Rulemaking Activities
Commission-Wide
Sunset Rule
The Commission issued a final rule regarding the duration of administrative cease and desist orders in both antitrust and consumer protection matters. Under the new Sunset Rule, administrative orders issued prior to August 16, 1995, will expire automatically 20 years after they were issued, unless there has been a complaint or consent decree alleging that the order has been violated. The Rule incorporating this "sunset" policy for existing administrative orders follows Commission policy issued in August 1995 that provides for termination of future administrative orders after 20 years. Before the Rule was adopted, the Commission could set aside orders or provisions of orders only upon filing of a petition by the respondent or initiation of show-cause proceedings by the Commission. The new Rule became effective on January 2, 1996.
Competition Mission
Premerger Review Regulations
The Commission issued amendments to premerger notification rules by adopting five new rules that exempt certain mergers and acquisitions from prior review by federal regulators. Under the new rules, certain classes of transactions that are not likely to raise antitrust concerns are exempted from the reporting requirements of the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976. That Act generally requires entities contemplating mergers to file premerger reports with the Commission and the Department of Justice and to wait a specified period of time before consummating the transactions, so that the government can review the mergers and challenge those that may violate antitrust laws. The new rules clarify types of transactions that are exempt from the advance notice requirement, including certain acquisitions of real estate and fuel resources. Adoption of the new rules, which target transactions unlikely to have a significant anticompetitive impact, will remove an unnecessary burden from both businesses and government.
Consumer Protection Mission
Appliance Labeling Rule
The Appliance Labeling Rule, in effect since 1980, is designed to help consumers comparison-shop for energy-efficient home appliances such as refrigerators and freezers. Under this Rule, manufacturers must attach to most major appliances EnergyGuide labels that provide an estimate of the product's annual energy consumption or energy efficiency. The Commission amended the Rule this year to allow appliance manufacturers to place energy use labels required by the Canadian and Mexican governments "directly adjoining" the EnergyGuide labels. The amended Rule, which became effective June 28, 1996, supports the goal of the North American Free Trade Agreement to harmonize standards-related measures to facilitate trade among the United States, Canada, and Mexico.
Funeral Rule
In conjunction with the National Funeral Directors Association (NFDA), the Commission implemented two programs to improve and ensure the funeral industry's compliance with the Funeral Rule. This Rule requires that funeral homes give shoppers a general price list of funeral goods and services. One program, the Funeral Rule Offenders Program (FROP), is an option to resolve violations of the Rule. Violators choosing to enroll in this program make voluntary payments to the U.S. Treasury or state government, undergo compliance review by NFDA counsel, and hold NFDA-led training for all employees. The second program, the Funeral Industry Rule Compliance Assurance Program, provides continuous training to funeral industry personnel on Rule compliance.
Recycled Oil Rule
The Commission approved a final rule on test procedures and labeling standards for recycled or "rerefined" oil intended for use as engine oil. The Recycled Oil Rule implements statutory requirements designed to encourage the use of recycled oil. It permits manufacturers to represent on a container of recycled oil that the oil is substantially equivalent to new engine oil, as long as the determination of equivalency is based on the test procedures prescribed by the new Rule.
Regulatory Reform
The Commission continued its activities under the ten-year schedule to review all rules and guides, repealing those that are outdated or no longer needed, and streamlining those that are retained. In fiscal year 1996, the Commission rescinded eight rules (the Fiberglass Curtain and Draperies Rule, the Quick Freeze Spray Rule, the Binocular (Prismatic) Rule, the Sleeping Bag Rule, the Tablecloth Rule, the Extension Ladder Rule, the Leather Belt Rule, and the Light Bulb Rule) and two industry guides (the Hosiery Guides and the Watch Band Guides). In addition, the Commission revised six rules (the Cooling-Off Rule, the Used Car Rule, the R-Value Rule, the Textile Rules, the Appliance Labeling Rule (mentioned above), and the Smokeless Tobacco Rule), and two industry guides (the Jewelry Guides and the Automotive Fuel Economy Guides).
Telemarketing Sales Rule
The Telemarketing Sales Rule, designed to give consumers important information regarding telemarketing offers, went into effect on December 31, 1995. The Rule prohibits telephone solicitors from a variety of practices, including calling before 8 a.m. or after 9 p.m., calling people who have said they do not want to be called, misrepresenting any aspect of the goods or services offered, and seeking advance payment before rendering service.