E6-3244. Agency Information Collection Activities; Proposed Collection; Comment Request

AGENCY:

Federal Trade Commission (FTC or Commission).

ACTION:

Notice.

SUMMARY:

The FTC is soliciting public comments on proposed information requests to beverage alcohol manufacturers. These comments will be considered before the FTC submits a request for Office of Management and Budget (OMB) review under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501-3520, of compulsory process orders to alcohol advertisers for information concerning, inter alia, compliance with voluntary advertising placement provisions, sales and marketing expenditures, and the status of third-party review of complaints regarding compliance with voluntary advertising codes.

DATES:

Comments must be received on or before May 8, 2006.

ADDRESSES:

Interested parties are invited to submit written comments. Comments should refer to the “Alcohol Reports: Paperwork Comment, FTC File No. P064505” to facilitate the organization of the comments. A comment filed in paper form should include this reference both in the text and on the envelope and should be mailed or delivered, with two complete copies, to the following address: Federal Trade Commission/Office of the Secretary, Room H-135 (Annex J), 600 Pennsylvania Avenue, NW., Washington, DC 20580. Because paper mail in the Washington area and at the Commission is subject to delay, please consider submitting your comments in electronic form, as prescribed below. However, if the comment contains any material for which confidential treatment is requested, it must be filed in paper form, and the first page of the document must be clearly labeled “Confidential.” ^[1] The FTC is requesting that any comment filed in paper form be sent by courier or overnight service, if possible. Alternatively, comments may be filed in electronic form (in ASCII format, WordPerfect, or Microsoft Word) as part of or as an attachment to e-mail messages directed to the following e-mail box: [e-mail].

The FTC Act and other laws the Commission administers permit the collection of public comments to consider and use in this proceeding as appropriate. All timely and responsive public comments, whether filed in paper or electronic form, will be considered by the Commission, and will be available to the public on the FTC Web site, to the extent practicable, at http://www.ftc.gov. As a matter of discretion, the FTC makes every effort to remove home contact information for individuals from public comments it receives before placing those comments on the FTC Web site. More information, including routine uses permitted by the Privacy Act, may be found in the FTC's privacy policy, at http://www.ftc.gov/​ftc/​privacy.htm.

FOR FURTHER INFORMATION CONTACT:

Requests for additional information should be addressed to Janet Evans or Mamie Kresses, Attorneys, Division of Advertising Practices, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue, NW., Washington, DC 20580; telephone: [phone] or [phone].

SUPPLEMENTARY INFORMATION:

The FTC previously published reports on voluntary advertising self-regulation by the alcohol industry in September 1999 and September 2003. The data contained in the reports was based on information submitted to the Commission, pursuant to compulsory process, by U.S. beverage alcohol advertisers. The FTC has authority to compel production of this information from advertisers under Section 6 of the FTC Act, 15 U.S.C. 46. The Commission believes that it is in the public interest to collect updated data from alcohol advertisers on sales and marketing expenditures, compliance with the industry's self-imposed regulatory code concerning advertising placement, and the status of third-party review of complaints regarding compliance with the industry's self-regulatory advertising standards, and to publish a report on the data obtained.

The Commission intends to address its information requests to the ultimate parent of alcohol advertisers in order to assure that no relevant data from affiliated or subsidiary companies goes unreported. Because the number of separately incorporated companies affected by the Commission's requests will presumably exceed ten entities, the Commission intends to seek OMB clearance under the Paperwork Reduction Act (“PRA”) before requesting any information from beverage alcohol advertisers.

Under the PRA, federal agencies must obtain approval from OMB for each collection of information they conduct or sponsor. “Collection of information” means agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. 44 U.S.C. 3502(3), 5 CFR 1320.3(c). As required by the PRA, 44 U.S.C. 3506(c)(2)(A), the FTC is providing this opportunity for public comment before requesting that OMB grant the clearance for the proposed information collection requirements.

The FTC invites comment on: (1) Whether the proposed collections of information are necessary for the proper performance of the functions of the FTC, including whether the information will have practical utility; (2) the accuracy of the FTC's estimate of the burden of the proposed collections of information; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of collecting the information on those who are to respond, including through the use of collection techniques or other form of information technology, e.g., permitting electronic submissions of responses. All comments should be filed as prescribed in the ADDRESSES section above, and must be received on or before May 8, 2006.

A. Information Requests to the Beverage Alcohol Industry

1. Description of the Collection of Information and Proposed Use

The FTC proposes to send information requests to the ultimate parent company of up to twelve advertisers of beer, wine, or distilled spirits in the United States (“industry members”). The information requests will seek, among other information, data regarding: (1) Sales of beverage alcohol; (2) expenditures to advertise and promote beverage alcohol in measured and non-measured media; (3) compliance with the 30% product placement standard contained in the industry's self-regulatory codes; and (4) third-party or other external compliance review mechanisms; to the extent industry members possess such data.

It should be noted that subsequent to this notice any destruction, removal, mutilation, alteration, or falsification of documentary evidence that may be responsive to this information collection within the possession or control of a person, partnership or corporation subject to the FTC Act may be subject to criminal prosecution. 15 U.S.C. 50; see also 18 U.S.C. 1505.

Confidentiality: Section 6(f) of the FTC Act, 15 U.S.C. 46(f), bars the Commission from publicly disclosing trade secrets or confidential commercial or financial information it receives from persons pursuant to, among other methods, special orders authorized by Section 6(b) of the FTC Act. Such information also would be exempt from disclosure under the Freedom of Information Act. 5 U.S.C. 552(b)(4). Moreover, under Section 21(c) of the FTC Act, 15 U.S.C. 57b-2(c), a submitter who designates a submission as confidential is entitled to 10 days' advance notice of any anticipated public disclosure by the Commission, assuming that the Commission has determined that the information does not, in fact, constitute 6(f) material. Although materials covered under one or more of these various sections are protected by stringent confidentiality constraints, the FTC Act and the Commission's rules authorize disclosure in limited circumstances (e.g., official requests by Congress, requests from other agencies for law enforcement purposes, administrative or judicial proceedings). Even in those limited contexts, however, the Commission's rules may afford protections to the submitter, such as advance notice to seek a protective order in litigation. See 15 U.S.C. 57b-2; 16 CFR 4.9-4.11.

Finally, the information presented in the study will not reveal company-specific data. See 15 U.S.C. 57b-2(d)(1)(B). Rather, the Commission anticipates providing information on an anonymous or aggregated basis, in a manner sufficient to protect individual companies' confidential information, to provide a factual summary of how the alcohol industry self-regulation has operated for the specified period.

2. Estimated Hours Burden

The FTC staff's estimate of the hours burden is based on the time required to respond to each information request. Because beverage alcohol companies vary in size, the number of products that they sell, and the extent and variety of their advertising and promotion efforts, the FTC staff has provided a range of the estimated hours burden. As noted above, each company will receive information requests pertaining to four categories. Based upon its knowledge of the industry, the staff estimates, on average, that the time required to gather, organize, format, and produce responses to each of the four information categories will range between 15 and 120 hours for most companies, but that the largest companies could require as many as 280 hours for the most time-consuming category, that is, placement information. The total estimated burden per company is based on the following:

Identify, obtain and organize sales information, prepare response: 15-35 hours.

Identify, obtain, and organize information on advertising and marketing expenditures, prepare response: 25-65 hours.

Identify, obtain, and organize placement information, prepare response: 120-280 hours.

Identify, obtain, and organize information regarding compliance review, prepare response: 10-20 hours.

FTC staff anticipates that the cumulative hours burden to respond to the information requests will be between 170 hours and 400 hours per company. Nonetheless, in order to be conservative, the FTC estimates that the burden per company for each of up to twelve intended recipients will be 400 hours. Accordingly, staff's estimate of the total burden is 4,800 hours. These estimates include any time spent by separately incorporated subsidiaries and other entities affiliated with the ultimate parent company that has received the information requests.

3. Estimated Cost Burden

It is difficult to calculate with precision the labor costs associated with this data production, as they entail varying compensation levels of management and/or support staff among companies of different sizes. Although financial, marketing, legal, and clerical personnel may be involved in the information collection process, FTC staff has assumed that mid-management personnel and outside legal counsel will handle most of the tasks involved in gathering and producing responsive information and has applied an average hourly wage of $250/hour for their labor. FTC staff anticipates that the labor costs per company will range between $42,500 (170 hours × $250/hour) and $100,000 (400 hours × $250/hour). Nonetheless, in order to be conservative, the FTC estimates that the total labor costs per company will be $100,000.

FTC staff estimates that the capital or other non-labor costs associated with the information requests are minimal. Although the information requests may necessitate that industry members maintain the requested information provided to the Commission, they should already have in place the means to compile and maintain business records.

William Blumenthal,

General Counsel.

Footnotes

1.  Commission Rule 4.2(d), 16 CFR 4.2(d). The comment must be accompanied by an explicit request for confidential treatment, including the factual and legal basis for the request, and must identify the specific portions of the comment to be withheld from the public record. The request will be granted or denied by the Commission's General Counsel, consistent with applicable law and the public interest. See Commission Rule 4.9(c), 16 CFR 4.9(c).