Federal Register, Volume 85 Issue 206 (Friday, October 23, 2020)

[Federal Register Volume 85, Number 206 (Friday, October 23, 2020)]
[Notices]
[Pages 67541-67544]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-23515]

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FEDERAL TRADE COMMISSION

Agency Information Collection Activities; Submission for OMB
Review; Comment Request

AGENCY: Federal Trade Commission (``FTC'' or ``Commission'').

ACTION: Notice.

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SUMMARY: The information collection requirements described below will
be submitted to the Office of Management and Budget (``OMB'') for
review, as required by the Paperwork Reduction Act (``PRA''). The FTC
seeks public comments on proposed information requests sent pursuant to
compulsory process to a combined ten or more of the largest domestic
cigarette manufacturers and smokeless tobacco manufacturers. The
information sought would include, among other things, data on annual
sales and marketing expenditures. The current FTC clearance from the
Office of Management and Budget (``OMB'') to conduct such information
collection expires December 31, 2020. The Commission intends to ask OMB
for

[[Page 67542]]

renewed three-year clearance to collect this information.

DATES: Comments on the proposed information requests must be received
on or before November 23, 2020.

ADDRESSES: Written comments and recommendations for the proposed
information collection should be sent within 30 days of publication of
this notice to www.reginfo.gov/public/do/PRAMain. Find this particular
information collection by selecting ``Currently under 30-day Review--
Open for Public Comments'' or by using the search function. The
reginfo.gov web link is a United States Government website produced by
OMB and the General Services Administration (GSA). Under PRA
requirements, OMB's Office of Information and Regulatory Affairs (OIRA)
reviews Federal information collections.

FOR FURTHER INFORMATION CONTACT: Requests for additional information or
copies of the proposed collection of information should be addressed to
Michael Ostheimer, Division of Advertising Practices, Bureau of
Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue
NW, Mailstop CC-10507, Washington, DC 20580, (202) 326-2699.

SUPPLEMENTARY INFORMATION:
Title: FTC Cigarette and Smokeless Tobacco Data Collection.
OMB Control Number: 3084-0134.
Type of Review: Extension of a currently approved collection.
On June 25, 2020, the FTC sought public comment on the information
collection requirements associated with the Cigarette and Smokeless
Tobacco Data Collection. 85 FR 38139. Four germane comments were
received. Pursuant to the OMB regulations, 5 CFR part 1320, that
implement the PRA, 44 U.S.C. 3501 et seq., the FTC is providing this
second opportunity for public comment while seeking OMB approval to
renew the pre-existing clearance for the Cigarette and Smokeless
Tobacco Data Collection.
In response to the June 25, 2020 Notice, the Commission received
comments from the Campaign for Tobacco-Free Kids (``CTFK''), the
American Lung Association (``ALA''), Truth Initiative, and Altria
Client Services (``Altria'').

I. CTFK

The CTFK comment specifically noted the utility and importance of
the Commission's Cigarette and Smokeless Tobacco Reports, and urged the
agency to continue collecting and reporting industry sales and
marketing expenditure data, which CTFK stated provide ``critical data
to researchers, policymakers, advocates and the general public.'' CTFK
additionally observed:

The FTC is currently the only public source for data on
cigarette and smokeless tobacco companies' marketing and promotional
expenditures. No other agency collects and publishes such
information directly from the companies, making the FTC reports the
most accurate and reliable assessment of tobacco marketing and
promotion expenditures available.

CTFK at 1. CTFK, however, suggested certain modifications to the
Commission's reports. Specifically, CTFK recommended that the
Commission: (1) Clarify in which category coupons that consumers obtain
online are to be counted; (2) report data on a company-specific or
brand-specific basis, rather than on a fully-aggregated basis; (3)
require manufacturers to report expenditures related to corporate
sponsorships and advertisements; and (4) publish reports within one
year of data collection. Id. at 2. CTFK also requested that the FTC
extend its data collection to include electronic cigarettes (``e-
cigarettes'') and cigars.\1\
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\1\ Two other commenters, ALA and Truth Initiative, made the
same suggestion. The collection of data regarding e-cigarettes or
cigars is beyond the scope of this proposed collection. Note though
that the FTC has a separate ongoing study on e-cigarettes. See FTC
Press Release, FTC to Study E-Cigarette Manufacturers' Sales,
Advertising, and Promotional Methods (Oct. 3, 2019), https://www.ftc.gov/news-events/press-releases/2019/10/ftc-study-e-cigarette-manufacturers-sales-advertising-promotional.
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The Commission's proposed Orders clarify that expenditures on
coupons delivered online should be reported together with coupons
delivered by other means. The full impact of couponing by the major
cigarette and smokeless tobacco manufacturers can only be seen if
expenditures for all coupons are reported together, regardless of how
those coupons are delivered to consumers.
Regarding CTFK's suggestion that data be reported on other than a
fully-aggregated, nationwide basis, the cigarette and smokeless tobacco
companies assert that those data are confidential and, as CTFK
acknowledges, the Commission cannot publicly release trade secrets or
certain commercial or financial information. Id. at 2, n.2.
The Commission has for a number of years required the recipients of
its 6(b) Orders to report certain expenditures related to corporate
sponsorships and advertisements made in the name of the company, rather
than any of its brands.\2\ The Commission has not included those data
in its Cigarette and Smokeless Tobacco Reports, and has therefore
decided to cease collecting this information.
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\2\ Both the cigarette and smokeless tobacco Orders required the
recipients to report expenditures on ``public entertainment events
(including, but not limited to, concerts and sporting events)
bearing or otherwise displaying the name of the Company or any
variation thereof but not bearing or otherwise displaying the name,
logo, or an image of any portion of the package'' of any of its
cigarettes or smokeless tobacco products, or otherwise referring to
those products.
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Regarding CTFK's suggestion to publish reports within one year of
data collection, the Commission always strives to publish the Cigarette
and Smokeless Tobacco Reports as quickly as possible. It takes the
recipients of its 6(b) Orders time to submit their reports and they may
request extensions, such as this year due to the COVID-19 pandemic.
After reviewing the resulting reports, staff often has to go back to
one or more of the 6(b) Order recipients for clarifications and
corrections. The data also requires analysis, and the reports require
writing and review and approval at multiple levels. The Commission does
in fact usually publish the Cigarette and Smokeless Tobacco Reports
well within a year of when the data is first submitted.

II. ALA

The ALA comment stated that the Commission's Cigarette and
Smokeless Tobacco Reports provide ``valuable information on cigarette
and smokeless tobacco products sales and marketing that is used on an
ongoing basis in the Lung Association's education and public policy
activities related to preventing and reducing tobacco use.'' ALA at 1.
ALA additionally observed:

These data are also important for public health officials and
other organizations working to reduce the terrible burden caused by
tobacco. By understanding how much tobacco companies spend on
marketing and the distribution channels they use, it allows public
health officials to determine where and how best to deliver tobacco
prevention and cessation messages.

Id.

III. Truth Initiative

Truth Initiative's comment stressed the critical importance and
utility of the Cigarette and Smokeless Tobacco reports. Truth
Initiative at 1. It said that the reports provide information that is
not available elsewhere and is not duplicative of other data
collections. Id. Truth Initiative believes the reports often provide
the basis for strong public health policies with regard to tobacco use
and marketing and such policies save lives. Id.
Truth Initiative, however, suggested certain modifications to the

[[Page 67543]]

Commission's reports. Specifically, Truth Initiative recommended that
the Commission: (1) Collect information regarding heated tobacco
products with its cigarette Orders; (2) collect information regarding
low nicotine cigarettes; (3) reinstate previously asked questions
requesting lists of new and discontinued cigarette products; (4)
collect information regarding nicotine pouches and lozenges that do not
contain tobacco; (5) collect information regarding the flavors of
smokeless tobacco products; (6) clarify that streaming shows are
included in questions about product placement; (7) define ``youth'' as
persons younger than 18 years of age and ``underage'' as persons
younger than 21 years of age. Id. at 2-6.
The Commission agrees that heated, non-combusted tobacco products
are an important emerging segment of the tobacco market. The Commission
plans to monitor these products and will consider whether and how best
to collect information about these products when the market has further
developed to make such information collection warranted.
As for Truth Initiative's suggestion that the Commission collect
information regarding low-nicotine cigarette products, none of the
current recipients of the cigarette Orders sell such products. The
Commission's Cigarette Reports focus on the largest cigarette
manufacturers and do not attempt to present a complete picture of the
cigarette market. There are numerous smaller manufacturers and
importers of cigarettes to which the Commission does not direct its
cigarette Orders. The Commission does not intend, at this time, to seek
information specifically regarding low nicotine cigarettes or to direct
an Order to the one company that has expressed an intention in
marketing such products.
In 2017, the Commission determined that it no longer needed lists
of cigarettes first sold or discontinued in a calendar year and it does
not see a sufficient basis to revisit that decision.
As the Truth Initiative notes, nicotine pouches and lozenges are
currently being marketed by some of the major smokeless tobacco
companies, and are an important emerging segment of the tobacco market.
Id. at 4. The Commission will add a question to its smokeless tobacco
Orders about total unit and dollar sales of these products to help the
agency assess whether collection of more complete information about
such products would be warranted.
Given the information presented by the Truth Initiative regarding
the popularity of flavored smokeless tobacco, especially among youth
(id. at 4), and the Commission's collection of flavor information
regarding cigarettes (and recently e-cigarettes), the Commission will
modify its smokeless tobacco 6(b) Orders to seek information regarding
the flavors of smokeless tobacco products.
The Commission believes that its product placement questions that
ask about ``motion picture(s)'' and ``television show(s)'' cover
``original shows streamed via the internet.'' On the other hand, the
Commission sees no harm in clarifying that is the case and intends to
do so.
The Truth Initiative correctly points out that the federal minimum
age to purchase tobacco is now 21. Id. at 6. The Commission will use
the term ``underage persons'' in lieu of ``youth'' in its 6(b) Orders
and define ``underage persons'' as persons younger than 21 years of
age.

IV. Altria

Altria stated that the Commission should no longer collect any
information from cigarette and smokeless tobacco manufacturers ``due to
the Food and Drug Administration's . . . extensive, active regulatory
authority over tobacco products under the Family Smoking Prevention and
Tobacco Control Act.'' Altria at 1. Because FDA has the authority to
require tobacco product manufacturers to submit additional information
to promulgate additional regulations regarding advertising and
promotion of tobacco products, Altria calls the Commission's
collections ``superfluous'' and unnecessary ``burdens.'' Id. at 2.
Altria also contends that ``responding to FTC's collection requests
requires several full-time employees (across multiple departments and
operating companies) to spend weeks compiling data, revising reports,
and reviewing ledgers before preparing for submission to FTC'' and that
this effort takes ``far longer than 180 hours'' estimated by the
Commission as the ``average annual burden on manufacturers.'' Id. at 2.
The FTC staff and FDA staff have a long tradition of working
together on the many areas where the two agencies share jurisdiction.
However, since the FDA is not collecting cigarette or smokeless tobacco
sales and marketing expenditure data like that required by the
Commission's 6(b) Orders, there is no overlap or duplication with
respect to such data. The Commission intends to continue collecting
cigarette and smokeless tobacco sales and marketing expenditure data.
To the extent that in the future FDA duplicates the FTC's data
collection, the FTC can modify or cease its collection.
Altria contends that the Commission underestimates its burden in
responding to the FTC's information collection and that its burden is
``far longer than 180 hours.'' The Commission's burden estimate of 180
hours was an average for the nine largest recipients of the
Commission's information request. The recipients vary greatly in size,
in the number of products that they sell, and in the extent and variety
of their advertising and promotion. Our burden estimate clearly stated
that the very largest recipients might require hundreds of hours.
Altria, which owns Philip Morris USA and the U.S. Smokeless Tobacco
Co., says on its website that its ``tobacco companies . . . have been
the undisputed market leaders in the U.S. tobacco industry for
decades.'' \3\ Altria's comment is consistent with the number of hours
that its Philip Morris subsidiary previously told FTC staff that it
spent complying with the Commission's cigarette Order. All the other
tobacco companies that responded to the FTC staff's latest inquiries
reported spending substantially fewer hours. We also note that Altria
is the recipient of two 6(b) Orders, one for cigarettes and one for
smokeless tobacco. To err on the side of caution, the Commission will
increase its burden estimate from 1,980 hours to 2,940 hours.
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\3\ See www.altria.com/about-altria?src=megaspotlight.
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Burden Statement

Estimated Annual Burden: 2,940 hours.\4\
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\4\ The Commission intends to use this PRA clearance renewal to
collect information from the companies concerning their marketing
and sales activities for the years 2021, 2022, and 2023. The
Commission expects to issue compulsory process orders seeking this
information annually, but it is possible that orders might not be
issued in any given year and that orders seeking information for two
years would be issued the next year. The figures set forth in this
notice for the estimated hours and labor costs associated with this
information collection represent average annual burden over the
course of the prospective PRA clearance.
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Estimated Number of Respondents: 15 6(b) recipients (maximum).\5\
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\5\ Since three and possibly more of these 6(b) recipients are
parent companies that have separately incorporated subsidiaries or
affiliates that the FTC anticipates or expects that the parent
companies will transmit the collection instrument to and seek
information from, the proposal to send up to 15 6(b) Orders could
equate to 20 ``persons'' under the PRA. See 5 CFR 1320.3(c)(4)
(``[ten or more persons] . . . refers to the persons to whom a
collection of information is addressed by the agency within any 12-
month period, and to any independent entities to which the initial
addressee may reasonably be expected to transmit the collection of
information during that period, including . . . separately
incorporated subsidiaries or affiliates.'').

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These estimates include any time spent by separately incorporated
subsidiaries and other entities affiliated with the ultimate parent
companies that receive the information requests.
Estimated Average Burden per Year Per Request: 196 hours.
(a) Information requests to the four largest recipients \6\ of the
Commission's information request, at a per request average each year of
400 hours = 2,400 hours, cumulatively, per year; and
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\6\ There are two tobacco companies that receive both a
cigarette Order and a smokeless tobacco Order. Thus, this would
equate to six requests for burden analysis.
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(b) Information requests to nine additional respondents, of smaller
size, at a per request average each year of 60 hours = 540 hours,
cumulatively, per year.
Estimated Annual Labor Cost: $294,000.
Estimated Capital or Other Non-Labor Cost: de minimis.
Request for Comment
Your comment--including your name and your state--will be placed on
the public record of this proceeding. Because your comment will be made
public, you are solely responsible for making sure that your comment
does not include any sensitive personal information, such as anyone'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.

Josephine Liu,
Assistant General Counsel for Legal Counsel.
[FR Doc. 2020-23515 Filed 10-22-20; 8:45 am]
BILLING CODE 6750-01-P