[Federal Register Volume 59, Number 130 (Friday, July 8, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-16513]
[[Page Unknown]]
[Federal Register: July 8, 1994]
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FEDERAL TRADE COMMISSION
16 CFR Parts 2 and 4
Procedures for Review of Compliance Reports and Delegation of
Authority To Resolve Confidentiality Issues
AGENCY: Federal Trade Commission.
ACTION: Final rule.
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SUMMARY: The Federal Trade Commission amends 16 CFR Parts 2 and 4 to
streamline the processing of compliance reports and to delegate to the
General Counsel the authority to resolve confidentiality issues
respecting information in compliance reports and in other documents
subject to routine placement on the public record. These amendments are
intended to improve efficiency and reduce delays in connection with the
processing of compliance reports and the resolution of confidentiality
issues by the agency.
EFFECTIVE DATE: July 8, 1994.
FOR FURTHER INFORMATION CONTACT: Robert M. Frisby, Attorney, Bureau of
Consumer Protection, 202-326-2098.
SUPPLEMENTARY INFORMATION:
Compliance Procedures
The Commission is revising its procedures for processing compliance
reports submitted pursuant to Commission orders and pursuant to section
2.41(a) of the Commission's Rules of Practice, 16 CFR 2.41(a). Under
former section 2.41(b) of the rules, most compliance reports were
either ``approved'' or ``rejected,'' although the Commission could
bring a civil penalty case pursuant to section 5(l) of the FTC Act, 15
U.S.C. 45(l), without any prior notice to the respondents. See 16 CFR
2.41(a). Henceforth, there will be no provision for Commission approval
or rejection of compliance reports; rather, staff will review these
reports and determine whether to recommend that the Commission take
further action, such as commencing a civil penalty case for failure to
comply with the order.1 Staff may also, in appropriate cases,
advise a respondent that a compliance report appears inadequate and
request that the report be supplemented with additional material that
shall be deemed part of the report.
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\1\This amendment does not revise the approval process relating
to proposed divestitures, acquisitions, or similar transactions
subject to Commission review pursuant to 16 CFR 2.41(f).
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Under the former rules, there was a limited delegation by the
Commission to the Directors and Deputy Directors of the Bureaus of
Competition and Consumer Protection of the authority to approve or
reject most types of compliance reports after five days notice to the
Commission. However, the Commission had reserved for itself the
authority to review, and if warranted to approve or reject four
categories of reports: (1) Most reports involving section 7 of the
Clayton Act; (2) reports in matters which had received previous
Commission consideration as to compliance or in which the Commission or
any Commissioner had expressed an interest; (3) reports in matters
proposed to be closed by reason of expense of investigation or testing,
and (4) reports in matters involving substantial questions as to the
public interest, Commission policy or statutory construction.
Under the new rules, the Director, Deputy Directors, and Assistant
Director for Compliance of the Bureau of Competition and the Director,
Deputy Directors, and Associate Director for Enforcement of the Bureau
of Consumer Protection will be delegated the authority to monitor
compliance reports, and to open and close compliance investigations,
subject to the requirement that staff submit an analysis regarding
their intended actions to the Commission for any report falling within
categories (2), (3), or (4) above. Many compliance reports involving
section 7 of the Clayton Act do not raise issues that require
Commission review. Therefore, the staff will not have to submit an
analysis regarding their intended actions with respect to such reports
unless they fall within categories (2), (3), or (4) above. The result
of the new rules will be to continue to have the Commission advised of
compliance matters of special priority, while promoting the efficient
use of Commission resources.
Confidentiality Requests
The Commission is also amending its rules of practice to delegate
to the General Counsel the authority to resolve confidentiality issues
with respect to information in documents subject to disclosure on the
public record. Section 4.9(b) of the Commission's Rules of Practice, 16
CFR 4.9(b), provides that certain categories of documents are routinely
placed on the public record.2 However, the rules also provide that
portions of compliance reports and other documents subject to routine
placement on the public record will be withheld from public disclosure
if the submitter can make an adequate showing of confidentiality, 16
CFR 2.41(f), 4.9(b)(7), 4.9(c)(1), or if the documents are otherwise
exempt from mandatory public disclosure, 16 CFR 4.9(c)(3) and
4.10.3 Under the revised rule, the General Counsel has the
authority to resolve confidentiality issues respecting such materials.
The General Counsel has substantial expertise in resolving
confidentiality issues, and already resolves numerous other
confidentiality issues. See, e.g., 16 CFR 4.11(a)(2) (appeals under the
Freedom of Information Act); 4.11(e) (subpoenas to Commission
employees).
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\2\Section 4.9(b) sets forth a list of materials subject to
public disclosure. Some of the public record requirements set forth
in section 4.9(b) also appear in other rules. See, e.g., 16 CFR
2.41(f).
\3\Although confidentiality issues will generally be raised by
submitters, Bureau staff may identify a confidentiality issue that
submitters failed to raise. For example, submitters may not identify
as confidential information in a compliance report filed pursuant to
a credit practices order that reveals personal information about
debtors. Such materials may be withheld from the public record,
under section 4.9(c)(3), to the extent that they are exempt from
mandatory public disclosure under the Freedom of Information Act, 5
U.S.C. Sec. 552.
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In addition, the Commission is amending section 4.9(b) of its rules
to provide for placement on the public record of staff letters to
respondents advising them that their compliance reports do not warrant
any further action. This amendment will afford such letters the same
treatment as closing letters sent to the targets of Commission law
enforcement investigations--See 16 CFR 4.9(b)(4)(ii) (provides for
placement of closing letters in initial and full phase investigations
on the public record)--and the same treatment as the compliance reports
themselves. See 16 CFR 4.9(b)(7)(i).
As required by the Regulatory Flexibility Act, 5 U.S.C. 604, it is
hereby certified that this rule will not have a significant economic
impact on small business entities. The agency did not seek or accept
public comments on these amendments because they address rules of
agency organization, procedure, or practice. See 5 U.S.C. 553(b)(A).
List of Subjects
16 CFR Part 2
Administrative practice and procedure, Investigations, Reporting
and recordkeeping requirements.
16 CFR Part 4
Administrative practice and procedure, Freedom of information,
Privacy, Sunshine Act.
PART 2--NONADJUDICATIVE PROCEDURES
1. The authority for part 2 continues to read as follows:
Authority: Sec. 6, 38 Stat. 721; 15 U.S.C. 46, unless otherwise
noted.
2. Section 2.33 is revised to read as follows:
Sec. 2.33 Compliance procedure.
The Commission may in its discretion require that a proposed
agreement containing an order to cease and desist be accompanied by an
initial report signed by the respondent setting forth in precise detail
the manner in which the respondent will comply with the order when and
if entered. Such report will not become part of the public record
unless and until the accompanying agreement and order are accepted by
the Commission. At the time any such report is submitted a respondent
may request confidentiality for any portion thereof with a precise
showing of justification therefore, and the General Counsel with due
regard to statutory restrictions, the Commission's rules, and the
public interest will act upon such request.
3. Sections 2.41 (a), (b), (e), and (f) are revised to read as
follows:
Sec. 2.41 Reports of compliance.
(a) In every proceeding in which the Commission has issued an
order, pursuant to the provisions of section 5 of the Federal Trade
Commission Act or section 11 of the Clayton Act, as amended, and except
as otherwise specifically provided in any such order, each respondent
named in such order shall file with the Commission, within sixty (60)
days after service thereof, or within such other time as may be
provided by the order or the rules in this chapter, a report in
writing, signed by the respondent, setting forth in detail the manner
and form of his compliance with the order, and shall thereafter file
with the Commission such further signed, written reports of compliance
as it may require. Reports of compliance shall be under oath if so
requested. Where the order prohibits the use of a false advertisement
of a food, drug, device, or cosmetic which may be injurious to health
because of results from its use under the conditions prescribed in the
advertisement, or under such conditions as are customary or usual, or
if the use of such advertisement is with intent to defraud or mislead,
or in any other case where the circumstances so warrant, the order may
provide for an interim report stating whether and how respondents
intend to comply to be filed within ten (10) days after service of the
order. When court review of an order of the Commission is pending, the
respondent shall file only such reports of compliance as the court may
require. Thereafter, the time for filing a report of compliance shall
begin to run de novo from the final judicial determination, except that
if no petition for certiorari has been filed following affirmance of
the order of the Commission by a court of appeals, the compliance
report shall be due the day following the date on which the time
expires for the filing of such petition. Staff of the Bureaus of
Competition and Consumer Protection will review such reports of
compliance and may advise each respondent whether the staff intends to
recommend that the Commission take any enforcement action. The
Commission may, however, institute proceedings, including certification
of facts to the Attorney General pursuant to the provisions of section
5(l) of the Federal Trade Commission Act (15 U.S.C. 45(l)) and section
11(1) of the Clayton Act, as amended (15 U.S.C. 21(1)), to enforce
compliance with an order, without advising a respondent whether the
actions set forth in a report of compliance evidence compliance with
the Commission's order or without prior notice of any kind to a
respondent.
(b) The Commission has delegated to the Director, the Deputy
Directors, and the Assistant Director for Compliance of the Bureau of
Competition, and to the Director, the Deputy Directors, and the
Associate Director for Enforcement of the Bureau of Consumer Protection
the authority to monitor compliance reports and to open and close
compliance investigations. With respect to any compliance matter which
has received previous Commission consideration as to compliance or in
which the Commission or any Commissioner has expressed an interest, any
matter proposed to be closed by reason of expense of investigation or
testing, or any matter involving substantial questions as to the public
interest, Commission policy or statutory construction, the Bureaus
shall submit an analysis to the Commission regarding their intended
actions.
* * * * *
(e) The Commission may at any time reconsider any advice given
under this section and, where the public interest requires, rescind or
revoke its prior advice. In such event the respondent will be given
notice of the Commission's intent to revoke or rescind and will be
given an opportunity to submit its views to the Commission. The
Commission will not proceed against a respondent for violation of an
order with respect to any action which was taken in good faith reliance
upon the Commission's advice under this section, where all relevant
facts were fully, completely, and accurately presented to the
Commission and where such action was promptly discontinued upon
notification of rescission or revocation of the Commission's advice.
(f) All applications for approval of proposed divestitures,
acquisitions, or similar transactions subject to Commission review
under outstanding orders, together with supporting materials, will be
placed on the public record as soon after they are received as
circumstances permit, except for information for which confidential
classification has been requested, with a showing of justification
therefor, and which the General Counsel, with due regard to statutory
restrictions, the Commission's rules, and the public interest, has
determined should not be made public. Within thirty (30) days after
such requests and materials are placed on the public record, any person
may file formal written objections or comments with the Secretary of
the Commission. Such objections or comments shall be placed on the
public record except for information for which confidentiality has been
requested, with a showing of justification therefor, and which the
General Counsel with due regard to statutory restrictions, the
Commission's rules, and the public interest, has determined should not
be made public. Additionally, any communications, written or oral,
concerning such proposed transactions, received by any individual
member of the Commission, or by any employee involved in the decisional
process, will be placed on the public record immediately after their
receipt. In the case of an oral communication, the member or employee
shall immediately furnish the Commission with a memorandum setting
forth the full contents of such communication and the circumstances
thereof, and such memorandum will immediately be placed on the public
record. All responses to applications for approval of proposed
divestitures, acquisitions, or similar transactions subject to
Commission review under outstanding orders, together with a statement
of supporting reasons, will be published when made.
PART 4--MISCELLANEOUS RULES
4. The authority for part 4 continues to read as follows:
Authority: Sec. 6, 38 Stat. 721; 15 U.S.C. 46.
5. Section 4.9(b)(7)(i), (c)(1) and (c)(3) are revised to read as
follows:
Sec. 4.9. Public records.
* * * * *
(b) * * *
(7) Compliance/Enforcement (16 CFR 2.33, 2.41). (i) Reports of
compliance filed pursuant to the rules in this chapter or pursuant to a
provision in a Commission order and supplemental materials filed in
connection with these reports, except for reports of compliance, and
supplemental materials filed in connection with Commission orders
requiring divestitures or establishment of business enterprises or
facilities, which are confidential until the last divestiture or
establishment of a business enterprise or facility, as required by a
particular order, has been finally approved by the Commission, and
staff letters to respondents advising them that their compliance
reports do not warrant any further action. At the time each such report
is submitted the filing party may request confidential treatment in
whole or in part and submit satisfactory reasons therefor, and the
General Counsel with due regard for statutory restrictions, the
Commission's rules and the public interest will pass upon such request;
* * * * *
(c) Confidentiality and in camera records. (1) Persons submitting
documentary material to the Commission described in this section may
designate that material or portions of it confidential and request that
it be withheld from the public record. No such material or portions of
material (including documents generated by the Commission or its staff
containing or reflecting such material or portions of material) will be
placed on the public record pursuant to this section until the General
Counsel has ruled on the request for confidential treatment and
provided any prior notice to the submitter required by law. All
requests for confidential treatment shall be supported by a showing of
justification in light of applicable statutes, rules, orders of the
Commission or its administrative law judges, orders of the courts, or
other relevant authority.
* * * * *
(3) To the extent that any documents or portions of documents
otherwise falling within Sec. 4.9(b) of this section contain
information that would be exempt from mandatory public disclosure under
Sec. 4.10 of this part, the General Counsel may determine to withhold
such materials from the public record.
By direction of the Commission, Commissioner Owen dissenting.
Donald S. Clark,
Secretary.
[FR Doc. 94-16513 Filed 7-7-94; 8:45 am]
BILLING CODE 6750-01-P
