FTC Rule Incorporating "Sunset Policy" for Existing Administrative Orders in Consumer Protection and Antitrust Cases...

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The Federal Trade Commission announced today that, effective Jan. 2, 1996, administrative orders issued prior to Aug. 16, 1995, will expire automatically 20 years after they were issued, absent the filing of a complaint or consent decree alleging that such an order has been violated. The FTC rule incorporating this "sunset policy" for existing administrative orders in consumer protection and antitrust cases follows earlier FTC announcements that future administrative orders in these cases ordinarily will terminate after 20 years.

FTC Chairman Robert Pitofsky said this final step in reforming the Commission's sunset policy is part of the agency's continuing effort to eliminate outmoded or unnecessary regulatory requirements in an era when markets change rapidly and companies regularly change hands or exchange corporate cultures. "In such an environment, orders more than 20 years old that have not been violated ordinarily will have served their purpose, and clearing the marketplace of outdated orders can be both pro-competition and pro-consumer," he said.

In August, the FTC proposed the rule announced today, and the vast majority of the 22 comments it received supported that proposal. Before the rule was adopted, the Commission could only set aside whole orders or provisions within them upon filing of a petition by the respondent, or pursuant to show-cause proceedings initiated by the Commission. The new rule "reduces the administrative expense and burden associated with those procedures," the Commission states in a notice regarding the rule to be published in the Federal Register shortly.

Under the new rule, existing administrative orders in consumer protection and antitrust cases ordinarily will terminate 20 years after the date they were issued by the Commission, unless the FTC or the Justice Department has filed a complaint (with or without an accompanying settlement) in federal district court while the order remains in force, alleging that it has been violated. In that case, the 20-year clock on the duration of such orders will begin from the date the order-violation complaint or consent decree was filed. The duration of an order against any respondent not named as a defendant in an order-violation case will not be affected, and the filing of an order violation complaint will not affect the duration of any order provision that has expired or will expire by its own terms. This comports with FTC sunset policy for future administrative orders.

The FTC sunset policy does not apply to federal district court orders. The FTC has said that many of these orders are against defendants involved in hard-core fraud, and that the Com- mission has little basis on which to judge whether such orders become unnecessary after 20 years, because most of the cases were brought under relatively new authority given the agency in the 1970s (section 13(b) of the FTC Act). Other federal district court orders bar violations of FTC trade regulation rules or statutes other than the FTC Act that are already binding on both the defendants and their competitors, or of administrative orders which will themselves expire 20 years after the complaints alleging the order violations were filed in court.

The Commission vote to adopt the final rule for sunsetting existing administrative orders was 5-0.

Copies of the Federal Register notice and other documents associated with this policy are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web site at: http://www.ftc.gov

(FTC Matter No. P954211)

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