Industry Guidance; Advisory Opinions Rule Amendment

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BILLING CODE 8025-01-M FEDERAL TRADE COMMISSION 16 CFR Part 1 Industry Guidance; Advisory Opinions Rule Amendment AGENCY: Federal Trade Commission. a c t io n : Final rule. s u m m a r y : This amendment of the agency’s advisory opinion procedures seeks to expedite advice and guidance to the public, especially small businesses, about enforcement of the laws and regulations administered by the Commission. The change is intended to clarify §§ 1.1 through 1.4 of the Rules of Practices so as to indicate the circumstances in which Commission or staff advice will be issued. Commission opinions will be issued where the question involves a substantial or novel question, or a proposed merger. In other cases the Commission’s staff will respond, with advice or with a statement reflecting present staff enforcement intentions. Such staff advice would be rendered without prejudice to the right of the Commission later to rescind it. The changes also delete the present provision under which advisory opinions may not be rendered with respect to ongoing courses of action.

This change was published for comment on January 8,1979 (44 FR 1753). No comments were received and no changes have been made from the original proposal.

DATE: Effective April 11,1979. FOR FURTHER INFO RM ATION CONTACT: Barry R. Rubin, Assistant General Counsel, Federal Trade Commission, Washington, D.C. 20580, (202) 523-3520. SUPPLEMENTARY INFO RM ATION: Since 1962, the Commission has rendered formal advisory opinions about the legality of proposed courses of action. See 16 CFR § 1.1 et seq.; 16 CFR § 15.1 et seq.

Under the amendment, the Commission will continue to issue formal opinions where the matter involves a substantial or novel question and there is no clear precedent; where a proposed merger or acquisition is involved; or where the subject matter is of significant public interest. Advice will be given on both proposed and current courses of action. The Commission will also continue to advise whether proposed conduct will violate an outstanding cease and desist order under § 3.61 of the Rules of Practice. In other circumstances, the staff is expressly authorized to render advice. The vast majority of requests from the public are already handled informally by the staff of the Office of General Counsel or the bureaus. In the recent past, the Commission has averaged only about 16 formal opinions per year, about half of these, involving compliance with trade regulation rules, other Commission rules, or outstanding cease and desist orders. Not only is informal advice provided by General Counsel staff letters, the bureaus constantly are answering mail and telephone inquiries. Small businesses and others tend to receive the quickest and most helpful advice in this manner. Thus, the proposal reduces to writing what is already routine present practice. For these reasons, the Commission amends its Rules of Practice, §§ 1.1-1.4, to read as follows:

Part 1—General Procedures § 1.1 Policy.

(a) Any person, partnership, or corporation may request advice from the Commission with respect to a course of action which the requesting party proposes to pursue. The Commission will consider such requests for advice and inform the requesting party of the Commission’s views, where practicable, under the following circumstances. (1) The matter involves a substantial or novel question of fact of law and there is no clear Commission or court precedent;

(2) A proposed corporate merger or acqusition is involved; or (3) The subject matter of the request and consequent publication of Commission advice is of significant public interest.

(b) The Commission has authorized its staff to consider all requests for advice and to render advice, where practicable, in those circumstances in which a Commission opinion would not be warranted. Hypothetical questions will not be answered, and a request for advice will ordinarily be considered inappropriate where (1) the same or substantially the same course of action is under investigation or is or has been the subject of a current proceeding involving the Commission or another governmental agency, or (2) an informed opinion cannot be made or could be made only after extensive investigation, clinical study, testing, or collateral inquiry.

§ 1.2 Procedure.

(a) Application. The request for advice or interpretation should be submitted in writing (one original and two copies) to the Secretary of the Commission and should (1) state clearly the question(s) that the applicant wishes resolved; (2) cite the provision of law under which the question arises; and (3) state all facts which the applicant believes to be material. In addition, the identity of the companies and other persons involved should be disclosed. Letters relating to unnamed companies or persons may not be answered. Submittal of additional facts may be requested prior to the rendering of any advice.

(b) Compliance matters. If the request is for advice as to whether the proposed course of action may violate an outstanding order to cease and desist issued by the Commission, such request will be considered as provided for in § 3.61 of these Rules.

§ 1.3 Advice.

(a) On the basis of the materials submitted, as well as any other information available, and if practicable, the Commission or its staff will inform the requesting party of its views.

(b) Any advice given by the Commission is without prejudice to the right of the Commission to reconsider the questions involved and, where the public interest requires, to rescind or revoke the action. Notice of such rescission or revocation will be given to the requesting party so that he may discontinue the course of action taken pursuant to the Commission’s advice. The Commission will not proceed against the requesting party with respect to any action taken in good faith reliance upon the Commission’s advice under this section, where all the relevant facts were fully, completely, and accurately presented to the Commission and where such action was promptly discontinued upon notification of rescission or revocation of the Commission’s approval.

(c) Advice rendered by the staff is without prejudice to the right of the Commission later to rescind the advice and, where appropriate, to commence an enforcement proceeding. § 1.4 Public disclosure. Written advice rendered pursuant to this Section and requests therefor,

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Federal Registelr / Vol. 44, No, 71 / Wednesday, April 11, 1979 / Rules and Regulations 21625 including names and details, will be placed in the Commission’s public record immediately after the requesting party has received the advice, subject to any limitations on public disclosure arising from statutory restrictions, the Commission’s rules, and the public interest. A request for confidential treatment of information submitted in connection with the questions should be made separately.

By direction of the Commission dated March 30,1979.

Carol M. Thomas, Secretary.

[FR Doc. 79-11237 Filed 4-10-79; 8:45 am]