FPLA '15 SS fin

Supporting Statement for Information Collection Provisions
Contained in the Rules Implementing the
Fair Packaging and Labeling Act
16 C.F.R. Parts 500-503
(OMB Control #: 3084-0110)
1.

Necessity for Collecting the Information

The Fair Packaging and Labeling Act, 15 U.S.C. §§ 1451-1461 (“FPLA” or “Act”), was
enacted in order to: (1) eliminate consumer confusion in the marketplace; (2) standardize the
means used by sellers to disclose package content information to buyers; and (3) eliminate
consumer deception and confusion concerning product size representations. In Section 2 of the
Act, Congress determined that “[p]ackages and their labels should enable consumers to obtain
accurate information as to the quantity of the contents and should facilitate value comparisons.”
15 U.S.C. § 1451. The Act, in turn, directs the Federal Trade Commission (“FTC” or
“Commission”) to issue rules requiring that labels for all “consumer commodities” 1 disclose the
package’s net contents, identity of commodity, and name and place of business of the product’s
manufacturer, packer, or distributor. The Act authorizes additional rules where necessary to
prevent consumer deception (or to facilitate value comparisons) regarding descriptions of
ingredients, slack fill of packages, use of “cents-off” or lower price labeling, or characterization
of package sizes.
In 1968, the FPLA Rules (16 C.F.R. Parts 500-503) took effect. The FPLA Rules
prescribe the manner and form of labeling consumer commodities (as defined in the FPLA)
regarding: (1) the identity of the commodity; (2) the name and place of business of the
manufacturer, packer, or distributor; (3) the net quantity of contents (in both inch/pound units
and metric units); and (4) the net quantity of servings, uses or applications represented to be
present. 16 C.F.R. §§ 500.3-500.26. The rules also require sellers that make “cents off,”
“introductory offer,” or “economy size” claims to keep records for one year showing compliance
with the Act's requirements for such claims. 16 C.F.R. §§ 502.100-502.102.
The FPLA Rules closely parallel the statute’s requirements, and provide detailed
guidance on the manner and form of disclosures the Act requires. The FTC administers the
FPLA for “consumer commodities” that are consumed or expended in the household and that
are not otherwise excluded from FTC purview. The Food and Drug Administration (“FDA”)
administers the FPLA for food, drugs, cosmetics, and medical devices. The U.S. Department
of Agriculture is responsible for rules covering meat and poultry products.

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“The term consumer commodity or commodity means any article, product, or commodity of any kind or
class which is customarily produced or distributed for sale through retail sales agencies or instrumentalities
for consumption by individuals, or use by individuals for purposes of personal care or in the performance of
services ordinarily rendered within the household, and which usually is consumed or expended in the course
of such consumption or use.” 16 CFR 500.2(c). For the precise scope of the term’s coverage see 16 CFR
500.2(c); 503.2; 503.5. See also
http://ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings/fair-packaging-labeling-act.

2.

Use of the Information

Consumers use the information required for disclosure by these rules to make informed
product value comparisons and purchasing decisions.
3.

Consideration to Use Improved Information Technology to Reduce Burden

Firms subject to these rules are free to use improved information disclosure and package
printing technologies to reduce the burden of complying. In the many years since the rules took
effect, covered businesses have integrated the process of compliance into routine packaging
operations. Compliance requirements are reasonably well understood throughout the industry,
and formal FTC enforcement actions have not been undertaken. State officials responsible for
weights and measures activities play a central role in ensuring consumers receive accurate and
complete product disclosure at the point of sale.
Information about consumer commodities is most valuable at the point of sale, and
labeling is the method most closely tailored to consumer shopping behavior. As such,
providing an option for electronic disclosure in lieu of labeling pursuant to the Government
Paperwork Elimination Act, 44 U.S.C. § 3502 note, is impracticable.
4.

Efforts to Identify Duplication/Availability of Similar Information

Although FPLA enforcement involves several agencies (see #1 above), there is no
duplication of compliance requirements for any particular product subject to the Act.
5.

Efforts to Minimize Burden on Small Businesses

Section 3(a) of the FPLA leaves no discretion for exemption or modification of
requirements based on firm size. 15 U.S.C. § 1452. The burden for small businesses is
already minimized because the requirements of these rules are limited to information that a
company would receive in the ordinary course of business. For the most part, compliance with
the FPLA Rules entails no more than affected entities consulting the FTC (and/or company
in-house counsel) on an as-needed basis to answer questions they may have to help ensure such
compliance.
6.

Consequences of Conducting Collection Less Frequently

The statutory framework requiring information disclosure on packages does not provide
any basis for reducing the frequency of information disclosure.

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7.

Circumstances Requiring Collection Inconsistent with Guidelines

The collection of information in these rules is consistent with the OMB guidelines stated
in 5 C.F.R. § 1320.5(d)(2).
8.

Consultation Outside the Agency

At the FTC, primary responsibility for implementing the FPLA Rules is delegated to the
Bureau of Consumer Protection, Division of Enforcement, which has continuous informal
contact with industry members who need guidance concerning compliance requirements.
Moreover, the Commission systematically reviews its rules to ensure that the rules continue to
achieve their intended goals without unduly burdening commerce. These reviews are
conducted on a ten-year schedule. In the most recent such review regarding the FPLA Rules,
the Commission followed its Notice of Intent to Request Public Comments 2 with an Advance
Notice of Proposed Rulemaking3 and a Notice of Proposed Rulemaking. 4
Additionally, through its triennial pursuit to renew OMB clearance for the disclosure
provisions of the FPLA Rules, the Commission seeks, in accordance with 5 C.F.R. § 1320.8(d),
public comment on the practical utility of those provisions, ways to improve the quality, utility,
and clarity of required labeling, as well as comments on the accuracy of and methodology
underlying the FTC’s burden estimates. The Commission sought such comment most recently
with its latest PRA clearance request for these rules. See 79 Fed. Reg. 74,722 (December 16,
2014). No relevant comments were received. Consistent with 5 C.F.R. § 1320.12(c), the
Commission is doing so again contemporaneous with this submission.
9.

Payments or Gifts to Respondents
Not applicable.

10. & 11. Assurances of Confidentiality/Matters of Sensitive Nature
Not applicable.

2

78 Fed. Reg. 30,798 (May 23, 2013).

3

79 Fed. Reg. 15,272 (March 19, 2014) (“ANPR”).

4

80 Fed. Reg. 5491 (Feb. 2, 2015). In response to the comments received on the ANPR, the Commission
proposed amendments to the FPLA Rules, including modernizing the place-of-business listing requirement to
incorporate online resources and eliminating obsolete references to commodities advertised using the terms
“cents off,” “introductory offer,” and “economy size.” The Commission also proposed to revise the Rules to
incorporate a more comprehensive metric chart. The comment period for the NPRM closes on March 30,
2015.

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12.

Estimated Information Collection Burden

Estimated annual hours burden: 8,015,140 total burden hours (solely relating to
disclosure) 5
The major information collection burden of the FPLA Rules comes from the Act’s
consumer commodity labeling requirements. Accurately estimating the number of respondents
subject to these rules and annual burden work hours caused by these rules present several
challenges. For example, independent data does not tidily conform to the dividing lines of
jurisdiction between the FTC and the FDA.
Based on U.S. Census data, however, staff conservatively estimates that approximately
801,514 manufacturers, packagers, distributors, and retailers of consumer commodities 6 make
disclosures at an average burden of ten hours per entity, for a total disclosure burden of
8,015,140 hours.
Associated labor costs: $185,149,734
Labor costs are derived by applying appropriate estimated hourly cost figures to the
burden hours described above. The FTC assumes that respondents will use employees to create
compliant labels. Of the 10 hours spent by each respondent, Commission staff assumes the
hour breakdown will be as follows: 1 hour of managerial and/or professional time per covered
entity, at an hourly wage of $60, 7 2 hours of specialized clerical support, at an hourly wage of

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To the extent that the FPLA-implementing regulations require sellers of consumer commodities to keep
records that substantiate “cents off,” “introductory offer,” and/or “economy size” claims, staff believes that
most, if not all, of the records that sellers maintain would be kept in the ordinary course of business,
regardless of the legal mandates. “Burden,” for OMB purposes, excludes recordkeeping customarily
maintained in the normal course of business. See 5 C.F.R. § 1320.3(b)(2).
6

Commission staff identified categories of entities under its jurisdiction that supply consumer commodities as
defined in the FPLA Rules. Those categories include retailers, wholesalers, and manufacturers. Commission staff
estimated the number of retailers (735,038) based on Census data (under NAICS subsectors 445, 452, and 453,
respectively, for food and beverage stores, general merchandise stores, and miscellaneous store retailers) compiled
by PricewaterhouseCoopers, LLC for the National Retail Federation report, “Retail’s Impact Across America”:
https://nrf.com/advocacy/retails-impact. Commission staff estimated the number of wholesalers (42,160) and
manufacturers (24,316) based on 2007 Census data (comparable 2012 Census data for them have not yet been
released). See generally http://www.census.gov/econ/census/data/historical_data.html. Although the stated
number of respondents suggests precision, it is an estimate in that it aggregates the number of establishments under
industry codes that FTC staff believes reflect entities subject to the FPLA. But, even allowing for industries that
may apply, the Census data do not separately break out non-household products from household use. Accordingly,
the source information is over-inclusive and thus overstates what is actually subject to the FPLA.
7

Based on an average of “General and Operations Managers” ($55.81) and ($63.46), resulting in $59.64, rounded
up to $60, available from “Bureau of Labor Statistics, Economic News Release, April 1, 2014, Table 1, “National
employment and wage data from the Occupational Employment Statistics survey by occupation, May 2013.”
http://www.bls.gov/news.release/ocwage.nr0.htm.

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$26 8, 7 hours of clerical time per covered entity, at an hourly wage of $17, 9 for a total of
$185,149,734 ($231 blended labor cost per covered entity x 801,514 entities).
13.

Estimated Capital/Other Non-Labor Costs

Commission staff believes that the FPLA Rules impose negligible capital or other
non-labor costs, as the affected entities are likely to have the necessary supplies and/or
equipment already (e.g., offices and computers) for the information collections discussed above
14.

Estimate of Cost to Federal Government

Staff estimates that a representative year’s cost of administering the rules’ requirements
during the three-year clearance period sought will be approximately $40,000. This represents
attorney and investigator costs, and includes employee benefits.
15.

Program Changes or Adjustments

The revised burden hour estimate reflects a decreased number of affected entities, thus
accounting for a decrease in cumulative burden hours (the estimate of ten hours per respondent,
however, remains unchanged). Estimated labor costs decrease slightly, a reflection of partially
offsetting factors of the reduced burden hour estimate paired with updated increases in hourly
labor amounts used in staff’s calculations.
16.

Statistical Use of Information
There are no plans to publish any information for statistical use.

17.

Display of Expiration Date for OMB Approval
Not applicable.

18.

Exceptions to the Certification for Paperwork Reduction Act Submissions
Not applicable.

8

“Specialized clerical support” consists of computer support personnel who design the appearance and layout of
product packaging, including appropriate display of the disclosures required by the FPLA regulations. The wage
estimate is based on mean hourly wages for “Computer support specialist.” See Bureau of Labor Statistics,
Economic News Release, April 1, 2014, Table 1, “National employment and wage data from the Occupational
Employment Statistics survey by occupation, May 2013. http://www.bls.gov/news.release/ocwage.nr0.htm.

9

See id. The clerical wage estimate is a rounded average of mean hourly wages for “computer operators” ($19.25)
and “data entry and information processing workers” ($15.28).

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