81 FR 54088 - Agency Information Collection Activities; Proposed Collection; Comment Request

FEDERAL TRADE COMMISSION

Federal Register Volume 81, Issue 157 (August 15, 2016)

Page Range		54088-54091
FR Document		2016-19226

The information collection requirements described below will be submitted to the Office of Management and Budget (``OMB'') for review, as required by the Paperwork Reduction Act (``PRA''). The FTC is seeking public comments on its proposal to extend for an additional three years the current PRA clearance for information collection requirements in its Affiliate Marketing Rule (or ``Rule''), which applies to certain motor vehicle dealers, and its shared enforcement with the Consumer Financial Protection Bureau (``CFPB'') of the provisions (subpart C) of the CFPB's Regulation V regarding other entities (``CFPB Rule''). The current clearance expires on January 31, 2017.

Federal Register, Volume 81 Issue 157 (Monday, August 15, 2016)

[Federal Register Volume 81, Number 157 (Monday, August 15, 2016)]
[Notices]
[Pages 54088-54091]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2016-19226]

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FEDERAL TRADE COMMISSION

Agency Information Collection Activities; Proposed Collection;
Comment Request

AGENCY: Federal Trade Commission (``FTC'' or ``Commission'').

ACTION: Notice.

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SUMMARY: The information collection requirements described below will
be submitted to the Office of Management and Budget (``OMB'') for
review, as required by the Paperwork Reduction Act (``PRA''). The FTC
is seeking public comments on its proposal to extend for an additional
three years the current PRA clearance for information collection
requirements in its Affiliate Marketing Rule (or ``Rule''), which
applies to certain motor vehicle dealers, and its shared enforcement
with the Consumer Financial Protection Bureau (``CFPB'') of the
provisions (subpart C) of the CFPB's Regulation V regarding other
entities (``CFPB Rule''). The current clearance expires on January 31,
2017.

DATES: Comments must be filed by October 14, 2016.

ADDRESSES: Interested parties are invited to submit written comments
electronically or in paper form by following the instructions in the
Request for Comment part of the SUPPLEMENTARY INFORMATION section
below. Write ``Affiliate Marketing Disclosure Rule, PRA Comment: FTC
File No. P0105411'' on your comment, and file your comment online at
https://ftcpublic.commentworks.com/ftc/affiliatemarketingpra, by
following the instructions on the web-based form. If you prefer to file
your comment on paper, mail your comment to the following address:
Federal Trade Commission, Office of the Secretary, 600 Pennsylvania
Avenue NW., Suite CC-5610 (Annex J), Washington, DC 20580, or deliver
your comment to the following address: Federal Trade Commission, Office
of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor,
Suite 5610 (Annex J), Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT: Requests for additional information
should be addressed to Ruth Yodaiken, Attorney, Division of Privacy and
Identity Protection, Bureau of Consumer Protection, Federal Trade
Commission,

[[Page 54089]]

600 Pennsylvania Avenue NW., Room CC-8232, Washington, DC 20580, (202)
326-2127.

SUPPLEMENTARY INFORMATION: On July 21, 2010, President Obama signed
into law the Dodd-Frank Wall Street Reform and Consumer Protection Act
(``Dodd-Frank Act'').\1\ The Dodd-Frank Act substantially changed the
federal legal framework for financial services providers. Among the
changes, the Dodd-Frank Act transferred to the CFPB most of the FTC's
rulemaking authority for the Affiliate Marketing provisions of the Fair
Credit Reporting Act (``FCRA''),\2\ on July 21, 2011.\3\ For certain
other portions of the FCRA, the FTC retains its full rulemaking
authority.\4\
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\1\ Public Law 111-203, 124 Stat. 1376 (2010).
\2\ 15 U.S.C. 1681 et seq.
\3\ Dodd-Frank Act, at section 1061. This date was the
``designated transfer date'' established by the Treasury Department
under the Dodd-Frank Act. See Dep't of the Treasury, Bureau of
Consumer Financial Protection; Designated Transfer Date, 75 FR
57252, 57253 (Sept. 20, 2010); see also Dodd-Frank Act, at section
1062.
\4\ The Dodd-Frank Act does not transfer to the CFPB rulemaking
authority for FCRA sections 615(e) (``Red Flag Guidelines and
Regulations Required'') and 628 (``Disposal of Records''). See 15
U.S.C. 1681s(e); Public Law 111-203, section 1088(a)(10)(E).
Accordingly, the Commission retains full rulemaking authority for
its ``Identity Theft Rules,'' 16 CFR part 681, and its rules
governing ``Disposal of Consumer Report Information and Records,''
CFR part 682. See 15 U.S.C. 1681m, 1681w.
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The FTC retains rulemaking authority for its Affiliate Marketing
Rule, 16 CFR 680, solely for motor vehicle dealers described in section
1029(a) of the Dodd-Frank Act that are predominantly engaged in the
sale and servicing of motor vehicles, the leasing and servicing of
motor vehicles, or both.\5\
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\5\ See Dodd-Frank Act, at section 1029 (a), (c).
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Regulation V subpart C does not affect the pre-existing
requirements of the FCRA. Additionally, the FTC shares enforcement
authority with the CFPB for provisions of Regulation V subpart C that
apply to entities other than those specified above. Thus, for that
remainder, the FTC and CFPB have overlapping enforcement authority.
As an analytical framework to estimate PRA burden in the ``Burden
Statement'' below, the FTC estimates burden pertaining to respondents
over which both agencies have shared enforcement authority, divides the
resulting total by one-half to reflect the FTC's shared jurisdiction,
and add to the resulting subtotal the incremental estimated burden
regarding the motor vehicle dealers described above over which the FTC
retains exclusive enforcement (and rulemaking) authority.

Background

As mandated by section 214 of the Fair and Accurate Credit
Transactions Act (``FACT Act''), Public Law 108-159 (Dec. 6, 2003), the
Affiliate Marketing Rule, 16 CFR part 680, specifies disclosure
requirements for certain affiliated companies. Except as discussed
below, these requirements constitute ``collection[s] of information''
for purposes of the PRA. Specifically, the FACT Act and the FTC Rule
require covered entities to provide consumers with notice and an
opportunity to opt out of the use of certain information before sending
marketing solicitations. The FTC Rule generally provides that, if a
company communicates certain information about a consumer (eligibility
information) to an affiliate, the affiliate may not use it to make or
send solicitations to him or her unless the consumer is given notice
and a reasonable opportunity to opt out of such use of the information
and s/he does not opt out.
To minimize compliance costs and burdens for entities, particularly
any small businesses that may be affected, the FTC Rule contains model
disclosures and opt-out notices that may be used to satisfy the
statutory requirements. The FTC Rule also gives covered entities
flexibility to satisfy the notice and opt-out requirement by sending
the consumer a free-standing opt-out notice or by adding the opt-out
notice to the privacy notices already provided to consumers, such as
those provided in accordance with the provisions of Title V, subtitle A
of the Gramm Leach Bliley Act (``GLBA'').\6\ In either event, the time
necessary to prepare or incorporate an opt-out notice would be minimal
because those entities could either use the model disclosure verbatim
or base their own disclosures upon it. Moreover, verbatim adoption of
the model notice does not constitute a PRA ``collection of
information.'' \7\
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\6\ 15 U.S.C. 6801 et seq.
\7\ ``The public disclosure of information originally supplied
by the Federal government to the recipient for purpose of disclosure
to the public is not included within [the definition of collection
of information].'' 5 CFR 1320.3(c)(2).
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Burden Statement

Under the PRA, 44 U.S.C. 3501-3521, federal agencies must get OMB
approval for each collection of information they conduct or sponsor.
``Collection of information'' includes agency requests or requirements
to submit reports, keep records, or provide information to a third
party. 44 U.S.C. 3502(3); 5 CFR 1320.3(c). The FTC is seeking clearance
for its assumed share of the estimated PRA burden regarding the
disclosure requirements under the FTC and CFPB Rules.
Except where otherwise specifically noted, staff's estimates of
burden are based on its knowledge of the consumer credit industries and
knowledge of the entities over which the Commission has jurisdiction.
This said, estimating PRA burden of the Rule's disclosure requirements
is difficult given the highly diverse group of affected entities that
may use certain eligibility information shared by their affiliates to
send marketing notices to consumers.
The estimates provided in this burden statement may well overstate
actual burden. As noted above, verbatim adoption of the disclosure of
information provided by the federal government is not a ``collection of
information'' to which to assign PRA burden estimates, and an unknown
number of covered entities will opt to use the model disclosure
language. Second, an uncertain, but possibly significant, number of
entities subject to FTC jurisdiction do not have affiliates and thus
would not be covered by section 214 of the FACT Act or the Rule. Third,
Commission staff does not know how many companies subject to FTC
jurisdiction under the Rule actually share eligibility information
among affiliates and, of those, how many affiliates use such
information to make marketing solicitations to consumers. Fourth, still
other entities may choose to rely on the exceptions to the Rule's
notice and opt-out requirements.\8\ Finally, the population estimates
below to apply further calculations are based on industry data that,
while providing tallies of business entities within industries and
industry segments, does not identify those entities individually. Thus,
there is no clear path to ascertain how many individual businesses have
newly entered and departed within a given industry classification, from
one year to the next or from one triennial PRA clearance cycle to the
next. Accordingly, there is no ready way to quantify how many
establishments accounted for in the data reflect those previously
accounted for in the FTC's prior PRA analysis, i.e., entities that
would already have experienced a declining learning curve applying the
Rule with the passage of time. For simplicity, the FTC analysis will
continue to treat covered entities as newly undergoing the previously

[[Page 54090]]

assumed learning curve cycle, although this would effectively overstate
estimated burden for unidentified covered entities that have remained
in existence since OMB's most recent clearances for the FTC Rule.\9\
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\8\ Exceptions include, for example, having a preexisting
business relationship with a consumer, using information in response
to a communication initiated by the consumer, and solicitations
authorized or requested by the consumer.
\9\ On January 16, 2014, OMB granted three-year clearance for
the Rule through January 31, 2017.
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As in the past, FTC staff's estimates assume a higher burden will
be incurred during the first year of a prospective OMB three-year
clearance, with a lesser burden for each of the subsequent two years
because the opt-out notice to consumers is required to be given only
once. Institutions may provide for an indefinite period for the opt-out
or they may time limit it, but for no less than five years.
Staff's labor cost estimates take into account: Managerial and
professional time for reviewing internal policies and determining
compliance obligations; technical time for creating the notice and opt-
out, in either paper or electronic form; and clerical time for
disseminating the notice and opt-out.\10\ In addition, staff's cost
estimates presume that the availability of model disclosures and opt-
out notices will simplify the compliance review and implementation
processes, thereby significantly reducing the cost of compliance.
Moreover, the Rule gives entities considerable flexibility to determine
the scope and duration of the opt-out. Indeed, this flexibility permits
entities to send a single joint notice on behalf of all of its
affiliates.
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\10\ No clerical time was included in staff's burden analysis
for GLBA entities as the notice would likely be combined with
existing GLBA notices.
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A. Non-GLBA Entities

Based, in part, on industry data regarding the number of businesses
under various industry codes, staff estimates that 958,894 non-GLBA
entities under FTC jurisdiction have affiliates and would be affected
by the Rule.\11\ Commission staff further estimates an average of 5
businesses per family or affiliated relationship, and believes that the
affiliated entities will choose to send a joint notice, as permitted by
the Rule. Thus, an estimated 191,779 non-GLBA business families may
send the affiliate marketing notice.
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\11\ This estimate is derived from an analysis of a database of
U.S. businesses based on June 2015 SIC codes for businesses that
market goods or services to consumers, which included, among others,
the following industries: Transportation services; communication;
electric, gas, and sanitary services; retail trade; finance,
insurance, and real estate; and services (excluding business
services and engineering, management services). See http://www.naics.com/search.htm. This estimate excludes businesses not
subject to FTC jurisdiction as well as businesses that do not use
data or information subject to the rule. To the resulting sub-total
(5,824,739), staff applies a continuing assumed rate of affiliation
of 16.75 percent, see 78 FR 73,192, 73,193 n.12 (Dec. 5, 2013),
thus, 975,644 (businesses in a family tree of at least two members),
reduced by a continuing estimate of 100,000 entities subject to the
Commission's GLBA privacy notice regulations, see id., applied to
the same assumed rate of affiliation. The net total is 958,894
(975,644-(100,000 x 16.75%).
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Staff also estimates that non-GLBA entities under the jurisdiction
of the FTC would each incur 14 hours of burden during the prospective
requested three-year PRA clearance period, comprised of a projected 7
hours of managerial time, 2 hours of technical time, and 5 hours of
clerical assistance. Non-GLBA entities, however, will give notice only
once during the clearance period ahead. Thus, average annual burden for
non-GLBA families during the prospective three-year clearance period
would approximate 894,969 hours.\12\ Associated average annual labor
cost would total $35,626,785.\13\ These estimates include the start-up
burden and attendant costs, such as determining compliance obligations.
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\12\ 191,779 x (14 / 3).
\13\ The associated labor cost is based on the labor cost burden
per notice by adding the hourly mean private sector wages for
managerial, technical, and clerical work and multiplying that sum by
the estimated number of hours. The classifications used are
``Management Occupations'' for managerial employees, ``Computer and
Mathematical Science Occupations'' for technical staff, and ``Office
and Administrative Support'' for clerical workers. See OCCUPATIONAL
EMPLOYMENT AND WAGES--MAY 2015, U.S. Department of Labor, released
March 30, 2016, Table 1 (``National employment and wage data from
the Occupational Employment Statistics survey by occupation, May
2015''): http://www.bls.gov/news.release/ocwage.htm. The respective
private sector hourly wages for these classifications are $55.30,
$41.43, and $17.47. Estimated hours spent for each labor category
are 7, 2, and 5, respectively. Multiplying each occupation's hourly
wage by the associated time estimate, labor cost burden per notice
equals $557.31. This subtotal is then multiplied by the estimated
number of non-GLB business families projected to send the affiliate
marketing notice (191,779) to determine cumulative labor cost burden
for non-GLBA entities ($106,880,354). Averaged over a three-year
clearance period this amounts to $35,626,785 per year.
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B. GLBA Entities

Entities that are subject to the Commission's GLBA privacy notice
regulation already provide privacy notices to their customers.\14\
Because the FACT Act and the Rule contemplate that the affiliate
marketing notice can be included in the GLBA notices, the burden on
GLBA regulated entities would be greatly reduced. Accordingly, the GLBA
entities would incur 6 hours of burden during the first year of the
clearance period, comprised of a projected 5 hours of managerial time
and 1 hour of technical time to execute the notice, given that the Rule
provides a model.\15\ Staff further estimates that 3,350 GLBA entities
under FTC jurisdiction would be affected.\16\ Allowing for increased
familiarity with procedure, however, the PRA burden in ensuing years
would decline, with GLBA entities each incurring an estimated 4 hours
of annual burden (3 hours of managerial time and 1 hour of technical
time) during the remaining two years of the clearance. Thus, average
annual burden for GLBA families during the prospective three-year
clearance period would approximate 15,633 hours.\17\ Associated average
annual labor cost would total $818,059.\18\
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\14\ Financial institutions must provide a privacy notice at the
time the customer relationship is established and then annually so
long as the relationship continues. Staff's estimates assume that
the affiliate marketing opt-out will be incorporated in the
institution's initial and annual notices.
\15\ As stated above, no clerical time is included in the
estimate because the notice likely would be combined with existing
GLBA notices.
\16\ Based on the previously stated estimates of 100,000 GLBA
business entities at an assumed rate of affiliation of 16.75 percent
(16,750), divided by the presumed ratio of 5 businesses per family,
this yields a total of 3,350 GLBA business families subject to the
Rule.
\17\ 3,350 x (14 / 3).
\18\ Year 1: 3,350 GLBA families x [($55.30 x 5 hours) + ($41.43
x 1 hour)] = $1,065,066. Years 2 and 3: 3,350 GLBA families x
[($55.30 x 3 hours) + ($41.43 x 1 hour)] = $694,556 each.
Annualized: ($1,065,066 + $694,556 + $694,556) / 3 = $818,059.
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Before attribution to the FTC of its apportioned share of PRA
burden estimates, the cumulative average annual burden for both non-
GLBA and GLBA for the prospective three-year clearance period is
910,602 burden hours and $36,444,844 in labor costs. GLBA entities are
already providing notices to their customers so there are no new
capital or non-labor costs, as this notice may be consolidated into
their current notices. For non-GLBA entities, the Rule provides for
simple and concise model forms that institutions may use to comply.
Thus, any capital or non-labor costs associated with compliance for
these entities are negligible.

C. FTC Share of Burden: 460,205 Hours; $18,472,938, Labor Costs

To calculate the total burden attributed to the FTC, staff first
deducted from the total annual burden hours those hours attributed to
motor vehicle dealers, which are in the exclusive jurisdiction of the
FTC. Staff estimates that there are 62,750 motor vehicle dealerships
subject to the Rule.\19\ Of these, staff estimates that

[[Page 54091]]

10% are non-GLBA entities (6,275), and 90% are GLBA entities (56,475).
Applying an assumed rate of affiliation of 16.75%, staff estimates that
there are 1,051 non-GLBA and 9,460 GLBA motor vehicle dealerships in
affiliated families. Staff further assumes there are an average of 5
businesses per family or affiliated relationship, leaving approximately
210 non-GLBA and 1,892 GLBA motor vehicle dealership families,
respectively.
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\19\ This figure consists, in part, of 62,750 car dealers (based
on industry data for the number of franchise/new car and
independent/used car dealers) (81 FR 33,255 at 33,257 n9 (May 25,
2016) (FTC Prescreen Opt-Out Rule PRA analysis).
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Staff further estimates that non-GLBA business families will spend
14 hours in the first year and 0 hours thereafter to comply with the
Rule, while GLBA business families will spend 6 hours in the first
year, and 4 hours in each of the following two years. The cumulative
average annual burden for the non-GLBA and GLBA motor vehicle
dealership families is 9,809 hours.\20\
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\20\ (210 non-GLBA business families x 4.666667 average hours =
980 hours, annualized) + (1,892 GLBA business families x 4.666667
average hours per family = 8,829 hours, annualized) = 9,809 hours,
annualized.
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To calculate the FTC's total shared burden hours, staff deducted
from overall estimated burden hours (910,602 hours) the hours
attributed to motor vehicle dealerships (9,809 hours), leaving a total
of 900,793 hours to split between the CFPB and the FTC. The resulting
shared burden for the CFPB is half that amount, or 450,396 hours. To
calculate the total burden hours apportioned to the FTC, staff added to
the shared sub-total (450,396 hours) the hours separately attributed to
motor vehicle dealers (9,809 hours), which yields for the FTC an
apportioned burden estimate of 460,205 hours.
Staff used the same approach to estimate the shared costs for the
FTC. Staff estimated the costs attributed to motor vehicle dealers as
follows: Non-GLBA business families have $35,626,785 in annualized
labor costs,\21\ and GLBA business families have $818,059 in annualized
labor costs,\22\ for cumulative annualized costs of $36,444,844.
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\21\ 191,779 non-GLBA business families x combined rate of
$557.31 (see supra note 13) / 3 = $35,626,785.
\22\ See supra note 18.
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To calculate, on an annualized basis, the FTC's cumulative share of
labor cost burden, staff deducted from overall total labor costs
($36,444,844) the labor costs attributed to motor vehicle dealerships
($501,032), leaving a net amount of $35,943,812 to split between the
CFPB and the FTC. The resulting shared burden for the CFPB is half that
amount, or $17,971,906. To calculate the total burden hours for the
FTC, staff added the costs associated with motor vehicle dealers
($501,032), resulting in a total cost burden for the FTC of
$18,472,938.

Request for Comment

You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before October 14,
2016. Write ``Affiliate Marketing Disclosure Rule, PRA Comment: FTC
File No. P0105411'' on your comment. Your comment, including your name
and your state--will be placed on the public record of this proceeding,
including, to the extent practicable, on the public Commission Web
site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of
discretion, the Commission tries to remove individuals' home contact
information from comments before placing them on the Commission Web
site.
Because your comment will be made public, you are solely
responsible for making sure that your comment doesn't include any
sensitive personal information, like anyone's Social Security number,
date of birth, driver's license number or other state identification
number or foreign country equivalent, passport number, financial
account number, or credit or debit card number. You are also solely
responsible for making sure that your comment doesn't include any
sensitive health information, like medical records or other
individually identifiable health information. In addition, don't
include any ``[t]rade secret or any commercial or financial information
which is . . . privileged or confidential,'' as provided in Section
6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR
4.10(a)(2). In particular, don't include competitively sensitive
information such as costs, sales statistics, inventories, formulas,
patterns, devices, manufacturing processes, or customer names.
If you want the Commission to give your comment confidential
treatment, you must file it in paper form, with a request for
confidential treatment, and you have to follow the procedure explained
in FTC Rule 4.9(c), 16 CFR 4.9(c).\23\ Your comment will be kept
confidential only if the FTC General Counsel grants your request in
accordance with the law and the public interest.
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\23\ In particular, the written request for confidential
treatment that accompanies the comment must include the actual and
legal basis for the request, and must identify the specific portions
of the comment to be withheld from the public record. See FTC Rule
4.9(c), 16 CFR 4.9(c).
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Postal mail addressed to the Commission is subject to delay due to
heightened security screening. As a result, we encourage you to submit
your comments online. To make sure that the Commission considers your
online comment, you must file it at https://public.commentworks.com/ftc/affiliatemarketingpra by following the instructions on the web-
based form. If this Notice appears at http://www.regulations.gov/#!home, you also may file a comment through that Web site.
If you file your comment on paper, write ``Affiliate Marketing
Disclosure Rule, PRA Comment: FTC File No. P0105411'' on your comment,
and on the envelope, and mail or deliver it to the following address:
Federal Trade Commission, Office of the Secretary, 600 Pennsylvania
Avenue NW., Suite CC-5610 (Annex J), Washington, DC 20580, or deliver
your comment to the following address: Federal Trade Commission, Office
of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor,
Suite 5610 (Annex J), Washington, DC 20024. If possible, submit your
paper comment to the Commission by courier or overnight service.
The FTC Act and other laws that the Commission administers permit
the collection of public comments to consider and use in this
proceeding as appropriate. The Commission will consider all timely and
responsive public comments that it receives on or before October 14,
2016. For information on the Commission's privacy policy, including
routine uses permitted by the Privacy Act, see http://www.ftc.gov/ftc/privacy.htm.

David C. Shonka,
Acting General Counsel.
[FR Doc. 2016-19226 Filed 8-12-16; 8:45 am]
BILLING CODE 6750-01-P

54088 Federal Register / Vol. 81, No. 157 / Monday, August 15, 2016 / Notices

may deter similar conduct that has no Certainly, market and price-related By direction of the Commission.
legitimate business purpose.5 communications between a Donald S. Clark,
As described above, during the manufacturer and its distributor can be Secretary.
relevant time period, Fortiline competed appropriate and procompetitive.9 A firm [FR Doc. 2016–19339 Filed 8–12–16; 8:45 am]
with Manufacturer A in selling DIP to may not, however, use an intrabrand BILLING CODE 6750–01–P
customers while also serving as relationship to shield itself from
Manufacturer A’s distributor. anticompetitive interbrand conduct.10
Fundamentally, the fact that the firms As an intrabrand relationship will not FEDERAL TRADE COMMISSION
are competitors in some transactions immunize an otherwise unlawful
and collaborators in others does not agreement, it likewise will not Agency Information Collection
alter the legal analysis. An agreement immunize an unlawful invitation to Activities; Proposed Collection;
between actual or potential competitors collude. If Manufacturer A accepted Comment Request
that restrains interbrand price Fortiline’s requests to raise prices on AGENCY: Federal Trade Commission
competition between the two firms projects for which the firms were (‘‘FTC’’ or ‘‘Commission’’).
presumptively harms competition. The interbrand competitors, the resulting
existence of an intrabrand component to ACTION: Notice.
agreement would be per se unlawful. It
the conspirators’ relationship (such as a follows that Fortiline’s communications SUMMARY: The information collection
distribution agreement or a license to Manufacturer A—its attempts to requirements described below will be
agreement) does not necessarily secure an unlawful agreement—were submitted to the Office of Management
foreclose per se analysis.6 The relevant unlawful invitations to collude. and Budget (‘‘OMB’’) for review, as
issue is not whether the parties are in required by the Paperwork Reduction
a vertical or horizontal relationship, but III. The Proposed Consent Order
Act (‘‘PRA’’). The FTC is seeking public
whether the restraint on competition is The Commission recognizes the need comments on its proposal to extend for
an intrabrand restraint or an interbrand to tailor relief that will prevent Fortiline an additional three years the current
restraint.7 A similar analysis applies in from engaging in the anticompetitive PRA clearance for information
the context of an invitation to collude. conduct described in the complaint, yet collection requirements in its Affiliate
Here, the Complaint charges that avoid chilling procompetitive Marketing Rule (or ‘‘Rule’’), which
Fortiline invited Manufacturer A to communications and efficient applies to certain motor vehicle dealers,
collude on pricing across the board, contracting between Fortiline and each and its shared enforcement with the
including on transactions in which of its current and future suppliers. Consumer Financial Protection Bureau
Fortiline was distributing for a rival The Proposed Order contains the (‘‘CFPB’’) of the provisions (subpart C)
manufacturer, Manufacturer B.8 following substantive provisions: of the CFPB’s Regulation V regarding
5 In re Valassis Commc’ns, 141 F.T.C. at 283
Section II prohibits Fortiline from other entities (‘‘CFPB Rule’’). The
(Analysis of Agreement Containing Consent Order
entering into, attempting to enter into, current clearance expires on January 31,
to Aid Public Comment). participating in, maintaining, 2017.
6 See Gen. Leaseways, Inc. v. Nat’l Truck Leasing organizing, implementing, enforcing, DATES: Comments must be filed by
Ass’n, 744 F.2d 588, 594 (7th Cir. 1984) (‘‘It does inviting, encouraging, offering or October 14, 2016.
not follow that because two firms sometimes have soliciting an agreement or
a cooperative relationship there are no competitive ADDRESSES: Interested parties are
gains from forbidding them to cooperate in ways understanding with any competitor to invited to submit written comments
that yield no economies but simply limit raise or fix prices or any other pricing electronically or in paper form by
competition.’’). See also Palmer v. BRG of Georgia, action, or to allocate or divide markets, following the instructions in the
Inc., 498 U.S. 46, 49 (1990) (per se liability where customers, contracts, transactions,
conspirators had both horizontal and vertical Request for Comment part of the
(licensor/licensee) relationship); Eli Lilly and Co. v. business opportunities, lines of SUPPLEMENTARY INFORMATION section
Zenith Goldline Pharmaceuticals, Inc., 172 commerce, or territories. Two provisos below. Write ‘‘Affiliate Marketing
F.Supp.2d 1060 (S.D. Ind. 2001) (per se liability apply to Section II. The first proviso Disclosure Rule, PRA Comment: FTC
where conspirators had both horizontal and vertical makes clear that Fortiline may engage in
relationship); United States v. General Electric Co., File No. P0105411’’ on your comment,
1997–1 Trade Cas. (CCH) ¶ 71,765 (D. Mont. 1997) conduct that is reasonably related to, and file your comment online at https://
(same). and reasonably necessary to achieve the ftcpublic.commentworks.com/ftc/
7 See United States v. Apple, Inc., 791 F.3d 290, procompetitive benefits of, a lawful affiliatemarketingpra, by following the
322 (2d Cir. 2015) (internal citations omitted) manufacturer-distributor relationship,
(rejecting Apple’s argument that its role in a
instructions on the web-based form. If
horizontal conspiracy with publishers should be
joint venture agreement, or lawful you prefer to file your comment on
evaluated under rule of reason because it was in a merger, acquisition, or sale agreement. paper, mail your comment to the
vertical relationship with publishers, noting that ‘‘it The second proviso makes clear that following address: Federal Trade
is the type of restraint that Apple agreed with the Fortiline may negotiate and enter into
publishers to impose that determines whether the
Commission, Office of the Secretary,
per se rule or the rule of reason is appropriate.
an agreement to buy DIP from, or sell 600 Pennsylvania Avenue NW., Suite
These rules are means of evaluating ‘whether [a] DIP to, a competitor. CC–5610 (Annex J), Washington, DC
restraint is unreasonable,’ not the reasonableness of Paragraphs III–VI of the Proposed 20580, or deliver your comment to the
a particular defendant’s role in the scheme.’’). Order impose certain standard reporting
8 The Commission has previously found similar
following address: Federal Trade
and compliance requirements on Commission, Office of the Secretary,
communications to constitute unlawful invitations
to collude. E.g., In re Step N Grip LLC, 160 F.T.C. Fortiline. Constitution Center, 400 7th Street SW.,
ll, Docket No. C–4561 (Dec. 7, 2015), https:// The Proposed Order will expire in 20 5th Floor, Suite 5610 (Annex J),
sradovich on DSK3GMQ082PROD with NOTICES

www.ftc.gov/enforcement/cases-proceedings/151- years. Washington, DC 20024.
0181/step-n-grip-llc-matter (respondent
communicated to competitor that both parties FOR FURTHER INFORMATION CONTACT:
should sell at the same price); In re Precision (respondent complained to competitor about its Requests for additional information
Moulding, 122 F.T.C. 104 (1996) (respondent pricing, and subsequently faxed the competitor
comparative price lists from both companies).
should be addressed to Ruth Yodaiken,
complained to competitor that the competitor’s
pricing was ‘‘ridiculously low’’ and that the 9 See Monsanto Co. v. Spray-Rite Service Corp., Attorney, Division of Privacy and
competitor did not have to ‘‘give the product 465 U.S. 752, 764–65 (1984). Identity Protection, Bureau of Consumer
away’’); In re AE Clevite, 116 F.T.C. 389, 391 (1993) 10 See supra notes 6–8. Protection, Federal Trade Commission,

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Document Created: 2016-08-13 02:22:36
Document Modified: 2016-08-13 02:22:36

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
Action		Notice.
Dates		Comments must be filed by October 14, 2016.
Contact		Requests for additional information
FR Citation		81 FR 54088