FEDERAL TRADE COMMISSION

Answer to questionnaire submitted to Federal executive departments and independent agencies by Government Information Subcommittee of the House Government Operations Committee

I. GENERAL

1. What categories and types of information possessed by your agency are not available to—

(a) The press and other information media serving the general public?

The Commission's general regulations regarding categories and types of information which are available and which are not available to the public are described in the Commission's Rules of Practice and Procedure, Subpart M-Public and Confidential Information. These regulations are as follows:

SEC. 1.131. Requests. (a) All written requests for information should be addressed to the Commission at its principal office.

(b) Where the request is for materials of which copies are not available and photostating or reproduction by other means is required, such service will be provided upon payment of the costs involved.

SEC. 1.132. Public information. (a) Annually, subsequent to the end of the fiscal year, the Commission makes a report to Congress summarizing its work during the year. Such reports are available for inspection at the Commission and Government depositories, and copies thereof may be obtained from the Superintendent of Documents, United States Government Printing Office, Washington 25, D. C.

(b) The Commission's rules of practice and procedure and a description of its organization and policies are published in the Federal Register. Copies thereof may be obtained from the Commission upon request.

(c) The decisions of the Commission in adjudicative proceedings and digests of accepted informal agreements to cease and desist from unlawful practices are published periodically in official reports under the title "Federal Trade Commission Decisions."

(d) Rules issued under the Wool Products Labeling Act, the Fur Products Labeling Act, and the Flammable Fabrics Act pursuant to subpart A of part 2 of this chapter (sections 2.1 to 2.8), quantity limit rules issued under section 2 (a) of the Clayton Act, as amended by the Robinson-Patman Act, pursuant to subpart B of part 2 of this chapter (sections 2.11 to 2.18), and Trade Practice Conference rules for respective industries, issued under subpart C of part 2 of this chapter (sections 2.21 to 2.32), are published in the Federal Register. Copies thereof may be obtained upon request to the Commission.

(e) The pleadings, transcript of testimony, exhibits, and all documents received in evidence or made a part of the record in adjudicative proceedings, records of hearings in all rulemaking proceedings and continuing guaranties filed under the Wool, Fur, and Flamable Fabrics Acts are available at the principal office of the Commission for inspection and copying at reasonable times. Where copies of such materials are desired, section 131 (b) applies.

(f) After having been received and filed, reports of compliance filed under section 3.26 of this chapter, describing the manner and form in which respondents allege they have complied with the Commission's orders to cease and desist, are available at the principle office of the Commission for inspection and copying at reasonable times, unless in the opinion of the General Counsel they contain information of a confidential nature, in which case request for release may be

made to the Commission pursuant to the provisions of section 1.134. Where copies are desired, section 1.131 (b) applies.

(g) Additional information concerning the activities of the Commission is released from time to time through the Commission's Office of Information.

SEC. 1.133 Confidential information. (a) The records and files of the Commission, and all documents, memoranda, correspondence, exhibits, and information of whatever nature, other than the documentary matters above described, coming into the possession or within the knowledge of the Commission or any of its officers or employees in the discharge of their official duties, are confidential, and none of such material or information may be disclosed, divulged, or produced for inspection or copying except under the procedures set forth in section 1.134.

(b) Under section 10 of the Federal Trade Commission Act, any officer or employee of the Commission who shall make public any information obtained by the Commission without its authority, unless directed by a court, shall be deemed guilty of a misdemeanor, and upon conviction thereof, shall be punished by a fine not exceeding $5,000, or by imprisonment not exceeding 1 year, or by fine and imprisonment, in the discretion of the court.

§ 1.134 Release of confidential information. (a) Upon good cause shown, the Commission may by order direct that certain records, files, papers, or information be disclosed to a particular applicant.

(b) Application by a member of the public for such disclosure shall be in writing, under oath, setting forth the interest of the applicant in the subject matter; a description of the specific information, files, documents, or other material inspection of which is requested; whether copies are desired; and the purpose for which the information or material, or copies, will be used if the application is granted. Upon receipt of such an application the Commission will take action thereon, having due regard to statutory restrictions, its rules, and the public interest.

(c) In the event that confidential material is desired for inspection, copying, or use by some agency of the Federal or a State Government, a request therefor may be made by the administrative head of such agency. Such request shall be in writing, and shall describe the information or material desired, its relevancy to the work and function of such agency and, if the production of documents or records or the taking of copies thereof is asked, the use which is intended to be made of them. The Commission will consider and act upon such requests, having due regard to statutory restrictions, its rules, and the public interest.

The records and files of the Commission, and all other documents, memoranda, correspondence, exhibits, and information of whatever nature, other than the documentary matters described in section 1.132, coming into the possession or within the knowledge of the Commission or any of its officers or employees in the discharge of their official duties, are confidential. These materials include applications for Federal Trade Commission complaints and the investigational and history files in Commission cases as well as reports in writing to the Commission and any papers which contain trade secrets and names of customers. None of such materials or information may be disclosed, divulged, or produced for inspection or copying except under the procedures set forth in section 1.134 of the Commission's Rules of Practice and Procedure.

(b) The Congress?

There are no categories or types of information possessed by this agency which are not available to Congress or committees duly constituted by Congress. During the course of the last 9 months the Federal Trade Commission has been investigated by or has been asked to supply information to the following congressional committees or subcommittees:

1. Select Committee on Small Business of the Senate.

2. Antitrust and Monopoly Subcommittee, Senate Committee on the Judiciary.

3. Subcommittee on Government Employees' Security Program, House Committee on Post Office and Civil Service.

4. Subcommittee on Automobile Marketing Practices, Senate Committee on Interstate and Foreign Commerce.

5. Antitrust Subcommittee, Committee on the Judiciary, House of Representatives.

6. Subcommittee No. 1 on Regulatory Agencies.

7. Subcommittee No. 5 on Distribution Problems, Select Committee on Small Business, House of Representatives.

8. Legal and Monetary Affairs Subcommittee,

9. Government Information Subcommittee, Committee on Government Operations, House of Representatives.

The Commission has extended cooperation to all of these. The expense of compliance with committee requests is indicated by the reply to question 6 (c), congressional section. The extent of the cooperation extended by the Commission is indicated by the fact that several of the above-named committees were supplied office space in the Federal Trade Commission Building and were given complete access to all Commission files as well as complete freedom to contact all members of the staff. Attached letters of June 9 and 22, 1955, addressed to the Select Committee on Small Business of the House also evidence the Commission's cooperation.

(c) Other Federal agencies?

With respect to other Federal agencies, the release of information is governed by the purpose and manner of use of the information sought. For several years, the Commission has made evidentiary material available to the Department of Justice, which has concurrent jurisdiction with the Federal Trade Commission in certain areas of law enforcement. But until recently all such requests were acted upon individually by the Commission. On September 13, 1954, authority to grant clearance to the Department of Justice was delegated to the Commission's Secretary. On April 14, 1955, the Commission directed that evidentiary material be made available to the below-listed lawenforcement agencies, which have a community of interest with respect to certain problems faced by the Federal Trade Commission, on the same basis as such material is made available to the Department of Justice:

(1) Post Office Department;

(2) Food and Drug Administration, Department of Health, Education, and Welfare;

(3) Patent Office, Department of Commerce;

(4) Alcohol and Tobacco Tax Division, Office of Commissioner of Internal Revenue, Department of the Treasury; and

(5) Pesticide Regulation Section, Plant Pest Control Branch, Agricultural Research Service, United States Department of Agriculture.

With respect to other agencies, decision as to release of information is made on an individual basis with due regard to statutory restrictions, the Commission's rules, and the public interest. Present policy shows a marked contrast with policy prevailing in the 1940's, when the Federal Trade Commission investigational files were not made available to the Department of Justice or other Government agencies.

(d) Business, trade, and other groups with an economic interest in the information?

Generally, the restrictions set forth in 1 (a) are applicable. Special requests for release of information may be made under section 1.134 of the Commission's Rules of Practice and Procedure. Such requests are governed by the standards set forth therein.

(e) Research specialists, scientists, public affairs organizations and similar groups or individuals?

Policy as to research specialists, etc., is governed by the purpose and manner of the use of the information sought, as provided in section 1.134 of the Rules of Practice and Procedure.

2. On what do you base authority for denying access to or not making available such information? Please provide copies of regulations, directives, letters, policy statements, etc., bearing on the withholding of information by your agency. Please cite any court decisions and statutes which relate to your agency

The regulations of the Federal Trade Commission relating to the release of information are based upon section 6 of the Commission's Organic Act, which provides:

SEC. 6. That the Commission shall also have power

(f) To make public from time to time such portions of the information obtained by it hereunder, except trade secrets and names of customers, as it shall deem expedient in the public interest; and to make annual and special reports to the Congress and to submit therewith recommendations for additional legislation; and to provide for the publication of its reports and decisions in such form and manner as may be best adapted for public information and use.

Reliable, thorough, and up-to-date information is essential to the operations of the Federal Trade Commission. The Commission is basically a factfinding agency. In recognition of the special needs of the Commission, Congress provided, in sections 6 and 9 of the Federal Trade Commission Act, very broad powers of investigation and inquiry. These include the power to require special reports, the power of subpena, and the power of access to corporate records.

In addition, section 9 contains enforcement powers, and section 10 provides fines and imprisonment, or both, for failure to comply with the Commission's lawful demands for information.

In the early years of its existence, the Federal Trade Commission was seriously hindered by inability to obtain evidence and information required by it to protect the public from unfair methods of competition (Federal Trade Commission v. American Tobacco Co., 264 U. S. 298 (1924)). In 1950, however, in United States v. Morton Salt Co. (338 U. S. 632), the Supreme Court clarified the investigative authority of the Federal Trade Commission:

*** Because judicial power is reluctant, if not unable, to summon evidence until it is shown to be relevant to issues in litigation, it does not follow that an administrative agency charged with seeing that the laws are enforced may not have and exercise powers of original inquiry. It has a power of inquisition, if one chooses to call it that, which is not derived from the judicial function. It is more analogous to the grand jury, which does not depend on a case or controversy for power to get evidence but can investigate merely on suspicion that the law is being violated, or even just because it wants assurance that it is not. When investigative and accusatory duties are delegated by statute to an administrative body, it too may take steps to inform itself as to whether there is probable violation of the law.

In the Morton Salt case, the Supreme Court ruled that the Federal Trade Commission Act conferred upon the Federal Trade Commission the power "to get information from those who best can give it and who are most interested in not doing so."

At the same time, section 6 of the Federal Trade Commission Act and its legislative history indicate the concern of Congress over the possible release of types of information which would not be in the public interest. Publication of trade secrets and names of customers was specifically forbidden, and the Commission was given broad discretion to release such other information as it "shall deem expedient in the public interest."

The importance attached by the Congress in 1914 to the necessity of protecting Commission information is evidenced also by section 10 of the Federal Trade Commission Act which provides:

Any officer or employee of the Commission who shall make public any information obtained by the Commission without its authority, unless directed by a court, shall be deemed guilty of a misdemeanor, and, upon conviction thereof, shall be punished by a fine not exceeding $5,000, or by imprisonment not exceeding one year, or by fine and imprisonment, in the discretion of the court.

The withholding of information concerning applicants for Commission complaint is governed by section 1.15 of the Commission's Rules of Practice and Procedure:

SEC. 1.15 Confidentiality of applications. It always has been and now is strict Commission policy not to publish or divulge the name of an applicant or complaining party.

This rule not only protects applicants from possible retaliation by corporations against whom they may complain, but it is in accord with sound public policy. This rule has been in effect since the origin of the Federal Trade Commission in 1914. It is fully supported in case law on the basis of "informer's privilege." (See 8 Wigmore, Evidence, sec. 2374 (3d edition, 1940), Worthington v. Scribner, 109 Mass. 487, Vogel v. Gruaz, 110 U. S. 311, and In re Quarles and Butler, 158 U. S. 532.)

3. What terms do you use to describe restrictions placed on imparting information?

Information which has not been made public by the Commission is designated "for staff use only."

(a) Please define each term to indicate the type of information material which it includes, to what group or individuals it applies, and what exceptions are made in its application The types of nonpublic informational materials, the groups to which the regulations apply, and the exceptions are described in reply to question 1 above.

(b) What proportion is withheld on each basis?

When information is withheld, it is done so on a statutory basissections 6 and 10 of the Federal Trade Commission Act, cited above in reply to question 2, general section.

(c) What steps have been taken by your agency to insure that procedures for restricting information are not being abused?

Restrictions regarding release of information are subject to the review of the Commission's General Counsel and of the Commission. itself.