Agency Information Collection Activities; Proposed Collection; Comment Request

AGENCY:

Federal Trade Commission (“Commission” or “FTC”).

ACTION:

Notice.

SUMMARY:

The FTC intends to conduct a study of food marketing to children and adolescents, as a follow-up to the study it published in 2008 on the same topic. For this reason, the FTC seeks public comments on proposed information requests to approximately 45 major food, beverage, and quick service restaurant (QSR) companies. These comments will be considered before the FTC submits a request for Office of Management and Budget (OMB) review under the Paperwork Reduction Act (PRA) of compulsory process orders to food, beverage, and QSR companies. The compulsory process orders will seek information from those companies concerning, among other things, their marketing activities and expenditures targeted to children and adolescents and nutritional information about the companies’ food and beverage products marketed to children and adolescents.

DATES:

Comments on the proposed information requests must be received on or before November 23, 2009.

ADDRESSES:

Interested parties are invited to submit written comments electronically or in paper form, by following the instructions in Part III of the SUPPLEMENTARY INFORMATION section below. Comments in electronic form should be submitted by using the following weblink: ( https://secure.commentworks.com/ftc-foodmarketingPRA ) (and following the instructions on the web-based form). Comments in paper form should be mailed or delivered to the following address: Federal Trade Commission, Office of the Secretary, Room H-135 (Annex J), 600 Pennsylvania Avenue, NW., Washington, DC 20580, in the manner detailed in the SUPPLEMENTARY INFORMATION section below.

FOR FURTHER INFORMATION CONTACT:

Carol Jennings, Attorney, 202-326-3010, or Mary Johnson, Attorney, 202-326-3115, Division of Advertising Practices, Bureau of Consumer Protection, Federal Trade Commission.

SUPPLEMENTARY INFORMATION:

I. Background

In July 2008, the FTC published a report entitled Marketing Food to Children and Adolescents: A Review of Industry Expenditures, Activities, and Self-Regulation.¹ The report analyzed expenditures and marketing activities by 44 food companies across various promotional activity and food product categories for the year 2006. The report also reviewed policies and initiatives undertaken by companies to encourage healthy eating and lifestyle choices by children and adolescents, and evaluated the extent to which companies had implemented recommendations of the report from a workshop on Marketing, Self-Regulation & Childhood Obesity that the FTC and the Department of Health and Human Services jointly convened in 2005.² Calendar year 2006 was an appropriate benchmark year for the FTC’s study - before the Council of Better Business Bureaus implemented its efforts to modify food advertising to children through the Children’s Food and Beverage Advertising Initiative, and early into the Alliance for a Healthier Generation’s efforts to reduce and change the nature of food and beverage marketing in schools.

The Commission obtained data and information for the 2006 study by issuing compulsory process orders to producers, distributors, and marketers of foods frequently advertised to children (ages 2-11) and adolescents (ages 12-17), such as carbonated and non-carbonated beverages, snacks, baked goods, cereals, prepared meals, candy, dairy products, andrestaurant food.³ The study found that the companies spent more than $1.6 billion⁴ marketing their products to children and adolescents in 2006, and employed a variety of techniques, including promotion through traditional measured media, the Internet and other “new” media, product packaging, and in-store advertising, as well as integrated campaigns that combined several techniques and cross-promotions with media and entertainment companies.

In addition to presenting the study findings, the Commission made several recommendations in the 2008 report, including:

(1) for companies that market food or beverage products to adopt meaningful nutrition-based standards for all products marketed to children under age 12, through all forms of advertising and promotional techniques targeted to children;

(2) for food and beverage companies to define “marketing to children,” for purposes of self-regulatory limitations, to encompass all advertising and promotional techniques, including: television, print, and radio; website, Internet, and digital advertising; word-of-mouth and viral advertising; product packaging and retail promotion; movie and video promotion; use of premiums in connection with the sale of a product; product placements, character licensing, and cross-promotion; athletic sponsorship; celebrity endorsements; and in-school marketing; and

(3) for media and entertainment companies to limit licensing of their characters to healthier foods and beverages that are marketed to children.

Further, the Commission indicated it would issue a follow-up report assessing the extent to which the 2008 report recommendations have been implemented and what, if any, additional measures may be warranted.

The proposed study will seek information in keeping with the 2006 study, including:(1) food industry marketing activities and expenditures targeted to children (ages 2-11) and adolescents (ages 12-17) for calendar year 2009; and (2) marketing to youth of a specific gender, race, ethnicity, or income level. The Commission additionally proposes to gather nutrition information about products the companies marketed to children and adolescents in calendar years 2006 and 2009, to evaluate possible changes in the nutritional content, and variety, of youth-marketed foods. The Commission also proposes to seek scientific and market research exploring psychological and other factors that may contribute to food advertising appeal among youth.

The FTC has the authority to compel production of this data and information from food, beverage, and QSR companies under Section 6(b) of the FTC Act, 15 U.S.C. § 46(b). The Commission intends to send its information requests to the corporate parents of these types of companies to assure that no relevant information from affiliated or subsidiary companies goes unreported. Because the number of separately incorporated companies affected by the Commission’s requests will exceed nine entities, the Commission will seek OMB clearance under the PRA, 44 U.S.C. §§ 3501-3521, before sending any information requests.

It should be noted that subsequent to this notice, any destruction, removal, mutilation, alteration, or falsification of documentary evidence that may be responsive to this information collection within the possession or control of a person, partnership, or corporation subject to the FTC Act may be subject to criminal prosecution. 15 U.S.C. § 50; see also 18 U.S.C. § 1505.

II. Paperwork Reduction Act

As required by Section 3506(c)(2)(A) of the PRA, the FTC is providing this opportunity for public comment before requesting that OMB approve the study. Under the PRA, federal agencies must obtain OMB approval for each collection of information they conduct or sponsor if the same information collection is posed to ten or more entities. “Collection of information” means agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. 44 U.S.C. § 3502(3); 5 CFR 1320.3(c).

Specifically, the FTC invites comments on: (1) whether the proposed collection of information is necessary for the proper performance of the functions of the FTC, including whether the information will have practical utility; (2) the accuracy of the FTC’s estimate of the burden of the proposed collection of information; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of collecting information on those who respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses. The FTC encourages recipients of the 2007 compulsory process orders to offer suggestions on how the burden of the proposed collection may be reduced.

A. Description of the Collection of Information and Proposed Use

The FTC proposes to send information requests to approximately 45 parent companies of food and beverage and QSR companies in the United States (“industry members”). The companies that will receive these information requests are those selling the categories of food and beverage products that appear to be advertised to youth most frequently. Specifically, these categories of products will include: breakfast cereal; snack foods; candy, including frozen and chilled desserts; dairy products, including milk and yogurt; baked goods; carbonated beverages; fruit juice and non-carbonated beverages; prepared foods and meals; and restaurant foods. In addition, the FTC proposes to collect information from major marketers of fruits and vegetables to ensure that data and information are gathered regarding efforts to promote consumption of these foods among children and adolescents.

The information requests will seek data and information regarding, among other things: (1) the types of foods marketed to children and adolescents; (2) the types of promotional activities⁵ used to market products to children and adolescents; (3) the amount spent to communicate marketing messages in measured and unmeasured media to children and adolescents; and (4) nutrition information (e.g., from the product’s “Nutrition Facts” label). The Commission will provide information on an anonymous or aggregated basis, in a manner sufficient to protect individual companies’ confidential information, to provide a factual summary of food industry marketing activities and expenditures targeted to children and adolescents. See 15 U.S.C. § 57b-2(d)(1)(B).

B. Estimated Hours Burden: 12,250 hours

The FTC staff’s estimate of the hours burden is based on the time required to respond to each information request. The Commission intends to issue the information requests to approximately 45 parent companies of food, beverage, and QSR marketers. Because these companies vary in size, in the number of products they market to children and adolescents, and in the extent and variety of their marketing and advertising, the FTC staff has provided a range of the estimated hours burden for companies that market a single category of food products and for companies that market multiple categories of food.⁶

Based upon its knowledge of the industries, FTC staff estimates, on average, that the time required to gather, organize, format, and produce such responses will range between 140 and 200 hours per information request for companies that market a single category of product to children and adolescents; thus, an average of 170 hours. Staff further estimates that companies marketing multiple categories of products to children and adolescents would spend between 200 and 600 hours to respond to an information request; thus, an average of 400 hours. The total estimated burden per company is based on the following assumptions:

The Commission intends to send information requests to approximately 25 parent companies that market a single category of product to children and adolescents. As a result, staff estimates a total burden for these companies of approximately 4,250 hours (25 companies x 170 average burden hours per company). The Commission intends to send information requests to approximately 20 parent companies that market multiple categories of products to children and adolescents. As a result, staff estimates a total burden for these companies of approximately 8,000 hours (20 companies x 400 average burden hours per company). Thus, cumulative estimated burden is 12,250 hours. These estimates include any time spent by separately incorporated subsidiaries and other entities affiliated with the ultimate parent company that has received the information request.

C. Estimated Cost Burden: $3,675,000

It is difficult to calculate with precision the labor costs associated with the information requests, as the costs entail varying compensation levels of management and/or support staff among companies of different sizes. Financial, legal, marketing, and clerical personnel may be involved in the information collection process. The FTC staff has assumed that professional personnel and outside legal counsel will handle most of the tasks involved in gathering and producing responsive information, and has applied an average hourly wage of $300/hour for their labor. Thus, the staff estimates that the total labor costs for the information requests will be approximately $3,675,000 (($300 x 4,250 hours for companies that market a single category) + ($300 x 8,000 hours for companies that market multiple categories)).

FTC staff estimates that the capital or other non-labor costs associated with the information requests will be minimal. Although the information requests may necessitate that industry members maintain the requested information provided to the Commission, they should already have in place the means to compile and maintain business records.

III. Instructions For Submitting Comments

Interested parties are invited to submit written comments electronically or in paper form. All comments must be received on or before November 23, 2009. Comments should refer to “Food Industry Marketing to Children and Adolescents Study: Paperwork Comment; Project No. P094511” to facilitate the organization of comments. Please note that your comment - including your name and your state - will be placed on the public record of this proceeding, including on the publicly accessible FTC Website, at ( http://www.ftc.gov/os/publiccomments.shtm .)

Because comments will be made public, they 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 secret or any commercial or financial information which is obtained from any person and which is privileged or confidential. . . .” as provided in Section 6(f) of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. § 46(f), and FTC 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 form, must be clearly labeled “Confidential,” and must comply with FTC Rule 4.9(c), 16 CFR 4.9(c).⁸

Because paper mail addressed to the FTC is subject to delay due to heightened security screening, please consider submitting your comment in electronic form. Comments filed in electronic form should be submitted by using the following weblink: ( https://secure.commentworks.com/ftc-foodmarketingPRA ) (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-foodmarketingPRA ) weblink. If this Notice appears at ( http://www.regulations.gov/search/Regs/home.html#home ), you may also file an electronic comment through that website. The Commission will consider all comments that ( http://www.regulations.gov ) forwards to it. You may also visit the FTC website at ( http://www.ftc.gov/ ) to read the Notice and the news release describing it.

A comment filed in paper form should include the reference “Food Industry Marketing to Children and Adolescents Study: Paperwork Comment; Project No. P094511” both in the text and on the envelope, and should be mailed or delivered to the following address: Federal Trade Commission, Office of the Secretary, Room H-135 (Annex J), 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. 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.

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 Website, to the extent practicable, at ( http://www.ftc.gov/os/publiccomments.shtm ). 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.shtm ).

Section 6(f) of the FTC Act, 15 U.S.C. § 46(f), bars the Commission from publicly disclosing trade secrets or confidential commercial or financial information it receives from persons pursuant to, among other methods, special orders authorized by Section 6(b) of the FTC Act, 15 U.S.C. § 46(b). Such information also would be exempt from disclosure under the Freedom of Information Act. 5 U.S.C. § 552(b)(4). Moreover, under Section 21(c) of the FTC Act, 15 U.S.C. § 57b-2(c), a submitter who designates a submission as confidential is entitled to 10 days’ advance notice of any anticipated public disclosure by the Commission, assuming that the Commission has determined that the information does not, in fact, constitute 6(f) material. Although materials covered under one or more of these various sections are protected by stringent confidentiality constraints, the FTC Act and the Commission’s rules authorize disclosure in limited circumstances (e.g., official requests by Congress, requests from other agencies for law enforcement purposes, and administrative or judicial proceedings). Even in those limited contexts, however, the Commission’s rules may afford protections to the submitter, such as advance notice to seek a protective order in litigation. See 15 U.S.C. § 57b-2; 16 CFR 4.9-4.11.

By direction of the Commission.