[Federal Register Volume 63, Number 73 (Thursday, April 16, 1998)]
[Rules and Regulations]
[Pages 18819-18821]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-10078]


=======================================================================
-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION

16 CFR Parts 2 and 4


Procedures in Prior Approval Proceedings

AGENCY: Federal Trade Commission.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Federal Trade Commission is amending its regulations, 
which govern applications for approval of proposed divestitures, 
acquisitions, or similar transactions that are subject to Commission 
review under outstanding orders, and is also making a conforming 
amendment. The principal changes accomplished by these amendments are 
to clarify the nature of the materials that will be placed on the 
public record in prior approval proceedings, to clarify the timing of 
such placement, and to provide expressly that, in appropriate cases, 
the Commission may shorten, eliminate, extend or reopen a comment 
period.

DATES: The amendments are effective April 16, 1998.

FOR FURTHER INFORMATION CONTACT:
Marc Winerman, Attorney, Office of the General Counsel, 202-326-2451.

SUPPLEMENTARY INFORMATION:

I. Materials To Be Placed on the Public Record in Prior Approval 
Proceedings

    Amended Rule 2.41(f)(1) replaces the requirement that prior 
approval applications under that rule be placed on the public record 
``together with supporting materials.'' The revised rule explains that 
applications shall ``fully describe the terms of the transaction and 
shall set forth why the transaction merits Commission approval.'' It 
provides for placement on the public record of the application, 
together with any additional applicant submissions that the Commission 
directs be placed on the public record.\1\ It also delegates to the 
Director of the Bureau of Competition the authority to direct placement 
of additional applicant submissions on the public record (subject to 
confidentiality determinations by the General Counsel).
---------------------------------------------------------------------------

    \1\ Such disclosures would be made to further the goal of the 
comment period. That goal is to inform the Commission's judgment, 
and not to confer any substantive rights on submitters. Letter, 
Donald S., Clark, Secretary (by direction of the Commission), to 
Robert A. Hammond, Esq., Re: Institute Merieux, S.A. Docket No. C-
3301 (April 20, 1992). Cf. General Motors Corp., 103 F.T.C. 58, 63 
(1984) (explaining rationale for the public comment period on 
proposed settlements under Rule 2.34).
---------------------------------------------------------------------------

    The rule also clarifies a requirement for placing on the public 
record any written or oral communication that concerns a prior approval 
proceeding and that is directed to a Commissioner or ``any employee 
involved in the decisional process.'' As construed by the Commission, 
and as amended Sec. 2.41(f)(3) makes explicit, this disclosure 
requirement applies only to communications between outside parties and 
Commissioners or their personal staffs. The amended rule also replaces 
the provision that such disclosures will be made ``immediately'' with a 
provision that disclosures will be made ``expeditiously.''
    Section 2.41(f)(5) makes clear that all disclosure requirements 
under the rule are subject to confidentiality requests. If such 
requests are denied, the submitter will receive notice before any 
disclosure of affected information takes place. See also 15 U.S.C. 57b-
2(c). Section 2.41(f)(5) also explains that confidentiality requests 
need not be

[[Page 18820]]

resolved before, or at the time of, the application's disposition.

II. Provision To Shorten, Eliminate Extend or Reopen Comment 
Periods

    Amended Rule 2.41(f)(2) provides that the 30-day comment period for 
a prior approval application may be shortened, eliminated, extended or 
reopened in appropriate cases. The Commission has occasionally 
shortened a comment period in the past or decided not to hold one,\2\ 
consistent with case law establishing that agencies can deviate from a 
rule (like the public comment provision of the prior approval rule) if 
the rule is not intended to confer important procedural benefits on 
individuals and if the ends of justice require such action.\3\ Under 
the revised rule, the Commission may determine, in light of the 
relevant facts, to solicit comment respecting a prior application for 
less than 30 days, or not at all. For example, the Commission might 
shorten or eliminate a comment period if it had previously sought 
comment on a similar or identical proposal. The Commission may also 
reopen or extend a comment period if, for example, it wishes to elicit 
comment on materials that are placed on the public record late in the 
comment period or after the comment period closes.
---------------------------------------------------------------------------

    \2\ E.g., Press Release, ``Public Comment Period on Supermarket 
Divestiture Shortened'' (November 4, 1996) (divestiture by 
Knonklijke Ahold NV). In 1986, the Commission decided not to seek 
comment on a divestiture application from Flowers Industries, Inc., 
where the Commission had denied a similar prior application after 
receiving public comment, and Flowers had then submitted a further 
application with additional materials.
    \3\ See American Farm Lines v. Black Ball Freight Service, 397 
U.S. 532, 538-39 (1970); Onslow County v. United States Dep't of 
Labor, 774 F.2d 607, 611 (4th Cir. 1985).
---------------------------------------------------------------------------

III. Conforming Amendment to Sec. 4.9

    Finally, the Commission has made a conforming amendment to 
Sec. 4.9, which identifies the materials that are placed routinely on 
the Commission's public record. Rule 4.9(b)(7)(ii) formerly provided 
for disclosure of certain specified materials in prior approval 
proceedings, and Rule 4.9(b)(7)(iii) provided, with some overlap, for 
disclosure of ``requests for advice concerning proposed mergers and 
materials required to be made public under Sec. 2.41(f).'' The 
Commission has replaced these provisions with a new subsection (ii), 
providing for disclosures of ``[m]aterials required to be made public 
under Sec. 2.41(f) in connection with applications for approval of 
proposed divestitures, acquisitions or similar transactions subject to 
Commission review under outstanding orders.'' \4\ Rule 2.41(f), in 
turn, specifies the applicant submissions, third party submissions, and 
Commission responses that routinely will be placed on the public 
record.
---------------------------------------------------------------------------

    \4\ The reference to ``requests for advice concerning proposed 
mergers'' in former Rule 4.9(b)(7)(ii) has been deleted. It is a 
vestige of a previously deleted provision in Sec. 1.1 of the 
Commission's rules. See 54 FR 14072 (1989).
---------------------------------------------------------------------------

IV. Procedural Matters

    The proposed amendments are exempt from the notice and comment 
requirements of the Administrative Procedure Act as ``rules of agency 
organization, procedure, or practice.'' 5 U.S.C. 553(b)(A). They do not 
entail information collection for purposes of the Paperwork Reduction 
Act of 1980, 44 U.S.C. 3501 et seq., and are not subject to the 
requirements of the Regulatory Flexibility Act, 5 U.S.C. 605(b).

List of Subjects

16 CFR Part 2

    Administrative practice and procedure, Reporting and recordkeeping 
requirements.

16 CFR Part 4

    Administrative practice and procedure, Freedom of information.
    Accordingly, the Federal Trade Commission amends Title 16, Chapter 
1, Subchapter A, the Code of Federal Regulations as follows:

PART 2--NONADJUDICATIVE PROCEDURES

    1. The authority for part 2 continues to read as follows:

    Authority: Sec. 6, 38 Stat. 721; 15 U.S.C. 46.

    2. Section 2.41(f) is revised to read as follows:


Sec. 2.41  Reports of compliance.

* * * * *
    (f)(1) All applications for approval of proposed divestitures, 
acquisitions, or similar transactions subject to Commission review 
under outstanding orders shall fully describe the terms of the 
transaction and shall set forth why the transaction merits Commission 
approval. Such applications will be placed on the public record, 
together with any additional applicant submissions that the Commission 
directs be placed on the public record. The Director of the Bureau of 
Competition is delegated the authority to direct such placement.
    (2) The Commission will receive public comment on a prior approval 
application for 30 days. During the comment period, any person may file 
formal written objections or comments with the Secretary of the 
Commission, and such objections or comments shall be placed on the 
public record. In appropriate cases, the Commission may shorten, 
eliminate, extend, or reopen a comment period.
    (3) If a Commissioner or a member of a Commissioner's personal 
staff receives a written communication from a person not employed by 
the agency concerning a proposed transaction that is subject to this 
section, such communication will be placed on the public record 
expeditiously after its receipt. If a Commissioner or a member of a 
Commissioner's personal staff receives an oral communication concerning 
such a transaction from a person not employed by the Commission, the 
recipient shall expeditiously prepare and have placed on the public 
record a memorandum setting forth the full contents of such 
communication and the circumstances thereof.
    (4) Responses to applications under this section, together with a 
statement of supporting reasons, will be published when made, together 
with responses to any public comments filed under this section.
    (5) Persons submitting information that is subject to public record 
disclosure under this section may request confidential treatment for 
that information or portions thereof. Such requests shall be made in 
accordance with 16 CFR 4.9(c) and the General Counsel will determine 
whether to grant confidentiality in accordance with 16 CFR 4.9(c). 
Nothing in this section requires that confidentiality requests be 
resolved prior to, or contemporaneously with, the disposition of the 
application.

PART 4--MISCELLANEOUS RULES

    1. The authority for part 4 continues to read as follows:

    Authority: Sec. 6, 38 Stat. 721; 15 U.S.C. 46.

    2. Section 4.9 is amended by removing paragraph (b)(7)(iii) and 
revising paragraph (b)(7)(ii) to read as follows:


Sec. 4.9  The public record.

 * * * * *
    (b) * * *
    (7) * * *
    (ii) Materials required to be made public under 16 CFR 2.41(f) in 
connection with applications for approval of proposed divestitures, 
acquisitions or similar transactions subject to Commission review under 
outstanding orders.
 * * * * *

[[Page 18821]]

    By direction of the Commission.
Benjamin I. Berman,
Acting Secretary.
[FR Doc. 98-10078 Filed 4-15-98; 8:45 am]
BILLING CODE 6750-01-M