[Federal Register Volume 87, Number 54 (Monday, March 21, 2022)]
[Notices]
[Pages 15995-15997]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[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 https://www.regulations.gov 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 https://www.bls.gov/news.release/ocwage.htm (``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 Amazon.com's 
marketplace to sell to customers have agreements that provide that 
Amazon handles packaging and shipping the products to customers. 
Whether Amazon.com 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.

------------------------------------------------------------------------
                                            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 Amazon.com, Walmart.com, and Ebay.com 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 https://www.wsj.com/articles/amazons-free-shipping-pushes-small-retailers-delivery-firms-to-compete-1491649203.
    \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 https://www.bls.gov/news.release/ocwage.t01.htm.
    \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 https://www.regulations.gov 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 https://www.regulations.gov 
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 https://www.regulations.gov, 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 www.regulations.gov, 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 https://www.ftc.gov/site-information/privacy-policy.

Josephine Liu,
Assistant General Counsel for Legal Counsel.
[FR Doc. 2022-05850 Filed 3-18-22; 8:45 am]
BILLING CODE 6750-01-P