Guides for Advertising Allowances and Other Merchandising Payments and Services, 71741-71743 [2012-29189]

Agencies

• FEDERAL TRADE COMMISSION

[Federal Register Volume 77, Number 233 (Tuesday, December 4, 2012)]
[Proposed Rules]
[Pages 71741-71743]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-29189]


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FEDERAL TRADE COMMISSION

16 CFR Part 240


Guides for Advertising Allowances and Other Merchandising 
Payments and Services

AGENCY: Federal Trade Commission.

ACTION: Request for public comments.

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SUMMARY: The Federal Trade Commission (``Commission'') requests public 
comments on the overall costs and benefits of and the continuing need 
for its Guides for Advertising Allowances and Other Merchandising 
Payments and Services (``the Fred Meyer Guides'' or ''the Guides''), as 
part of the agency's review of all its current regulations and guides.

DATES: Written comments will be accepted until January 29, 2013.

ADDRESSES: Interested parties may file a comment online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Fred Meyer Guides 
Review'' on your comment. You may file your comment online at https://ftcpublic.commentworks.com/ftc/fredmeyerguides, by following the 
instructions on the web-based form. If you prefer to file your comment 
on paper, mail or deliver it to the following address: Federal Trade 
Commission, Office of the Secretary, Room H-113 (Annex B), 600 
Pennsylvania Ave. NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Neil W. Averitt (202) 326-2885, or 
Julie A. Goshorn (202) 326-3033, Bureau of Competition, Federal Trade 
Commission, 600 Pennsylvania Avenue NW., Washington, DC 20580.

SUPPLEMENTARY INFORMATION:

[[Page 71742]]

I. Background

    The Fred Meyer Guides are intended to help businesses comply with 
sections 2(d) and 2(e) of the Clayton Act, as amended by the Robinson-
Patman Act (``the Act''). See 15 U.S.C. Sec. Sec.  13(d)-(e). These 
sections of the Act generally require a seller to make advertising and 
promotional allowances or services available to all competing customers 
on proportionately equal terms. The Fred Meyer Guides help sellers meet 
these requirements by providing elaboration and examples of some of the 
statute's central provisions, such as the definition of ``competing 
customer'' and some of the permissible accounting means by which 
payments can be made proportional.
    The Commission promulgated the Fred Meyer Guides under sections 5 
and 6 of the Federal Trade Commission Act (``FTC Act''), 15 U.S.C. 45-
46, in 1969. Industry guides such as these are administrative 
interpretations of the law. Therefore, they do not have the force and 
effect of law and are not independently enforceable. The Guides are 
intended to reflect and interpret the requirements that courts have 
imposed upon sellers, in actions brought by private parties as well as 
by the Government. The Guides were most recently reviewed and amended 
in 1990. See 55 FR 33651 (Aug. 17, 1990).
    The Guides contain a total of fifteen sections. The first seven of 
these consist of definitions and explanations that spell out the 
general scope of the Robinson-Patman Act and of the Guides themselves. 
Section 1 describes the purpose of the Guides, and emphasizes that, 
while they are intended to be consistent with the case law, they do not 
themselves have the force of law. Section 2 spells out systematically 
the jurisdictional prerequisites that must be met before 2(d) or 2(e) 
of the Robinson-Patman Act will apply, including, for example, having a 
seller of products, engaged in interstate commerce, who either directly 
or through an intermediary, makes certain payments or provides certain 
services. Section 3 defines the term ``seller'' explaining that the 
term reaches any person making sales for resale, that it includes 
intermediaries in the distribution chain such as wholesalers and 
distributors, and includes sales of goods that must be processed before 
being resold. Section 4 defines the term ``customer,'' clarifying that 
the term includes indirect purchasers and the headquarters of group 
buyers, but not the individual stores in such groups. Section 5 defines 
``competing customers'' to include all businesses that compete in the 
resale of the seller's products of like grade and quality at the same 
functional level of distribution (e.g., a seller must offer the same 
promotion to a retailer that buys through a wholesaler as it offers to 
a retailer that buys directly from the seller if the two resell within 
the same geographic area). Section 6 defines ``interstate commerce,'' 
specifying that firms may be subject to the Robinson-Patman Act if 
there is any part of their business that in any way crosses state 
lines. Section 7 defines ``services'' and ``facilities'' to cover those 
that promote the resale of the seller's product by the customer, as 
distinct from services that relate primarily to the original sale 
(which are covered by section 2(a) of the Act).
    The next three sections interpret the substantive requirements of 
the Robinson-Patman Act. Section 8 suggests that sellers should provide 
their promotional payments and services according to a pre-determined 
plan, and, if the plan is complex, that they would be well advised to 
put it in writing. Section 9 interprets the reference to 
``proportionately equal terms'' and notes that no single way of 
proportionalizing is prescribed by law, but suggests that convenient 
and acceptable techniques for doing so would include providing benefits 
on the basis of the dollar volume or the unit quantity of the product 
purchased during a specified period. Section 10 explains that the 
seller should take reasonable steps to ensure that the benefits are 
useable in a practical sense by all competing customers, a principle 
that may require offering alternative forms of benefits for customers 
of different sizes or customers that use different sales channels.
    The last five sections address a variety of administrative issues 
and affirmative defenses. Section 11 states that a seller may contract 
with intermediaries, such as wholesalers, to perform its obligations. 
Section 12 states that the seller should take ``reasonable 
precautions'' to ensure that customers expend the allowance solely for 
its intended purposes. Section 13 deals with the subject of customer 
liability, and notes that, although sections 2(d) and 2(e) of the 
Robinson-Patman Act apply only to sellers, the Commission may proceed 
under section 5 of the FTC Act against customers who induce sellers to 
violate the Robinson-Patman Act. Section 14 affirms that a ``meeting-
competition'' defense is available to charges under 2(d) and 2(e), 
provided that the seller acts in good faith to meet those competing 
offers. Section 15 notes that it is no defense to a charge that an 
allowance violates the Act that the payment or service could be 
justified through savings in the cost of manufacture, sales or delivery 
(i.e., there is no cost-justification defense to charges of violation 
of sections 2(d) and 2(e) of the Act).

II. Regulatory Review Program

    The Commission periodically reviews all of its rules and guides. 
These reviews seek information about the costs and benefits of the 
agency's rules and guides, and their regulatory and economic impact. 
The information obtained assists the Commission in identifying those 
rules and guides that warrant modification or rescission. Therefore, 
the Commission solicits comments on, among other things, the economic 
impact of and the continuing need for the Fred Meyer Guides; possible 
developments in the case law that need to be reflected in the Guides; 
and the effect on the Guides of any technological, economic, or other 
industry changes.

III. Request for Comment

    The Commission solicits written public comments on the following 
questions:
    (1) Is there a continuing need for the Fred Meyer Guides?
    (2) Have there been changes in the case law that are not, but 
should be, reflected in the Guides?
    (3) How, if at all, should the Guides be revised to account for new 
methods of commerce introduced as a result of the growth of the 
Internet since 1990? In particular, how should the Guides address: (a) 
Support for Internet or other electronic promotion in various forms, 
such as pay-per-click, display ads, targeted ads, mobile ads, or other 
formats; (b) manufacturer support for different pages within a 
retailer's Web site (e.g., support for display on the home or 
``landing'' page of a Web site, versus support for display on an 
interior page); (c) general principles for distinguishing between price 
reductions and promotional allowances in an Internet context; (d) the 
definition of ``competing sellers'' as it applies to traditional and 
Internet retailers; (e) general principles of proportional equality, if 
any, that should apply to promotional support given to traditional and 
Internet retailers; and (f) any other aspects of the Guides that might 
need revision or clarification in light of the development and 
prominence of e-commerce?
    (4) To what extent, if any, should Sec.  240.13(a) of the Guides be 
revised to reflect cases discussing the possibility that what appears 
to be a discrimination in promotional allowances may support

[[Page 71743]]

a private action for inducing or receiving a discrimination in price? 
See, e.g., American Booksellers Ass'n v. Barnes & Noble, 135 F. Supp. 
2d 1031 (N.D. Calif. 2001); but see United Magazine Co. v. Murdoch 
Magazines Distribution, 2001 U.S. Dist. Lexis 20878 (S.D.N.Y. 2001).
    (5) What benefits and costs have the Guides had on businesses that 
grant promotional allowances and services?
    (6) What benefits and costs have the Guides had for businesses who 
receive promotional allowances and services?
    (7) What benefits and costs have the Guides had for ultimate 
consumers?
    (8) What changes, if any, should be made to the Guides to increase 
their benefits to those who use them and to consumers? Are there terms 
in the statute or concepts in the case law that are not presently 
addressed in the Guides, and that might benefit from clarification? How 
would these changes affect the costs that the Guides impose on firms 
that conform to them?
    (9) What changes, if any, should be made to the Guides to reduce 
the burdens or costs imposed on firms that conform to them? How would 
these changes affect the benefits provided by the Guides?
    (10) Do the Guides overlap or conflict with other federal, state, 
or local laws or regulations? If so, what changes in the Guides, if 
any, would be appropriate?
    (11) In addition to the issues mentioned in Question (3) above, 
since the Guides were last amended, what, if any, developments in 
technology or economic conditions require modification to the Guides? 
What modifications are required?
    (12) What effects, if any, do the Guides have on the costs, 
profitability, competitiveness and employment of small business 
entities?
    (13) Are there foreign or international laws, regulations, or 
standards concerning the avoidance of discriminatory allowances and 
services that the Commission should consider as it reviews the Guides? 
If so, what are they? (a) Should the Guides be changed to harmonize 
with these foreign or international laws, regulations, or standards? 
Why or why not? (b) How would harmonization affect the costs and 
benefits of the Guides for consumers? (c) How would harmonization 
affect the costs and benefits of the Guides for businesses, 
particularly small businesses?
    (14) Are there any other problems occurring in the provision of 
promotional allowances and services covered by the Guides that are not 
dealt with in the Guides? If so, what mechanisms should be explored to 
address such problems?

IV. Instructions for Submitting Comments

    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before January 29, 
2013. Write ``Fred Meyer Guides Review'' on the comment.
    Your comment, including your name and your state, will be placed on 
the public record of this proceeding, including, to the extent 
practicable, on the public Commission Web site, at https://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the Commission tries 
to remove individuals' home contact information from comments before 
placing them on the Commission Web site.
    Because your comment will be made public, you are solely 
responsible for making sure that your comments do not include any 
sensitive personal information, such as a Social Security number, date 
of birth, driver's license number or other state identification number 
or foreign country equivalent, passport number, financial account 
number, or credit or debit card number. You are also solely responsible 
for making sure that your comment does not include any sensitive health 
information, such as medical records or other individually identifiable 
health information.
    In addition, do not include any ``[t]rade secret or any commercial 
or financial information which is * * * privileged or confidential,'' 
as discussed in Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC 
Rule 4.10(a)(2), 16 CFR 4.10(a)(2). In particular, do not include 
competitively sensitive information such as costs, sales statistics, 
inventories, formulas, patterns, devices, manufacturing processes, or 
customer names.
    If you want the Commission to give your comment confidential 
treatment, you must file it in paper form, with a request for 
confidential treatment, and you must follow the procedure explained in 
FTC Rule 4.9(c), 16 CFR 4.9(c). In particular, the written request for 
confidential treatment that accompanies the comment must include the 
factual and legal basis for the request, and must identify the specific 
portions of the comments to be withheld from the public record. Your 
comment will be kept confidential only if the FTC General Counsel, in 
his or her sole discretion, grants your request in accordance with the 
law and the public interest.
    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comment online. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/fredmeyerguides, by following the instructions on the web-based 
form. If this Notice appears at https://www.regulations.gov/#!home, you 
also may file a comment through that Web site.
    If you file your comment on paper, write ``Fred Meyer Guides 
Review'' on your comment and on the envelope, and mail or deliver it to 
the following address: Federal Trade Commission, Office of the 
Secretary, Room H-113 (Annex B), 600 Pennsylvania Ave. NW., Washington, 
DC 20580. If possible, submit your paper comment to the Commission by 
courier or overnight service.
    Visit the Commission Web site at https://www.ftc.gov to read this 
Notice and the news release describing it. The FTC Act and other laws 
that the Commission administers permit the collection of public 
comments to consider and use in this proceeding as appropriate. The 
Commission will consider all timely and responsive public comments that 
it receives on or before January 29, 2013. You can find more 
information, including routine uses permitted by the Privacy Act, in 
the Commission's privacy policy, at https://www.ftc.gov/ftc/privacy.htm.

    By direction of the Commission.
Donald S. Clark
Secretary.
[FR Doc. 2012-29189 Filed 12-3-12; 8:45 am]
BILLING CODE 6750-01-P