Agency Information Collection Activities; Proposed Collection; Comment Request, 76348-76357 [2016-26486]
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Federal Register / Vol. 81, No. 212 / Wednesday, November 2, 2016 / Notices
Notice is hereby given that the Federal
Deposit Insurance Corporation (‘‘FDIC’’)
as Receiver for WestBridge Bank & Trust
Company, Chesterfield, Missouri (‘‘the
Receiver’’) intends to terminate its
receivership for said institution. The
FDIC was appointed receiver of
WestBridge Bank and Trust Company
on October 15, 2010. The liquidation of
the receivership assets has been
completed. To the extent permitted by
available funds and in accordance with
law, the Receiver will be making a final
dividend payment to proven creditors.
Based upon the foregoing, the
Receiver has determined that the
continued existence of the receivership
will serve no useful purpose.
Consequently, notice is given that the
receivership shall be terminated, to be
effective no sooner than thirty days after
the date of this Notice. If any person
wishes to comment concerning the
termination of the receivership, such
comment must be made in writing and
sent within thirty days of the date of
this Notice to: Federal Deposit
Insurance Corporation, Division of
Resolutions and Receiverships,
Attention: Receivership Oversight
Department 34.6, 1601 Bryan Street,
Dallas, TX 75201.
No comments concerning the
termination of this receivership will be
considered which are not sent within
this time frame.
owned by the bank holding company,
including the companies listed below.
The applications listed below, as well
as other related filings required by the
Board, are available for immediate
inspection at the Federal Reserve Bank
indicated. The applications will also be
available for inspection at the offices of
the Board of Governors. Interested
persons may express their views in
writing on the standards enumerated in
the BHC Act (12 U.S.C. 1842(c)). If the
proposal also involves the acquisition of
a nonbanking company, the review also
includes whether the acquisition of the
nonbanking company complies with the
standards in section 4 of the BHC Act
(12 U.S.C. 1843). Unless otherwise
noted, nonbanking activities will be
conducted throughout the United States.
Unless otherwise noted, comments
regarding each of these applications
must be received at the Reserve Bank
indicated or the offices of the Board of
Governors not later than November 29,
2016.
A. Federal Reserve Bank of Dallas
(Robert L. Triplett III, Senior Vice
President) 2200 North Pearl Street,
Dallas, Texas 75201–2272:
1. International Bancshares
Corporation and IBC Subsidiary
Corporation, both of Laredo, Texas; to
acquire International Bank of
Commerce, Oklahoma City, Oklahoma.
B. Federal Reserve Bank of Chicago
(Colette A. Fried, Assistant Vice
President) 230 South LaSalle Street,
Chicago, Illinois 60690–1414:
1. Fentura Financial, Inc., Fenton,
Michigan; to acquire 100 percent of
Community Bancorp, Inc., and thereby
indirectly acquire Community State
Bank both of Saint Charles, Michigan.
Dated: October 28, 2016.
Federal Deposit Insurance Corporation.
Valerie J. Best,
Assistant Executive Secretary.
Board of Governors of the Federal Reserve
System, October 28, 2016.
Yao-Chin Chao,
Assistant Secretary of the Board.
[FR Doc. 2016–26482 Filed 11–1–16; 8:45 am]
[FR Doc. 2016–26470 Filed 11–1–16; 8:45 am]
BILLING CODE 6714–01–P
BILLING CODE 6210–01–P
FEDERAL RESERVE SYSTEM
FEDERAL TRADE COMMISSION
Formations of, Acquisitions by, and
Mergers of Bank Holding Companies
Agency Information Collection
Activities; Proposed Collection;
Comment Request
FEDERAL DEPOSIT INSURANCE
CORPORATION
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Notice to All Interested Parties of the
Termination of the Receivership of
10299—WestBridge Bank and Trust
Company, Chesterfield, Missouri
The companies listed in this notice
have applied to the Board for approval,
pursuant to the Bank Holding Company
Act of 1956 (12 U.S.C. 1841 et seq.)
(BHC Act), Regulation Y (12 CFR part
225), and all other applicable statutes
and regulations to become a bank
holding company and/or to acquire the
assets or the ownership of, control of, or
the power to vote shares of a bank or
bank holding company and all of the
banks and nonbanking companies
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Federal Trade Commission
(‘‘FTC’’ or ‘‘Commission’’).
ACTION: Notice.
AGENCY:
The FTC is submitting the
information collection requirements
described below to the Office of
Management and Budget (‘‘OMB’’) for
review, as required by the Paperwork
Reduction Act (‘‘PRA’’). The FTC is
seeking public comments on proposed
SUMMARY:
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information requests to marketers of
electronic cigarettes (‘‘e-cigarettes’’).
The FTC proposes to issue compulsory
process orders to up to 15 e-cigarette
manufacturers, distributors, and
marketers per year for information
concerning, among other things, data on
annual sales and marketing
expenditures. The Commission intends
to ask OMB for a three-year clearance to
collect this information.
DATES: Comments on the proposed
information requests must be received
on or before December 2, 2016.
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 ‘‘Electronic Cigarettes:
Paperwork Comment, FTC File No.
P14504,’’ on your comment. File your
comment online at https://
ftcpublic.commentworks.com/ftc/
electroniccigarettespra2 by following
the instructions on the web-based form.
If you prefer to file your comment on
paper, mail your comment to the
following address: Federal Trade
Commission, Office of the Secretary,
600 Pennsylvania Avenue NW., Suite
CC–5610 (Annex J), Washington, DC
20580, or deliver your comment to the
following address: Federal Trade
Commission, Office of the Secretary,
Constitution Center, 400 7th Street SW.,
5th Floor, Suite 5610 (Annex J),
Washington, DC 20024.
FOR FURTHER INFORMATION CONTACT:
Requests for additional information
should be addressed to Elizabeth Sanger
or Rosemary Rosso, Division of
Advertising Practices, Bureau of
Consumer Protection, Federal Trade
Commission. Telephone: (202) 326–
2757 (Sanger) or (202) 326–2174
(Rosso).
SUPPLEMENTARY INFORMATION:
I. Background
In the past few years, sales of ecigarettes have grown rapidly in the
United States.1 These devices are
available in both disposable and
refillable models, in a range of nicotine
strengths (including nicotine-free), and
in a multitude of flavors. E-cigarettes are
manufactured, distributed, and sold by
a wide variety of industry members,
ranging from large companies, including
major U.S. tobacco companies, to small,
single-location operators. They can be
1 These products are most commonly referred to
as e-cigarettes, but sometimes also are referenced as
vape pens, personal vaporizers, e-hookah, and
electronic nicotine delivery systems. This
information collection would cover all such
products, regardless of how they are referenced.
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purchased at conventional retail stores,
at ‘‘vape shops,’’ which are retail stores
that primarily or exclusively sell ecigarettes, and online.
For many years, the Commission has
published reports on sales and
marketing expenditures by the major
cigarette and smokeless tobacco
manufacturers. These data allow the
agency to analyze industry sales and
assess how industry members allocate
their promotional activities and
expenditures. The data also provide
information to policymakers and public
health researchers that, in many
instances, is not available from other
sources. Given their increasing
prevalence, the Commission believes it
is important and necessary for the
agency to begin collecting information
about e-cigarette sales and marketing
activities. The Commission intends to
publish a report with the data it
obtains,2 and to issue similar
information requests regularly in order
to track trends over time. The
information will be sought using
compulsory process under Section 6(b)
of the Federal Trade Commission Act,
15 U.S.C. 46(b).
The Commission intends to issue
information requests to up to 15
industry members, including larger and
smaller entities, and will seek
information about the different types of
e-cigarette products marketed, certain
characteristics of those products, and
information about marketing
expenditures for broad categories of
media. While the data may not represent
overall sales and marketing activities for
the entire e-cigarette industry, the
information provided should provide a
valuable snapshot of the current ecigarette market, including its major
players. Because the number of
separately incorporated companies
affected by the Commission’s requests
will exceed nine entities, the
Commission is seeking OMB clearance
under the PRA before requesting any
information from the industry
members.3 On October 27, 2015, as
required by the PRA, the FTC published
a Federal Register Notice seeking
comments from the public concerning
the proposed collection of information
from e-cigarette marketers. See 80 FR
65758 (‘‘October 2015 Notice’’). As
2 The report would not disclose any companyspecific confidential data.
3 Under the PRA, 44 U.S.C. 3501–3521, federal
agencies must obtain approval from OMB for each
‘‘collection of information’’ they conduct or sponsor
if posed to ten or more entities within any twelvemonth period. 44 U.S.C. 3502(3); 5 CFR 1320.3(c).
‘‘Collection of information’’ means agency requests
or requirements that members of the public submit
reports, keep records, or provide information to a
third party. 44 U.S.C. 3502(3); 5 CFR 1320.3(c).
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discussed below, 37 comments were
received.
Pursuant to the OMB regulations that
implement the PRA (5 CFR part 1320),
the FTC is providing this second
opportunity for public comment while
requesting that the OMB grant the
clearance for the proposed collection of
information. All comments should be
filed as prescribed in the Request for
Comment part below, and must be
received on or before December 2, 2016.
II. Public Comments
The FTC received 37 comments in
response to the October 2015 Notice.4
Of these, 20 comments expressly
supported and substantively addressed
the proposed data collection. A joint
comment favoring the proposal was
submitted by the following public
health organizations: American
Academy of Pediatrics; the American
Heart Association; Campaign for
Tobacco-Free Kids; Tobacco Control
Legal Consortium; and Truth Initiative
(‘‘Joint Public Health Comment’’).
Comments supporting the proposal also
were received from three individual
public health or public interest
organizations.5 Favorable substantive
comments were submitted by three
government-related entities or
individuals: National Association of
Attorneys General Tobacco Committee
(‘‘NAAG’’); the Oregon Public Health
Division; and the Comptroller of the
City of New York; and from three
academic centers involved in public
health and tobacco control issues.6 Ten
individuals, many involved in local
health education or tobacco control
activities, filed individual comments
supporting the data collection.7
Five comments were received from
industry members: R.J. Reynolds Vapor
Company and RAI Services Company
(‘‘Reynolds’’); Altria Client Services Inc.
and Nu Mark LLC (‘‘Altria’’); Rock River
Manufacturing, the tobacco products
manufacturing division of Ho-Chunk,
4 See https://www.ftc.gov/policy/publiccomments/initiative-626.
5 Comments by Campaign for Tobacco-Free Kids
(‘‘CTFK’’); American Lung Association; and Truth
In Advertising, Inc.
6 Comment by Georgia State University Tobacco
Center of Regulatory Science (‘‘Georgia State’’);
Comment by Glantz, et al., University of California,
San Francisco Tobacco Center for Regulatory
Science and Center for Tobacco Control Research
and Education (‘‘UCSF’’); and Comment by Ribisl
et al., University of North Carolina Gillings School
of Global Public Health (‘‘UNC’’).
7 Comments by K. Miloski (Riverhead Community
Awareness Program); L. Rotolo (TFAC); S. Hills; D.
Moore (Tobacco Free Action Committee); S.
Fischer; A. Zanatta (Jewish Community Center); K.
Keenan (Roswell Park Cancer Institute), M. James
(POW’R Against Tobacco); J. DiFranza; and T. Cain
(Anderson Aconee Behavioral Health).
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Inc. (‘‘Ho-Chunk’’); (4) Fontem US, Inc.
(‘‘Fontem’’), and (5) Logic Technology
Development LLC (‘‘Logic’’). None of
these comments expressly opposed the
proposed data collection, although two
companies questioned whether the data
collection was premature given the
then-pending FDA deeming regulation
that, among other provisions, asserts
regulatory authority over e-cigarettes
and other tobacco products.8 Each
industry comment made suggestions
that it asserted would enhance the
quality, utility, and clarity of the
information to be collected and reduce
the burden on the respondents.
The remaining 12 comments did not
substantively address the proposed data
collection.
A. General Support for the Data
Collection
In its October 2015 Notice, the FTC
sought comments regarding whether the
proposed collection is necessary.9 Many
of the comments stated that the data
collection would provide important
information, especially given the
increased use of e-cigarettes by youth,10
and the limited availability of data on ecigarette advertising and marketing from
other sources.11 The Joint Public Health
Comment stated that the collected data
could provide valuable information and
insights into the e-cigarette market and
be used as a basis for public policy
decisions. The UNC comment stated
that the data collection would enable
public health professionals to better
understand where e-cigarette
advertising and marketing dollars are
being spent, and to help develop
specific interventions to prevent
underage use. The UCSF comment
stated that the reports would enable
retrospective assessment of advocacy
activities and policy changes.
A number of comments made
favorable comparisons between the
proposed collection of information on ecigarette sales and marketing
expenditures and the FTC’s existing
reports on cigarettes and smokeless
tobacco, noting that the existing reports
are widely used by public health
8 FDA has since issued its final regulation:
Deeming Tobacco Products To Be Subject to the
Federal Food, Drug, and Cosmetic Act, as Amended
by the Family Smoking Prevention and Tobacco
Control Act; Restrictions on the Sale and
Distribution of Tobacco Products and Required
Warning Statements for Tobacco Products
(‘‘Deeming Regulation’’), 81 FR 28974 (May 10,
2016).
9 See 80 FR 65758 at 65759.
10 See, e.g., Joint Public Health Comment;
comments from CTFK; UCSF; and Oregon Public
Health Division.
11 See, e.g., Joint Public Health Comment;
comments from CTFK; UNC; and Georgia State.
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professionals, researchers,
policymakers, and government
agencies.12 These comments stated that
expansion of data collection to ecigarettes is needed to inform these
same stakeholders about the nature and
extent of e-cigarette advertising and
marketing practices, and to allow them
to monitor trends.13
The FTC believes that these
information requests are in the public
interest and essential to the agency’s
performance of its authority to
investigate and report publicly on
industry practices that affect the
economic well-being of consumers.
Consistent with the agency’s
information collection for cigarettes and
smokeless tobacco products, the data
will also provide important information
for researchers and policymakers.
B. Utility of the Information Collection
The FTC’s October 2015 Notice also
sought comment on whether the
proposed data collection is necessary for
the proper performance of the functions
of the FTC, including whether the
information will be practically useful.14
The NAAG comment stated that the data
collection would greatly facilitate state
efforts to better understand and
effectively regulate e-cigarettes. The
Joint Public Health Comment and the
Georgia State comment noted that the
FTC’s report would facilitate research
into e-cigarette marketing because it
would provide access to data that are
otherwise unavailable from commercial
sources, which tend to focus on larger
companies and traditional distribution
channels such as convenience stores.
The UCSF comment states that scholarly
research of e-cigarette marketing would
be best served by reliable data, such as
data collected directly from members of
the e-cigarette market. Individual public
health educators commented that a
report on e-cigarette sales and marketing
would facilitate their local and state
health education work, which in turn
informs evidence-based policymaking
and regulatory action.15 One drug
prevention specialist stated that a report
on e-cigarette sales and marketing
expenditures would also inform
advocacy work and counter-marketing
strategies to discourage youth and other
vulnerable populations from using ecigarettes.16
One industry member, Ho-Chunk,
questioned whether the value of the
12 See, e.g., Joint Public Health Comment;
comments from Oregon Public Health Division; M.
James; D. Moore; S. Fisher; S. Hills; and L. Rotolo.
13 See, e.g., comment from CTFK.
14 80 FR 65758 at 65759.
15 See, e.g., comments by L. Rotolo and M. James.
16 See comment by T. Cain.
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proposed data collection could be
outweighed by the risk that a negative
public perception of e-cigarettes would
damage the growth of the industry. The
company expressed concern that the
FTC’s data collection could send a
premature message that the industry is
engaged in predatory marketing or that
there are as-yet-unknown health and
safety risks associated with the use of
these products.
The Commission intends to use the
data collection to provide useful
baseline information (starting with 2015
data) concerning sales of the various ecigarette products and allow the
Commission to analyze how industry
members allocate their promotional
activities and expenditures across
various media. The data also will
provide researchers and policymakers
with sales and marketing information
that will assist their research and
regulatory efforts. The Commission does
not believe that the data collection itself
will create any negative public
perception of e-cigarettes or damage the
growth of the industry. In particular, the
proposal seeks sales and marketing
expenditure data only and does not
include an inquiry into any hypothetical
predatory practices or health or safety
information. In addition, the data
collection here is very similar in content
and methodology to studies that the
Commission for many years has
undertaken with respect to other
markets, including cigarettes and
smokeless tobacco products (OMB
Control No. 3084–0134); alcoholic
beverages (OMB Control No. 3084–
0138); and food (OMB Control No.
3084–0139).
C. Suggestions To Improve the
Information Collection
In its October 2015 Notice, the FTC
invited comments concerning ways to
enhance the quality, utility, and clarity
of the information to be collected.17 The
FTC received substantive comments for
enhancing its proposed data collection
as follows: (1) Expand the scope of the
proposed data collection by collecting
data from a broad cross-section of
market participants and increasing the
number of surveyed entities; (2) collect
and report data on a state-by-state basis;
(3) collect and report sales data that are
segmented by product type,
differentiates product characteristics
such as flavors and nicotine strength,
that include data on refills and
cartridges, and that report sales data
separately from product give-aways; and
17 80
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(4) collect and report broad categories of
marketing expenditure data.
1. Scope of the Data Collection
The Commission’s October 2015
Notice anticipated collecting and
reporting data obtained from as many as
15 entities that would vary in size, in
the number of products sold, and in the
extent and variety of their advertising
and marketing.18 A number of
comments recommended that the
Commission expand the scope of the
data collection by including a broad
cross-section of market participants,
including distributors and entities
whose products are sold in traditional
retail stores (e.g., convenience stores), as
well as online sellers, and vape shops.
To accomplish this goal, some
commenters recommended that the
Commission increase the number of
entities from whom it would collect
data.
a. Type of Market Participant. A wide
range of commenters, including both
industry and public health
organizations and researchers,
recommended that the Commission
expand the scope of the proposed data
collection by including a broad crosssection of market participants in the
entities surveyed through the data
collection. Logic recommended that the
FTC seek a broader cross-section of the
market. Fontem commented that vape
shops comprise a large percentage of the
market, and noted that the data
collection would not be meaningful if
vape shops were not included. Altria
also suggested that the FTC send data
requests to a selection of vape shops.
Reynolds recommended that the
Commission differentiate the
information requests by type of market
participant, reasoning that such
segmentation would present less need
for highly differentiated sales and
marketing data. The Joint Public Health
Comment recommended that the FTC
survey a selection of large companies, as
well as a geographically dispersed
selection of e-cigarette manufacturers,
distributors, and retailers (including
online sellers and vape shops) in order
to get a cross-section of market
participants. The UNC comment
recommended that the proposed data
collection differentiate the method of
sale (distributors, online, retail) so that
subsequent enforcement efforts can be
tailored appropriately. Georgia State and
one individual also recommended that
the Commission differentiate by method
of sale. Another individual
recommended that the data requests
segment market participants into two
18 Id.
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groups: Those that sell only e-cigarette
products and those that sell e-cigarettes
and other tobacco products.
The Commission agrees that seeking
data from a broad cross-section of the
overall market, including distributors to
conventional retail sellers, online
sellers, and vape shops, would provide
a fuller perspective on the overall ecigarette market. However, the
Commission was not able to find
sufficient, reliable market data that
would permit it to identify and select
which smaller online sellers and vape
shops should receive data requests. The
available data from which the
Commission could identify a sample of
online sellers or vape shops are so
limited and insufficient that any
separate samples of these sellers would
at best provide anecdotal information.
In contrast, the available market data
do permit a reliable sample of the
largest e-cigarette marketers and some
online sellers. The Commission believes
that a sample of these companies will
account for at least 80 percent of the
conventional retail market and a sizable
share of the online market. Thus, the
data will provide useful information
concerning at least this large subset of
the overall market. At the same time, the
Commission remains interested in
collecting and reporting sales and
marketing expenditure data from a
broader cross-section of the market.
Should more reliable market data
become available, the Commission may
seek OMB clearance to collect sales and
marketing expenditure data for a
broader cross-section of companies at
such time, and would report on the data
received.
b. Number of Entities Submitting
Data. To capture data from a broad
cross-section of market participants,
several commenters recommended that
the Commission collect data from more
than 15 entities, the number identified
in the October 2015 Notice. Altria
recommended increasing the number
beyond 15 entities given industry
fragmentation and the increased market
presence of vape shops. Reynolds
questioned whether data collection from
15 entities would be sufficient to allow
the FTC to characterize overall market
sales and marketing activities. Logic
stated that the proposed data collection
was under-inclusive because too few
companies would be required to report
data. The Georgia State and Truth In
Advertising comments stated that
expanding the data collection beyond 15
entities would provide a fuller
perspective and more accurate
representation of the overall market.
The Joint Public Health Comment also
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recommended that the FTC send data
requests to more than 15 entities.
As discussed above, reliable data
permitting the Commission to identify a
representative sample of a broad crosssection of the market do not appear to
be available at this time. As a result, the
Commission does not believe it
necessary to increase the number of
entities from whom it will seek to
collect and report data.
2. State-By-State Data Collection
The FTC’s October 2015 Notice asked
whether the agency should seek data on
state-by-state sales of e-cigarettes.19
Altria recommended that the
Commission consider conducting a
state-by-state analysis given the highly
fragmented nature of the overall market.
Comments from public health
organizations and research centers also
supported state-by-state data collection
for sales and, in some comments, also
for marketing expenditures.20 The UNC
comment noted that reporting state-bystate data would help tobacco control
professionals understand which states
and regions have the greatest sales, and
help them target their tobacco control
efforts accordingly. The Oregon Public
Health Division and Georgia State
comments noted that state-by-state data
would be useful in evaluating the
impact of state and local regulatory
efforts. Reynolds opposed state-by-state
data collection, stating that such data
were not readily available for ecigarettes sold through distributors who
sell such products in more than one
state. Reynolds further stated that there
are no efficient and reliable means to
obtain state-by-state data.
Although the Commission agrees that
state-by-state data collection could
provide useful information, such data
collection would significantly increase
the complexity and burden of the data
requests and might not be readily
practical for some e-cigarette sellers.
Thus, the Commission has decided
against requesting approval for state-bystate data collection at this time. The
Commission remains interested in this
issue, however, and could request OMB
clearance to collect state-by-state data in
the future.
3. Collection of Sales Data
a. Type of Product. A number of
commenters noted the wide variety of
different e-cigarette products currently
19 80
FR 65758 at 65759.
20 See Joint Public Health Comment, recognizing
that certain marketing expenditures made on a
national level could not be reported on a state-bystate basis. See also comments from Oregon Public
Health Division; UNC; Georgia State; UCSF; and T.
Cain.
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marketed. Reynolds noted that three
general categories of e-cigarette products
are currently available: (1) Disposable
products, (2) rechargeable and pre-filled
cartridge products, and (3) ‘‘tank’’
products that require the user to put eliquid into an aerosol-generating device.
The Joint Public Health Comment
recommended that the Commission
require responders to report separately
by product type.21 The UNC comment
also supported separate reporting by
product type, noting that separate
reporting can be useful to track changes
in popularity and use. Similarly, the
UCSF comment supported separate
reporting as a means to help evaluate
how changes in sales of different
products correspond to changes in use.
Reynolds recommended against
differentiating by product type, noting
that the different products generally
could be categorized by the retail market
where the products are sold, with
conventional retail stores selling
disposable and rechargeable products,
and ‘‘vape stores’’ selling tank products.
Reynolds preferred categorizing by type
of marketer rather than type of product.
Given the wide variety of products
available, the Commission believes that
separate reporting by product type will
be useful and important in tracking
future developments in the e-cigarette
market. Thus, the proposed data
collection contemplates separate
reporting across three categories: (1)
Non-refillable (i.e., disposable)
products; (2) refillable closed systems
(i.e., rechargeable and refillable
cartridge products); and (3) refillable
open systems (i.e., ‘‘tank’’ systems).
b. Differentiation by Flavors.
Comments from public health
organizations, research centers, and
health educators recommended that the
Commission seek sales data that are
differentiated by their various
characterizing flavors.22 The Joint
Public Health Comment stated that
flavors appear to be one of the reasons
youth and adults try e-cigarettes. The
CTFK comment stated that the available
data suggest that flavors are a key reason
youth try and use e-cigarettes, citing the
2013–2014 Population Assessment of
Tobacco and Health (‘‘PATH’’) study,
which showed that most youth smoked
flavored e-cigarettes when they first
tried the product and during the past
month. The comment also cited data
21 Other commenters also supported separate
reporting generally. See comments from CTFK;
American Lung Ass’n; NAAG; L. Rotolo; and S.
Fisher.
22 See Joint Public Health Comment, and
comments from CTFK; American Lung Ass’n;
NAAG; UNC; UCSF; Georgia State; M. James; and
L. Rotolo.
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from the PATH study indicating that
surveyed youth reported ‘‘comes in
flavors that I like’’ as one of the reasons
they used e-cigarettes. The Georgia State
comment stated that data differentiated
by flavors would help regulators and the
public health community determine the
role flavors play in patterns or reasons
for use, perceptions of harm, and social
norms.
Reynolds and Fontem opposed the
collection of detailed flavor data.
Fontem noted that there is no
standardized method of reporting
flavors across the industry, and both
stated that characterizing flavors is
subjective. Reynolds stated that the
utility of seeking flavor data is not clear.
Given the potential importance of
flavors for trial and use of e-cigarettes,
especially among youth, the
Commission will seek to collect data
that differentiate among flavors.
However, as discussed infra at section
II.D.2, to reduce the burden, the
proposed data collection will designate
only three flavor categories, rather than
requiring companies to report each
flavor individually.
c. Differentiation by Nicotine
Strength. The comments from public
health organizations, research centers,
and NAAG supported the collection of
data on nicotine content levels. The
Georgia State comment indicated that
research suggests nicotine levels are
related to patterns or reasons for use.
The CTFK comment stated that ecigarettes contain highly variable
amounts of nicotine, and there are no
reliable data providing information
about nicotine strength. The UNC
comment indicated that information
about nicotine strength could be
valuable for determining equivalence to
conventional tobacco products and for
consideration of potential long-term
health risks. The UCSF comment noted
that nicotine content data could
facilitate the testing of competing
hypotheses as to the effect of nicotine
regulation on use.
Fontem and Reynolds opposed
collection of data concerning nicotine
strength. Fontem commented that
collection of nicotine content data
would not be useful because there is no
standardized method of reporting
nicotine content across the industry.
Reynolds also questioned whether
nicotine content data would provide
useful information.
The Commission believes that
collection of data concerning nicotine
strength will provide useful information
that is not readily available from other
sources. The agency does not believe
that the lack of a standardized reporting
method invalidates the utility of these
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data. The FTC will take into account the
various comments received in the
course of developing its report on the
data collection.
d. Cartridges and Refills. Several
commenters addressed the
Commission’s request for comments on
the collection of data concerning refills,
especially with regard to refillable
products sold with more than one refill
unit. E-cigarette products, other than
disposable products, are often marketed
to consumers with the device, battery,
atomizer, and one or more refill units
sold together in a single package. The
Joint Public Health Comment stated that
any cartridge or liquid unit above one
should be counted as a refill, regardless
of whether it is packaged as part of the
same stock keeping unit (‘‘SKU’’) or sold
individually. Fontem stated that there is
no consistency among marketers as to
blister packs or refills that come in a
single package. Thus, Fontem
questioned whether gathering
information on refills would yield
meaningful information. The company
recommended that if the Commission
opted to track refills, that it simply track
the total number of refills. Reynolds
recommended that for products sold
with more than one cartridge, the FTC
should abide by the product
configuration as sold to consumers, i.e.,
allow companies to use the SKUs for
reporting. Reynolds stated that relying
on existing SKUs would allow
responders to use existing records to
produce data and, thus, would be
simpler and clearer.
On balance, requiring companies to
report the total number of refill units
will provide a more accurate picture of
e-cigarette sales. Thus, if an e-cigarette
product is sold with more than one
cartridge or e-liquid unit, each cartridge
or unit above one should be reported as
a refill. Likewise, each cartridge or eliquid unit sold individually also would
count as a refill. In addition, the
Commission believes this approach is
consistent with the approach it has
taken with regard to the collection of
sales data for other tobacco products.
For example, if three pouches of
smokeless tobacco are packaged together
as a single unit for sale to consumers,
the Commission’s compulsory process
orders have required a responding
company to report each pouch
separately, for a total of three units.
e. Sales and Give-Aways. Comments
from public health organizations and
research centers generally supported the
collection of data on both sales and
give-aways and the reporting of these
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data separately.23 CTFK noted that
currently only limited data are available
concerning market size and that current
estimates do not differentiate between
sales and give-aways.24 The UNC
comment stated that collecting sales and
give-away data and reporting those data
separately is important for evaluating
which products are most frequently
purchased, and the Georgia State
comment noted that reporting the data
separately more accurately reflects
market transactions. The UCSF
comment stated that give-aways are
important to identify separately given
their potential to reach youth under the
age of 18.
The Commission agrees that data on
sales and give-aways should be
collected and reported separately given
the distinct role each plays in the
overall market. In addition, the agency
collects and reports data on sales and
give-aways separately in its data
collection for cigarettes and smokeless
tobacco products and, therefore,
separate collection and reporting will be
consistent with the approach taken for
these other tobacco products.
4. Collection of Marketing Data
A number of comments supported
data collection for the various media
specifically identified in the FTC’s
October 2015 Notice, as well as other
marketing channels.25 The NAAG
comment stated that collection and
reporting of broad categories of
marketing expenditure data would be
useful not only to the public but also to
state officials who are assessing
regulatory options and enforcement
efforts.
The Joint Public Health Comment and
the CTFK comment stated that it is
important to collect marketing
expenditures for television, radio, and
other broadcast media, noting that
unlike cigarettes and smokeless tobacco
products, no statutory broadcast ban
applies to e-cigarettes. Several
23 See Joint Public Health Comment; see also
comments from CTFK; UNC; UCSF; Georgia State;
American Lung Ass’n; and NAAG.
24 The CTFK comment and the Joint Public Health
Comment also noted that collecting data on giveaways was especially important because at the time
there were no national restrictions on free sampling.
These comments noted that such restrictions would
not take effect until FDA issued its final Deeming
Regulation that, among other things, asserted
jurisdiction over e-cigarettes and other tobacco
products. As noted supra note 7, FDA has now
issued its Deeming Regulation. As a result of this
regulation, the national ban on the distribution of
free samples will apply to all tobacco products. 90
FR 28974 at 29054; 21 CFR 1140.16(d). The
prohibition on free sampling took effect on August
8, 2016. 90 FR 28974 at 28976.
25 See, e.g., Joint Public Health Comment;
comments from CTFK; Oregon Public Health
Division; American Lung Ass’n; and NAAG.
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comments specifically noted the
importance of collecting and reporting
data for marketing expenditures for
media especially attractive to youth,
such as point-of-sale advertising,26
sponsorship of concerts and other
events as well as sports teams or
individual athletes or drivers,27 and
celebrity endorsers.28 Several comments
specifically identified product
placement as a category where
marketing expenditures should be
collected and reported,29 with the Joint
Public Health Comment noting that
expenditures for all forms of product
placement should be collected,
including product placement
expenditures for broadcast media,
movies, digital, and other media. The
Georgia State comment supported
detailed data collection for web-based
and social media marketing
expenditures, noting that availability of
these data from commercial data sources
is limited. Fontem recommended that
the FTC include couponing as a
category of marketing expenditures; the
UCSF and Georgia State comments
likewise identified coupons as well as
other forms of price promotion as
categories where the Commission
should collect marketing expenditure
data.
Reynolds recommended that the data
collection focus on the marketing
expenditure categories already used by
the FTC in its data collection for
cigarettes and smokeless tobacco
products, noting that the Commission
has decades of experience collecting
those data. One individual commenter
also recommended that the Commission
seek and report the same categories of
marketing expenditure data tracked for
cigarettes and smokeless tobacco
products in order to facilitate
comparisons.30
The Commission agrees that
collecting and reporting data for broad
categories of marketing expenditures
will be useful, including data
concerning traditional and newer
media, product placement, sponsorship,
endorsements, and price promotions.
The agency will seek to collect
marketing data in categories that
generally track those used for cigarettes
and smokeless tobacco products, with
two primary differences. First, the
26 See,
e.g., Joint Public Health Comment.
e.g., Joint Public Health Comment,
comments from Oregon Public Health Division and
NYC Office of the Comptroller.
28 See, e.g., comments from Oregon Public Health
Division and NYC Office of the Comptroller.
29 See, e.g., Joint Public Health Comment,
comments from CTFK and Oregon Public Health
Division.
30 Comment by J. DiFranza.
27 See,
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Commission will seek to collect and
report data for marketing expenditures
on broadcast media such as television
and radio because, unlike cigarettes and
smokeless tobacco products, no statute
prohibits using these media to advertise
and market e-cigarettes. Second, some of
the categories have been updated to
explicitly recognize newer forms of
media now used for advertising and
marketing, such as digital and social
media.
D. Suggestions To Minimize the Burden
of the Information Collection
The Commission’s October 2015
Notice invited comments on ways to
minimize the burden of the collection of
information on entities required to
respond to the data requests.31
1. Defer Data Collection Until Issuance
of FDA Final Deeming Regulation
Reynolds and Fontem suggested that
the Commission defer its data collection
until after FDA issued its final Deeming
Regulation. Reynolds noted that the
final regulation would clarify the scope
and impact of FDA’s regulation of ecigarettes. As noted above, FDA issued
its final regulation on May 10, 2016.
There is no overlap between FDA’s
regulation and the proposed data
collection. Accordingly, it is not
necessary to defer the data collection.
2. Categorize Product Flavors and
Nicotine Strength
As discussed above, the Commission
plans to collect data concerning ecigarette flavors and nicotine strength.
To reduce the burden of reporting each
individual flavor, the Joint Public
Health comment and comments from
CTFK and the American Lung
Association recommended that
companies report three categories of
flavors: Tobacco, menthol/mint, and
other. The Joint Public Health comment
stated that these three categories would
most easily capture the breadth of
flavors available, and make it easier for
the industry and the FTC to count all
the flavors. CTFK noted that
categorizing in this manner would also
eliminate the overlap that might result
from more limited flavor categories.
Comments from UCSF and NAAG, on
the other hand, stated that the
Commission should collect data on each
individual flavor. Given the variety and
number of different flavors, the
Commission believes that classifying ecigarettes into three categories of
flavors—tobacco, menthol/mint, and
other—will provide useful information
while significantly reducing the burden
31 80
PO 00000
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on reporting companies, and will use
these categories in the data collection, if
approved.
The Joint Public Health Comment and
the CTFK comment also indicated that
reporting nicotine strength by categories
might be sufficient and would reduce
the reporting burden on responding
entities. The UCSF comment, on the
other hand, recommended that the
Commission require companies to
report each different nicotine strength.
Categorizing nicotine strengths would
require consultation with scientific
authorities to determine the appropriate
categories for reporting. In addition,
reporting in categories could blur trends
over time due to inherent imprecision.
Thus, the Commission plans to require
reporting for each individual nicotine
strength sold by the reporting entity,
rather than for categories. Once the
Commission has these data, it will
consider how best to organize and
discuss them in the course of
developing its report.
3. Narrow Scope of Data Requests by
Requiring Less Specificity
Reynolds and Fontem each
recommended that the Commission
require less detail in the data requests
as a means of reducing the burden of
responding, and suggested that the
collection of certain information might
not be useful. Fontem suggested that the
Commission not seek information
concerning product flavors, nicotine
strength, or blister packs and refills. The
company suggested that if the
Commission did decide to collect flavor
data, it require only two categories of
information: Tobacco and other. It also
suggested that if the agency decided that
some information about refills was
needed, it simply track total number of
refills sold. Reynolds suggested that the
Commission model its requests on the
information requests for cigarettes and
smokeless tobacco products, and not
require differentiation by type of
product, nicotine concentration, size,
method of sale, and flavors. If the
Commission opted to seek information
about flavors, Reynolds recommended
that the agency request data based on
brand style names and descriptions the
product manufacturers created to
describe their products. For the reasons
discussed above, the Commission
believes that the information collection
should include information concerning
flavors, nicotine strength, refill units,
and other product characteristics.
Collection of flavor information by
broad categories, rather than
individually, will reduce the burden on
responding to the information requests.
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4. Limit Information Collection to Age
Screening and Ad Content Review
In its comment, Logic proposed that
the Commission limit its information
collection to data applicable to: (1)
Youth access and (2) illegal, inaccurate,
or deceptive advertising claims about ecigarettes. According to Logic, these two
areas address the relevant societal issues
for information collection, consistent
with the FTC’s mandate to prevent
unfair or deceptive business practices.
Logic stated that collecting substantial
data concerning sales and marketing
expenditures would represent a
substantial burden and, thus, suggested
that the Commission confine the
information sought to companies’ agescreening mechanisms and to
production of their advertising
campaigns for review to ensure they are
not making deceptive claims. The
Commission disagrees with limiting the
data collection to these two categories of
information. Rather, broader
information collection about sales and
marketing expenditures is in the public
interest, because it will allow the
Commission to analyze sales and assess
how industry members allocate their
promotional activities and expenditures.
For decades, the Commission has
collected and reported information
about sales and marketing expenditures
for other tobacco products, as well as for
other consumer products, and the ecigarette information requests are
consistent with the data collection and
reporting for those products. Although
the Commission agrees that preventing
false and deceptive advertising is an
important component of its consumer
protection mission, law enforcement
action against specific marketers, rather
than information collection, is a better
means of addressing potentially unfair
or deceptive e-cigarette advertising.
E. Age-Screening Mechanisms
In its October 2015 Notice, the
Commission anticipated that its data
collection requests would include
seeking information concerning efforts
such as age-screening mechanisms to
prevent youth from being exposed to
advertising and promotion of ecigarettes or from obtaining free product
samples. One industry member, Logic,
supported data collection regarding ageverification methods, stating that many
online sellers use no age-verification
methods at all while conventional retail
stores require rigorous age-verification.
The Joint Public Health comment, and
comments from CTFK, Georgia State,
UCSF, and one individual, also
supported data collection for this
category, with Georgia State and UCSF
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also specifying age verification for
online purchases. The Georgia State
comment noted that data collection and
reporting for this category would be
useful to determine whether more
stringent regulatory action was needed.
The Commission agrees that data
concerning age-verification methods
would be useful, and plans to collect
and report data concerning agescreening mechanisms to prevent youth
from being exposed to e-cigarette
advertising and promotion or from
obtaining free product samples.
F. Accuracy of Estimated Burden of the
Information Collection
The Commission’s October 2015
Notice invited comments on the
accuracy of the agency’s estimate of the
burden of the proposed collection of
information, including the validity of
the methodology and assumptions
used.32 The Commission estimated a per
company average of 200 hours for each
recipient of an information request for
the first year, and a per company
average of 150 hours for the remaining
years. Thus, the total hours burden for
15 information requests was estimated
to be 3,000 hours for the first year, and
2,250 for each of the subsequent two
years, for a total of 7,500 hours. The
Commission estimated that the total
labor costs for 15 information requests
to be $300,000 for the first year, and
$225,000 for each of the subsequent two
years, for a total of $750,000. This
estimate assumed an average $100/hour
wage, which is the same estimated wage
average used in the Commission’s recent
request for reauthorization of
information requests to cigarette and
smokeless tobacco companies.
The comment from Reynolds asserted
that the Commission had
underestimated the total hours burden.
The company stated that it usually takes
it twice as long as the FTC’s estimated
time burden to compile information for
similar data collections for cigarette and
smokeless tobacco companies. Reynolds
also stated that the FTC should include
in its estimate the amount of time
companies will need to communicate
directly with Commission staff when
seeking clarification regarding the data
collection. Reynolds and Fontem
commented that the FTC’s labor cost
estimate also underestimates the total
burden costs, stating that an average
wage of $100/hour was too low. Neither
company, however, provided an
alternative figure or other information
indicating what a more accurate hourly
labor cost should be.
32 80
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The Commission believes that its
estimate burdens with respect to both
average hours and labor costs are
reasonable, especially in the absence of
more specific information to calculate
estimates that are more precise.
However, out of an abundance of
caution, the Commission has revised its
burden estimate from that stated in the
October 2015 Notice by increasing its
estimated hours burden by 50 percent.
As revised, the Commission calculates a
per company average of 300 hours for
the first year, and 225 hours for each of
the two remaining years, resulting in a
cumulative total of 11,250 hours for 15
information requests over three years.
The Commission has not changed is
average hourly cost estimate. The
Commission’s estimate is based on the
assumption that the labor costs will
include varying compensation levels
among staff, management, and legal
review, with most work performed by
non-legal staff. In the absence of more
precise data, the Commission believes
that the same $100/hour wage that it
used in its recent application for
reauthorization of information requests
to cigarette and smokeless tobacco
companies is appropriate here as well.
As discussed infra, however, the total
cost burden will increase due to the
increase in the estimated hours burden.
G. Other Comments
The Joint Public Health Comment and
the comments from CTFK and American
Lung Association recommended that the
Commission coordinate its data
collection with FDA. The American
Lung Association stated that
coordination might be mutually
beneficial for both agencies, and CTFK
indicated that coordination might help
assure consistency in measures. Altria
also encouraged the Commission to
consider how it would interact with
FDA once the Deeming Regulation was
issued. The FTC staff and FDA staff
already have a long tradition of working
together on tobacco issues and the many
other areas where the two agencies
share jurisdiction. The FTC staff expects
that tradition will continue. To the
extent that coordination is required for
specific issues concerning the proposed
information collection, the agencies
already have processes and procedures
in place to address those issues.
The Georgia State comment
recommended that the FTC require
detailed brand-specific information,
noting that the Commission’s reports for
cigarettes and smokeless tobacco
products report aggregated rather than
brand-specific data. The UCSF comment
also recommended that the Commission
collect and report brand-specific data.
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The Commission’s compulsory process
orders to surveyed companies will
collect brand-specific data. However,
because Section 6(f) of the FTC Act, 15
U.S.C. 46(f), protects confidential
commercial information that is
submitted to the Commission, the
agency cannot publicly identify sales
and marketing data for particular brands
or companies that is not already public.
Thus, the Commission’s report on the
data collection will provide aggregated
rather than brand-specific data.
Commenters also recommended that
the Commission seek more detailed
differentiation of certain marketing
expenditure data. The Joint Public
Health Comment recommended that the
Commission obtain data concerning the
demographic composition of social
media networks. The UCSF comment
suggested collecting data regarding the
amounts spent for different population
subgroups, specific information
concerning the time when marketing
activities occurred, and requiring each
responding company to identify its top
three outlets and top three marketing
programs within each media category.
The added detail would significantly
increase the complexity and burden of
responding to the information requests.
In addition, as indicated above, the
Commission cannot publicly identify
sales and marketing data on particular
brands or companies and, thus, would
not be able to include the specific data
in its report. Thus, the Commission will
not seek to include these data in the
proposed information requests.
The Georgia State comment
recommended that the Commission
collect data on e-cigarette device
specifications and capabilities. The
comment indicated that this information
would permit assessment of product
differences concerning characteristics
such as nicotine delivery, patterns of
use, and puff topography. Collection of
these data, however, is beyond the
scope of the information requests’
purpose.
Fontem’s comment recommended that
the Commission review e-cigarettes as
smoking cessation devices and that it
expand the information requests in
order to collect data on other smoking
cessation products, such as nicotine
patches. This suggestion is beyond the
scope of the proposed information
collection, which concerns sales and
marketing data for e-cigarette products,
not products intended to treat nicotine
addiction, which is the intended use for
smoking cessation products. Whether
any product is approved for use as a
smoking cessation product is a question
within the jurisdiction of FDA, not the
FTC.
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As noted earlier, the FTC received
twelve comments that did not address
the proposed data collection. One
individual raised concerns that some ecigarette marketers were making false
claims that the products were effective
for smoking cessation, and four
individuals indicated that e-cigarettes
helped with smoking cessation. Three
individuals called for regulation of ecigarettes, which FDA’s recent issuance
of its Deeming Regulation accomplishes.
One individual stated that e-cigarettes
should not be available to persons under
the age of 18. FDA’s Deeming
Regulation prohibits the sale (both inperson and online) of e-cigarettes and
other tobacco products to persons under
the age of 18.33 One individual
commented that e-cigarette
advertisements seem to be targeted to
youth. One individual commented that
the FTC should consider that a
substantial portion of the e-cigarette
market is for cannabis e-cigarette
products rather than tobacco. Finally,
one commenter asked the FTC to keep
public health at the forefront of its
decision-making.
III. Information Requests to the
E-Cigarette Industry
The Commission proposes to send
information requests to the ultimate
U.S. parent entities of up to 15 ecigarette marketers in the United States.
These companies will vary in size, the
number of products sold, and in the
extent and variety of their advertising
and marketing activities, and will
include the largest marketers of ecigarettes. As noted above, based on
available market data, the Commission
estimates its sample will account for
more than 80 percent of the
conventional retail market and a sizable
portion of the online market.
The proposed information requests
will seek sales data about the types and
variety of e-cigarette products sold. The
sales information will be reported under
three broad categories: (1) Non-refillable
(i.e., disposable) products; (2) refillable
closed systems (i.e., rechargeable and
pre-filled cartridge products); and (3)
refillable open systems (i.e., ‘‘tank’’
systems). Within these three categories,
companies will report data
differentiated by the strength of nicotine
content and three categories of flavors:
Tobacco, menthol/mint, and other. Data
will be reported separately for sales and
give-aways. The information requests
will collect data for both unit sales as
well as by net sales revenues. Data on
33 90 FR at 28974 at 29103; 21 CFR 1140.14. This
provision took effect on August 8, 2016.
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net sales revenues will be reported by
flavor only.
The information requests also will
seek information and data concerning
advertising and marketing activities and
expenditures in a broad variety of media
categories, including: (1) Radio,
television, and print advertising; (2)
Web site, digital, and social media
marketing; (3) product placement; (4)
endorsements, including celebrity
endorsements; (5) sponsorship of
concerts and other events and as well as
of sports teams or individual athletes
such as racing car drivers; (6)
distribution of free samples; and (7)
price promotions, including couponing
programs. These expenditure categories
generally track those used by the FTC in
its data collections for cigarettes and
smokeless tobacco products, with two
exceptions. First, the proposed
information requests will seek data
concerning television and radio
expenditures, since e-cigarette
advertising is not subject to statutory
broadcast media prohibitions. In
addition, the media categories have
been updated to provide more
differentiation among online and digital
advertising media.
The proposed information requests
also will include information about
company policies pertaining to agescreening mechanisms to prevent youth
from being exposed to e-cigarette
advertising and promotion or from
obtaining free samples of e-cigarettes.
IV. Burden Estimates and
Confidentiality
A. Estimated Hours Burden: 11,250
Hours
FTC staff’s estimate of the hours
burden is based on the time that would
be required to respond to the
Commission’s information requests. The
FTC currently anticipates sending
information requests to as many as 15 ecigarette companies each year. Because
the Commission anticipates that these
companies will vary in size, in the
number of products they sell, and in the
extent and variety of their advertising
and promotion, and given the currently
evolving nature of the e-cigarette
industry, FTC staff has not calculated
separate burden estimates for large and
small companies, as is traditionally the
case for the Commission’s cigarette and
smokeless tobacco information requests.
For example, an e-cigarette marketer
with a large volume of sales but a
relatively small product line could
potentially require fewer resources to
respond to the Commission’s
information request than a marketer
with lower overall sales but a
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substantially larger product line that
offers consumers a greater range of
flavor and nicotine options. Rather than
account for each potential permutation
of factors, FTC staff has calculated a per
company average at the upper limit of
this potential range. Some companies
likely will require less time to compile
their responses.
The Commission anticipates that even
if it provides models for the Excel
datafiles the companies will be required
to submit, recipients of its information
requests will need substantial time to
prepare a response the first time. Once
an e-cigarette marketer has prepared its
first response to a Commission
information request, however, it will
need less time in subsequent years to
prepare its reports because it will know
what information it will be required to
produce, and will already have a
template for its submission.
Accordingly, as an approximation,
FTC staff assumes a per company
average of 300 hours for each recipient
of the Commission’s information
requests the first year they have to
comply with the Commission’s
information request. Staff anticipates
that in subsequent years, the per
company average will be 225 hours.
Thus, the overall estimated burden for
15 recipients of the information requests
is 4,500 hours for the first year and
3,375 hours for each of the two
subsequent years, or a total of 11,250
hours. Thus, the average yearly burden,
over the course of a prospective threeyear clearance, is 3,750 hours, or 250
hours per recipient (large and small).
These estimates include any time spent
by separately incorporated subsidiaries
and other entities affiliated with the
ultimate parent company that has
received the information request.
B. Estimated Cost Burden: $1,125,000
Commission staff cannot calculate
with precision the labor costs associated
with these data requests, as they entail
varying compensation levels of
management and/or support staff among
companies of different sizes. FTC staff
assumes that computer analysts and
other non-legal staff will perform most
of the work involved in responding to
the information requests, although legal
personnel will likely be involved in
reviewing the actual submission to the
Commission. FTC staff believes that the
same $100 per hour wage that it used in
its recent request for reauthorization of
information requests to the major
cigarette and smokeless tobacco
manufacturers is appropriate here also
for the combined efforts of these
individuals. Using this figure, FTC
staff’s best estimate for the total labor
VerDate Sep<11>2014
17:18 Nov 01, 2016
Jkt 241001
costs for 15 information requests is
$450,000 (4,500 hours × $100 per hour)
for the first year and $337,000 for the
two subsequent years (3,375 hours ×
$100 per hour × 2), for a total of
$1,125,000 over the entire three-year
period. The annualized labor cost per
respondent will average approximately
$25,000.
Staff believes that the capital or other
non-labor costs associated with the
information requests are minimal.
Although the information requests may
necessitate that industry members
maintain the requested information
provided to the Commission, they
should already have in place the means
to compile and maintain business
records.
C. Confidentiality
Section 6(f) of the FTC Act, 15 U.S.C.
46(f), bars the Commission from
publicly disclosing trade secrets or
confidential commercial or financial
information it receives from persons
pursuant to, among other methods,
special orders authorized by Section
6(b) of the FTC Act. Such information
also would be exempt from disclosure
under the Freedom of Information Act,
5 U.S.C. 552(b)(4). Moreover, under
Section 21(c) of the FTC Act, 15 U.S.C.
57b–2(c), a submitter who designates a
submission as confidential is entitled to
ten days’ advance notice of any
anticipated public disclosure by the
Commission, assuming that the
Commission has determined that the
information does not constitute Section
6(f) material. Although materials
covered under one or more of these
various sections are protected by
stringent confidentiality constraints, the
FTC Act and the Commission’s rules
authorize disclosure in limited
circumstances (e.g., official requests by
Congress, requests from other agencies
for law enforcement purposes, and
administrative or judicial proceedings).
Even in those limited contexts,
however, the Commission’s rules may
afford protections to the submitter, such
as advance notice to seek a protective
order in litigation. See 15 U.S.C. 57b–2;
16 CFR 4.9–4.11.
Finally, the information presented in
the report will not reveal companyspecific data, except data that are
public. See 15 U.S.C. 57b–2(d)(1)(B).
Rather, the Commission anticipates
providing information on an anonymous
or aggregated basis, in a manner
sufficient to protect individual
companies’ confidential information, to
provide a factual summary of e-cigarette
industry marketing activities and sales.
PO 00000
Frm 00026
Fmt 4703
Sfmt 4703
V. 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 December 2, 2016. Write
‘‘Electronic Cigarettes: Paperwork
Comment, FTC File No. P114504’’ on
your 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 comment does
not include any sensitive personal
information, like anyone’s 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, like 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 provided
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 have to follow the procedure
explained in FTC Rule 4.9(c).34 Your
comment will be kept confidential only
if the FTC General Counsel 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
comments online. To make sure that the
34 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 comment to be withheld from the
public record. See FTC Rule 4.9(c), 16 CFR 4.9(c).
E:\FR\FM\02NON1.SGM
02NON1
Federal Register / Vol. 81, No. 212 / Wednesday, November 2, 2016 / Notices
Commission considers your online
comment, you must file it at https://
ftcpublic.commentworks.com/ftc/
electroniccigarettespra2, by following
the instructions on the web-based form.
When 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 ‘‘Electronic Cigarettes: Paperwork
Comment, FTC File No. P114504’’ on
your comment and on the envelope.
You can mail your comment to the
following address: Federal Trade
Commission, Office of the Secretary,
600 Pennsylvania Avenue NW., Suite
CC–5610 (Annex J), Washington, DC
20580, or deliver your comment to the
following address: Federal Trade
Commission, Office of the Secretary,
Constitution Center, 400 7th Street SW.,
5th Floor, Suite 5610 (Annex J),
Washington, DC 20024.
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 December 2, 2016. For
information on the Commission’s
privacy policy, including routine uses
permitted by the Privacy Act, see https://
www.ftc.gov/ftc/privacy.htm.
Comments on the information
collection requirements subject to
review under the PRA should
additionally be submitted to OMB. If
sent by U.S. mail, they should be
addressed to Office of Information and
Regulatory Affairs, Office of
Management and Budget, Attention:
Desk Officer for the Federal Trade
Commission, New Executive Office
Building, Docket Library, Room 10102,
725 17th Street NW., Washington, DC
20503. Comments sent to OMB by U.S.
postal mail, however, are subject to
delays due to heightened security
precautions. Thus, comments instead
should be sent by facsimile to (202)
395–5806.
sradovich on DSK3GMQ082PROD with NOTICES
David C. Shonka,
Acting General Counsel.
[FR Doc. 2016–26486 Filed 11–1–16; 8:45 am]
BILLING CODE 6750–01–P
VerDate Sep<11>2014
17:18 Nov 01, 2016
Jkt 241001
check www.regulations.gov,
approximately two to three days after
submission to verify posting (except
allow 30 days for posting of comments
submitted by mail).
DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
[OMB Control No. 9000–0161; Docket 2016–
0053; Sequence 37]
Information Collection; Reporting
Purchases From Sources Outside the
United States
Department of Defense (DOD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Notice of request for public
comments regarding an extension to an
existing OMB clearance.
AGENCY:
Under the provisions of the
Paperwork Reduction Act, the
Regulatory Secretariat Division will be
submitting to the Office of Management
and Budget (OMB) a request to review
and approve an extension of a currently
approved information collection
requirement concerning reporting
purchases from sources outside the
United States.
DATES: Submit comments on or before
January 3, 2017.
ADDRESSES: Submit comments
identified by Information Collection
9000–0161, Reporting Purchases from
Sources Outside the United States, by
any of the following methods:
• Regulations.gov: https://
www.regulations.gov.
Submit comments via the Federal
eRulemaking portal by searching for
‘‘9000–0161; Reporting of Purchases
from Outside the United States’’. Select
the link ‘‘Submit a Comment’’ that
corresponds with ‘‘9000–0161;
Reporting of Purchases from Outside the
United States’’. Follow the instructions
provided at the ‘‘Submit a Comment’’
screen. Please include your name,
company name (if any), and 9000–0161;
Reporting of Purchases from Outside the
United States’’ on your attached
document.
• Mail: General Services
Administration, Regulatory Secretariat
Division (MVCB), 1800 F Street NW.,
Washington, DC 20405. ATTN: Ms.
Flowers/IC 9000–0161.
Instructions: Please submit comments
only and cite IC 9000–0161, in all
correspondence related to this case.
Comments received generally will be
posted without change to https://
www.regulations.gov, including any
personal and/or business confidential
information provided. To confirm
receipt of your comment(s), please
SUMMARY:
PO 00000
Frm 00027
Fmt 4703
Sfmt 4703
76357
Ms.
Cecelia L. Davis, Procurement Analyst,
at 202–219–0202 or via email at
cecelia.davis@gsa.gov.
FOR FURTHER INFORMATION CONTACT:
SUPPLEMENTARY INFORMATION:
A. Purpose
The information on place of
manufacture was formerly used by each
Federal agency to prepare a report to
Congress required by 41 U.S.C.
8302(b)(1) for FY 2009 through 2011 on
acquisitions of articles, materials, or
supplies that are manufactured outside
the United States. However, the data is
still necessary for analysis of the
application of the Buy American statue
and the trade agreements and for other
reports to Congress. Additionally,
contracting officers require this data as
the basis for entry into the Federal
Procurement Data System for further
data on the rationale for purchasing
foreign manufactured items.
B. Annual Reporting Burden
Number of respondents: 482,150.
Responses per respondent: 10.
Total annual responses: 1,483,592.
Hours per response: 0.01.
Total response burden hours: 14,836.
C. Public Comments
Public comments are particularly
invited on: Whether this collection of
information is necessary for the proper
performance of functions of the FAR,
and whether it will have practical
utility; whether our estimate of the
public burden of this collection of
information is accurate, and based on
valid assumptions and methodology;
ways to enhance the quality, utility, and
clarity of the information to be
collected; and ways in which we can
minimize the burden of the collection of
information on those who are to
respond, through the use of appropriate
technological collection techniques or
other forms of information technology.
Obtaining Copies of Proposals:
Requesters may obtain a copy of the
information collection documents from
the General Services Administration,
Regulatory Secretariat Division (MVCB),
1800 F Street NW., Washington, DC
20405, telephone 202–501–4755.
Please cite OMB Control Number
9000–0161, Reporting Purchases from
Sources Outside the United States, in all
correspondence.
E:\FR\FM\02NON1.SGM
02NON1
]]>Agencies
[Federal Register Volume 81, Number 212 (Wednesday, November 2, 2016)]
[Notices]
[Pages 76348-76357]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-26486]
=======================================================================
-----------------------------------------------------------------------
FEDERAL TRADE COMMISSION
Agency Information Collection Activities; Proposed Collection;
Comment Request
AGENCY: Federal Trade Commission (``FTC'' or ``Commission'').
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: The FTC is submitting the information collection requirements
described below to the Office of Management and Budget (``OMB'') for
review, as required by the Paperwork Reduction Act (``PRA''). The FTC
is seeking public comments on proposed information requests to
marketers of electronic cigarettes (``e-cigarettes''). The FTC proposes
to issue compulsory process orders to up to 15 e-cigarette
manufacturers, distributors, and marketers per year for information
concerning, among other things, data on annual sales and marketing
expenditures. The Commission intends to ask OMB for a three-year
clearance to collect this information.
DATES: Comments on the proposed information requests must be received
on or before December 2, 2016.
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 ``Electronic Cigarettes:
Paperwork Comment, FTC File No. P14504,'' on your comment. File your
comment online at https://ftcpublic.commentworks.com/ftc/electroniccigarettespra2 by following the instructions on the web-based
form. If you prefer to file your comment on paper, mail your comment to
the following address: Federal Trade Commission, Office of the
Secretary, 600 Pennsylvania Avenue NW., Suite CC-5610 (Annex J),
Washington, DC 20580, or deliver your comment to the following address:
Federal Trade Commission, Office of the Secretary, Constitution Center,
400 7th Street SW., 5th Floor, Suite 5610 (Annex J), Washington, DC
20024.
FOR FURTHER INFORMATION CONTACT: Requests for additional information
should be addressed to Elizabeth Sanger or Rosemary Rosso, Division of
Advertising Practices, Bureau of Consumer Protection, Federal Trade
Commission. Telephone: (202) 326-2757 (Sanger) or (202) 326-2174
(Rosso).
SUPPLEMENTARY INFORMATION:
I. Background
In the past few years, sales of e-cigarettes have grown rapidly in
the United States.\1\ These devices are available in both disposable
and refillable models, in a range of nicotine strengths (including
nicotine-free), and in a multitude of flavors. E-cigarettes are
manufactured, distributed, and sold by a wide variety of industry
members, ranging from large companies, including major U.S. tobacco
companies, to small, single-location operators. They can be
[[Page 76349]]
purchased at conventional retail stores, at ``vape shops,'' which are
retail stores that primarily or exclusively sell e-cigarettes, and
online.
---------------------------------------------------------------------------
\1\ These products are most commonly referred to as e-
cigarettes, but sometimes also are referenced as vape pens, personal
vaporizers, e-hookah, and electronic nicotine delivery systems. This
information collection would cover all such products, regardless of
how they are referenced.
---------------------------------------------------------------------------
For many years, the Commission has published reports on sales and
marketing expenditures by the major cigarette and smokeless tobacco
manufacturers. These data allow the agency to analyze industry sales
and assess how industry members allocate their promotional activities
and expenditures. The data also provide information to policymakers and
public health researchers that, in many instances, is not available
from other sources. Given their increasing prevalence, the Commission
believes it is important and necessary for the agency to begin
collecting information about e-cigarette sales and marketing
activities. The Commission intends to publish a report with the data it
obtains,\2\ and to issue similar information requests regularly in
order to track trends over time. The information will be sought using
compulsory process under Section 6(b) of the Federal Trade Commission
Act, 15 U.S.C. 46(b).
---------------------------------------------------------------------------
\2\ The report would not disclose any company-specific
confidential data.
---------------------------------------------------------------------------
The Commission intends to issue information requests to up to 15
industry members, including larger and smaller entities, and will seek
information about the different types of e-cigarette products marketed,
certain characteristics of those products, and information about
marketing expenditures for broad categories of media. While the data
may not represent overall sales and marketing activities for the entire
e-cigarette industry, the information provided should provide a
valuable snapshot of the current e-cigarette market, including its
major players. Because the number of separately incorporated companies
affected by the Commission's requests will exceed nine entities, the
Commission is seeking OMB clearance under the PRA before requesting any
information from the industry members.\3\ On October 27, 2015, as
required by the PRA, the FTC published a Federal Register Notice
seeking comments from the public concerning the proposed collection of
information from e-cigarette marketers. See 80 FR 65758 (``October 2015
Notice''). As discussed below, 37 comments were received.
---------------------------------------------------------------------------
\3\ Under the PRA, 44 U.S.C. 3501-3521, federal agencies must
obtain approval from OMB for each ``collection of information'' they
conduct or sponsor if posed to ten or more entities within any
twelve-month period. 44 U.S.C. 3502(3); 5 CFR 1320.3(c).
``Collection of information'' means agency requests or requirements
that members of the public submit reports, keep records, or provide
information to a third party. 44 U.S.C. 3502(3); 5 CFR 1320.3(c).
---------------------------------------------------------------------------
Pursuant to the OMB regulations that implement the PRA (5 CFR part
1320), the FTC is providing this second opportunity for public comment
while requesting that the OMB grant the clearance for the proposed
collection of information. All comments should be filed as prescribed
in the Request for Comment part below, and must be received on or
before December 2, 2016.
II. Public Comments
The FTC received 37 comments in response to the October 2015
Notice.\4\ Of these, 20 comments expressly supported and substantively
addressed the proposed data collection. A joint comment favoring the
proposal was submitted by the following public health organizations:
American Academy of Pediatrics; the American Heart Association;
Campaign for Tobacco-Free Kids; Tobacco Control Legal Consortium; and
Truth Initiative (``Joint Public Health Comment''). Comments supporting
the proposal also were received from three individual public health or
public interest organizations.\5\ Favorable substantive comments were
submitted by three government-related entities or individuals: National
Association of Attorneys General Tobacco Committee (``NAAG''); the
Oregon Public Health Division; and the Comptroller of the City of New
York; and from three academic centers involved in public health and
tobacco control issues.\6\ Ten individuals, many involved in local
health education or tobacco control activities, filed individual
comments supporting the data collection.\7\
---------------------------------------------------------------------------
\4\ See https://www.ftc.gov/policy/public-comments/initiative-626.
\5\ Comments by Campaign for Tobacco-Free Kids (``CTFK'');
American Lung Association; and Truth In Advertising, Inc.
\6\ Comment by Georgia State University Tobacco Center of
Regulatory Science (``Georgia State''); Comment by Glantz, et al.,
University of California, San Francisco Tobacco Center for
Regulatory Science and Center for Tobacco Control Research and
Education (``UCSF''); and Comment by Ribisl et al., University of
North Carolina Gillings School of Global Public Health (``UNC'').
\7\ Comments by K. Miloski (Riverhead Community Awareness
Program); L. Rotolo (TFAC); S. Hills; D. Moore (Tobacco Free Action
Committee); S. Fischer; A. Zanatta (Jewish Community Center); K.
Keenan (Roswell Park Cancer Institute), M. James (POW'R Against
Tobacco); J. DiFranza; and T. Cain (Anderson Aconee Behavioral
Health).
---------------------------------------------------------------------------
Five comments were received from industry members: R.J. Reynolds
Vapor Company and RAI Services Company (``Reynolds''); Altria Client
Services Inc. and Nu Mark LLC (``Altria''); Rock River Manufacturing,
the tobacco products manufacturing division of Ho-Chunk, Inc. (``Ho-
Chunk''); (4) Fontem US, Inc. (``Fontem''), and (5) Logic Technology
Development LLC (``Logic''). None of these comments expressly opposed
the proposed data collection, although two companies questioned whether
the data collection was premature given the then-pending FDA deeming
regulation that, among other provisions, asserts regulatory authority
over e-cigarettes and other tobacco products.\8\ Each industry comment
made suggestions that it asserted would enhance the quality, utility,
and clarity of the information to be collected and reduce the burden on
the respondents.
---------------------------------------------------------------------------
\8\ FDA has since issued its final regulation: Deeming Tobacco
Products To Be Subject to the Federal Food, Drug, and Cosmetic Act,
as Amended by the Family Smoking Prevention and Tobacco Control Act;
Restrictions on the Sale and Distribution of Tobacco Products and
Required Warning Statements for Tobacco Products (``Deeming
Regulation''), 81 FR 28974 (May 10, 2016).
---------------------------------------------------------------------------
The remaining 12 comments did not substantively address the
proposed data collection.
A. General Support for the Data Collection
In its October 2015 Notice, the FTC sought comments regarding
whether the proposed collection is necessary.\9\ Many of the comments
stated that the data collection would provide important information,
especially given the increased use of e-cigarettes by youth,\10\ and
the limited availability of data on e-cigarette advertising and
marketing from other sources.\11\ The Joint Public Health Comment
stated that the collected data could provide valuable information and
insights into the e-cigarette market and be used as a basis for public
policy decisions. The UNC comment stated that the data collection would
enable public health professionals to better understand where e-
cigarette advertising and marketing dollars are being spent, and to
help develop specific interventions to prevent underage use. The UCSF
comment stated that the reports would enable retrospective assessment
of advocacy activities and policy changes.
---------------------------------------------------------------------------
\9\ See 80 FR 65758 at 65759.
\10\ See, e.g., Joint Public Health Comment; comments from CTFK;
UCSF; and Oregon Public Health Division.
\11\ See, e.g., Joint Public Health Comment; comments from CTFK;
UNC; and Georgia State.
---------------------------------------------------------------------------
A number of comments made favorable comparisons between the
proposed collection of information on e-cigarette sales and marketing
expenditures and the FTC's existing reports on cigarettes and smokeless
tobacco, noting that the existing reports are widely used by public
health
[[Page 76350]]
professionals, researchers, policymakers, and government agencies.\12\
These comments stated that expansion of data collection to e-cigarettes
is needed to inform these same stakeholders about the nature and extent
of e-cigarette advertising and marketing practices, and to allow them
to monitor trends.\13\
---------------------------------------------------------------------------
\12\ See, e.g., Joint Public Health Comment; comments from
Oregon Public Health Division; M. James; D. Moore; S. Fisher; S.
Hills; and L. Rotolo.
\13\ See, e.g., comment from CTFK.
---------------------------------------------------------------------------
The FTC believes that these information requests are in the public
interest and essential to the agency's performance of its authority to
investigate and report publicly on industry practices that affect the
economic well-being of consumers. Consistent with the agency's
information collection for cigarettes and smokeless tobacco products,
the data will also provide important information for researchers and
policymakers.
B. Utility of the Information Collection
The FTC's October 2015 Notice also sought comment on whether the
proposed data collection is necessary for the proper performance of the
functions of the FTC, including whether the information will be
practically useful.\14\ The NAAG comment stated that the data
collection would greatly facilitate state efforts to better understand
and effectively regulate e-cigarettes. The Joint Public Health Comment
and the Georgia State comment noted that the FTC's report would
facilitate research into e-cigarette marketing because it would provide
access to data that are otherwise unavailable from commercial sources,
which tend to focus on larger companies and traditional distribution
channels such as convenience stores. The UCSF comment states that
scholarly research of e-cigarette marketing would be best served by
reliable data, such as data collected directly from members of the e-
cigarette market. Individual public health educators commented that a
report on e-cigarette sales and marketing would facilitate their local
and state health education work, which in turn informs evidence-based
policymaking and regulatory action.\15\ One drug prevention specialist
stated that a report on e-cigarette sales and marketing expenditures
would also inform advocacy work and counter-marketing strategies to
discourage youth and other vulnerable populations from using e-
cigarettes.\16\
---------------------------------------------------------------------------
\14\ 80 FR 65758 at 65759.
\15\ See, e.g., comments by L. Rotolo and M. James.
\16\ See comment by T. Cain.
---------------------------------------------------------------------------
One industry member, Ho-Chunk, questioned whether the value of the
proposed data collection could be outweighed by the risk that a
negative public perception of e-cigarettes would damage the growth of
the industry. The company expressed concern that the FTC's data
collection could send a premature message that the industry is engaged
in predatory marketing or that there are as-yet-unknown health and
safety risks associated with the use of these products.
The Commission intends to use the data collection to provide useful
baseline information (starting with 2015 data) concerning sales of the
various e-cigarette products and allow the Commission to analyze how
industry members allocate their promotional activities and expenditures
across various media. The data also will provide researchers and
policymakers with sales and marketing information that will assist
their research and regulatory efforts. The Commission does not believe
that the data collection itself will create any negative public
perception of e-cigarettes or damage the growth of the industry. In
particular, the proposal seeks sales and marketing expenditure data
only and does not include an inquiry into any hypothetical predatory
practices or health or safety information. In addition, the data
collection here is very similar in content and methodology to studies
that the Commission for many years has undertaken with respect to other
markets, including cigarettes and smokeless tobacco products (OMB
Control No. 3084-0134); alcoholic beverages (OMB Control No. 3084-
0138); and food (OMB Control No. 3084-0139).
C. Suggestions To Improve the Information Collection
In its October 2015 Notice, the FTC invited comments concerning
ways to enhance the quality, utility, and clarity of the information to
be collected.\17\ The FTC received substantive comments for enhancing
its proposed data collection as follows: (1) Expand the scope of the
proposed data collection by collecting data from a broad cross-section
of market participants and increasing the number of surveyed entities;
(2) collect and report data on a state-by-state basis; (3) collect and
report sales data that are segmented by product type, differentiates
product characteristics such as flavors and nicotine strength, that
include data on refills and cartridges, and that report sales data
separately from product give-aways; and (4) collect and report broad
categories of marketing expenditure data.
---------------------------------------------------------------------------
\17\ 80 FR 65758 at 65759.
---------------------------------------------------------------------------
1. Scope of the Data Collection
The Commission's October 2015 Notice anticipated collecting and
reporting data obtained from as many as 15 entities that would vary in
size, in the number of products sold, and in the extent and variety of
their advertising and marketing.\18\ A number of comments recommended
that the Commission expand the scope of the data collection by
including a broad cross-section of market participants, including
distributors and entities whose products are sold in traditional retail
stores (e.g., convenience stores), as well as online sellers, and vape
shops. To accomplish this goal, some commenters recommended that the
Commission increase the number of entities from whom it would collect
data.
---------------------------------------------------------------------------
\18\ Id. at 65760.
---------------------------------------------------------------------------
a. Type of Market Participant. A wide range of commenters,
including both industry and public health organizations and
researchers, recommended that the Commission expand the scope of the
proposed data collection by including a broad cross-section of market
participants in the entities surveyed through the data collection.
Logic recommended that the FTC seek a broader cross-section of the
market. Fontem commented that vape shops comprise a large percentage of
the market, and noted that the data collection would not be meaningful
if vape shops were not included. Altria also suggested that the FTC
send data requests to a selection of vape shops. Reynolds recommended
that the Commission differentiate the information requests by type of
market participant, reasoning that such segmentation would present less
need for highly differentiated sales and marketing data. The Joint
Public Health Comment recommended that the FTC survey a selection of
large companies, as well as a geographically dispersed selection of e-
cigarette manufacturers, distributors, and retailers (including online
sellers and vape shops) in order to get a cross-section of market
participants. The UNC comment recommended that the proposed data
collection differentiate the method of sale (distributors, online,
retail) so that subsequent enforcement efforts can be tailored
appropriately. Georgia State and one individual also recommended that
the Commission differentiate by method of sale. Another individual
recommended that the data requests segment market participants into two
[[Page 76351]]
groups: Those that sell only e-cigarette products and those that sell
e-cigarettes and other tobacco products.
The Commission agrees that seeking data from a broad cross-section
of the overall market, including distributors to conventional retail
sellers, online sellers, and vape shops, would provide a fuller
perspective on the overall e-cigarette market. However, the Commission
was not able to find sufficient, reliable market data that would permit
it to identify and select which smaller online sellers and vape shops
should receive data requests. The available data from which the
Commission could identify a sample of online sellers or vape shops are
so limited and insufficient that any separate samples of these sellers
would at best provide anecdotal information.
In contrast, the available market data do permit a reliable sample
of the largest e-cigarette marketers and some online sellers. The
Commission believes that a sample of these companies will account for
at least 80 percent of the conventional retail market and a sizable
share of the online market. Thus, the data will provide useful
information concerning at least this large subset of the overall
market. At the same time, the Commission remains interested in
collecting and reporting sales and marketing expenditure data from a
broader cross-section of the market. Should more reliable market data
become available, the Commission may seek OMB clearance to collect
sales and marketing expenditure data for a broader cross-section of
companies at such time, and would report on the data received.
b. Number of Entities Submitting Data. To capture data from a broad
cross-section of market participants, several commenters recommended
that the Commission collect data from more than 15 entities, the number
identified in the October 2015 Notice. Altria recommended increasing
the number beyond 15 entities given industry fragmentation and the
increased market presence of vape shops. Reynolds questioned whether
data collection from 15 entities would be sufficient to allow the FTC
to characterize overall market sales and marketing activities. Logic
stated that the proposed data collection was under-inclusive because
too few companies would be required to report data. The Georgia State
and Truth In Advertising comments stated that expanding the data
collection beyond 15 entities would provide a fuller perspective and
more accurate representation of the overall market. The Joint Public
Health Comment also recommended that the FTC send data requests to more
than 15 entities.
As discussed above, reliable data permitting the Commission to
identify a representative sample of a broad cross-section of the market
do not appear to be available at this time. As a result, the Commission
does not believe it necessary to increase the number of entities from
whom it will seek to collect and report data.
2. State-By-State Data Collection
The FTC's October 2015 Notice asked whether the agency should seek
data on state-by-state sales of e-cigarettes.\19\ Altria recommended
that the Commission consider conducting a state-by-state analysis given
the highly fragmented nature of the overall market. Comments from
public health organizations and research centers also supported state-
by-state data collection for sales and, in some comments, also for
marketing expenditures.\20\ The UNC comment noted that reporting state-
by-state data would help tobacco control professionals understand which
states and regions have the greatest sales, and help them target their
tobacco control efforts accordingly. The Oregon Public Health Division
and Georgia State comments noted that state-by-state data would be
useful in evaluating the impact of state and local regulatory efforts.
Reynolds opposed state-by-state data collection, stating that such data
were not readily available for e-cigarettes sold through distributors
who sell such products in more than one state. Reynolds further stated
that there are no efficient and reliable means to obtain state-by-state
data.
---------------------------------------------------------------------------
\19\ 80 FR 65758 at 65759.
\20\ See Joint Public Health Comment, recognizing that certain
marketing expenditures made on a national level could not be
reported on a state-by-state basis. See also comments from Oregon
Public Health Division; UNC; Georgia State; UCSF; and T. Cain.
---------------------------------------------------------------------------
Although the Commission agrees that state-by-state data collection
could provide useful information, such data collection would
significantly increase the complexity and burden of the data requests
and might not be readily practical for some e-cigarette sellers. Thus,
the Commission has decided against requesting approval for state-by-
state data collection at this time. The Commission remains interested
in this issue, however, and could request OMB clearance to collect
state-by-state data in the future.
3. Collection of Sales Data
a. Type of Product. A number of commenters noted the wide variety
of different e-cigarette products currently marketed. Reynolds noted
that three general categories of e-cigarette products are currently
available: (1) Disposable products, (2) rechargeable and pre-filled
cartridge products, and (3) ``tank'' products that require the user to
put e-liquid into an aerosol-generating device. The Joint Public Health
Comment recommended that the Commission require responders to report
separately by product type.\21\ The UNC comment also supported separate
reporting by product type, noting that separate reporting can be useful
to track changes in popularity and use. Similarly, the UCSF comment
supported separate reporting as a means to help evaluate how changes in
sales of different products correspond to changes in use.
---------------------------------------------------------------------------
\21\ Other commenters also supported separate reporting
generally. See comments from CTFK; American Lung Ass'n; NAAG; L.
Rotolo; and S. Fisher.
---------------------------------------------------------------------------
Reynolds recommended against differentiating by product type,
noting that the different products generally could be categorized by
the retail market where the products are sold, with conventional retail
stores selling disposable and rechargeable products, and ``vape
stores'' selling tank products. Reynolds preferred categorizing by type
of marketer rather than type of product.
Given the wide variety of products available, the Commission
believes that separate reporting by product type will be useful and
important in tracking future developments in the e-cigarette market.
Thus, the proposed data collection contemplates separate reporting
across three categories: (1) Non-refillable (i.e., disposable)
products; (2) refillable closed systems (i.e., rechargeable and
refillable cartridge products); and (3) refillable open systems (i.e.,
``tank'' systems).
b. Differentiation by Flavors. Comments from public health
organizations, research centers, and health educators recommended that
the Commission seek sales data that are differentiated by their various
characterizing flavors.\22\ The Joint Public Health Comment stated that
flavors appear to be one of the reasons youth and adults try e-
cigarettes. The CTFK comment stated that the available data suggest
that flavors are a key reason youth try and use e-cigarettes, citing
the 2013-2014 Population Assessment of Tobacco and Health (``PATH'')
study, which showed that most youth smoked flavored e-cigarettes when
they first tried the product and during the past month. The comment
also cited data
[[Page 76352]]
from the PATH study indicating that surveyed youth reported ``comes in
flavors that I like'' as one of the reasons they used e-cigarettes. The
Georgia State comment stated that data differentiated by flavors would
help regulators and the public health community determine the role
flavors play in patterns or reasons for use, perceptions of harm, and
social norms.
---------------------------------------------------------------------------
\22\ See Joint Public Health Comment, and comments from CTFK;
American Lung Ass'n; NAAG; UNC; UCSF; Georgia State; M. James; and
L. Rotolo.
---------------------------------------------------------------------------
Reynolds and Fontem opposed the collection of detailed flavor data.
Fontem noted that there is no standardized method of reporting flavors
across the industry, and both stated that characterizing flavors is
subjective. Reynolds stated that the utility of seeking flavor data is
not clear.
Given the potential importance of flavors for trial and use of e-
cigarettes, especially among youth, the Commission will seek to collect
data that differentiate among flavors. However, as discussed infra at
section II.D.2, to reduce the burden, the proposed data collection will
designate only three flavor categories, rather than requiring companies
to report each flavor individually.
c. Differentiation by Nicotine Strength. The comments from public
health organizations, research centers, and NAAG supported the
collection of data on nicotine content levels. The Georgia State
comment indicated that research suggests nicotine levels are related to
patterns or reasons for use. The CTFK comment stated that e-cigarettes
contain highly variable amounts of nicotine, and there are no reliable
data providing information about nicotine strength. The UNC comment
indicated that information about nicotine strength could be valuable
for determining equivalence to conventional tobacco products and for
consideration of potential long-term health risks. The UCSF comment
noted that nicotine content data could facilitate the testing of
competing hypotheses as to the effect of nicotine regulation on use.
Fontem and Reynolds opposed collection of data concerning nicotine
strength. Fontem commented that collection of nicotine content data
would not be useful because there is no standardized method of
reporting nicotine content across the industry. Reynolds also
questioned whether nicotine content data would provide useful
information.
The Commission believes that collection of data concerning nicotine
strength will provide useful information that is not readily available
from other sources. The agency does not believe that the lack of a
standardized reporting method invalidates the utility of these data.
The FTC will take into account the various comments received in the
course of developing its report on the data collection.
d. Cartridges and Refills. Several commenters addressed the
Commission's request for comments on the collection of data concerning
refills, especially with regard to refillable products sold with more
than one refill unit. E-cigarette products, other than disposable
products, are often marketed to consumers with the device, battery,
atomizer, and one or more refill units sold together in a single
package. The Joint Public Health Comment stated that any cartridge or
liquid unit above one should be counted as a refill, regardless of
whether it is packaged as part of the same stock keeping unit (``SKU'')
or sold individually. Fontem stated that there is no consistency among
marketers as to blister packs or refills that come in a single package.
Thus, Fontem questioned whether gathering information on refills would
yield meaningful information. The company recommended that if the
Commission opted to track refills, that it simply track the total
number of refills. Reynolds recommended that for products sold with
more than one cartridge, the FTC should abide by the product
configuration as sold to consumers, i.e., allow companies to use the
SKUs for reporting. Reynolds stated that relying on existing SKUs would
allow responders to use existing records to produce data and, thus,
would be simpler and clearer.
On balance, requiring companies to report the total number of
refill units will provide a more accurate picture of e-cigarette sales.
Thus, if an e-cigarette product is sold with more than one cartridge or
e-liquid unit, each cartridge or unit above one should be reported as a
refill. Likewise, each cartridge or e-liquid unit sold individually
also would count as a refill. In addition, the Commission believes this
approach is consistent with the approach it has taken with regard to
the collection of sales data for other tobacco products. For example,
if three pouches of smokeless tobacco are packaged together as a single
unit for sale to consumers, the Commission's compulsory process orders
have required a responding company to report each pouch separately, for
a total of three units.
e. Sales and Give-Aways. Comments from public health organizations
and research centers generally supported the collection of data on both
sales and give-aways and the reporting of these data separately.\23\
CTFK noted that currently only limited data are available concerning
market size and that current estimates do not differentiate between
sales and give-aways.\24\ The UNC comment stated that collecting sales
and give-away data and reporting those data separately is important for
evaluating which products are most frequently purchased, and the
Georgia State comment noted that reporting the data separately more
accurately reflects market transactions. The UCSF comment stated that
give-aways are important to identify separately given their potential
to reach youth under the age of 18.
---------------------------------------------------------------------------
\23\ See Joint Public Health Comment; see also comments from
CTFK; UNC; UCSF; Georgia State; American Lung Ass'n; and NAAG.
\24\ The CTFK comment and the Joint Public Health Comment also
noted that collecting data on give-aways was especially important
because at the time there were no national restrictions on free
sampling. These comments noted that such restrictions would not take
effect until FDA issued its final Deeming Regulation that, among
other things, asserted jurisdiction over e-cigarettes and other
tobacco products. As noted supra note 7, FDA has now issued its
Deeming Regulation. As a result of this regulation, the national ban
on the distribution of free samples will apply to all tobacco
products. 90 FR 28974 at 29054; 21 CFR 1140.16(d). The prohibition
on free sampling took effect on August 8, 2016. 90 FR 28974 at
28976.
---------------------------------------------------------------------------
The Commission agrees that data on sales and give-aways should be
collected and reported separately given the distinct role each plays in
the overall market. In addition, the agency collects and reports data
on sales and give-aways separately in its data collection for
cigarettes and smokeless tobacco products and, therefore, separate
collection and reporting will be consistent with the approach taken for
these other tobacco products.
4. Collection of Marketing Data
A number of comments supported data collection for the various
media specifically identified in the FTC's October 2015 Notice, as well
as other marketing channels.\25\ The NAAG comment stated that
collection and reporting of broad categories of marketing expenditure
data would be useful not only to the public but also to state officials
who are assessing regulatory options and enforcement efforts.
---------------------------------------------------------------------------
\25\ See, e.g., Joint Public Health Comment; comments from CTFK;
Oregon Public Health Division; American Lung Ass'n; and NAAG.
---------------------------------------------------------------------------
The Joint Public Health Comment and the CTFK comment stated that it
is important to collect marketing expenditures for television, radio,
and other broadcast media, noting that unlike cigarettes and smokeless
tobacco products, no statutory broadcast ban applies to e-cigarettes.
Several
[[Page 76353]]
comments specifically noted the importance of collecting and reporting
data for marketing expenditures for media especially attractive to
youth, such as point-of-sale advertising,\26\ sponsorship of concerts
and other events as well as sports teams or individual athletes or
drivers,\27\ and celebrity endorsers.\28\ Several comments specifically
identified product placement as a category where marketing expenditures
should be collected and reported,\29\ with the Joint Public Health
Comment noting that expenditures for all forms of product placement
should be collected, including product placement expenditures for
broadcast media, movies, digital, and other media. The Georgia State
comment supported detailed data collection for web-based and social
media marketing expenditures, noting that availability of these data
from commercial data sources is limited. Fontem recommended that the
FTC include couponing as a category of marketing expenditures; the UCSF
and Georgia State comments likewise identified coupons as well as other
forms of price promotion as categories where the Commission should
collect marketing expenditure data.
---------------------------------------------------------------------------
\26\ See, e.g., Joint Public Health Comment.
\27\ See, e.g., Joint Public Health Comment, comments from
Oregon Public Health Division and NYC Office of the Comptroller.
\28\ See, e.g., comments from Oregon Public Health Division and
NYC Office of the Comptroller.
\29\ See, e.g., Joint Public Health Comment, comments from CTFK
and Oregon Public Health Division.
---------------------------------------------------------------------------
Reynolds recommended that the data collection focus on the
marketing expenditure categories already used by the FTC in its data
collection for cigarettes and smokeless tobacco products, noting that
the Commission has decades of experience collecting those data. One
individual commenter also recommended that the Commission seek and
report the same categories of marketing expenditure data tracked for
cigarettes and smokeless tobacco products in order to facilitate
comparisons.\30\
---------------------------------------------------------------------------
\30\ Comment by J. DiFranza.
---------------------------------------------------------------------------
The Commission agrees that collecting and reporting data for broad
categories of marketing expenditures will be useful, including data
concerning traditional and newer media, product placement, sponsorship,
endorsements, and price promotions. The agency will seek to collect
marketing data in categories that generally track those used for
cigarettes and smokeless tobacco products, with two primary
differences. First, the Commission will seek to collect and report data
for marketing expenditures on broadcast media such as television and
radio because, unlike cigarettes and smokeless tobacco products, no
statute prohibits using these media to advertise and market e-
cigarettes. Second, some of the categories have been updated to
explicitly recognize newer forms of media now used for advertising and
marketing, such as digital and social media.
D. Suggestions To Minimize the Burden of the Information Collection
The Commission's October 2015 Notice invited comments on ways to
minimize the burden of the collection of information on entities
required to respond to the data requests.\31\
---------------------------------------------------------------------------
\31\ 80 FR 65758 at 65759.
---------------------------------------------------------------------------
1. Defer Data Collection Until Issuance of FDA Final Deeming Regulation
Reynolds and Fontem suggested that the Commission defer its data
collection until after FDA issued its final Deeming Regulation.
Reynolds noted that the final regulation would clarify the scope and
impact of FDA's regulation of e-cigarettes. As noted above, FDA issued
its final regulation on May 10, 2016. There is no overlap between FDA's
regulation and the proposed data collection. Accordingly, it is not
necessary to defer the data collection.
2. Categorize Product Flavors and Nicotine Strength
As discussed above, the Commission plans to collect data concerning
e-cigarette flavors and nicotine strength. To reduce the burden of
reporting each individual flavor, the Joint Public Health comment and
comments from CTFK and the American Lung Association recommended that
companies report three categories of flavors: Tobacco, menthol/mint,
and other. The Joint Public Health comment stated that these three
categories would most easily capture the breadth of flavors available,
and make it easier for the industry and the FTC to count all the
flavors. CTFK noted that categorizing in this manner would also
eliminate the overlap that might result from more limited flavor
categories. Comments from UCSF and NAAG, on the other hand, stated that
the Commission should collect data on each individual flavor. Given the
variety and number of different flavors, the Commission believes that
classifying e-cigarettes into three categories of flavors--tobacco,
menthol/mint, and other--will provide useful information while
significantly reducing the burden on reporting companies, and will use
these categories in the data collection, if approved.
The Joint Public Health Comment and the CTFK comment also indicated
that reporting nicotine strength by categories might be sufficient and
would reduce the reporting burden on responding entities. The UCSF
comment, on the other hand, recommended that the Commission require
companies to report each different nicotine strength. Categorizing
nicotine strengths would require consultation with scientific
authorities to determine the appropriate categories for reporting. In
addition, reporting in categories could blur trends over time due to
inherent imprecision. Thus, the Commission plans to require reporting
for each individual nicotine strength sold by the reporting entity,
rather than for categories. Once the Commission has these data, it will
consider how best to organize and discuss them in the course of
developing its report.
3. Narrow Scope of Data Requests by Requiring Less Specificity
Reynolds and Fontem each recommended that the Commission require
less detail in the data requests as a means of reducing the burden of
responding, and suggested that the collection of certain information
might not be useful. Fontem suggested that the Commission not seek
information concerning product flavors, nicotine strength, or blister
packs and refills. The company suggested that if the Commission did
decide to collect flavor data, it require only two categories of
information: Tobacco and other. It also suggested that if the agency
decided that some information about refills was needed, it simply track
total number of refills sold. Reynolds suggested that the Commission
model its requests on the information requests for cigarettes and
smokeless tobacco products, and not require differentiation by type of
product, nicotine concentration, size, method of sale, and flavors. If
the Commission opted to seek information about flavors, Reynolds
recommended that the agency request data based on brand style names and
descriptions the product manufacturers created to describe their
products. For the reasons discussed above, the Commission believes that
the information collection should include information concerning
flavors, nicotine strength, refill units, and other product
characteristics. Collection of flavor information by broad categories,
rather than individually, will reduce the burden on responding to the
information requests.
[[Page 76354]]
4. Limit Information Collection to Age Screening and Ad Content Review
In its comment, Logic proposed that the Commission limit its
information collection to data applicable to: (1) Youth access and (2)
illegal, inaccurate, or deceptive advertising claims about e-
cigarettes. According to Logic, these two areas address the relevant
societal issues for information collection, consistent with the FTC's
mandate to prevent unfair or deceptive business practices. Logic stated
that collecting substantial data concerning sales and marketing
expenditures would represent a substantial burden and, thus, suggested
that the Commission confine the information sought to companies' age-
screening mechanisms and to production of their advertising campaigns
for review to ensure they are not making deceptive claims. The
Commission disagrees with limiting the data collection to these two
categories of information. Rather, broader information collection about
sales and marketing expenditures is in the public interest, because it
will allow the Commission to analyze sales and assess how industry
members allocate their promotional activities and expenditures. For
decades, the Commission has collected and reported information about
sales and marketing expenditures for other tobacco products, as well as
for other consumer products, and the e-cigarette information requests
are consistent with the data collection and reporting for those
products. Although the Commission agrees that preventing false and
deceptive advertising is an important component of its consumer
protection mission, law enforcement action against specific marketers,
rather than information collection, is a better means of addressing
potentially unfair or deceptive e-cigarette advertising.
E. Age-Screening Mechanisms
In its October 2015 Notice, the Commission anticipated that its
data collection requests would include seeking information concerning
efforts such as age-screening mechanisms to prevent youth from being
exposed to advertising and promotion of e-cigarettes or from obtaining
free product samples. One industry member, Logic, supported data
collection regarding age-verification methods, stating that many online
sellers use no age-verification methods at all while conventional
retail stores require rigorous age-verification. The Joint Public
Health comment, and comments from CTFK, Georgia State, UCSF, and one
individual, also supported data collection for this category, with
Georgia State and UCSF also specifying age verification for online
purchases. The Georgia State comment noted that data collection and
reporting for this category would be useful to determine whether more
stringent regulatory action was needed.
The Commission agrees that data concerning age-verification methods
would be useful, and plans to collect and report data concerning age-
screening mechanisms to prevent youth from being exposed to e-cigarette
advertising and promotion or from obtaining free product samples.
F. Accuracy of Estimated Burden of the Information Collection
The Commission's October 2015 Notice invited comments on the
accuracy of the agency's estimate of the burden of the proposed
collection of information, including the validity of the methodology
and assumptions used.\32\ The Commission estimated a per company
average of 200 hours for each recipient of an information request for
the first year, and a per company average of 150 hours for the
remaining years. Thus, the total hours burden for 15 information
requests was estimated to be 3,000 hours for the first year, and 2,250
for each of the subsequent two years, for a total of 7,500 hours. The
Commission estimated that the total labor costs for 15 information
requests to be $300,000 for the first year, and $225,000 for each of
the subsequent two years, for a total of $750,000. This estimate
assumed an average $100/hour wage, which is the same estimated wage
average used in the Commission's recent request for reauthorization of
information requests to cigarette and smokeless tobacco companies.
---------------------------------------------------------------------------
\32\ 80 FR 65758 at 65759.
---------------------------------------------------------------------------
The comment from Reynolds asserted that the Commission had
underestimated the total hours burden. The company stated that it
usually takes it twice as long as the FTC's estimated time burden to
compile information for similar data collections for cigarette and
smokeless tobacco companies. Reynolds also stated that the FTC should
include in its estimate the amount of time companies will need to
communicate directly with Commission staff when seeking clarification
regarding the data collection. Reynolds and Fontem commented that the
FTC's labor cost estimate also underestimates the total burden costs,
stating that an average wage of $100/hour was too low. Neither company,
however, provided an alternative figure or other information indicating
what a more accurate hourly labor cost should be.
The Commission believes that its estimate burdens with respect to
both average hours and labor costs are reasonable, especially in the
absence of more specific information to calculate estimates that are
more precise. However, out of an abundance of caution, the Commission
has revised its burden estimate from that stated in the October 2015
Notice by increasing its estimated hours burden by 50 percent. As
revised, the Commission calculates a per company average of 300 hours
for the first year, and 225 hours for each of the two remaining years,
resulting in a cumulative total of 11,250 hours for 15 information
requests over three years. The Commission has not changed is average
hourly cost estimate. The Commission's estimate is based on the
assumption that the labor costs will include varying compensation
levels among staff, management, and legal review, with most work
performed by non-legal staff. In the absence of more precise data, the
Commission believes that the same $100/hour wage that it used in its
recent application for reauthorization of information requests to
cigarette and smokeless tobacco companies is appropriate here as well.
As discussed infra, however, the total cost burden will increase due to
the increase in the estimated hours burden.
G. Other Comments
The Joint Public Health Comment and the comments from CTFK and
American Lung Association recommended that the Commission coordinate
its data collection with FDA. The American Lung Association stated that
coordination might be mutually beneficial for both agencies, and CTFK
indicated that coordination might help assure consistency in measures.
Altria also encouraged the Commission to consider how it would interact
with FDA once the Deeming Regulation was issued. The FTC staff and FDA
staff already have a long tradition of working together on tobacco
issues and the many other areas where the two agencies share
jurisdiction. The FTC staff expects that tradition will continue. To
the extent that coordination is required for specific issues concerning
the proposed information collection, the agencies already have
processes and procedures in place to address those issues.
The Georgia State comment recommended that the FTC require detailed
brand-specific information, noting that the Commission's reports for
cigarettes and smokeless tobacco products report aggregated rather than
brand-specific data. The UCSF comment also recommended that the
Commission collect and report brand-specific data.
[[Page 76355]]
The Commission's compulsory process orders to surveyed companies will
collect brand-specific data. However, because Section 6(f) of the FTC
Act, 15 U.S.C. 46(f), protects confidential commercial information that
is submitted to the Commission, the agency cannot publicly identify
sales and marketing data for particular brands or companies that is not
already public. Thus, the Commission's report on the data collection
will provide aggregated rather than brand-specific data.
Commenters also recommended that the Commission seek more detailed
differentiation of certain marketing expenditure data. The Joint Public
Health Comment recommended that the Commission obtain data concerning
the demographic composition of social media networks. The UCSF comment
suggested collecting data regarding the amounts spent for different
population subgroups, specific information concerning the time when
marketing activities occurred, and requiring each responding company to
identify its top three outlets and top three marketing programs within
each media category. The added detail would significantly increase the
complexity and burden of responding to the information requests. In
addition, as indicated above, the Commission cannot publicly identify
sales and marketing data on particular brands or companies and, thus,
would not be able to include the specific data in its report. Thus, the
Commission will not seek to include these data in the proposed
information requests.
The Georgia State comment recommended that the Commission collect
data on e-cigarette device specifications and capabilities. The comment
indicated that this information would permit assessment of product
differences concerning characteristics such as nicotine delivery,
patterns of use, and puff topography. Collection of these data,
however, is beyond the scope of the information requests' purpose.
Fontem's comment recommended that the Commission review e-
cigarettes as smoking cessation devices and that it expand the
information requests in order to collect data on other smoking
cessation products, such as nicotine patches. This suggestion is beyond
the scope of the proposed information collection, which concerns sales
and marketing data for e-cigarette products, not products intended to
treat nicotine addiction, which is the intended use for smoking
cessation products. Whether any product is approved for use as a
smoking cessation product is a question within the jurisdiction of FDA,
not the FTC.
As noted earlier, the FTC received twelve comments that did not
address the proposed data collection. One individual raised concerns
that some e-cigarette marketers were making false claims that the
products were effective for smoking cessation, and four individuals
indicated that e-cigarettes helped with smoking cessation. Three
individuals called for regulation of e-cigarettes, which FDA's recent
issuance of its Deeming Regulation accomplishes. One individual stated
that e-cigarettes should not be available to persons under the age of
18. FDA's Deeming Regulation prohibits the sale (both in-person and
online) of e-cigarettes and other tobacco products to persons under the
age of 18.\33\ One individual commented that e-cigarette advertisements
seem to be targeted to youth. One individual commented that the FTC
should consider that a substantial portion of the e-cigarette market is
for cannabis e-cigarette products rather than tobacco. Finally, one
commenter asked the FTC to keep public health at the forefront of its
decision-making.
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\33\ 90 FR at 28974 at 29103; 21 CFR 1140.14. This provision
took effect on August 8, 2016.
---------------------------------------------------------------------------
III. Information Requests to the E-Cigarette Industry
The Commission proposes to send information requests to the
ultimate U.S. parent entities of up to 15 e-cigarette marketers in the
United States. These companies will vary in size, the number of
products sold, and in the extent and variety of their advertising and
marketing activities, and will include the largest marketers of e-
cigarettes. As noted above, based on available market data, the
Commission estimates its sample will account for more than 80 percent
of the conventional retail market and a sizable portion of the online
market.
The proposed information requests will seek sales data about the
types and variety of e-cigarette products sold. The sales information
will be reported under three broad categories: (1) Non-refillable
(i.e., disposable) products; (2) refillable closed systems (i.e.,
rechargeable and pre-filled cartridge products); and (3) refillable
open systems (i.e., ``tank'' systems). Within these three categories,
companies will report data differentiated by the strength of nicotine
content and three categories of flavors: Tobacco, menthol/mint, and
other. Data will be reported separately for sales and give-aways. The
information requests will collect data for both unit sales as well as
by net sales revenues. Data on net sales revenues will be reported by
flavor only.
The information requests also will seek information and data
concerning advertising and marketing activities and expenditures in a
broad variety of media categories, including: (1) Radio, television,
and print advertising; (2) Web site, digital, and social media
marketing; (3) product placement; (4) endorsements, including celebrity
endorsements; (5) sponsorship of concerts and other events and as well
as of sports teams or individual athletes such as racing car drivers;
(6) distribution of free samples; and (7) price promotions, including
couponing programs. These expenditure categories generally track those
used by the FTC in its data collections for cigarettes and smokeless
tobacco products, with two exceptions. First, the proposed information
requests will seek data concerning television and radio expenditures,
since e-cigarette advertising is not subject to statutory broadcast
media prohibitions. In addition, the media categories have been updated
to provide more differentiation among online and digital advertising
media.
The proposed information requests also will include information
about company policies pertaining to age-screening mechanisms to
prevent youth from being exposed to e-cigarette advertising and
promotion or from obtaining free samples of e-cigarettes.
IV. Burden Estimates and Confidentiality
A. Estimated Hours Burden: 11,250 Hours
FTC staff's estimate of the hours burden is based on the time that
would be required to respond to the Commission's information requests.
The FTC currently anticipates sending information requests to as many
as 15 e-cigarette companies each year. Because the Commission
anticipates that these companies will vary in size, in the number of
products they sell, and in the extent and variety of their advertising
and promotion, and given the currently evolving nature of the e-
cigarette industry, FTC staff has not calculated separate burden
estimates for large and small companies, as is traditionally the case
for the Commission's cigarette and smokeless tobacco information
requests. For example, an e-cigarette marketer with a large volume of
sales but a relatively small product line could potentially require
fewer resources to respond to the Commission's information request than
a marketer with lower overall sales but a
[[Page 76356]]
substantially larger product line that offers consumers a greater range
of flavor and nicotine options. Rather than account for each potential
permutation of factors, FTC staff has calculated a per company average
at the upper limit of this potential range. Some companies likely will
require less time to compile their responses.
The Commission anticipates that even if it provides models for the
Excel datafiles the companies will be required to submit, recipients of
its information requests will need substantial time to prepare a
response the first time. Once an e-cigarette marketer has prepared its
first response to a Commission information request, however, it will
need less time in subsequent years to prepare its reports because it
will know what information it will be required to produce, and will
already have a template for its submission.
Accordingly, as an approximation, FTC staff assumes a per company
average of 300 hours for each recipient of the Commission's information
requests the first year they have to comply with the Commission's
information request. Staff anticipates that in subsequent years, the
per company average will be 225 hours. Thus, the overall estimated
burden for 15 recipients of the information requests is 4,500 hours for
the first year and 3,375 hours for each of the two subsequent years, or
a total of 11,250 hours. Thus, the average yearly burden, over the
course of a prospective three-year clearance, is 3,750 hours, or 250
hours per recipient (large and small). These estimates include any time
spent by separately incorporated subsidiaries and other entities
affiliated with the ultimate parent company that has received the
information request.
B. Estimated Cost Burden: $1,125,000
Commission staff cannot calculate with precision the labor costs
associated with these data requests, as they entail varying
compensation levels of management and/or support staff among companies
of different sizes. FTC staff assumes that computer analysts and other
non-legal staff will perform most of the work involved in responding to
the information requests, although legal personnel will likely be
involved in reviewing the actual submission to the Commission. FTC
staff believes that the same $100 per hour wage that it used in its
recent request for reauthorization of information requests to the major
cigarette and smokeless tobacco manufacturers is appropriate here also
for the combined efforts of these individuals. Using this figure, FTC
staff's best estimate for the total labor costs for 15 information
requests is $450,000 (4,500 hours x $100 per hour) for the first year
and $337,000 for the two subsequent years (3,375 hours x $100 per hour
x 2), for a total of $1,125,000 over the entire three-year period. The
annualized labor cost per respondent will average approximately
$25,000.
Staff believes that the capital or other non-labor costs associated
with the information requests are minimal. Although the information
requests may necessitate that industry members maintain the requested
information provided to the Commission, they should already have in
place the means to compile and maintain business records.
C. Confidentiality
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), bars the Commission
from publicly disclosing trade secrets or confidential commercial or
financial information it receives from persons pursuant to, among other
methods, special orders authorized by Section 6(b) of the FTC Act. Such
information also would be exempt from disclosure under the Freedom of
Information Act, 5 U.S.C. 552(b)(4). Moreover, under Section 21(c) of
the FTC Act, 15 U.S.C. 57b-2(c), a submitter who designates a
submission as confidential is entitled to ten days' advance notice of
any anticipated public disclosure by the Commission, assuming that the
Commission has determined that the information does not constitute
Section 6(f) material. Although materials covered under one or more of
these various sections are protected by stringent confidentiality
constraints, the FTC Act and the Commission's rules authorize
disclosure in limited circumstances (e.g., official requests by
Congress, requests from other agencies for law enforcement purposes,
and administrative or judicial proceedings). Even in those limited
contexts, however, the Commission's rules may afford protections to the
submitter, such as advance notice to seek a protective order in
litigation. See 15 U.S.C. 57b-2; 16 CFR 4.9-4.11.
Finally, the information presented in the report will not reveal
company-specific data, except data that are public. See 15 U.S.C. 57b-
2(d)(1)(B). Rather, the Commission anticipates providing information on
an anonymous or aggregated basis, in a manner sufficient to protect
individual companies' confidential information, to provide a factual
summary of e-cigarette industry marketing activities and sales.
V. 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 December 2,
2016. Write ``Electronic Cigarettes: Paperwork Comment, FTC File No.
P114504'' on your 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 comment does not include any
sensitive personal information, like anyone's 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, like 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 provided 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 have to follow the procedure explained
in FTC Rule 4.9(c).\34\ Your comment will be kept confidential only if
the FTC General Counsel grants your request in accordance with the law
and the public interest.
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\34\ 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 comment to be withheld from the public record. See FTC Rule
4.9(c), 16 CFR 4.9(c).
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Postal mail addressed to the Commission is subject to delay due to
heightened security screening. As a result, we encourage you to submit
your comments online. To make sure that the
[[Page 76357]]
Commission considers your online comment, you must file it at https://ftcpublic.commentworks.com/ftc/electroniccigarettespra2, by following
the instructions on the web-based form. When 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 ``Electronic Cigarettes:
Paperwork Comment, FTC File No. P114504'' on your comment and on the
envelope. You can mail your comment to the following address: Federal
Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW.,
Suite CC-5610 (Annex J), Washington, DC 20580, or deliver your comment
to the following address: Federal Trade Commission, Office of the
Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite
5610 (Annex J), Washington, DC 20024.
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 December 2,
2016. For information on the Commission's privacy policy, including
routine uses permitted by the Privacy Act, see https://www.ftc.gov/ftc/privacy.htm.
Comments on the information collection requirements subject to
review under the PRA should additionally be submitted to OMB. If sent
by U.S. mail, they should be addressed to Office of Information and
Regulatory Affairs, Office of Management and Budget, Attention: Desk
Officer for the Federal Trade Commission, New Executive Office
Building, Docket Library, Room 10102, 725 17th Street NW., Washington,
DC 20503. Comments sent to OMB by U.S. postal mail, however, are
subject to delays due to heightened security precautions. Thus,
comments instead should be sent by facsimile to (202) 395-5806.
David C. Shonka,
Acting General Counsel.
[FR Doc. 2016-26486 Filed 11-1-16; 8:45 am]
BILLING CODE 6750-01-P
