[Federal Register Volume 70, Number 128 (Wednesday, July 6, 2005)]
[Proposed Rules]
[Pages 38834-38837]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-13285]
=======================================================================
-----------------------------------------------------------------------
FEDERAL TRADE COMMISSION
16 CFR Part 23
Guides for the Jewelry, Precious Metals, and Pewter Industries
AGENCY: Federal Trade Commission (FTC or Commission).
ACTION: Request for public comment.
-----------------------------------------------------------------------
SUMMARY: The Commission is seeking comment on whether the platinum
section of the FTC's Guides for the Jewelry, Precious Metals, and
Pewter Industries, 16 CFR part 23, should be amended to provide
guidance on how to mark or describe non-deceptively products containing
between 500 and 850 parts per thousand pure platinum and no other
platinum group metals.
DATES: Written comments must be received on or before September 28,
2005.
ADDRESSES: Interested parties are invited to submit written comments.
Comments should refer to ``Jewelry Guides, Matter No. G711001'' to
facilitate the organization of comments. A comment filed in paper form
should include this reference both in the text
[[Page 38835]]
and on the envelope, and should be mailed or delivered, with two
complete copies, to the following address: Federal Trade Commission/
Office of the Secretary, Room 135-H (Annex Y), 600 Pennsylvania Avenue,
NW., Washington, DC 20580. Because paper mail in the Washington area
and at the Agency is subject to delay, please consider submitting your
comments in electronic form, as prescribed below. Comments containing
confidential material, however, must be filed in paper form, must be
clearly labeled ``Confidential,'' and must comply with Commission Rule
4.9(c). 16 CFR 4.9(c) (2004).\1\
---------------------------------------------------------------------------
\1\ The comment must be accompanied by an explicit request for
confidential treatment, including the factual and legal basis for
the request, and must identify the specific portions of the comment
to be withheld from the public record. The request will be granted
or denied by the Commission's General Counsel, consistent with
applicable law and the public interest. See Commission Rule 4.9(c),
16 CFR 4.9(c).
---------------------------------------------------------------------------
Comments filed in electronic form should be submitted by clicking
on the following: http://secure.commentworks.com/ftc-jewelry and
following the instructions on the web-based form. To ensure that the
Commission considers an electronic comment, you must file it on the
web-based form at the http://secure.commentworks.com/ftc-jewelry. You
also may visit http://www.regulations.gov to read this request for
comment, and may file an electronic comment through that website. The
Commission will consider all comments that regulations.gov forwards to
it.
The FTC Act and other laws the Commission administers permit the
collection of public comments to consider and use in this proceeding as
appropriate. All timely and responsive public comments, whether filed
in paper or electronic form, will be considered by the Commission, and
will be available to the public on the FTC website, to the extent
practicable, at http://www.ftc.gov. As a matter of discretion, the FTC
makes every effort to remove home contact information for individuals
from the public comments it receives before placing those comments on
the FTC website. More information, including routine uses permitted by
the Privacy Act, may be found in the FTC's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.
FOR FURTHER INFORMATION CONTACT: Neil Blickman, Attorney, Division of
Enforcement, Bureau of Consumer Protection, Federal Trade Commission,
600 Pennsylvania Avenue, NW., Washington, DC 20580, (202) 326-3038.
SUPPLEMENTARY INFORMATION:
I. Introduction
The Guides for the Jewelry, Precious Metals, and Pewter Industries
(``Jewelry Guides'' or ``Guides''), 16 CFR part 23, address claims made
about precious metals, diamonds, gemstones and pearl products. The
Jewelry Guides provide guidance as to when claims about jewelry
products may be deceptive and, for certain products, discuss when
disclosures should be made to avoid unfair or deceptive trade
practices. The Guides also provide examples of markings or descriptions
that the Commission would not consider unfair or deceptive. The
Commission is seeking public comment on Section 23.7 of the Guides,
which addresses claims for products made of platinum.
Industry guides are administrative interpretations of the
application of Section 5 of the FTC Act, 15 U.S.C. 45(a). The
Commission issues industry guides to provide guidance for the public to
conform with legal requirements. Guides provide the basis for voluntary
and simultaneous abandonment of unlawful practices by members of
industry. 16 CFR part 17. Failure to follow industry guides may result
in corrective action under Section 5 of the FTC Act. In any such
enforcement action, the Commission must prove that the act or practice
at issue is unfair or deceptive.
Recently, several jewelry manufacturers informed Commission staff
that they were seeking to market products that contain platinum, but
differ in composition from traditional platinum products. Platinum
products that have been marketed thus far typically contain over 85%
pure platinum or contain a combination of pure platinum and platinum
group metals (PGM) that total 95% PGM.\2\ Some manufacturers propose to
market products containing more than 50% but less than 85% pure
platinum and no other PGM.\3\ Subsequently, the staff responded to a
request for a staff opinion regarding the application of the platinum
section of the Guides to the marketing of a product containing 585
parts per thousand (ppt) pure platinum and no other PGM. The FTC staff
opinion letter concludes that the Guides do not specifically address
the marketing of such an alloy.\4\ The letter also stated that the
staff would recommend that the Commission publish a Federal Register
Notice soliciting comments on whether the platinum section of the
Jewelry Guides should be revised to address how to market non-
deceptively products containing 500-850 ppt pure platinum and no other
PGM.
---------------------------------------------------------------------------
\2\ The Platinum Group Metals include platinum, iridium,
palladium, ruthenium, rhodium and osmium.
\3\ The staff also is aware that other companies are selling
similar products but marketing them under names other than
``platinum.''
\4\ The request for a staff opinion and the staff's response to
that request can be found at www.ftc.gov/os/statutes/jewelry/letters/karatplatinum.pdf and http://www.ftc.gov/os/statutes/jewelry/letters/karatplatinum002.pdf respectively.
---------------------------------------------------------------------------
II. Background
The platinum section of the Jewelry Guides contains a general
prohibition against the deceptive use of the term ``platinum'' and
specific examples where the Commission would consider use of the term
``platinum'' unfair or deceptive.\5\ Section 7(a) of the Jewelry Guides
states that it is ``unfair or deceptive to use the words `platinum,'
`iridium,' `palladium,' `ruthenium,' `rhodium,' and `osmium,' or any
abbreviation to mark or describe all or part of an industry product if
such marking or description misrepresents the product's true
composition.'' \6\ 16 CFR part 23.7(a).
---------------------------------------------------------------------------
\5\ On April 8, 1997 (62 FR 16669), the Commission published the
current platinum section of the Jewelry Guides. The section was
revised as part of a comprehensive review of all of the provisions
of the Guides.
\6\ This section also lists the Platinum Group Metals.
---------------------------------------------------------------------------
Section 7(b) provides examples of markings or descriptions for
products containing platinum that may be misleading:
(1) Use of the word ``Platinum'' or any abbreviation, without
qualification, to describe all or part of any industry product that
is not composed throughout of 950 parts per thousand pure Platinum.
(2) Use of the word ``Platinum'' or any abbreviation accompanied
by a number indicating the parts per thousand of pure Platinum
contained in the product without mention of the number of parts per
thousand of other PGM contained in the product, to describe all or
part of an industry product that is not composed throughout of at
least 850 parts per thousand pure platinum, for example,
``600Plat.''
(3) Use of the word ``Platinum'' or any abbreviation therefor,
to mark or describe any product that is not composed throughout of
at least 500 parts per thousand pure Platinum.
16 CFR 23.7(b).
Section 7(c) includes four examples of markings and descriptions
that are not considered deceptive. The first example lists the four and
two-letter abbreviations for the PGM that would not be considered
unfair or deceptive. The remaining three examples provide examples of
descriptions for certain platinum products:
[[Page 38836]]
(2) An industry product consisting of at least 950 parts per
thousand pure platinum may be marked or described as ``Platinum.''
(3) An industry product consisting of 850 parts per thousand
pure Platinum, 900 parts per thousand pure Platinum or 950 parts per
thousand pure Platinum may be marked ``Platinum'' provided that the
Platinum marking is preceded by a number indicating the amount in
parts per thousand of pure Platinum * * * Thus, the following
markings may be used: ``950Pt.,'' ``950Plat.,'' ``900Pt.,''
``900Plat.,'' ``850Plat.,'' or ``850Pt.''
(4) An industry product consisting of at least 950 parts per
thousand PGM, and of at least 500 parts per thousand pure Platinum,
may be marked ``Platinum,'' provided that the mark of each PGM
constituent is preceded by a number indicating the amount in parts
per thousand of each PGM, as for example, ``600Pt.350Ir.,''
``600Plat.350Irid.'' or ``550Pt.350Pd.50Ir.'' or
``550Plat.350Pall.50Irid.''
16 CFR 23.7(c).
Last year the staff received letters stating that several jewelry
manufacturers were seeking to market products containing between 500
and 850 ppt pure platinum and no other PGM. On December 15, 2004, one
manufacturer requested an opinion from the FTC staff regarding the
application of the Jewelry Guides to a product that consists of 585 ppt
pure platinum and 415 ppt non-precious metals. The request stated that
the manufacturer's reading of the Guides indicated that the platinum
section did not prohibit marking or describing the product as
``Platinum'' and that the Guides do not address how to mark or describe
an alloy with this composition other than to require that any
representation be truthful and not misrepresent the product's
composition.
The staff posted this request on the FTC's website on December 17,
2004 to seek industry input. The staff notified several major jewelry
trade associations that the request had been posted and invited the
industry to provide comments by January 5, 2005, which the staff later
extended until January 10, 2005. The staff received sixteen comments
from jewelry trade associations and retailers.\7\
---------------------------------------------------------------------------
\7\ Comments were received from the Jewelers Vigilance
Committee, Platinum Guild International, Manufacturing Jewelers &
Suppliers of America, American Gem Society, Jewelers of America,
Sonny's On Fillmore, Kwiat, Inc., Cornell's Jewelers, Michael
Bondanza, Inc., PMI, Traditional Jewelers, Standley Jewelers
Gemologist, Davidson & Licht, Henne Jewelers, Johnson Matthey, MJ
Christensen.
---------------------------------------------------------------------------
On February 2, 2005, the staff responded to the request for an
opinion. The staff letter stated:
The Guides provide that, in order for a product to be marked or
described as ``platinum,'' the product must contain a minimum of 500
ppt pure platinum. 16 CFR 23.7(b)(3). In addition, the Guides
provide that, if a product contains 500 ppt pure platinum but less
than 850 ppt pure platinum, the marketer must disclose the amount in
ppt of the remaining PGM in the product. 16 CFR 23.7(b)(2).
In our opinion, a literal reading of the Guides indicates that
they do not address the marketing of the Karat Platinum alloy,
except to the extent that they require a minimum of 500 ppt pure
platinum. The provisions of Section 23.7 that address misuse of the
word ``platinum'' do not discuss how to mark or describe an alloy
that contains over 500 ppt pure platinum but no other PGM.
The staff letter further explained that the marketing of the alloy
would be subject to Section 23.1 of the Guides, which contains a
general prohibition on deception, as well as Section 5 of the FTC
Act.\8\ The letter opined that the staff considers the alloy to be
sufficiently different in composition from products consisting of
platinum combined with other PGM as to require clear and conspicuous
disclosure of the differences. The staff noted that it did not appear
that simple stamping of the jewelry's content (e.g., 585Plat., 0PGM)
would be sufficient to alert consumers to the differences between the
alloy and platinum products containing other PGM.
---------------------------------------------------------------------------
\8\ Section 5 of the FTC Act prohibits deceptive acts or
practices, in or affecting commerce. 15 U.S.C. 45(a).
---------------------------------------------------------------------------
The staff letter provides general, but not specific, guidance for
marketers seeking to mark or describe products that contain 50-85% pure
platinum but no other PGM. Because of the public interest in this
issue, the Commission is soliciting public comment as to whether the
Guides should be revised to address specifically how to mark or
describe such products.
Comments submitted previously stated that platinum alloys with no
other PGM may present special issues that may require marketers to
provide additional information. For example, commenters stated that it
is unclear whether such products would possess certain qualities
typically associated with traditional platinum products, such as being
hypoallergenic. In addition, commenters questioned whether the presence
of non-precious metals in the product might present unique issues in
conjunction with jewelry repairs and other procedures, such as re-
sizing. For instance, commenters asked whether a product with high
copper content might require a bench jeweler to use atmosphere control
equipment to avoid damaging the product. Accordingly, the Commission is
soliciting public comment on whether the Guides should be amended to
address products composed of 500-850 ppt pure platinum and no other
PGM.
Staff also has received some inquiries regarding the application of
the platinum section of the Guides to the marketing of platinum-clad or
platinum-coated jewelry products. The platinum section of the Guides
currently does not address platinum-clad, filled, plated or platinum-
overlay products. Other sections of the Guides, however, address gold
and silver-plated jewelry products.\9\ These sections basically advise
that the plating must be of a sufficient thickness to ensure reasonable
durability. The Commission also seeks comment as to whether the Guides
should provide guidance as to how to mark or describe non-deceptively
products such as platinum-clad, filled, coated or platinum-overlay
jewelry products.
---------------------------------------------------------------------------
\9\ See 16 CFR 23.4 and 23.6 (addressing gold-plated, gold-
filled, gold-overlay, gold-electroplated and silver-plated jewelry
products).
---------------------------------------------------------------------------
III. Request for Public Comment
The Commission seeks public comment on whether the Jewelry Guides
should be amended to discuss specifically how products that contain
between 500 and 850 ppt pure platinum and no other PGM should be marked
or described. In addition, the Commission seeks public comment on
whether the Guides should be revised to provide guidance on how to mark
or describe platinum-clad, filled, plated or platinum-overlay products.
The Commission is particularly interested in comments addressing the
following questions:
1. Should the platinum section of the Jewelry Guides be amended to
address with particularity products that contain 500-850 ppt pure
platinum and no other PGM?
2. Is there empirical evidence on what consumers generally expect
in terms of performance or other objective qualities when purchasing a
product marked or described as ``platinum''? What does that data show?
3. Are products containing 500-850 ppt pure platinum and no other
PGM currently being marketed, and if so, how? Is there empirical
evidence, e.g., copy testing or other research, as to how consumers
interpret the disclosures or marketing materials, or proposed
disclosures and marketing materials, accompanying such products?
4. For products containing 500-850 ppt pure platinum and no other
PGM what, if any, additional information, in addition to disclosure of
the product
[[Page 38837]]
composition, may be necessary to prevent deception under Section 5 of
the FTC Act? How do these disclosures compare to disclosures already
required for other jewelry products, for example, gold?
5. Are there significant differences between the 500-850 ppt pure
platinum alloys with no PGMs and other platinum products in terms of
durability, scratch resistance, tarnish, hypoallergenicity, ability to
hold settings, or similar qualities? What evidence is there on these
issues?
6. How would a product containing 500 ppt pure platinum and no
other PGM be marked if it were being sold outside the United States? Is
there an international standard that addresses a product with this
composition?
7. Should the platinum section of the Jewelry Guides be amended to
address other products that contain platinum, such as platinum-clad,
platinum-filled, platinum-plated, platinum-coated or platinum overlay
products, that are not currently addressed in the section? If so, why?
What guidance is needed to ensure that consumers are not misled about
the composition of such products and their performance, durability,
value and special care requirements, if any? Are such products
currently being marketed, and if so, how? How are such products marked
if they are sold outside the United States? Are there any international
standards that address such products?
All comments should be filed as prescribed in the ADDRESSES section
above, and must be received on or before September 28, 2005.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 05-13285 Filed 7-5-05; 8:45 am]
BILLING CODE 6750-01-U