The Federal Trade Commission ("FTC") hosted a roundtable workshop last week regarding the Jewelry Guides, 16 C.F.R. § 23. The Jewelry Guides apply to a wide range of jewelry industry products including precious metal, pewter, diamond, gemstone, and pearl products. On July 2, 2012, the FTC sought public comment on a variety of issues as part of its periodic regulatory flexibility review. The purpose of this workshop was to address two topics for further consideration prior to making Commission proposals. The topics were as follows: (1) The marketing of alloy products containing precious metals in amounts below the Guides’ minimum thresholds; and (2) surface applications of precious metals.
The Guides currently provide minimum standards for the use of certain precious metal descriptors. For example, Section 23.4 provides that it may be misleading to use the word "gold" or any abbreviation, or a quality mark implying gold content, to describe a product that is composed throughout of an alloy of gold that is less than 10 karats. Nonetheless, the Guides do not currently explain how such a product can be properly described. Several panelists recommended using percentages to describe alloys that do not meet the 10 karat standard, e.g., 750 parts per 1000. However, one panelist and one audience member advocated against using a percentage due to concern that two systems, e.g., one for below 10 karats and one for above 10 karats, would be confusing to consumers.
Consumer confusion was also a consideration regarding surface applications of precious metals. The current Guides discuss certain aspects of surface applications but do not comprehensively set specific minimum standards for the use of terms indicating precious metal application. The panelists indicated that the current high price of precious metals has led to an increase in products containing a surface-layer application of precious metal over a less expensive metal. The panelists generally agreed that clear guidance from the FTC is needed in this area although differed as to the preferred terms and standards for them.
The FTC staff did not give any indication regarding timing for proposed Jewelry Guide changes. Comments filed in response to the FTC’s May 6, 2013 request can be found here.