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Business Opportunity Rule; Proposed Rule

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Business Opportunity Rule; Proposed Rule Wednesday, March 26, 2008 Part II Federal Trade Commission 16 CFR Part 37 Business Opportunity Rule; Proposed Rule VerDate Aug<31>2005 19:35 Mar 25, 2008 Jkt 214001 PO 00000 Frm 00001 Fmt 4717 Sfmt 4717 E:\FR\FM\26MRP2.SGM 26MRP2 mstockstill on PROD1PC66 with PROPOSALS2 16110 Federal Register / Vol. 73, No. 59 / Wednesday, March 26, 2008 / Proposed Rules FEDERAL TRADE COMMISSION The FTC is requesting that any comment to lengthy delays due to heightened filed in paper form be sent by courier or security precautions. 16 CFR Part 437 overnight service, if possible, because FOR FURTHER INFORMATION CONTACT: U.S. postal mail in the Washington area Monica Vaca (202) 326-2245, Division of RIN 3084-AB04 and at the Commission is subject to Marketing Practices, Room 286, Bureau delay due to heightened security Business Opportunity Rule of Consumer Protection, Federal Trade precautions. Moreover, because paper Commission, 600 Pennsylvania Avenue, AGENCY: Federal Trade Commission. mail in the Washington area and at the NW, Washington, DC 20580. ACTION: Revised Notice of Proposed Agency is subject to delay, please SUPPLEMENTARY INFORMATION: This Rulemaking. consider submitting your comments in Revised Notice of Proposed Rulemaking electronic form, as prescribed below. seeks comment on a revised proposed SUMMARY: The Federal Trade Comments filed in electronic form Business Opportunity Rule. In addition Commission (the ‘‘Commission’’ or should be submitted by using the to minor wording and punctuation ‘‘FTC’’) is publishing a revised Notice of following weblink: https:// changes to improve clarity, the revised Proposed Rulemaking to amend Part secure.commentworks.com/ftc- proposed rule modifies the initial 437, the trade regulation rule governing bizopRNPR/ (and following the proposal in six significant ways: sale of business opportunities that are instructions on the web-based form). To • It narrows the scope of the proposed not covered by the amended Franchise ensure that the Commission considers Rule to avoid broadly sweeping in Rule. The revised proposed Business an electronic comment, you must file it sellers of multi-level marketing Opportunity Rule (or ‘‘the Rule’’) is on the web-based form at the weblink opportunities, while retaining coverage based upon the comments received in https://secure.commentworks.com/ftc- of those business opportunities sellers response to an Advance Notice of bizopRNPR/. If this notice appears at historically covered by the FTC’s Proposed Rulemaking (‘‘ANPR’’), a http://www.regulations.gov, you may original Franchise Rule (and by the Notice of Proposed Rulemaking also file an electronic comment through FTC’s interim Business Opportunity (‘‘NPRM’’), and other information that website. The Commission will Rule), as well as coverage of sellers of discussed in this notice. The revised consider all comments that work-at-home schemes; proposed Business Opportunity Rule regulations.gov forwards to it. You may • It cures a potential overbreadth would require business opportunity also visit the FTC website at http:// problem that may have inadvertently sellers to furnish prospective purchasers www.ftc.gov/opa/index.shtml to read swept in companies using traditional with specific information that is the Revised Notice of Proposed product distribution arrangements; material to the consumer’s decision as Rulemaking and the news release • It eliminates the previously- to whether to purchase a business describing this proposed Rule. proposed requirement that a covered opportunity and which should help the The FTC Act and other laws the business opportunity seller disclose the purchaser identify fraudulent offerings. Commission administers permit the number of cancellation and refund The proposed rule also would prohibit collection of public comments to requests it received; other acts or practices that are unfair or consider and use in this proceeding as • It eliminates the requirement to deceptive within the meaning of Section appropriate. The Commission will disclose litigation history of certain 5 of the Federal Trade Commission Act consider all timely and responsive sales personnel (while retaining the (the ‘‘FTC Act’’). public comments that it receives, requirement to disclose litigation DATES: Written comments must be whether filed in paper or electronic history of the seller, its principals, received on or before May 27, 2008. form. Comments received will be officers, directors, and sales managers, Rebuttal comments must be received on available to the public on the FTC as well as any individual who occupies or before June 16, 2008. website, to the extent practicable, at a position or performs a function similar ADDRESS: Interested parties are invited http://www.ftc.gov. As a matter of to an officer, director, or sales manager); • to submit written comments. Comments discretion, the FTC makes every effort to It adds a requirement to include a should refer to ‘‘Business Opportunity remove home contact information for citation to the Rule in the title of the Rule, R511993’’ to facilitate the individuals from the public comments it required disclosure document; and • organization of comments. A comment receives before placing those comments It prohibits misrepresenting that the filed in paper form should include this on the FTC website. More information, government or any law forbids reference both in the text and on the including routine uses permitted by the providing prospects with a list of prior envelope, and should be mailed or Privacy Act, may be found in the FTC’s purchasers of a business opportunity. delivered, with two complete copies, to privacy policy, at http://www.ftc.gov/ The Commission invites interested the following address: Federal Trade ftc/privacy.htm. parties to submit data, views, and Commission/Office of the Secretary, Comments on any proposed filing, arguments on the proposed Business Room H-135 (Annex S), 600 recordkeeping, or disclosure Opportunity Rule and, specifically, on Pennsylvania Avenue, NW, Washington, requirements that are subject to the questions set forth in Section J of DC 20580. Comments containing paperwork burden review under the this notice. The comment period will confidential material, however, must be Paperwork Reduction Act should remain open until May 27, 2008. To the filed in paper form, must be clearly additionally be submitted to: Office of extent practicable, all comments will be labeled ‘‘Confidential,’’ and must Information and Regulatory Affairs, available on the public record and comply with Commission Rule 4.9(c).1 Office of Management and Budget, placed on the Commission’s website: Attention: Desk Officer for the Federal http://www.ftc.gov/os/ 1 The comment must be accompanied by an Trade Commission. Comments should publiccomments.htm. After the close of explicit request for confidential treatment, be submitted via facsimile to (202) 395- the comment period, the record will including the factual and legal basis for the request, 6974 because U.S. Postal Mail is subject remain open until June 16, 2008, for and must identify the specific portions of the comment to be withheld from the public record. rebuttal comments. If necessary, the The request will be granted or denied by the applicable law and the public interest. See Commission also will hold hearings Commission’s General Counsel, consistent with Commission Rule 4.9(c), 16 CFR 4.9(c). with cross-examination and post- VerDate Aug<31>2005 19:35 Mar 25, 2008 Jkt 214001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4702 E:\FR\FM\26MRP2.SGM 26MRP2 mstockstill on PROD1PC66 with PROPOSALS2 Federal Register / Vol. 73, No. 59 / Wednesday, March 26, 2008 / Proposed Rules 16111 hearing rebuttal submissions, as opportunity agreement but to ensure In 1997, the Commission published specified in Section 18(c) of the FTC that sellers disclose material an Advance Notice of Proposed Act, 15 U.S.C. 57a(c). Parties who information to prospective buyers. The Rulemaking (‘‘ANPR’’) in the Federal request a hearing must file a comment Franchise Rule was posited on the Register,5 seeking further comment on in response to this notice and a notion that a fully informed consumer several proposed Franchise Rule statement explaining why they believe a can determine whether a particular modifications, including the separation hearing is warranted, how they would offering is in his or her best interest. of disclosure requirements for sales of participate in a hearing, and a summary As part of the Commission’s overall business opportunities from those for of their expected testimony, on or before policy of periodic review of its trade sales of franchises. The Commission May 27, 2008. Note that because the regulation rules, in 1995 the also sought comment on the proper NPR has been revised, parties interested Commission commenced a regulatory scope of the term ‘‘business 6 in a hearing must resubmit their request review of the Franchise Rule.3 From the opportunity,’’ the types of business in comments to this Revised NPR. outset of that review proceeding, the opportunities that are known to engage 7 Parties testifying at a hearing may be predominant theme sounded by in deceptive or fraudulent conduct, subject to cross-examination. For cross- commenters and other participants was and the types of disclosures that are examination or rebuttal to be permitted, that the Rule, insofar as it concerned material to business opportunity 8 interested parties must also file a sales of business format franchises, purchasers. comment and request to cross-examine
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