Competition MissionMerger Guidelines
The Commission and the Department of Justice revised their joint 1992 Horizontal Merger Guidelines to clarify how they analyze efficiency claims in mergers under review and what merging firms must do to demonstrate claimed efficiencies. The revisions, drafted by an interagency task force, explain how efficiencies may affect the analysis of whether a proposed merger may lessen competition substantially in a relevant market. The agency will analyze, according to the revisions, the extent to which efficiencies enhance the merged firm's capacity to behave competitively and whether those efficiencies are likely to result in lower prices, improved quality, and enhanced service or new products. The revisions define more precisely which efficiencies are attributable to a proposed merger and which could be achieved in other ways, clarify what parties must do to demonstrate claimed efficiencies, and explain how efficiencies are factored into the analysis of the competitive effects of a merger.
Consumer Protection Mission
Care Labeling Rule
The Commission modified its Trade Regulation Rule Concerning the Care Labeling of Textile Wearing Apparel and Certain Piece Goods to permit clothing manufacturers to use symbols rather than written care instructions, beginning on July 1, 1997. The specified care symbols, developed by the American Society for Testing and Materials, appear on permanent labels inside garments to indicate a method for properly cleaning them. For the first 18 months the new symbols are in use, manufacturers must include written information explaining the symbols on hangtags or elsewhere with the garments. Allowing manufacturers to use symbols to comply with labeling requirements harmonizes U.S. clothing labeling regulations with those of Canada and Mexico, so that companies can use the same labels on garments offered for sale in any or all of the countries that are parties to the North American Free Trade Agreement.
Environmental Marketing Guides
The Commission updated its "green guides" on environmental claims in marketing, to reflect changing consumer perceptions and the emergence of new claims since 1992 when the first guides were issued. Additional guidance is now provided on the use of environmental seal-of-approval logos and the chasing arrows symbol, as well as marketing claims such as "environmentally preferable," "nontoxic," and "chlorine free." The Environmental Marketing Guidelines retain the section on general advertising principles and continue to address specific categories of environmental benefit claims, such as "degradable," "recycled content," and "ozone friendly." The revised guides were effective as of October 1996.
Games of Chance Rule
The Commission repealed its Trade Regulation Rule on Games of Chance in the Food Retailing and Gasoline Industries because the concerns that prompted adoption of the rule in 1966 appear to have disappeared. The Rule had addressed abuses in games of chance used by grocery stores and gas stations and had required various disclosures and prescribed certain procedures for operating the games. The Rule also became outdated because it covered only a limited sector of retail businesses that now use games of chance in their promotions. The Commission determined that the costs of the Rule now outweigh its benefits and that any future abuses can be prosecuted on a case-by-case basis.
The Commission revised its guide for the marketing of jewelry made wholly or in part of platinum, a precious metal more costly than gold. The guide provides for different markings on articles made of platinum, depending on the relative fineness or parts per thousand of pure platinum versus platinum-group metals (iridium, palladium, ruthenium, rhodium, and osmium). The revised guide adopts the international standard for platinum jewelry but continues to permit some markings not currently included in the international standard on products marketed in the United States. Other sections of the Guides for Jewelry, Precious Metals, and Pewter Industries, which assist the industry and consumers by helping marketers avoid deceptive or misleading representations about such products, were revised in 1996.
As part of its efforts to streamline and update regulations, the Commission issued Guides for Select Leather and Imitation Leather Products, which combine relevant portions of three older guides for shoes, luggage, and handbags, and provisions from a now-rescinded rule on the marketing of leather belts. The Commission also worked to harmonize the new guides with a European Union Directive concerning footwear. The new guidelines warn manufacturers and retailers against misrepresenting the composition of such products or misusing terms such as "waterproof" and "scratchproof." Products that are imitation leather should include a disclosure to that effect. The new guides became effective in December 1996.
The Commission rescinded the Guides for the Mirror Industry, which have been made obsolete by the adoption of industry standards and the technological advances in the manufacture of mirror glass. The Guides, issued in 1962 and revised in 1972, were intended to help the industry avoid deceptive claims in advertising or promotional materials, concerning such things as the quality or composition of mirrors or mirror glass.
Used Oil Rule
The Commission repealed the Trade Regulation Rule on Deceptive Advertising and Labeling of Previously Used Lubricating Oil, stating that the Rule's requirements for engine oils had been preempted by the new Recycled Oil Rule, which the agency promulgated in October 1995 as required by the Energy Policy and Conservation Act. The Recycled Oil Rule permits manufacturers and sellers to represent that recycled oil is substantially equivalent to new engine oil, so long as the determination of equivalency is based on test procedures prescribed by the Commission.