FEDERAL TRADE COMMISSION (FTC)

Statement of Regulatory and Deregulatory Priorities

I. Regulatory and Deregulatory Priorities

Background

The Federal Trade Commission ("FTC" or "Commission") is an independent agency charged by its enabling statute, the Federal Trade Commission Act, with protecting American consumers from "unfair methods of competition" and "unfair or deceptive acts or practices" in the marketplace. The Commission strives to ensure that consumers benefit from a vigorously competitive marketplace. The Commission's work is rooted in a belief that competition, based on truthful and non-misleading information about products and services, provides consumers the best choice of products and services at the lowest prices.

The Commission pursues its goal of promoting competition in the marketplace through two different, but complementary, approaches. Unfair or deceptive acts or practices injure both consumers and honest competitors alike and undermine competitive markets. Through its consumer protection activities, the Commission seeks to ensure that consumers receive accurate, truthful, and non-misleading information in the marketplace. At the same time, for consumers to have a choice of products and services at competitive prices and quality, the marketplace must be free from anticompetitive business practices. Thus, the second part of the Commission's basic mission-antitrust enforcement-is to prohibit anticompetitive mergers or other anticompetitive business practices without unduly interfering with the legitimate activities of businesses. These two complementary missions make the Commission unique insofar as it is the Nation's only Federal agency to be given this combination of statutory authority to protect consumers.

The Commission is, first and foremost, a law enforcement agency. It pursues its mandate primarily through case-by-case enforcement of the Federal Trade Commission Act and other statutes. In addition, the Commission is also charged with the responsibility of issuing and enforcing regulations under a number of statutes. Pursuant to the FTC Act, the Commission currently has in place 16 trade regulation rules. Other examples include the regulations enforced pursuant to credit and financial statutes[1] and to energy laws.[2] The Commission also has adopted a number of voluntary industry guides. Most of the regulations and guides pertain to consumer protection matters and are intended to ensure that consumers receive the information necessary to evaluate competing products and make informed purchasing decisions.

Commission Initiatives

The Commission protects consumers through a variety of tools, including both regulatory and non-regulatory approaches. It has encouraged industry self-regulation, developed a corporate leniency policy for certain rule violations, and established compliance partnerships where appropriate.

As detailed below, protecting consumer privacy, helping consumers in financial distress, promoting competition in health care and containing costs of prescription drugs, and using appropriate measures of enforcement, education, and public engagement to address evolving technology and innovation continue to be at the forefront of the Commission's consumer protection and competition programs. By subject area, the FTC discusses the major workshops, reports,[3] and initiatives it has pursued since the 2011 Regulatory Plan was published.

(a) Protecting Consumer Privacy. The Commission continues to raise the profile of privacy practices - online and off - through law enforcement, consumer education, and policy initiatives. FTC settlement orders against Facebook and Google resolved charges that these companies violated their privacy promises to consumers.[4] These two settlements showed that all companies big or small must abide by FTC orders against them and keep their privacy promises to consumers.

During 2011-2012, the Commission hosted a series of workshops to explore the privacy issues and challenges associated with 21st century technology and business practices to determine how best to protect consumer privacy while supporting beneficial uses of information and technological innovation. The facial recognition technologies workshop (December 2011) examined the benefits to consumers, as well as privacy and security concerns regarding current and possible future commercial uses of facial recognition technologies, and staff will make recommendations by the end of 2012 on best practices for companies that use these new technologies. Also, on May 30, 2012, the Commission held a workshop to consider the need for new guidance concerning advertising and privacy disclosures in today's online and mobile environments.

Additionally, the FTC's final report[5] (March 2012) on privacy adopted three principles proposed in the draft report (December 2010)-privacy by design, greater transparency, and more consumer choice-to help ensure consumer privacy and business innovation. The report continued to encourage businesses to improve their privacy practices through self-regulation, including a Do Not Track system, and noted some industry progress in this area. The report also identified areas such as large platforms, mobile, and data brokers for further attention in the coming year, and recommended that Congress consider legislation implementing basic privacy protections.

(b) Help for Consumers in Financial Distress. The FTC is vigilantly investigating and prosecuting "Last Dollar" Fraud from scammers who take advantage of the Nation's most financially fragile consumers through deceptive mortgage servicing practices, abusive debt collection tactics, bogus credit repair services, mortgage, tax and debt relief offers, and fraudulent job and business opportunity schemes. Historic levels of consumer debt, continued unemployment, and an unprecedented downturn in the housing and mortgage markets contributed to high rates of consumer bankruptcies and mortgage loan delinquency and foreclosure. Debt relief services proliferated after the financial crisis and a significant number of consumers hold debts they cannot pay.

The national mortgage crisis launched an industry of companies purporting, for a fee, to obtain mortgage loan modifications or other relief for consumers facing foreclosure. The Commission and other law enforcement have also taken action against mortgage companies that harm consumers through their advertising and servicing practices.

In recent years, debt buyers have become a significant part of the debt collection system. The Commission issued the compulsory process following its February 2009 report, based on an agency debt collection workshop, in which it found major problems in the flow of information among creditors, debt buyers, and collection agencies. In December 2009, the Commission issued compulsory information requests to nine of the Nation's largest debt buying[6] companies, requiring them to produce information about their practices in buying and selling consumer debt. These nine companies collectively purchased about 75 percent of the debt sold in the United States in 2008. The Commission issued the compulsory information requests to determine whether the practice of debt buying is contributing to the information flow problems and, more generally, to obtain a better understanding of the role of debt buyers in the debt collection system. The Commission is using the information for a study of the debt buying industry and plans to report its findings by the end of 2012.

On April 28, 2011, the Commission held a workshop, "Debt Collection 2.0: Protecting Consumers as Technologies Change." The workshop addressed the impact of technological advances on the debt collection system, the resulting consumer protection concerns, and the need for responsive policy changes. Technologies discussed included the tools collectors use to locate consumers and their assets; changing modes of collector-consumer communications, such as mobile phones, auto-dialers, and electronic mail; the software that collectors use to manage information about consumers and debts; and collector use of social media applications. Commission staff is drafting a document highlighting the workshop's key findings and their policy implications.

(c) Promoting Competition in Health Care. The FTC continues to work to restrict anticompetitive settlements featuring payments by branded drug firms to a generic competitor to keep generic drugs off the market (so called, "pay for delay" agreements). It's a practice where the pharmaceutical industry wins, but consumers lose. The brand company protects its drug franchise, the generic competitor

makes more money from the sweetheart deal than if it had entered the market and competed, and

Consumers end up paying an estimated additional $3.5 billion annually because of these deals.[7] The Commission has a two-pronged approach to restricting pay-for-delay agreements: Active support for legislation to ban these harmful agreements-including proposed legislation that the Senate Judiciary Committee recently approved[8]-and Federal court challenges to invalidate individual agreements. The FTC is actively litigating to restrict pay-for-delay agreements,[9] including participating as an amicus in a landmark decision during July 2012 by an appellate court in the Third Circuit,[10] with jurisdiction over a significant number of U.S. pharmaceutical firms, which agreed with the Commission's position on pay-for-delay. However, solving this problem through the courts will take considerable time during which American consumers and governments will continue to pay high prices for prescription drugs. Therefore, even as the Commission fights against anticompetitive pay-for-delay settlements in the courts, the Commission continues to support a legislative solution to the problem.

Also in the health care arena, the FTC worked with the Department of Justice and other agencies, most notably the Centers for Medicare and Medicaid Services, to develop a Joint Statement of Antitrust Enforcement Policy for Accountable Care Organizations (ACOs).[11] Broadly speaking, the policy statement explains how the Agencies will enforce the antitrust laws with respect to ACOs. It creates a safety zone for certain ACOs that are highly unlikely to raise significant competitive concerns, and therefore will not be challenged by the Agencies under the antitrust laws, absent extraordinary circumstances. The statement also provides guidance for ACOs that do not fall within the safety zone.

We have sought where possible to be flexible in our approach. In response to feedback from providers and other stakeholders, we made some modifications to the proposed policy statement. For example, the entire final policy Statement (with the exception of voluntary review) applies to all collaborations among otherwise independent providers and provider groups that are eligible and intend, or have been approved, to participate in the Medicare Shared Savings Program. The policy statement no longer only applies to collaborations formed after March 23, 2010. We also expanded the rural exception, which allows rural ACOs to fall within the safety zone, under certain circumstances.

(d) Food Marketing to Children. After obtaining OMB approval, the Commission issued information requests on August 12, 2010, to 48 major food and beverage manufacturers, and quick-service restaurant companies about spending and marketing activities targeting children and adolescents, as well as nutritional information for food and beverage products that the companies market to these young consumers. The study will advance the Commission's understanding of how food industry promotional dollars targeted to children and adolescents are allocated, the types of activities and marketing techniques the food industry uses to market its products to children and adolescents, and the extent to which self-regulatory efforts are succeeding in improving the nutritional quality of foods advertised to children and adolescents. The Bureau of Consumer Protection is analyzing the data and preparing a report, which is expected to be released in late 2012.

(e) Alcohol Advertising. On February 1, 2012, OMB gave the Commission approval, under the Paperwork Reduction Act, to issue compulsory process orders to up to 14 alcohol companies. On April 16, 2012, the Commission issued the orders, seeking information on company brands, sales, and marketing expenses; compliance with advertising placement codes; and use of social media and other digital marketing.[12] The Commission staff estimates that the study will be completed, and a report issued, in spring 2013. The Commission also continues to promote the "We Don't Serve Teens" consumer education program, supporting the legal drinking age.[13]

(f) Gasoline Prices. Given the impact of energy prices on consumer budgets, the energy sector continues to be a major focus of FTC law enforcement and study. In November 2009, the FTC's Petroleum Market Manipulation Rule became final.[14] Our staff continues to examine all

communications from the public about potential violations of this Rule, which prohibits

manipulation in wholesale markets for crude oil, gasoline, and petroleum distillates. In June 2011,

the FTC announced that it is using compulsory process to determine, among other things,

whether firms at various stages of the oil industry are engaging in anticompetitive or manipulative conduct.[15] Other activities complement these efforts, including merger enforcement and an agreement with the Commodity Futures Trading Commission to share investigative information.

(g) Financing of Motor Vehicles. The Commission held a series of roundtable events[16] to gather information on possible consumer protection issues that may arise in the sale, lease, or financing of motor vehicles. For many consumers, buying or leasing a car is their most expensive financial transaction aside from owning a home. With prices averaging more than $28,000 for a new vehicle and $14,000 for a used vehicle from a dealer, most consumers seek to lease or finance the purchase of a new or used car. Financing obtained at a dealership may provide benefits for many consumers, such as convenience, special manufacturer-sponsored programs, access to a variety of banks and financial entities, or access to credit otherwise unavailable to a buyer. Dealer-arranged financing, however, can be a complicated, opaque process and could potentially involve unfair or deceptive practices.[17] One hundred comments were received and are being considered.

In spring 2011, the Commission issued final orders regarding five auto dealers (Billion Auto, Ramey Motors, Frank Myers AutoMaxx, Key Hyundai, and Hyundai of Milford). The orders settled charges that the dealers made deceptive claims that they would pay off the remaining balance on consumers' trade-ins, no matter what they owed. Instead, the dealers rolled the negative equity into the consumers' new vehicle loans or, regarding one dealer, required consumers to pay it out of pocket. The agency is continuing to monitor this industry and will identify other enforcement actions and initiatives, as appropriate, to protect consumers in the financing and leasing of motor vehicles.

(h) Fraud Surveys. The FTC's Bureau of Economics (BE) continues to conduct fraud surveys and related research on consumer susceptibility to fraud. For example, the FTC is conducting an exploratory study on consumer susceptibility to fraudulent and deceptive marketing. This research is intended to further the FTC's mission of protecting consumers from unfair and deceptive marketing. Data analysis has been completed and BE is drafting a staff report. BE is also surveying consumer experiences with consumer fraud. Data has been collected and is currently being analyzed. Neither study is intended to lead to enforcement actions; rather, study results may aid the FTC's efforts to better target its enforcement actions and consumer education initiatives, and improve future fraud surveys.

(i) Protecting Consumers from Cross-Border Harm. The FTC continues to protect American consumers from fraud by making greater use of the tools provided by the U.S. SAFE WEB Act. The FTC has used the Act to cooperate with its foreign law enforcement counterparts in investigations and enforcement actions involving Internet fraud and other technological abuses and deceptive schemes that victimize U.S. consumers. Given the success of the U.S. SAFE WEB Act, the Commission continues to recommend that Congress repeal the Act's 7-year sunset provision before it expires in 2013.

The FTC strives to promote sound approaches to common problems by building relationships with sister agencies around the world. The FTC and DOJ recently signed a landmark Memorandum of Understanding with China's competition agencies, and reaffirmed a set of best practices for use in U.S./European Union merger reviews. These efforts foster consistent outcomes in antitrust investigations, especially international mergers. For example, the FTC cooperated with 10 foreign jurisdictions to review Western Digital's proposed acquisition of Hitachi Global Storage Technologies and design remedies to resolve allegations that the deal would likely harm competition in the personal computer hard disk drive market.

The agency also continued its outreach to aid effective international cooperation by creating an online virtual university for competition authorities worldwide as part of the International Competition Network's Curriculum Project. In the last year, the FTC's technical assistance to foreign agencies included intensive training for the Competition Commission of India and for consumer protection agencies in Latin America.

In December 2011, the Commission urged the Internet Corporation for Assigned Names and Numbers (ICANN) to implement consumer protection safeguards before it dramatically expands the Internet domain name system.[18] The FTC warned that without additional protections, the rapid expansion in the number of generic top-level domain names will increase opportunities for consumer fraud.

(j) Journalism and the Internet. In 2009-2010, the FTC began a project to examine how the Internet has transformed the competitive dynamics of the news media industry. The Agency first held a series of exploratory workshops, seeking expert views and public comments on various aspects of the challenges and new opportunities facing the news industry. The Agency continues to analyze the issues discussed at those workshops and elsewhere, including the economics of journalism in a digital world, new business and non-profit models for journalism, and whether any changes to Government policies might be warranted. The Agency plans to release a report in late fall 2012.

(k) Self-Regulatory and Compliance Initiatives with Industry. The Commission continues to engage industry in compliance partnerships in the funeral and franchise industries. Specifically, the Commission's Funeral Rule Offender Program, conducted in partnership with the National Funeral Directors Association, is designed to educate funeral home operators found in violation of the requirements of the Funeral Rule, 16 CFR 453, so that they can meet the rule's disclosure requirements. Some 400 funeral homes have participated in the program since its inception in 1996. In addition, the Commission established the Franchise Rule Alternative Law Enforcement Program in partnership with the International Franchise Association (IFA), a nonprofit organization that represents both franchisors and franchisees. This program is designed to assist franchisors found to have a minor or technical violation of the Franchise Rule, 16 CFR 436, in complying with the rule. Violations involving fraud or other section 5 violations are not candidates for referral to the program. The IFA teaches the franchisor how to comply with the rule and monitors its business for a period of years. Where appropriate, the program offers franchisees the opportunity to mediate claims arising from the law violations. Since December 1998, 21 companies have agreed to participate in the program.

Rulemakings and Studies Required by Statute

Congress has enacted laws requiring the Commission to undertake rulemakings and studies. This section discusses required rules and studies. The final actions section below describes actions taken on the required rulemakings and studies since the 2011 Regulatory Plan was published.

FACTA Rules. The Commission has already issued nearly all of the rules required by FACTA (Fair and Accurate Credit Transactions Act). These rules are codified in several parts of 16 CFR 600 et seq., amending or supplementing regulations relating to the Fair Credit Reporting Act. The enforcement of the Red Flags Rule (or Identity Theft Rule), 16 CFR 681, was delayed by the Commission from its initial effective date of November 1, 2008, until January 1, 2011, pending clarification by Congress. The "Red Flag Program Clarification Act of 2010" (or the Act), Public Law No. 111-319, was signed into law on December 18, 2010. The Commission and the banking agencies expect to revise the Red Flags Rule to implement the Act by the end of 2012.

FACTA Studies. On March 27, 2009, the Commission issued compulsory information requests to the nine largest private providers of homeowner insurance in the Nation. The purpose was to help the FTC collect data for its study on the effects of credit-based scores in the homeowner insurance market, a study mandated by section 215 of the FACTA. During the summer of 2009, these nine insurers submitted responses to the Commission's requests. FTC staff has reviewed the large policy-level data files included in these submissions and has identified a sample set of data to be used for the study. The insurance companies then entered protracted negotiations with their vendor to ensure the security of delivering the data set to the FTC's own and separate vendor and then on to the Social Security Administration before returning the data to the FTC. Staff expects to prepare and submit the report to Congress during the summer of 2013. The data collection phase of the study should be completed by the end of fall, 2012. This study is not affected by the Consumer Financial Protection Act.

The FTC is also conducting a national study of the accuracy of consumer reports in connection as required under section 319 of the FACTA. This study is a follow-up to the Commission's two previous pilot studies that were undertaken to evaluate a potential design for a national study. Section 319 requires the FTC to study the accuracy and completeness of information in consumers' credit reports and to consider methods for improving the accuracy and completeness of such information. Section 319 of the Act also requires the Commission to issue a series of biennial reports to Congress over a period of 11 years.[19] A major report on the study is due by December 2012. This study is also not affected by the Consumer Financial Protection Act.

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), 16 CFR 305. Under direction from Congress to examine the effectiveness of light bulb labels, the FTC introduced a new "Lighting Facts" label in July 2010 for medium screw-base light bulbs. 75 FR 41696. On July 22, 2011, the Commission announced an NPRM seeking comment on expanding the "Lighting Facts" label coverage to additional bulb types and a specific test procedure for light-emitting diode (LED) bulbs. Staff anticipates sending a recommendation to the Commission by early 2013.

Regional Efficiency Standards--Section 306 of the EISA (Energy Independence and Security Act of 2007) directs that within 90 days of the Department of Energy (DOE) publishing a final rule establishing regional efficiency standards for furnaces, central air conditioners, and heat pumps, the FTC must undertake a rulemaking to determine the appropriate disclosures regarding conformance with such regional standards. The DOE's final rule became effective on October 25, 2011. The statutory deadline for the Commission to issue requirements for disclosures on residential heating and cooling equipment is 15 months after DOE issued their final efficiency standards. 76 FR 37408. Accordingly, on November 28, 2011, the Commission published an ANPRM seeking comment on disclosures to help consumers, distributors, contractors, and installers easily determine whether a specific furnace, central air conditioner, or heat pump meets the applicable new DOE efficiency standard for the region where it will be installed. 76 FR 72872. On June 6, 2012, the Commission published an NPRM seeking public comment on proposed changes to the EnergyGuide labels which would provide a U.S. map showing where the product can be installed legally, a simple format for efficiency ratings, and a link to an online energy cost calculator. The FTC also proposed requiring the label on manufacturers' websites, product packaging, and, as currently required, on the products themselves. The comment period closed on August 6, 2012, and the Commission expects to issue a final rule by January 2013.

Fur Rules. The Fur Products Labeling Act (Fur Act) requires covered furs and fur products to be labeled, invoiced, and advertised to show: (1) the name(s) of the animal that produced the fur(s); (2) where such is the case, that the fur is used fur or contains used fur; (3) where such is the case, that the fur is bleached, dyed, or otherwise artificially colored; and (4) the name of the country of origin of any imported furs used in the fur product. The implementing Fur Act rules (Fur Rules) are set forth at 16 CFR 301. In December 2010, Congress passed the Truth in Fur Labeling Act (the TFLA), which amends the Fur Act, by: (1) eliminating the Commission's discretion to exempt fur products of "relatively small quantity or value" from disclosure requirements; and (2) providing that the Fur Act will not apply to certain fur products "obtained ... through trapping or hunting" and sold in "face to face transaction[s]." Public Law No. 111-113. The TFLA also directs the Commission to review and allow comment on the Fur Products Name Guide, 16 CFR 301.0 (Name Guide). On September 17, 2012, the Commission published a proposed amendment to the Fur Rules to update its Fur Products Name Guide, provide more labeling flexibility, incorporate recently enacted Truth in Fur Labeling Act provisions, and eliminate unnecessary requirements. The comment period closes on November 16, 2012. 77FR 57043. Staff anticipates the Commission will issue a final rule by April 2013.

Retrospective Review of Existing Regulations

In 1992, the Commission implemented a program to review its rules and guides regularly. The Commission's review program is patterned after provisions in the Regulatory Flexibility Act, 5 U.S.C. 601-612. Under the Commission's program, rules have been reviewed on a 10-year schedule. For many rules, this has resulted in more frequent reviews than is generally required by section 610 of the Regulatory Flexibility Act. This program is also broader than the review contemplated under the Regulatory Flexibility Act, in that it provides the Commission with an ongoing systematic approach for seeking information about the costs and benefits of its rules and guides and whether there are changes that could minimize any adverse economic effects, not just a "significant economic impact upon a substantial number of small entities." 5 U.S.C. 610.

As part of its continuing 10-year review plan, the Commission examines the effect of rules and guides on small businesses and on the marketplace in general. These reviews may lead to the revision or rescission of rules and guides to ensure that the Commission's consumer protection and competition goals are achieved efficiently and at the least cost to business. In a number of instances, the Commission has determined that existing rules and guides were no longer necessary nor in the public interest. Most of the matters currently under review pertain to consumer protection and are intended to ensure that consumers receive the information necessary to evaluate competing products and make informed purchasing decisions. Pursuant to this program, the Commission has rescinded 37 rules and guides promulgated under the FTC's general authority and updated dozens of others since the early 1990s.

In light of Executive Orders 13563 and 13579, the FTC continues to take a fresh look at its longstanding regulatory review process. The Commission is taking a number of steps to ease burdens on business and promote transparency in its regulatory review program:

• The Commission recently issued a revised 10-year review schedule (see next paragraph below) and is accelerating the review of a number of rules and guides in response to recent changes in technology and the marketplace. More than a third of the Commission's 66 rules and guides will be under review, or will have just been reviewed, by the end of 2012.

• The Commission continues to request and review public comments on the effectiveness of its regulatory review program and suggestions for its improvement.

• The FTC has launched a Web page at http://www.ftc.gov/regreview that serves as a one-stop shop for the public to obtain information and provide comments on individual rules and guides under review as well as the Commission's regulatory review program generally.

Pursuant to section 2 of Executive Order 13579 "Regulation and Independent Regulatory Agencies" (July 11, 2011), the following Regulatory Identifier Numbers (RINs) have been identified as associated with retrospective review and analysis in the FTC's regulatory review plan. The table includes rulemakings that the Agency expects to issue in proposed or final form during the upcoming year. Each entry includes the title of the rulemaking subject to the Agency's retrospective analysis, the RIN and whether it is expected to reduce burdens on small businesses. The regulatory review plan can be found at: www.ftc.gov.

Rule

Regulatory Identifier Numbers (RIN)

Expected to Reduce Burdens on Small Business (Yes/No)

Trade Regulation Rule Concerning Cooling Off Period for Sales Made at Homes or at Certain Other Locations, 16 CFR 429

3084-AB10

Yes

Children's Online Privacy Protection Rule, 16 CFR 312

3084-AB20

No

In addition, the Commission's 10-year periodic review schedule includes the following rules and guides (77 FR 22234, Apr. 13, 2012) for 2013:

Furthermore, consistent with the goal of reducing unnecessary burdens under section 6 of Executive Order 13563, the Commission proposes to amend:

In particular, the Alternative Fuel Rule proposal is estimated to save industry approximately 35,000 hours in compliance time.[20] Please see the relevant sections under Rulemakings and Studies Required by Statute above (for Appliance Labeling Rule) and Ongoing Rule and Guide Reviews below (for Alternative Fuel Rule) for further information.

Ongoing Rule and Guide Reviews

The Commission is continuing review of a number of rules and guides, which are discussed below.

(a) Rules

Children's Online Privacy Protection Rule ("COPPA Rule"), 16 CFR 312. The COPPA Rule requires operators of websites and online service providers directed at children under 13 (operators), with certain exceptions, to obtain verifiable parental consent before collecting, using, or disclosing personal information from or about children under the age of 13. An operator must make reasonable efforts, in light of available technology, to ensure that the person providing consent is the child's parent. The Commission issued an ANPRM requesting comments on the Rule as part of the systematic regulatory review process. 75 FR 17089 (Apr. 5, 2010). The Commission held a public roundtable on the Rule on June 2, 2010, and the comment period, as extended, ended on July 12, 2010. On September 15, 2011, the Commission announced it was proposing modifications to the Rule in five areas to respond to changes in online technology, including in the mobile marketplace, and, where appropriate, to streamline the Rule: definitions, including the definitions of "personal information" and "collection," parental notice, parental consent mechanisms, confidentiality and security of children's personal information, and the role of self-regulatory "safe harbor" programs. 76 FR 59804. In addition, the Commission also proposed adding a new provision addressing data retention and deletion. The Commission received 350 comments.

In response to the comments and informed by its experience in enforcing and administering the COPPA Rule, the Commission issued a supplemental NPRM on August 6, 2012, to modernize the Rule to ensure that children's online privacy continues to be protected, as directed by Congress, as new online technologies evolve, and to clarify existing obligations for operators under the Rule. 77 FR 46643. The comment period, as extended, closed on September 24, 2012. Staff anticipates that the Commission will issue a final rule by the end of 2012.

Premerger Notification Rules and Report Form, 16 CFR 801-803. On August 20, 2012, the Commission, in conjunction with the DOJ's Antitrust Division, announced they were seeking public comments on proposed changes to the premerger notification rules that could require companies in the pharmaceutical industry to report proposed acquisitions of exclusive patent rights to the FTC and the DOJ for antitrust review. 77 FR 50057 (Aug. 20, 2012). The proposed rulemaking clarifies when a transfer of exclusive rights to a patent in the pharmaceutical industry results in a potentially reportable asset acquisition under the Hart Scott Rodino (HSR) Act. The comment period closed on October 25, 2012. Staff anticipates that a final rule will be issued in late 2012 or early 2013.

Labeling Requirements for Alternative Fuels and Alternative Fueled Vehicles Rule ("Alternative Fuel Rule"), 16 CFR 309. The Alternative Fuel Rule, which became effective on November 20, 1995, and was last reviewed in 2004, requires disclosure of appropriate cost and benefit information to enable consumers to make reasonable purchasing choices and comparisons between non-liquid alternative fuels, as well as alternative-fueled vehicles. On June 19, 2012, following a review of the rule, [21] the Commission proposed to amend the rule to: (1) consolidate the FTC's alternative fueled vehicle ("AFV") labels with new fuel economy labels required by the Environmental Protection Agency and the National Highway Traffic Safety Administration; and (2) eliminate the requirement for a separate AFV label for used vehicles. 77 FR 36423. The public comment period on these proposed amendments closed on August 17, 2012. Staff anticipates Commission action by December 2012.

Negative Option Rule, 16 CFR 425. The Negative Option Rule governs the operation of prenotification subscription plans. Under these plans, sellers ship merchandise automatically to their subscribers and bill them for the merchandise within a prescribed time. The rule protects consumers by requiring the disclosure of the terms of membership clearly and conspicuously and establishes procedures for administering the subscription plans. An ANPRM was published on May 14, 2009, 74 FR 22720, and the comment period closed on July 27, 2009. On August 7, 2009, the Commission reopened and extended the comment period until October 13, 2009. 74 FR 40121. Staff anticipates that the Commission will announce further action by October 2012.

Telemarketing Sales Rule (TSR), 16 CFR 308. TSR/Caller ID-The Commission issued an advance notice of proposed rulemaking on December 15, 2010, requesting public comment on provisions of the Telemarketing Sales Rule concerning caller identification services and disclosure of the identity of the seller or telemarketer responsible for telemarketing calls. 75 FR 78179. The Commission solicited comments on whether changes should be made to the TSR to reflect the current use and capabilities of Caller ID technologies. In particular, the Commission is interested in whether the TSR should be amended to better achieve the objectives of the Caller ID provisions-including enabling consumers and law enforcement to use Caller ID information to identify entities responsible for illegal telemarketing practices. The comment period closed on January 28, 2011. Staff is reviewing the comments and anticipates making a recommendation to the Commission by the end of 2012.

TSR/Anti-fraud Provisions-The Commission staff are also considering possible amendments to the TSR that would provide new or strengthen existing anti-fraud provisions, as well as make explicit certain other requirements in the TSR. Staff anticipates that the Commission will issue an NPRM by the end of 2012.

Mail or Telephone Order Merchandise Rule. The Mail Order Rule, 16 CFR 435, requires that, when sellers advertise merchandise, they must have a reasonable basis for stating or implying that they can ship within a certain time. On September 30, 2011, the Commission published a NPRM proposing to: clarify that the Rule covers all orders placed over the Internet; revise the Rule to allow sellers to provide refunds and refund notices by any means at least as fast and reliable as first class mail; clarify sellers' obligations when buyers use payment systems not enumerated in the Rule; and require that refunds be made within seven working days for purchases made using third-party credit cards. 76 FR 60765. The comment period closed on December 14, 2011. Staff has reviewed the comments and anticipates Commission action by early 2013.

Used Car Rule. The Used Motor Vehicle Trade Regulation Rule ("Used Car Rule"), 16 CFR 455, sets out the general duties of a used vehicle dealer; requires that a completed Buyers Guide be posted at all times on the side window of each used car a dealer offers for sale; and mandates disclosure of whether the vehicle is covered by a dealer warranty and, if so, the type and duration of the warranty coverage, or whether the vehicle is being sold "as is-no warranty." The Commission published a notice seeking public comments on the effectiveness and impact of the rule. 73 FR 42285 (July 21, 2008). The notice sought comments on a range of issues including, among others, whether a bilingual Buyers Guide would be useful or practicable, as well as what form such a Buyers Guide should take. The notice also sought comments on possible changes to the Buyers Guide that reflect new warranty products, such as certified used car warranties, that have become increasingly popular since the rule was last reviewed. The comment period, as extended and then reopened, ended on June 15, 2009. Staff anticipates that the Commission's next Federal Register notice will be issued by the end of October 2012.

Consumer Warranty Rules, 16 CFR 701-703. The Rule Governing the Disclosure of Written Consumer Product Warranty Terms and Conditions (Rule 701) establishes requirements for warrantors for disclosing the terms and conditions of written warranties on consumer products actually costing the consumer more than $15.00. The Rule Governing the Pre-Sale Availability of Written Warranty Terms, 16 CFR part 702 (Rule 702) requires sellers and warrantors to make the terms of a written warranty available to the consumer prior to sale. The Rule Governing Informal Dispute Settlement Procedures (IDSM) (Rule 703) establishes minimum requirements for those informal dispute settlement mechanisms that are incorporated by the warrantor into its consumer product warranty. By incorporating the IDSM into the warranty, the warrantor requires the consumer to use the IDSM before pursuing any legal remedies in court. On August 23, 2011, as part of its ongoing systematic review of all Federal Trade Commission rules and guides, the Commission requested comments on, among other things, the economic impact and benefits of these Rules, Guides, and Interpretations;[22] possible conflict between the Rules, Guides, and Interpretations and State, local, or other Federal laws or regulations; and the effect on the Rules, Guides, and Interpretations of any technological, economic, or other industry changes. 76 FR 52596. The comment period closed on October 24, 2011. Staff anticipates sending a recommendation to the Commission by December 2012.

Cooling-Off Rule. The Cooling-Off Rule requires that a consumer be given a 3-day right to cancel certain sales greater than $25.00 that occur at a place other than a seller's place of business. The rule also requires a seller to notify buyers orally of the right to cancel, to provide buyers with a dated receipt or copy of the contract containing the name and address of the seller and notice of cancellation rights, and to provide buyers with forms which buyers may use to cancel the contract. An ANPRM seeking comment was published on April 21, 2009. 74 FR 18170. The comment period, as extended, ended on September 25, 2009. 74 FR 36972 (Jul. 27, 2009). Staff prepared a recommendation for the Commission and anticipates publication of an NPRM by November 2012.

Unavailability Rule. The Unavailability Rule,16 CFR 424, states that it is a violation of section 5 of the Federal Trade Commission Act for retail stores of food, groceries, or other merchandise to advertise products for sale at a stated price if those stores do not have the advertised products in stock and readily available to customers during the effective period of the advertisement, unless the advertisement clearly discloses that supplies of the advertised products are limited or are available only at some outlets. This Rule is intended to benefit consumers by ensuring that advertised items are available, that advertising-induced purchasing trips are not fruitless, and that store prices accurately reflect the prices appearing in the ads. On August 12, 2011, the Commission announced an ANPRM and a request for comment on the Rule as part of its systematic periodic review of current rules. The comment period closed on October 19, 2011. Staff has reviewed the comments and expects to submit a recommendation to the Commission by the end of 2012.

(b) Guides

Guides for the Use of Environmental Marketing Claims (Green Guides), 16 CFR 260. After holding three public workshops, analyzing public comments, and studying consumer perceptions of certain environmental claims, the Commission announced on October 6, 2010, proposed revisions to the Green Guides to help marketers avoid making misleading environmental claims. The proposed changes are designed to update the Guides and make them easier for companies to understand and use. The changes to the Green Guides include new guidance on marketers' use of product certifications and seals of approval, "renewable energy" claims, "renewable materials" claims, and "carbon offset" claims. The comment period closed on December 10, 2010. On October 1, 2012, the Commission announced it was retaining the Guides with some revisions to help marketers avoid making misleading environmental claims. The changes update the Guides and make them easier for companies to understand and use, and include new guidance on marketers' use of product certifications and seals of approval, "renewable energy" claims, "renewable materials" claims, and "carbon offset" claims.

Vocational Schools Guides, 16 CFR 254. The Commission sought public comments on its Private Vocational and Distance Education Schools Guides, commonly known as the Vocational Schools Guides. 74 FR 37973 (July 30, 2009). Issued in 1972 and most recently amended in 1998 to add a provision addressing misrepresentations related to post-graduation employment, the guides advise businesses offering vocational training courses-either on the school's premises or through distance education, such as correspondence courses or the Internet-how to avoid unfair and deceptive practices in the advertising, marketing, or sale of their courses. The comment period closed on October 16, 2009. Staff is reviewing comments and anticipates sending a recommendation to the Commission by the end of 2012 proposing that the Guides be retained with some revisions.

Jewelry Guides, 16 CFR 23. The Commission sought public comments on its Guides for the Jewelry, Precious Metals, and Pewter Industries, commonly known as the Jewelry Guides. 77 FR 39202 (July 2, 2012). Since completing its last review of the Jewelry Guides in 1996, the Commission revised sections of

the Guides and addressed other issues raised in petitions from jewelry trade associations. The Guides explain to businesses how to avoid making deceptive claims about precious metal, pewter, diamond, gemstone, and pearl products, and when they should make disclosures to avoid unfair or deceptive trade practices. The comment period initially set to close on August 27, 2012, was subsequently extended until September 28, 2012. Staff is currently reviewing comments and anticipates announcing a workshop by the end of 2012.

Used Auto Parts Guides, 16 CFR 20. The Commission sought public comments on its Guides for the Rebuilt, Reconditioned, and Other Used Automobile Parts Industry, commonly known as the Used Auto Parts Guides, which are designed to prevent the unfair or deceptive marketing of used motor vehicle parts and assemblies, such as engines and transmissions, containing used parts. 77 FR 29922 (May 21, 2012).

The Guides prohibit misrepresentations that a part is new or about the condition, extent of previous use, reconstruction, or repair of a part. Previously used parts must be clearly and conspicuously identified as such in advertising and packaging, and, if the part appears new, on the part itself. The comment period closed on August 3, 2012. Staff is evaluating comments and meeting with commenters, and anticipates making a recommendation to the Commission in early 2013.

Fred Meyer Guides, 16 CFR 240. As part of the periodic review process, staff anticipates that by the end of 2012 the Commission will seek public comment relating to whether there is a continuing need for or a need to amend its Guides for Advertising Allowances and Other Merchandising Payments and Services, commonly known as the Fred Meyer Guides, by the end of 2012. The Guides assist businesses in complying with sections 2(d) and 2(e) of the Robinson-Patman Act, which proscribe certain discriminations in the provision of promotional allowances and services to customers. Broadly put, the Guides provide that unlawful discrimination may be avoided by providing promotional allowances and services to customers on "proportionally equal terms."

Final Actions[23]

Since the publication of the 2011 Regulatory Plan, the Commission has issued the following final rules or taken other actions to terminate rulemaking proceedings.

Business Opportunity Rule, 16 CFR 437. The Commission published a final rule amending the Business Opportunity Rule on December 8, 2011. 76 FR 76816. The Rule was amended to broaden its scope to cover business opportunity sellers not covered by the interim Business Opportunity Rule, such as sellers of work-at-home opportunities, and to streamline and simplify the disclosures that sellers must provide to prospective purchasers. The final rule became effective on March 1, 2012. The final rule was based upon the comments received in response to an Advance Notice of Proposed Rulemaking (62 FR 9115, Feb. 28, 1997), an Initial Notice of Proposed Rulemaking (71 FR 19054, Apr. 12, 2006), a Revised Notice of Proposed Rulemaking (73 FR 16110, Mar. 26, 2008), a public workshop, a Staff Report (75 FR 68559, Nov. 8, 2010), and other information discussed in the Federal Register notice for the final rule.

Dodd-Frank Rule Rescissions. On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), Public Law No. 111-203. Title X of the Dodd-Frank Act transferred rulemaking authority under several provisions of the consumer financial protection laws to the Consumer Financial Protection Bureau (CFPB). These rules were republished by the CFPB and became effective on an interim final basis on December 30, 2011. As a result, the Federal Trade Commission rescinded the following rules on April 13, 2012 (77 FR 22200): Disclosure Requirements for Depository Institutions Lacking Federal Deposit Insurance (16 CFR 320); Mortgage Acts and Practices-Advertising Rule (16 CFR 321); Mortgage Assistance Relief Services Rule (16 CFR 322); [Identity Theft] Definitions (16 CFR 603); Free Annual File Disclosures Rule (16 CFR 610); Prohibition Against Circumventing Treatment as a Nationwide Consumer Reporting Agency (16 CFR 611); Duration of Active Duty Alerts (16 CFR 613); Appropriate Proof of Identity (16 CFR 614); and Procedures for State Application for Exemption from the Provisions of the [Federal Debt Collection Practices] Act (16 CFR 901).

Summary

In both content and process, the FTC's ongoing and proposed regulatory actions are consistent with the President's priorities. The actions under consideration inform and protect consumers, while minimizing the regulatory burdens on businesses. The Commission will continue working toward these goals. The Commission's 10-year review program is patterned after provisions in the Regulatory Flexibility Act and complies with the Small Business Regulatory Enforcement Fairness Act of 1996. The Commission's 10-year program also is consistent with section 5(a) of Executive Order 12866, which directs executive branch agencies to develop a plan to reevaluate periodically all of their significant existing regulations. 58 FR 51735 (Sept. 30, 1993). In addition, the final rules issued by the Commission continue to be consistent with the President's Statement of Regulatory Philosophy and Principles, Executive Order 12866, section 1(a), which directs agencies to promulgate only such regulations as are, inter alia, required by law or are made necessary by compelling public need, such as material failures of private markets to protect or improve the health and safety of the public.

The Commission continues to identify and weigh the costs and benefits of proposed actions and possible alternative actions, and to receive the broadest practicable array of comment from affected consumers, businesses, and the public at large. In sum, the Commission's regulatory actions are aimed at efficiently and fairly promoting the ability of "private markets to protect or improve the health and safety of the public, the environment, or the well-being of the American people." Executive Order 12866, section 1.

II. Regulatory and Deregulatory Actions

The Commission has no proposed rules that would be a "significant regulatory action" under the definition in Executive Order 12866.[24] The Commission has no proposed rules that would have significant international impacts under the definition in Executive Order 13609. Also, there are no international regulatory cooperation activities that are reasonably anticipated to lead to significant regulations under Executive Order 13609. Even though it will not be reportable under Executive Order 13609, the announcement on July 25, 2012, that the United States will participate in the Asia-Pacific Economic Cooperation's (APEC) Cross Border Privacy Rules (CBPR) system, with the FTC as the system's first privacy enforcement authority, is expected to enhance electronic commerce, facilitate trade and economic growth, and strengthen consumer privacy protections across the Asia Pacific region. The APEC privacy system is a self-regulatory initiative to enhance the protection of consumer data that moves between the United States and other APEC members through a voluntary but enforceable code of conduct implemented by participating businesses. This system is expected to enable participating companies in the United States and other APEC member economies to more efficiently exchange data in a secure manner and will enhance consumer data privacy by establishing a consistent level of protection and accountability in the APEC region. The CBPR system directly supports the President's National Export Initiative goal of doubling U.S. exports by the end of 2014 by decreasing regulatory barriers to trade and commerce, and creating more export opportunities for American companies, and more American jobs.

The United States plans to work with APEC to launch the system in late 2012 or early 2013.

.

[1] For example, the Fair Credit Reporting Act (15 U.S.C. sections 1681 to 1681(u), as amended) and the Gramm-Leach-Bliley Act (Pub. L.106-102, 113 Stat.1338, codified in relevant part at 15 U.S.C. sections 6801 to 6809 and sections 6821 to 6827, as amended).

[2] For example, the Energy Policy Act of 1992 (106 Stat. 2776, codified in scattered sections of the U.S. Code, particularly 42 U.S.C. section 6201 et seq. and the Energy Independence and Security Act of 2007 (EISA)).

[3] The FTC also prepares a number of annual and periodic reports on the statutes it administers. These are not discussed in this plan.

[4] See press releases at http://ftc.gov/opa/2012/08/google.shtm and http://ftc.gov/opa/2012/08/facebook.shtm.

[5] The report on "Protecting Consumer Privacy in an Era of Rapid Change: Recommendations for Businesses and Policymakers," (Mar. 2012) can be found at http://ftc.gov/os/2012/03/120326privacyreport.pdf.

[6] A debt buyer is any third-party company that purchases unpaid consumer debts from another creditor.

[7] The report on "Pay-for-Delay: How Drug Company Pay-Offs Cost Consumers Billions" can be found at http://www.ftc.gov/os/2010/01/100112payfordelayrpt.pdf.

[8] S.27, "Preserve Access to Affordable Generics Act."

[9] FTC v. Watson Pharm., Inc., No. 10-12729-DD (11th Cir. argued May 13, 2011); FTC v. Cephalon, Inc., No. 2:08-CV-02141 (E.D. Pa. argued Oct. 21, 2009).

[10] In re K-Dur Antitrust Litigation, No. 10-2077, 2012 WL 2877662 (3d Cir. July 16, 2012).

[11] FTC & U.S. Department of Justice, Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program (2011), available at http://www.justice.gov/atr/public/health_care/276458.pdf.

[12] A copy of the order, a list of the target companies, and the press release are available online at http://www.ftc.gov/opa/2012/04/alcoholstudy.shtm.

[13] More information can be found at http://www.dontserveteens.gov/.

[14] 16 C.F.R. Part 317; See press release: "New FTC Rule Prohibits Petroleum Market Manipulation" (Aug. 6, 2009), available at http://www.ftc.gov/opa/2009/08/mmr.shtm; "FTC Issues Compliance Guide for Its Petroleum Market Manipulation Regulations," News Release (Nov. 13, 2009), available at http://www.ftc.gov/opa/2009/11/mmr.shtm.

[15] See press release: "Public Information Concerning the Federal Trade Commission Petroleum Industry Practices and Pricing Investigation" (June 20, 2011), available at http://www.ftc.gov/opa/2011/09/gasprices.shtm.

[16] The first event took place in Detroit, Michigan, on April 12, 2011. The FTC's second motor vehicle roundtable took place in San Antonio, Texas, on August 2-3, 2011. The FTC's third motor vehicle roundtable took place in Washington, D.C., on November 17, 2011. Dates for future additional roundtables will be posted on the FTC Web site at http://www.ftc.gov.

[17] Participants in the FTC motor vehicle roundtable identified some examples of unfair and deceptive practices, including deceptive advertising by motor vehicle dealers regarding purchase, loan, or lease terms or costs, as well as add-on products and deceptive claims by auto warranty robocallers.

[18] See press release on "FTC Warns That Rapid Expansion of Internet Domain Name System Could Leave Consumers More Vulnerable to Online Fraud" (December 16, 2011), available at http://www.ftc.gov/opa/2011/12/icann.shtm.

[19] See Federal Trade Commission Reports to Congress under sections 318 and 319 of the Fair and Accurate Credit Transactions Act of 2003; available at http://www.ftc.gov/reports/FACTACT/FACT Act_Report_2006.pdf (Dec. 2006 Report), http://www.ftc.gov/opa/2008/12/factareport.shtm (December 2008 Report) and http://www.ftc.gov/os/2011/01/1101factareport.pdf (December 2010 Report).

[20] See 77 FR 36423 and 36426.

[21] See Advance Notice of Proposed Rulemaking, 76 FR 31513 (June 1, 2011). Also, on June 1, 2011, the Commission postponed any amendments to its Guide Concerning Fuel Economy Advertising for New Automobiles upon completion of ongoing review by the Environmental Protection Agency and the National Highway Traffic Safety Administration of current fuel economy labeling requirements and the Commission's accelerated regulatory review of its own Alternative Fuel Rule. 76 FR 31467.

[22] The Federal Register Notice also announced the review of the related Guides for the Advertising of Warranties and Guarantees, 16 CFR 239, and the Interpretations of Magnuson-Moss Warranty Act, 16 CFR 700.

[23] Other final actions can be found under Rulemakings and Studies Required by Statute, supra.

[24] Section 3(f) of Executive Order 12866 defines a regulatory action to be "significant" if it is likely to result in a rule that may:

(1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy; a sector of the economy; productivity; competition; jobs; the environment; public health or safety; or State, local, or tribal governments or communities;

(2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;

(3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs, or the rights and obligations of recipients thereof; or

(4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in this Executive order.