[Federal Register Volume 62, Number 57 (Tuesday, March 25, 1997)]
[Proposed Rules]
[Pages 14050-14051]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-7433]


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FEDERAL TRADE COMMISSION
16 CFR Part 403


Deceptive Use of ``Leakproof,'' ``Guaranteed Leakproof,'' Etc., 
as Descriptive of Dry Cell Batteries

AGENCY: Federal Trade Commission.

ACTION: Advance notice of proposed rulemaking.

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SUMMARY: The Federal Trade Commission (the ``FTC'' or ``Commission'') 
proposes to commence a rulemaking proceeding to repeal its Trade 
Regulation Rule on Deceptive Use of ``Leakproof,'' ``Guaranteed 
Leakproof,'' Etc., as Descriptive of Dry Cell Batteries (``the Dry Cell 
Battery Rule'' or ``the Rule''), 16 CFR Part 403. The Commission is 
soliciting written comments, data, and arguments concerning this 
proposal. The Commission also is requesting comments about the overall 
costs and benefits of the Rule and its overall regulatory and economic 
impact as a part of its systematic review of all current Commission 
regulations and guides.

DATES: Written comments must be submitted on or before April 24, 1997.

ADDRESSES: Written comments should be identified as ``16 CFR Part 403 
Comment'' and sent to Secretary, Federal Trade Commission, Room 159, 
Sixth St. and Pennsylvania Ave., N.W., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Neil Blickman, Attorney, FTC, Bureau 
of Consumer Protection, Division of Enforcement, Sixth St. and 
Pennsylvania Ave., N.W., Washington, DC 20580, (202) 326-3038.

SUPPLEMENTARY INFORMATION:

Part A--Background Information

    This notice is being published pursuant to Section 18 of the 
Federal Trade Commission (``FTC'') Act, 15 U.S.C. 57a et seq., the 
provisions of Part 1, Subpart B of the Commission's Rules of Practice, 
16 CFR 1.7 et seq., and 5 U.S.C. et seq. This authority permits the 
Commission to promulgate, modify, and repeal trade regulations rules 
that define with specificity acts or practices that are unfair or 
deceptive in or affecting commerce within the meaning of Section 
5(a)(1) of the FTC Act, 15 U.S.C. 45(a)(1).
    On May 20, 1964, the Commission promulgated a trade regulation rule 
that states that in connection with the sale of dry cell batteries in 
commerce, the use of the word ``leakproof,'' the term ``guaranteed 
leakproof,'' or any other word or term of similar import, or any 
abbreviation thereof, in advertising, labeling, marking or otherwise, 
as descriptive of dry cell batteries, constitutes an unfair method of 
competition and an unfair or deceptive act or practice in violation of 
section 5 of the FTC Act (16 CFR 403.4). This Rule was based on the 
Commission's finding that, despite efforts by dry cell battery 
manufacturers to eliminate electrolyte leakage, battery leakage and 
damage therefrom occurs from the use to which consumers ordinarily 
subject dry cell batteries.
    The Rule does not prohibit manufacturers or marketers from offering 
or furnishing guarantees that provide for restitution in the event of 
damage from battery leakage, provided no representation is made, 
directly or indirectly, that dry cell batteries will not leak (16 CFR 
403.5). The Rule further provides that in the event any person develops 
a new dry cell battery that he believes is in fact leakproof, he may 
apply to the Commission for an amendment to the Rule, or other 
appropriate relief (16 CFR 403.6).
    The Commission conducted an informal review of industry practices 
by examining the advertising, labeling and marking of dry cell 
batteries available for retail sale. The products, packaging and 
advertising inspected contained no presentations that the batteries so 
described were leakproof. The Commission's review, therefore, indicated 
general compliance with the Rule's provisions. Moreover, the Commission 
has no record of receiving any complaints regarding non-compliance with 
the Rule, or of initiating any law enforcement actions alleging 
violations of the Rule.
    Additionally, the Commission's review indicated general voluntary 
compliance by the industry with the requirements of American National 
Standards Institute (``ANSI'') Standard C18.1M-1992 Dry Cells and 
Batteries--Specifications. The ANSI standard contains specifications 
for dry cell batteries, and requirements for labeling the products and 
their packages. The ANSI standard requires the following information to 
be printed on the outside of each battery (when necessary, the standard 
permits some of this information to be applied to the unit package): 
(1) The name or trade name of the manufacturer; (2) the ANSI/National 
Electronic Distributors Association number, or some other identifying 
designation; (3) year and month, week or day of manufacture, which may 
be a code, or the expiration of a guarantee period, in a clear readable 
form; (4) the nominal voltage; (5) terminal polarity; and (6) warnings 
or cautionary notes where applicable.\1\
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    \1\ See section 8.1 of ANSI Standard C18.1M-1992.
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    The ANSI standard recommends that dry cell battery manufacturers 
and sellers include on their products and packages several battery user 
guidelines and warnings that are relevant to this proceeding. They are: 
(1) although batteries basically are trouble-free products, conditions 
of abuse or misuse can cause leakage; (2) failure to replace all 
batteries in a unit at the same time may result in battery leakage; (3) 
mixing batteries of various chemical systems, ages, applications, types 
or manufacturers may result in poor device performance and battery 
leakage; (4) attempting to recharge a non-rechargeable battery is 
unsafe because it could cause leakage; (5) reverse insertion of 
batteries may cause charging, which may result in leakage; (6) devices 
that operate on either household current or battery power may subject 
batteries to a charging current, which may cause leakage; (7) do not 
store batteries or battery-powered equipment in high-temperature areas; 
and (8) do not dispose of batteries in fire.\2\
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    \2\ See section 7.5 of ANSI Standard C18.1M-1992.
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    At a minimum, each dry cell battery and battery package inspected 
by Commission staff informed consumers that the batteries may explode 
or leak if recharged, inserted improperly, disposed of in fire, or 
mixed with different battery types. Based on the foregoing, the 
Commission has tentatively concluded that industry members that comply 
with the standard's point-of-sale disclosure requirements, of 
necessity, also are in compliance with the Rule.

Part B--Objectives

    Based on the review described above, the Commission has tentatively 
determined that the Rule is no longer necessary.\3\ the objective of 
this notice is

[[Page 14051]]

to solicit comment on whether the Commission should initiate a 
rulemaking proceeding to repeal the Dry Cell Battery Rule.
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    \3\ Repealing the Dry Cell Battery Rule would eliminate the 
Commission's ability to obtain civil penalties for any future 
misrepresentations that dry cell batteries are leakproof. The 
Commission, however, has tentatively determined that repealing the 
Rule would not seriously jeopardize the Commission's ability to act 
effectively. Any significant problems that might arise could be 
addressed on a case-by-case basis under Section 5 of the FTC Act, 15 
U.S.C. 45, either administratively or through Section 13(b) action, 
15 U.S.C. 53(b), filed in federal district court. Prosecuting 
serious misrepresentations in district court allows the Commission 
to obtain injunctive relief as well as equitable remedies, such as 
redress or disgorgement.
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Part C--Alternative Actions

    The Commission is not considering any alternative other than the 
possibility of repealing the Dry Cell Battery Rule.

Part D--Request for Comments

    Members of the public are invited to comment on any issues or 
concerns they believe are relevant or appropriate to the Commission's 
review of the Dry Cell Battery Rule. The Commission requests that 
factual data upon which the comments are based be submitted with the 
comments. In this section, the Commission identifies the issues on 
which it solicits public comments. The identification of issues is 
designed to assist the public and should not be construed as a 
limitation on the issues on which public comment may be submitted.

Questions

    (1) Is there a continuing need for the Rule?
    (a) What benefits has the Rule provided to purchasers of the 
products affected by the Rule?
    (b) Has the Rule imposed costs on purchasers?
    (2) What changes, if any, should be made to the Rule to increase 
the benefits of the Rule to purchasers?
    (a) How would these changes affect the costs the Rule imposes on 
firms subject to its requirements?
    (3) What significant burdens or costs, including costs of 
compliance, has the Rule imposed on firms subject to its requirements?
    (a) Has the Rule provided benefits to such firms?
    (4) What changes, if any, should be made to the Rule to reduce the 
burdens or costs imposed on firms subject to its requirements?
    (a) How would these changes affect the benefits provided by the 
Rule?
    (5) Does the Rule overlap or conflict with other federal, state, or 
local laws or regulations?
    (6) Since the Rule was issued, what effects, if any, have changes 
in relevant technology or economic conditions had on the rule?
    (7) Are ``leakproof'' or ``guaranteed leakproof'' representations 
by manufacturers and marketers of dry cell batteries a significant 
problem in the marketplace?
    (8) Should the Rule, or any portion of it, be kept in effect, or 
should it be repealed?
    (9) How would repealing the Rule affect the benefits experienced by 
consumers?
    (10) How would repealing the Rule affect the benefits and burdens 
experienced by firms subject to Rule's requirements?
    (11) Does the existence of ANSI Standard C18.1M-1992 for Dry Cell 
Batteries eliminate or greatly lessen the need for the Rule?

    Authority: Section 18(d)(2)(B) of the Federal Trade Commission 
Act, 15 U.S.C. 57a(d)(2)(B).

List of Subjects in 16 CFR Part 403

    Advertising, Dry cell batteries, Labeling, Trade practices.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 97-7433 Filed 3-24-97; 8:45 am]
BILLING CODE 6750-01-M