We provide an update on some recent FCC decisions that act as a reminder to companies designing, manufacturing and marketing electronic devices of the importance of thorough pre-market review procedures.
In the last six weeks of 2020, the United States Federal Communications Commission (FCC) issued several citations and orders to companies that failed to comply with the agency's equipment authorization and labelling rules.
The FCC's decisions illustrate that companies designing, manufacturing, or marketing many types of electronic devices must be sure to comply with the FCC's equipment authorization rules before marketing or selling their devices.
In one case, the FCC settled an investigation with a manufacturer of hunting equipment. During the investigative process, the company voluntarily recalled six devices that did not comply with FCC rules. The settlement with the FCC required the company to pay a $55,000 fine and adopt an onerous, three-year compliance plan. In four other cases, the FCC required manufacturers to stop marketing and selling their non-compliant devices. The FCC also warned those four companies that future violations of its rules could subject the companies to substantial fines.
What Are the Risks of Non-compliance?
The FCC requires devices for the U.S. market that interact wirelessly - using Bluetooth, WiFi, cellular or any other technology - or that contain a processor, to comply with the FCC's equipment authorization rules. The FCC's rules are designed to ensure that electronic devices can coexist without interfering with one another. However, as the recent orders make clear, failure to comply with the rules poses significant risks, including (1) exposure to significant fines of up to $20,731 a day for each device that does not comply; (2) recalls and discontinuing all selling and marketing of unauthorized devices; (3) onerous mandatory compliance programs; and (4) substantial legal fees and other costs for responding to FCC investigations.
What Do FCC Equipment Rules Require?
With very limited exceptions, if a device is covered by the rules, it must go through the FCC's equipment authorization process and meet other requirements discussed below before it can be imported, marketed, or sold in the U.S.
The FCC's equipment authorization process varies depending on the specific device, but devices subject to the rules must be tested to ensure that they comply with limits on radio emissions, and the tests must be performed on the final version of a device. Devices can be tested in either accredited or unaccredited test facilities. Many accredited facilities test for compliance with U.S., Canadian and European requirements at the same time.
Many devices can be marketed once they pass the tests, but some equipment requires FCC approval, using a process called certification. Certification requires an application to the FCC that includes the test results and detailed product information (including the product manual).
Devices subject to the equipment authorization rules also must be labeled and include information on their packaging, in a manual, or both. The packaging and manual information tells consumers about the FCC authorization, discusses interference and how to correct it, and warns users not to modify the device. The label identifies the product so that the FCC can track complaints about interference and verify that the product has gone through the equipment authorization process. Labeling requirements vary depending on the type and size of the device, but any device with a screen can use electronic labeling, rather than placing the label on the outside of the device, and very small devices without screens can place the label information in the user manual. Even when electronic labeling is allowed, the product or packaging often must include some external labeling to demonstrate compliance with the FCC rules. (This labeling may be removable in some cases.)
While the FCC's equipment authorization rules can be onerous, making plans early in the design process can prevent material disruptions in product rollout. That planning also can eliminate costly risks associated with post-manufacturing enforcement action from the FCC.
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