SUPPLEMENTARY INFORMATION:

Commission Rule 1.98 sets forth civil penalty amounts for violations of certain laws enforced by the Commission.^[1] As mandated by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015,^[2] the Commission adjusted the maximum civil penalty amounts under its jurisdiction through an Interim Final Rulemaking in June 2016.^[3] This statutorily mandated “catch-up” adjustment was designed to address inflation since the civil penalties were first enacted. This Notice confirms those amendments and implements additional inflationary adjustments mandated by law.

Following the initial catch-up adjustment, the FCPIAA, as amended, directs agencies to adjust their civil penalties for inflation every January thereafter. Accordingly, the Commission is increasing these maximum civil penalty amounts to address inflation since the initial “catch-up” adjustment. The following adjusted amounts will take effect on January 24, 2017:

• Section 7A(g)(1) of the Clayton Act,15 U.S.C. 18a(g)(1) (premerger filing notification violations under the Hart-Scott-Rodino Improvements Act)—Increase from $40,000 to $40,654;
• Section 11(l) of the Clayton Act, 15 U.S.C. 21( l) (violations of cease and desist orders issued under Clayton Act section 11(b))—Increase from $21,250 to $21,598;
• Section 5(l) of the FTC Act, 15 U.S.C. 45( l) (unfair or deceptive acts or practices)—Increase from $40,000 to $40,654;
• Section 5(m)(1)(A) of the FTC Act,15 U.S.C. 45(m)(1)(A) (unfair or deceptive acts or practices)—Increase from $40,000 to $40,654;
• Section 5(m)(1)(B) of the FTC Act,15 U.S.C. 45(m)(1)(B) (unfair or deceptive acts or practices)—Increase from $40,000 to $40,654;
• Section 10 of the FTC Act,15 U.S.C. 50 (failure to file required reports)—Increase from $525 to $534;
• Section 5 of the Webb-Pomerene (Export Trade) Act,15 U.S.C. 65 (failure by associations engaged solely in export trade to file required statements)—Increase from $525 to $534;
• Section 6(b) of the Wool Products Labeling Act,15 U.S.C. 68d(b) (failure by wool manufacturers to maintain required records)—Increase from $525 to $534;
• Section 3(e) of the Fur Products Labeling Act,15 U.S.C. 69a(e) (failure to maintain required records regarding fur products)—Increase from $525 to $534;
• Section 8(d)(2) of the Fur Products Labeling Act,15 U.S.C. 69f(d)(2) (failure to maintain required records regarding fur products)—Increase from $525 to $534;
• Section 333(a) of the Energy Policy and Conservation Act,42 U.S.C. 6303(a) (knowing violations of EPCA § 332, including labeling violations)—Increase from $433 to $440;
• Section 525(a) of the Energy Policy and Conservation Act,42 U.S.C. 6395(a) (recycled oil labeling violations)—Increase from $21,250 to $21,598;
• Section 525(b) of the Energy Policy and Conservation Act,42 U.S.C. 6395(b) (willful violations of recycled oil labeling requirements)—Increase from $40,000 to $40,654;
• Section 621(a)(2) of the Fair Credit Reporting Act,15 U.S.C. 1681s(a)(2) (knowing violations of the Fair Credit Reporting Act)—Increase from $3,756 to $3,817;
• Section 1115(a) of the Medicare Prescription Drug Improvement and Modernization Act of 2003,Public Law 108-173, 21 U.S.C. 355 note (failure to comply with filing requirements)—Increase from $14,142 to $14,373; and
• Section 814(a) of the Energy Independence and Security Act of 2007,42 U.S.C. 17304 (violations of prohibitions on market manipulation and provision of false information to federal agencies)—Increase from $1,138,330 to $1,156,953.

Calculation of Inflation Adjustments

The FCPIAA, as amended, directs federal agencies to adjust each civil monetary penalty under their jurisdiction for inflation no later than January 15 of every year pursuant to a cost-of-living adjustment.^[4] The cost-of-living adjustment is based on the percent change between the U.S. Department of Labor's Consumer Price Index for all-urban consumers (“CPI-U”) for the month of October preceding the date of the adjustment, and the CPI-U for October of the prior year.^[5] Based on that formula, the cost-of-living adjustment multiplier for 2017 is 1.01636. The FCPIAA also directs that these penalty level adjustments should be rounded to the nearest dollar. Agencies do not have discretion over whether to adjust a maximum civil penalty, or the method used to determine the adjustment.

The following chart illustrates the application of these adjustments to the civil monetary penalties under the Commission's jurisdiction.

Effective Dates of New Penalties

These new penalty levels apply to civil penalties assessed after the effective date of the applicable adjustment, including civil penalties whose associated violation predated the effective date.^[6] These adjustments do not retrospectively change previously assessed or enforced civil penalties that the FTC is actively collecting or has collected.

Procedural Requirements

The FCPIAA, as amended, directs agencies to publish the required inflation adjustments in the Federal Register by no later than January 15, 2017, notwithstanding section 553 of title 5, United States Code. Pursuant to this congressional mandate, prior public notice and comment under the APA and a delayed effective date are not required. For this reason, the requirements of the Regulatory Flexibility Act (“RFA”) also do not apply.^[7] Further, this rule does not contain any collection of information requirements as defined by the Paperwork Reduction Act of 1995 as amended. 44 U.S.C. 3501 et seq.

Text of Amendments

For the reasons set forth in the preamble, the Federal Trade Commission amends Title 16, chapter I, subchapter A, of the Code of Federal Regulations, as follows:

1. The authority citation for subpart L continues to read as follows:

Authority: 28 U.S.C. 2461 note.

2. Revise § 1.98 to read as follows: