Brief Explains FTCs Funeral Rule is Meant to Permit Competition from Independent Casket Sellers
The Federal Trade Commission’s Funeral Rule protects consumers by promoting competition among providers of funeral goods – including independent casket retailers – according to the FTC in an amicus brief filed in federal district court in the matter of Powers v. Harris.
In the court case, an Internet-based casket seller filed suit against the Oklahoma State Board of Embalmers and Funeral Directors (Board) alleging that Oklahoma’s Funeral Services Licensing Act (FSLA), which requires all sellers of funeral goods to be licensed funeral directors, violates the Interstate Commerce Clause of the United States Constitution. In response to this lawsuit, the Board has argued that if the intent of the FTC’s Funeral Rule is to protect vulnerable consumers in their purchasing decisions, then all suppliers of funeral goods should be subject to the same regulation. Thus, the Board maintains that all sellers of funeral goods also should be licensed funeral directors, who are subject to the Funeral Rule.
The FTC’s brief clarifies that the Funeral Rule was adopted, in part, to open up casket sales to competition from sellers other than funeral directors, and not to restrict competition only to funeral directors. The FTC’s Funeral Rule requires providers to furnish consumers with a variety of information to help them comparison shop and purchase only the goods and services they want. The Rule’s price disclosure requirements ensure that consumers receive written, itemized price and billing information for funeral goods and services.
The Oklahoma legislation, in contrast, prevents anyone other than state-licensed funeral directors from selling caskets. The FTC brief notes, "Rather than promote consumer choice, the FSLA forces consumers to purchase caskets from funeral directors. Whatever ends the FSLA can be said to be advocating, it is not advancing the ends of the FTC’s Funeral Rule."
Ted Cruz, Director of the FTC’s Office of Policy Planning, said that policymakers should be especially concerned about the impact on electronic commerce of laws like the FSLA.
"Internet-based casket sellers often charge hundreds of dollars less for similar merchandise, and some offer custom caskets not readily available from funeral directors," he said. "Barring these sellers from the market doesn’t protect consumers, but it does restrict their choices and drive up their prices." Cruz noted that the FTC will examine barriers to Internet casket sales as part of a three-day public workshop on "Possible Anticompetitive Efforts to Restrict Competition on the Internet," to be held at the FTC on October 8-10, 2002.
The FTC brief emphasizes that substantial protections already exist for Oklahoma consumers who purchase caskets from sellers who are not funeral directors. Casket sellers would be subject to the Oklahoma Consumer Protection Act and to full liability under Oklahoma tort and contract law. Likewise, the FTC has authority under Section 5 of the FTC Act to bring an enforcement action against a casket seller who makes false and misleading claims about the products or services it provides. The Commission also has the authority under its unfairness jurisdiction to stop marketing practices that cause, or are likely to cause, substantial consumer injury which is not reasonably avoidable by consumers and is not outweighed by countervailing benefits to consumers or to competition.
The brief is available on the FTC’s Web site as a link to this release. For more information about the FTC’s October 8-10 workshop on "Possible Anticompetitive Efforts to Restrict Competition on the Internet."
The Commission vote authorizing staff to file the amicus brief was 5-0.
Copies of the documents mentioned in this release are available from the FTC’s Web site at http://www.ftc.gov/ and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. Call toll-free: 1-877-FTC-HELP.
Copies of the brief are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
(FTC Matter No. V020015)
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Director, Office of Policy Planning