Notice2022-05850
Agency Information Collection Activities; Proposed Collection; Comment Request; Extension
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
March 21, 2022
Issuing agencies
Federal Trade Commission
Abstract
In accordance with the Paperwork Reduction Act of 1995 (PRA), the Federal Trade Commission (FTC or Commission) is seeking public comment on its proposal to extend for an additional three years the Office of Management and Budget (OMB) clearance for information collection requirements contained in the Mail, internet, or Telephone Order Merchandise Rule (MITOR). That clearance expires on July 31, 2022.
Full Text
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<title>Federal Register, Volume 87 Issue 54 (Monday, March 21, 2022)</title>
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[Federal Register Volume 87, Number 54 (Monday, March 21, 2022)]
[Notices]
[Pages 15995-15997]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-05850]
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FEDERAL TRADE COMMISSION
Agency Information Collection Activities; Proposed Collection;
Comment Request; Extension
AGENCY: Federal Trade Commission.
ACTION: Notice.
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SUMMARY: In accordance with the Paperwork Reduction Act of 1995 (PRA),
the Federal Trade Commission (FTC or Commission) is seeking public
comment on its proposal to extend for an additional three years the
Office of Management and Budget (OMB) clearance for information
collection requirements contained in the Mail, internet, or Telephone
Order Merchandise Rule (MITOR). That clearance expires on July 31,
2022.
DATES: Comments must be received on or before May 20, 2022.
ADDRESSES: Interested parties may file a comment online or on paper by
following the instructions in the Request for Comments part of the
SUPPLEMENTARY INFORMATION section below. Write ``Paperwork Reduction
Act Comment: FTC File No. P072108'' on your comment, and file your
comment online at <a href="https://www.regulations.gov">https://www.regulations.gov</a> by following the
instructions on the web-based form. If you prefer to file your comment
on paper, mail your comment
[[Page 15996]]
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: Jock Chung, 202-326-2984, Attorney,
Enforcement Division, Bureau of Consumer Protection, 600 Pennsylvania
Avenue NW, Mail Drop CC-9528, Washington, DC 20580.
SUPPLEMENTARY INFORMATION:
Title: Mail, internet, or Telephone Order Merchandise Rule (MITOR
or Rule), 16 CFR part 435.
OMB Control Number: 3084-0106.
Type of Review: Extension of a currently approved collection.
Abstract: Generally, the MITOR requires a seller (or merchant) to:
(1) Have a reasonable basis for any express or implied shipment
representation made in soliciting the sale (if no express time period
is promised, the implied shipment representation is 30 days); (2)
notify the buyer (or consumer) and obtain the buyer's consent to any
delay in shipment; and (3) make prompt and full refunds when the buyer
exercises a cancellation option or the seller is unable to meet the
Rule's other requirements.
Likely Respondents: Businesses engaged in the sale of merchandise
by mail, internet or telephone.
Estimated Annual Hours Burden: 3,117,410 hours.
Third Party Disclosure: [(53,300 established businesses x 50 hours)
+ (1,967 new entrants x 230 hours) = 3,117,410 hours.
Estimated Annual Cost Burden: $82,269,450, which is derived from
3,117,410 hours x $26.39/hour.\1\
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\1\ The hourly wage rates for sales and related workers are
updated from the 60-Day Federal Register notice and are based on
mean hourly wages found at <a href="https://www.bls.gov/news.release/ocwage.htm">https://www.bls.gov/news.release/ocwage.htm</a> (``Occupational Employment and Wages-May 2020,'' U.S.
Department of Labor, released March 2021, Table 1 (``National
employment and wage data from the Occupational Employment Statistics
survey by occupation, May 2020'').
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As required by section 3506(c)(2)(A) of the PRA, 44 U.S.C.
3506(c)(2)(A), the FTC is providing this opportunity for public comment
before requesting that OMB extend the existing clearance for the
information collection requirements contained in the Commission's
Health Breach Notification Rule.
Burden Estimates
Estimated total annual hours burden: 3,117,410 hours.
In its 2019 PRA-related Federal Register Notices \2\ and
corresponding submission to OMB, FTC staff estimated that established
companies each spend an average of 50 hours per year on compliance with
the Rule, and that new industry entrants spend an average of 230 hours
(an industry estimate) for compliance measures associated with start-
up.\3\ Thus, the total estimated hours burden was calculated by
multiplying the estimated number of established companies x 50 hours,
multiplying the estimated number of new entrants x 230 hours, and
adding the two products.
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\2\ 84 FR 10072 (Mar. 19, 2019); 84 FR 24512 (May 28, 2019).
\3\ Most of the estimated start-up time relates to the
development and installation of computer systems geared to more
efficiently handle customer orders.
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No substantive provisions in the Rule have been amended or changed
since staff's 2019 submission to OMB. Thus, the Rule's disclosure
requirements remain the same. Moreover, the Commission received no
public comments regarding the above-noted estimates; thus, staff will
apply them to the current PRA burden analysis.
Since the prior submission to OMB, however, the number of
businesses engaged in the sale of merchandise subject to the MITOR has
increased. The most currently available data from the U.S. Census
Bureau indicates that, between 2005 and 2019, the number of businesses
subject to the MITOR grew from 15,924 to 43,465, or an average increase
of 1,967 new businesses a year [(43,465 businesses in 2019 - 15,924
businesses in 2005) / 14 years].\4\ Assuming this growth rate continues
from 2022 through 2025, the average number of established businesses
during the three-year period for which OMB clearance is sought for the
Rule would be 53,300: \5\
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\4\ Conceptually, this might understate the number of new
entrants. Given the virtually unlimited diversity of retail
establishments, it is very unlikely that there is a reliable
external measure; nonetheless, as in the past, the Commission
invites public comment that might better inform these estimates. For
example, many online marketplace sellers that use <a href="http://Amazon.com">Amazon.com</a>'s
marketplace to sell to customers have agreements that provide that
Amazon handles packaging and shipping the products to customers.
Whether <a href="http://Amazon.com">Amazon.com</a> is also the entity responsible for sending
customers delay notices when necessary could affect which entity is
subject to MITOR disclosure requirements, Amazon or the individual
marketplace seller.
\5\ As noted above, the existing OMB clearance for the Rule
expires on July 31, 2022, and the FTC is seeking to extend the
clearance for three years.
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Established
Year businesses New entrants
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2022-23................................. 51,333 1,967
2023-24................................. 53,300 1,967
2024-25................................. 55,267 1,967
Average:................................ 53,300 1,967
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In an average year during the three-year OMB clearance period,
staff estimates that established businesses and new entrants will
devote 3,117,410 hours to comply with the MITOR [(53,300 established
businesses x 50 hours) + (1,967 new entrants x 230 hours) = 3,117,410].
The estimated PRA burden per seller to comply with the MITOR is likely
overstated because much of the estimated time burden for disclosure-
related compliance would arguably be incurred even absent the Rule.
Over the years, industry trade associations and individual witnesses
have consistently taken the position that providing buyers with notice
about the status of their orders fosters buyer loyalty and encourages
repeat purchases, which are important to marketers' success. In recent
years, the demands of the internet's online marketplace and its leading
retailers such as <a href="http://Amazon.com">Amazon.com</a>, <a href="http://Walmart.com">Walmart.com</a>, and <a href="http://Ebay.com">Ebay.com</a> have driven
many businesses to upgrade the information management systems to track
and ship orders more effectively.\6\ These upgrades were primarily
prompted by the industry's need to deal with growing buyer demand for
merchandise that is timely shipped. Accordingly, most companies now
provide updated order information of the kind required by the Rule in
their ordinary course of business to meet buyer expectations regarding
timely shipment, notification of delay, and prompt and full refunds.\7\
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\6\ Brian Baskin, ``Amazon's Free Shipping Pushes Small
Retailers, Delivery Firms to Compete,'' The Wall Street Journal,
Apr. 8, 2017, available at <a href="https://www.wsj.com/articles/amazons-free-shipping-pushes-small-retailers-delivery-firms-to-compete-1491649203">https://www.wsj.com/articles/amazons-free-shipping-pushes-small-retailers-delivery-firms-to-compete-1491649203</a>.
\7\ Under the OMB regulation implementing the PRA, burden is
defined to exclude any effort that would be expended regardless of
any regulatory requirement. 5 CFR 1320.3(b)(2).
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Estimated labor costs: $82,269,450.
FTC staff derived labor costs by applying appropriate hourly cost
figures to the burden hours described above. According to the most
recent data available from the Bureau of Labor and Statistics,\8\ the
mean hourly income for workers in sales and related occupations was
$26.39/hour. The bulk of the burden of complying with the MITOR is
borne by clerical personnel along with
[[Page 15997]]
assistance from sales personnel. Staff believes that the mean hourly
income for workers in sales and related occupations is an appropriate
measure of a direct marketer's average labor cost to comply with the
Rule. Thus, the total annual labor cost to new and established
businesses for MITOR compliance during the three-year period for which
OMB approval is sought would be approximately $82,269,450 (3,117,410
hours x $26.39/hour). Relative to direct industry sales, this total is
negligible.\9\
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\8\ See Table 1, National employment and wage data from the
Occupational Employment Statistics survey by occupation, May 2020,
at <a href="https://www.bls.gov/news.release/ocwage.t01.htm">https://www.bls.gov/news.release/ocwage.t01.htm</a>.
\9\ Considering that sales for ``electronic shopping and mail
order houses'' grew from $295 billion in 2011 to $668 billion in
2019, staff estimates the annual mail, internet, or telephone sales
to consumers in the three year period for which OMB clearance is
sought will average $1.1 trillion. Thus, the projected average labor
cost for MITOR compliance by existing and new businesses for that
period would amount to 0.007% of sales.
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Request for Comments
Pursuant to Section 3506(c)(2)(A) of the PRA, the FTC invites
comments on: (1) Whether the proposed collection of information is
necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility; (2) 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; (3) ways to enhance the quality, utility, and
clarity of the information to be collected; and (4) ways to minimize
the burden of maintaining records and providing disclosures to
consumers. All comments must be received on or before May 20, 2022.
You can file a comment online or on paper. For the FTC to consider
your comment, we must receive it on or before May 20, 2022. Write
``Paperwork Reduction Act Comment: FTC File No. P072108'' on your
comment. Your comment--including your name and your state--will be
placed on the public record of this proceeding, including the <a href="https://www.regulations.gov">https://www.regulations.gov</a> website.
Due to the public health emergency in response to the COVID-19
outbreak and the agency's heightened security screening, postal mail
addressed to the Commission will be subject to delay. We encourage you
to submit your comments online through the <a href="https://www.regulations.gov">https://www.regulations.gov</a>
website.
If you prefer to file your comment on paper, write ``Paperwork
Reduction Act Comment: FTC File No. P072108'' on your comment and on
the envelope, and 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. If possible, submit your paper
comment to the Commission by courier or overnight service.
Because your comment will become publicly available at <a href="https://www.regulations.gov">https://www.regulations.gov</a>, you are solely responsible for making sure that
your comment does not include any sensitive or confidential
information. In particular, your comment should not include any
sensitive personal information, such as your or anyone else'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, such as medical records or other
individually identifiable health information. In addition, your comment
should not include any ``trade secret or any commercial or financial
information which . . . . is privileged or confidential''--as provided
by 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)--including in particular competitively
sensitive information such as costs, sales statistics, inventories,
formulas, patterns, devices, manufacturing processes, or customer
names.
Comments containing material for which confidential treatment is
requested must be filed in paper form, must be clearly labeled
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular,
the written request for confidential treatment that accompanies the
comment must include the factual and legal basis for the request, and
must identify the specific portions of the comment to be withheld from
the public record. See FTC Rule 4.9(c). Your comment will be kept
confidential only if the General Counsel grants your request in
accordance with the law and the public interest. Once your comment has
been posted publicly at <a href="http://www.regulations.gov">www.regulations.gov</a>, we cannot redact or remove
your comment unless you submit a confidentiality request that meets the
requirements for such treatment under FTC Rule 4.9(c), and the General
Counsel grants that request.
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 May 20, 2022.
For information on the Commission's privacy policy, including routine
uses permitted by the Privacy Act, see <a href="https://www.ftc.gov/site-information/privacy-policy">https://www.ftc.gov/site-information/privacy-policy</a>.
Josephine Liu,
Assistant General Counsel for Legal Counsel.
[FR Doc. 2022-05850 Filed 3-18-22; 8:45 am]
BILLING CODE 6750-01-P
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