[Federal Register Volume 75, Number 215 (Monday, November 8, 2010)]
[Proposed Rules]
[Pages 68559-68560]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-28044]
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FEDERAL TRADE COMMISSION
16 CFR Part 437
Disclosure Requirements and Prohibitions Concerning Business
Opportunities
AGENCY: Federal Trade Commission.
ACTION: Staff Report.
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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'')
announces the publication of the Staff Report on the Business
Opportunity Rule. The Staff Report sets forth the staff's
recommendations to the Commission on the various proposed amendments to
the Business Opportunity Rule.
DATES: Comments on the Staff Report must be submitted on or before
January 18, 2011.
ADDRESSES: Interested persons are invited to submit written comments
electronically or in paper form by following the instructions in the
SUPPLEMENTARY INFORMATION section below. Comments filed in electronic
form should be submitted at: https://ftcpublic.commentworks.com/ftc/busopprulestaffreport (and following the instructions on the web-based
form). Comments filed in paper form should be mailed or delivered to
the following address: Federal Trade Commission/Office of the
Secretary, Room 113-H, Annex S, 600 Pennsylvania Ave., NW., Washington,
DC 20580, in the manner detailed in the SUPPLEMENTARY INFORMATION
section below.
FOR FURTHER INFORMATION CONTACT: Kathleen Benway (202) 326-2024,
Division of Marketing Practices, Bureau of Consumer Protection, Federal
Trade Commission, 600 Pennsylvania Avenue, NW., Room H-286, Washington,
DC 20580.
SUPPLEMENTARY INFORMATION: The Business Opportunity Rule, 16 CFR part
437, requires the pre-sale disclosure of information to prospective
purchasers about the business opportunity and the seller.\1\ The
Business Opportunity Rule, modeled on the original Franchise Rule,
mandates that business opportunity sellers make 22 separate categories
of disclosures to potential buyers. The Commission has concluded that
these extensive disclosure requirements impose unnecessary compliance
costs on both business opportunity sellers and buyers.
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\1\ 16 CFR 437 et seq.
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The Commission's experience in conducting numerous law enforcement
sweeps of the business opportunity industry, however, demonstrates that
[[Page 68560]]
fraud in the sale of business opportunities is not only prevalent but
persistent. Accordingly, the Commission has engaged in an ongoing
effort to amend the Business Opportunity Rule to adequately protect
consumers from potentially fraudulent business opportunity sellers,
while at the same time minimizing compliance costs. The Commission
began by publishing an initial Notice of Proposed Rulemaking in
2006.\2\ It published a revised Notice of Proposed Rulemaking in 2008
(``RNPR''),\3\ and held a public workshop on June 1, 2009 to discuss
proposed amended disclosure requirements.\4\
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\2\ 71 FR 19,056 (Apr. 12, 2006).
\3\ 73 FR 16,110 (Mar. 28, 2008).
\4\ 74 FR 18,712 (Apr. 24, 2009).
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Pursuant to the Commission's Rules of Practice, and the rulemaking
procedures specified earlier in the RNPR, the Commission now announces
the availability of the Staff Report on the Business Opportunity Rule.
The Staff Report summarizes the rulemaking record to date, analyzes the
various alternatives suggested, and sets forth the staff's
recommendation to the Commission on the proposed revised Rule. The
Staff Report has not been endorsed or adopted by the Commission.
The Staff Report is available at the FTC's Web site at http://www.ftc.gov. It is also available from the Commission's Public
Reference Room, Room H-130, Federal Trade Commission, 600 Pennsylvania
Avenue, NW., Washington, DC 20580.
The Commission invites interested parties to submit written data,
views, and arguments on the recommendations announced by the Staff
Report by following the instructions in the ADDRESSES section of this
notice. Comments, however, are to be limited to those matters not
already part of the rulemaking record. Further, comments previously
submitted in the ongoing rulemaking procedures are already part of the
rulemaking record and need not be repeated. Written communications and
summaries or transcripts of any oral communications respecting the
merits of this proceeding from any outside party to any Commissioner or
Commissioner's advisor will also be placed on the public record. See 16
CFR 1.26(b)(5).
Please note that comments will be placed on the public record--
including on the publicly accessible FTC Web site, at http://www.ftc.gov/os/publiccomments.shtm--and therefore should not include
any sensitive or confidential information. In particular, comments
should not include any sensitive personal information, such as an
individual'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. Comments also should not include any sensitive
health information, such as medical records or other individually
identifiable health information. In addition, comments should not
include any ``[t]rade secrets and commercial or financial information
obtained from a person and privileged or confidential'' as provided in
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and Commission Rule
4.10(a)(2), 16 CFR 4.10(a)(2). Comments containing material for which
confidential treatment is requested must be filed in paper (rather than
electronic) form, must be clearly labeled ``Confidential,'' and must
comply with FTC Rule 4.9(c).\5\
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\5\ FTC Rule 4.2(d), 16 CFR 4.2(d). 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 FTC Rule 4.9(c), 16 CFR 4.9(c).
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The FTC is requesting that any comment filed in paper form be sent
by courier or overnight service, if possible, because U.S. postal mail
in the Washington area, and at the Commission, is subject to delay due
to heightened security precautions.
Because U.S. postal mail is subject to delay due to heightened
security measures, please consider submitting your comments in
electronic form. To ensure that the Commission considers an electronic
comment, you must file it on the web-based form at the weblink https://ftcpublic.commentworks.com/ftc/busopprulestaffreport. If this Notice
appears at http://www.regulations.gov/search/index.isp, you also may
file an electronic comment though that Web site. 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. The Commission will consider all timely and responsive
public comments that it receives, whether filed in electronic or paper
form. Comments received will be available to the public on the FTC Web
site, 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 Web site. More information, including
routine uses permitted by the Privacy Act, may be found at the FTC's
privacy policy, at http://www.ftc.gov/ftc/privacy.htm.
Upon completion of the comment period, the staff will make final
recommendations to the Commission about the Rule. Assuming the
Commission adopts the proposed revised Rule as recommended by the
staff, or after the conclusion of the comment period determines to make
changes to the proposed revised Rule, it will publish in a future
Federal Register notice the final text of the Rule, a statement of
Basis and Purpose on the Rule, and an announcement of when the revised
Rule will become effective.
By direction of the Commission.
Richard C. Donohue,
Acting Secretary.
[FR Doc. 2010-28044 Filed 11-5-10; 8:45 am]
BILLING CODE 6750-01-P