label, except a part or
publication number identification may be included on this label, as
desired by the manufacturer, and the energy use disclosure labels
required by the governments of Canada or Mexico may appear directly
adjoining this label, as desired by the manufacturer. If a manufacturer
elects to use a part or publication number, it must appear in the lower
right-hand corner of the label and be set in 6-point type or smaller.
* * * * *
3. It is proposed that section 305.11(a)(5)(ii)(I) be revised to
read as follows:
Sec. 305.11 Labeling for covered products.
(a) * * *
(5) * * *
(ii) * * *
(I) No marks or information other than that specified in this part
shall appear on or directly adjoining this label, except a part or
publication number identification may be included on this label, as
desired by the manufacturer, and the energy use disclosure labels
required by the governments of Canada or Mexico may appear directly
adjoining this label, as desired by the manufacturer. If a manufacturer
elects to use a part or publication number, it must appear in the lower
right-hand corner of the label and be set in 6-point type or smaller.
* * * * *
4. It is proposed that section 305.11(a)(5)(iii)(H)(1) be revised
to read as follows:
Sec. 305.11 Labeling for covered products.
(a) * * *
(5) * * *
(iii) * * *
(H) * * *
(1) No marks or information other than that specified in this part
shall appear on or directly adjoining this label, except a part or
publication number identification may be included on this label, as
desired by the manufacturer, and the energy use disclosure labels
required by the governments of Canada or Mexico may appear directly
adjoining this label, as desired by the manufacturer. If a manufacturer
elects to use a part or publication number, it must appear in the lower
right-hand corner of the label and be set in 6-point type or smaller.
* * * * *
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 96-4004 Filed 2-21-96; 8:45 am]
BILLING CODE 6750-01-M
