[Federal Register: December 27, 2006 (Volume 71, Number 248)]
[Notices]
[Page 77753-77754]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27de06-59]
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FEDERAL TRADE COMMISSION
Public Workshop: Negative Options: An FTC Workshop Analyzing
Negative Option Marketing
AGENCY: Federal Trade Commission (FTC).
ACTION: Notice announcing public workshop and requesting public
comment.
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SUMMARY: The FTC is planning to host a public workshop that will
analyze the marketing of offers of goods and services with negative
option features. The workshop will address the pros and cons of such
offers, discuss online marketing of such offers, and explore ways to
make effective disclosures in online advertising of such offers.
DATES: The workshop will be held on Thursday, January 25, 2007 from 8
a.m. to 4:30 p.m. at the Federal Trade Commission's Satellite Building,
located at 601 New Jersey Avenue, NW., Washington, DC. The event is
open to the public and there is no fee for attendance. Pre-registration
is not required. Comments addressing the workshop agenda topics and the
issues discussed by the panelists at the workshop must be received on
or before February 26, 2007.
ADDRESSES: Interested persons are invited to submit written comments
addressing the workshop agenda topics and the issues discussed by the
panelists at the workshop. Comments should refer to ``Negative Option
Workshop--Comment P064202'' to facilitate the organization of comments.
A comment filed in paper form should include this reference both in the
text and on the envelope, and should be mailed or delivered, with two
copies to the following address: Federal Trade Commission/Office of the
Secretary, Room 135-H (Annex E), 600 Pennsylvania Avenue, NW.,
Washington, DC 20580. If the comment contains any material for which
confidential treatment is requested, it must be filed in paper (rather
than electronic) form, and the first page of the document must be
clearly labeled ``Confidential.'' \1\ 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.
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\1\ Commission 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 Commission Rule 4.9(c), 16 CFR 4.9(c).
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Because U.S. postal mail is subject to delay due to heightened
security measures, please consider submitting your comments in
electronic form. Comments filed in electronic form (except comments
containing any confidential material) should be submitted by visiting
the Web site at https://secure.commentworks.com/ftc-negativeoptionworkshop
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 https://secure.commentworks.com/ftc-negativeoptionworkshop
Web site. If this
Notice appears at http://www.regulations.gov, you may also file an electronic
comment through 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 paper or electronic
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 in the FTC's
privacy policy, at http://www.ftc.gov/ftc/privacy.htm.
FOR FURTHER INFORMATION CONTACT: Robin Rosen Spector, 202-326-3740,
Bureau of Consumer Protection, 600 Pennsylvania Avenue, NW., Room NJ-
2202, Washington, DC 20580. Prior to the workshop, an agenda and
additional information for attendees will be posted on the FTC's Web
site, http://www.ftc.gov/bcp/workshops/negativeoption.
SUPPLEMENTARY INFORMATION:
Background and Workshop Goals
Many offers for products or services marketed to consumers today
include not just an offer for one product or an initial provision of
services, but the opportunity to consent in advance to continue to
receive products or services in the future. This type of sales offer or
agreement is commonly known as a ``negative option offer.'' The central
characteristic of a negative option offer is that the customer's
silence or failure to take an affirmative action to reject goods or
services or to cancel the agreement is interpreted by the seller as
acceptance of the offer.
Negative option offers take a variety of forms. One of the best
known is a prenotification negative option plan. In such a plan,
consumers receive periodic announcements of upcoming merchandise and
have a set period of time to contact the company and decline the item.
If they remain silent, the company sends them the merchandise. Another
common offer is called a continuity plan. In this type of plan,
consumers receive regular shipments of merchandise until the consumer
cancels the agreement. A third popular offer is the trial conversion.
Consumers in such a plan agree to receive products or utilize
[[Page 77754]]
services for a trial period at no charge or for a reduced price. If the
consumer does not cancel the agreement before the end of the trial
period, the product shipments or provision of services continue and the
consumer incurs charges.
The FTC's upcoming workshop ``Negative Options: Analyzing the
Marketing of Offers with Negative Option Features'' will continue the
Commission's long-standing efforts to address these types of sales
offers in a manner that balances their benefits to businesses and
consumers against the potential for deception and abuse. The workshop
will provide an opportunity to learn more about the benefits and costs
of negative option offers from consumer, business, and academic
perspectives.
With the explosion of Internet marketing over the past ten years,
negative option offers are as much a fixture of online advertising as
in any other advertising media. The workshop will bring together
Internet experts, industry, and consumer groups to discuss consumer
behavior online and how it affects consumers and marketers with respect
to negative option offers.
We expect to address the following questions:
1. What are the pros and cons of negative option marketing?
Why do businesses choose to structure offers with negative
option features?
What are the benefits of negative option offers to
businesses and consumers?
What are the costs of negative option offers to businesses
and consumers?
How do consumers interpret or misinterpret negative option
offers?
2. How do consumers behave when viewing and responding to marketing
offers online?
How do consumers navigate online advertising?
How do marketers present contract terms and make
disclosures in online advertising?
What does online research reveal about how to communicate
effectively important offer terms to consumers?
3. How can marketers meet the clear and conspicuous standard for
advertising disclosures when making negative option offers online?
Are there issues unique to negative option offers that
must be addressed when making clear and conspicuous disclosures?
What challenges do marketers face in applying the clear
and conspicuous standard to online negative option offers?
4. How can advertisers make negative option offers with effective
disclosures that are compatible with the advertising message?
Where in online advertising should marketers make negative
option disclosures?
At what point in the sales offer should marketers make
such disclosures?
What types of information about the offer should marketers
include in the advertising?
Form and Availability of Comments
The FTC requests that interested parties submit written comments
addressing the above questions to foster greater understanding of the
issues. In particular, the FTC requests that commentators submit
relevant studies, surveys, research, and empirical data. The comment
period will remain open after the workshop so that interested parties
can provide input regarding the discussions held at the workshop.
Written comments must be received on or before February 26, 2007, and
may be filed in either paper or electronic form. All comments should be
filed as prescribed in the ADDRESSES section above.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. E6-22147 Filed 12-26-06; 8:45 am]
BILLING CODE 6750-01-P