Views on the Benefits of the Federal Trade Commission's Line-of-Business Form and Assessment of the Benefits of the Program

GGD-79-49: Published: Apr 6, 1979. Publicly Released: Apr 6, 1979.

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The Line-of-Business (LB) Form to be used by the Federal Trade Commission (FTC) in its collection of financial data from the Nation's largest businesses was approved for the fourth time. After collection of the data, the results are to be analyzed and published to show revenues, costs. profits, and related information on a "line-of-business" or product-line basis.

Respondent firms have challenged the authority of FTC to collect LB data, questioned the confidentiality protections that are to be provided, and asserted that compliance costs would be excessively burdensome. The controversy between respondents and the FTC about the reliability and usefulness of LB data has centered around two points: the classification system used to define lines-of-business; and the accounting procedures used in compiling line-of-business data. Litigation has now been completed, resolving the legal issues in favor of FTC, but the fundamental management issue of whether the program's usefulness justifies its costs remains unresolved.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The FTC should: develop a plan for weighing the benefits of the LB Program against its total costs; complete an initial plan by December 31, 1979; and modify the initial plan appropriately as additional experience is gained with the program.

    Agency Affected:

 

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