Amplifier Rule-SS - 2021 - FINAL

Supporting Statement
Power Output Claims for Amplifiers Utilized in Home
Entertainment Products 16 C.F.R. Part 432 (Control Number: 3084-0105)

(1)

Necessity for Collecting the Information

Before the Federal Trade Commission issued its Trade Regulation Rule entitled Power
Output Claims for Amplifiers Utilized in Home Entertainment Products (“Amplifier Rule” or
“Rule”), the affected industry had been engaged in what was referred to as the “War of the
Watts,” during which manufacturers and retailers were making misleading power output claims.
When the Commission initially proposed the Rule on January 12, 1971, there were at least
seven commonly used methods of determining amplifier wattage ratings, all of which would
yield different results.
Thus, on November 4, 1974, the Federal Trade Commission issued the Amplifier Rule,
which assists consumers by standardizing the measurement and disclosure of power output,
distortion, and the associated power bandwidth and impedance ratings of amplifiers in stereos
and other home entertainment equipment. By requiring uniform power output disclosures in
the advertising of audio equipment, the Rule makes it easier for consumers to make
comparisons, including price comparisons, among the many types and brands of audio
equipment. The Rule also specifies the test conditions to be used in order to make the requisite
disclosures.
(2)

Use of the Information

Consumers use the information to compare different brands and types of audio
equipment and to intelligently shop for the best price.
(3)

Consideration of the Use of Improved Information Technology to
Reduce Burden

Consistent with the aims of the Government Paperwork Elimination Act, Pub. L. No.
105-277, § 1704, 12 Stat. 2681-749, 44 U.S.C. § 3504 note, regulated entities may use
any information technology available, so long as the disclosures the Rule requires appear
in advertisements and promotional materials.
(4)

Efforts to Identify Duplication/Availability of Similar Information

In issuing the Rule, the Commission determined that information concerning the power
performance characteristics of amplifiers was not being made available to consumers in a clear
and uniform manner. There is no other federal or state regulation that requires these
disclosures.

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(5)

Efforts to Minimize Burden on Small Businesses

Although the Rule applies to retailers, some of which are small, the burden is
minimal. Manufacturers supply the disclosures directly to retailers, without cost. The only
costs that retailers incur are associated with advertising the product, which would occur
anyway in the ordinary course of business.
(6)

Consequences of Conducting Collection Less Frequently

The Rule requires a power output disclosure whenever a representation is made about
any of four performance characteristics of home audio equipment: power output, power band,
power frequency, or distortion characteristics. In addition, whenever a representation is made
about any of the aforementioned four performance characteristics in any product brochure or
manufacturer specification sheet, the Rule also requires disclosures of total rated harmonic
distortion and the associated power bandwidth and impedance ratings. These disclosures are
necessary to effectuate the purpose of the Rule – to give consumers the necessary information
to make informed decisions regarding the purchase of audio equipment.
(7)

Circumstances Requiring Collection Inconsistent With Guidelines

The collections of information in the Rule are consistent with all applicable
guidelines contained in 5 C.F.R. § 1320.5(d)(2).
(8)

Consultation Outside the Agency

On November 2, 2020, the Commission sought public comment in connection with its
latest Paperwork Reduction Act clearance request for this Rule. See 85 Fed. Reg. 69,331. No
germane comments were received. The Commission is seeking comments again
contemporaneous with this submission.
(9)

Payments or Gifts to Respondents
Not Applicable.

(10) & (11) Assurances of Confidentiality/Matters of a Sensitive Nature
There are no recordkeeping or reporting requirements in the Rule. Accordingly,
confidentiality issues and issues involving questions of a sensitive nature are not
involved.
(12) Hours Burden and Associated Labor Costs
Estimated annual hours of burden: 450 hours (300 testing hours; 150 disclosure hours).

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The Rule’s provisions require affected entities to test the power output of amplifiers in
accordance with a specified FTC protocol. The Commission staff estimates that approximately
300 new amplifiers and receivers come on the market each year. High fidelity manufacturers
routinely conduct performance tests on these new products prior to sale. Because manufacturers
conduct such tests, the Rule imposes no additional costs except to the extent that the FTC protocol
is more time-consuming than alternative testing procedures. In this regard, a warm-up period that
the Rule requires before measurements are taken may add approximately one hour to the time
testing would otherwise entail. Thus, staff estimates that the Rule imposes approximately 300
hours (1 hour x 300 new products) of added testing burden annually.
In addition, the Rule requires disclosures if a manufacturer makes a power output claim
for a covered product in an advertisement, specification sheet, or product brochure. This
requirement does not impose any additional costs on manufacturers because, absent the Rule,
media advertisements, as well as manufacturer specification sheets and product brochures, would
contain a power specification obtained using an alternative to the Rule-required testing protocol.
The Rule, however, also requires disclosure of harmonic distortion, power bandwidth, and
impedance ratings in manufacturer specification sheets and product brochures that might not
otherwise be included.
Staff assumes that manufacturers produce one specification sheet and one brochure each
year for each new amplifier and receiver. The burden of disclosing the harmonic distortion,
bandwidth, and impedance information on the specification sheets and brochures is limited to the
time needed to draft and review the language pertaining to the aforementioned specifications.
Staff estimates the time involved for this task to be a maximum of fifteen minutes (or 0.25 hours)
for each new specification sheet or brochure for a total of 150 hours (derived from [(300 new
products x 1 specification sheet) + (300 new products x 1 brochure)] x 0.25 hours for each
specification sheet or brochure). The total annual burden imposed by the Rule, therefore, is
approximately 450 burden hours for testing and disclosures.
Estimated annual labor cost burden: $26,130.
Generally, electronics engineers perform the testing of amplifiers and receivers. Staff
estimates a labor cost of $15,897 for such testing (300 hours for testing x $52.99 mean hourly
wages). Staff assumes advertising or promotions managers prepare the disclosures contained in
product brochures and manufacturer specification sheet and estimates a labor cost of $10,233
(150 hours for disclosures x $68.22 mean hourly wages). Accordingly, staff estimates the total
labor costs associated with the Rule to be approximately $26,130 per year ($15,897 for testing +
$10,233 for disclosures).1

1
The wage rates for electronics engineers and advertising and promotions managers are based on recent
data from the Bureau of Labor Statistics Occupational Employment Statistics Survey at
https://www.bls.gov/news.release/ocwage.htm.

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(13) Estimated Annual Capital and/or Other Non-labor Related Costs
The Rule imposes no capital or other non-labor costs because its requirements
are incidental to testing and advertising done in the ordinary course of business.
(14) Estimated Cost to Federal Government
Staff estimates that the current year fiscal cost of administering this requirement is
approximately $10,000. This estimate includes attorney, economist, and other support
costs.
(15) Changes in Burden
The FTC staff is not requesting any change in the burden hours.
(16)

Statistical Use of Information
There are no plans to publish any information for statistical use.

(17) Display of the Expiration Date for OMB Approval
Not applicable.
(18)

Exceptions to the Certification for Paperwork Reduction Act Submissions
Not applicable.