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Tales of the Red Tape #30: FTC Sticks It to Appliance Makers

Posted By Diane Katz On April 17, 2012 @ 4:00 pm In Featured | Comments Disabled

The Dodd–Frank financial strangulation statute transferred a portion of the duties once performed by the Federal Trade Commission (FTC) to the new Consumer Financial Protection Bureau. That’s left the FTC to tap its $292 million budget and 1,176 full-time employees for devising stricter regulation of…appliance labels.

Specifically, the agency intends to prohibit manufacturers from hanging the ubiquitous yellow EnergyGuide labels from clothes washers, dishwashers, and refrigerators. (The current rule defines a “hang tag” as a label ‘‘affixed to the product…using string or similar material.’’) Instead, adhesive labels would be de rigueur. But not just any sticker will do. According to the FTC’s Notice of Proposed Rulemaking [1]:

The adhesive labels should be applied so they can be easily removed without the use of tools or liquids, other than water, but should be applied with an adhesion capacity sufficient to prevent their dislodgment during normal handling throughout the chain of distribution to the consumer. The paper stock for pressure-sensitive or other adhesive labels shall have a basic weight of not less than 58 pounds per 500 sheets (25”×38”) or equivalent, exclusive of the release liner and adhesive. A minimum peel adhesion capacity for the adhesive of 12 ounces per square inch is suggested, but not required if the adhesive can otherwise meet the requirements of this paragraph.

The proposal also dictates that the labels must be affixed by manufacturers, not retailers (heaven forbid!). However, retailers must reproduce the very same label information in catalogs and on websites.

The federal label police also are considering whether to require “QR” codes on the EnergyGuide labels. (For the uninitiated, a Quick Response code is a matrix imprint that can be read by a smartphone to connect to information sources.) In this case, the QR code would supposedly provide information about a product’s (hypothetical) impact on global warming.

All of which is supposedly authorized by the Appliance Labeling Rule (a la the Energy Policy and Conservation Act). The 1979 version of the statute applied to refrigerators, freezers, dishwashers, water heaters, clothes washers, room air conditioners, and furnaces. In predictable fashion, the FTC expanded its authority to central air conditioners, heat pumps, plumbing products, lighting products, ceiling fans, televisions, etc.

The FTC, according to its proposal, is deeply concerned that hang tags may be more prone to detachment than adhesive labels and thus less secure. They have concluded this because the Government Accountability Office conducted surveillance at 30 stores in 2007 and found that 26 percent of the products had no EnergyGuide label. Just to be sure, the FTC conducted its own investigation of 89 retail locations in nine metro areas and found either detached or missing tags on about 38 percent of the appliances.

Not to be outdone on label security, officials at U.S. Customs and Border Protection are proposing to turn away imports of consumer products and industrial equipment that do not comply with America’s unparalleled labeling standards.

Just imagine all the dire ramifications of a missing label, right? So it’s sure good to know that the feds are so diligent about them—especially considering the millions of other matters that government is attending to.


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URL to article: http://blog.heritage.org/2012/04/17/tales-of-the-red-tape-30-ftc-sticks-it-to-appliance-makers/

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[1] Notice of Proposed Rulemaking: http://www.gpo.gov/fdsys/pkg/FR-2012-03-15/pdf/2012-4865.pdf

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