[Federal Register Volume 59, Number 77 (Thursday, April 21, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-9629]


[[Page Unknown]]

[Federal Register: April 21, 1994]


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FEDERAL TRADE COMMISSION
[File No. 932 3200]

 

America's Favorite Chicken Company; Proposed Consent Agreement 
With Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: In settlement of alleged violations of federal law prohibiting 
unfair acts and practices and unfair methods of competition, this 
consent agreement, accepted subject to final Commission approval, would 
prohibit, among other things, a Georgia-based fast-food corporation 
from misrepresenting the extent to which any product or package is 
capable of being recycled, or the extent to which recycling collection 
programs are available for such products, and from making claims about 
any environmental benefit of its products or packaging unless it 
possesses competent and reliable evidence to substantiate the claims.

DATES: Comments must be received on or before June 20, 1994.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
room 159, 6th St. and Pa. Ave., NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:
C. Steven Baker or Catherine fuller, FTC/Chicago Regional Office, 55 
East Monroe St., suite 1437, Chicago, IL. 60603. (312) 353-8156.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Sec. 2.34 of the 
Commission's Rules of Practice (16 CFR 2.34), notice is hereby given 
that the following consent agreement containing a consent order to 
cease and desist, having been filed with and accepted, subject to final 
approval, by the Commission, has been placed on the public record for a 
period of sixty (60) days. Public comment is invited. Such comments or 
views will be considered by the Commission and will be available for 
inspection and copying at its principal office in accordance with 
Sec. 4.9(b)(6)(ii) of the Commission's Rules of Practice (16 CFR 
4.9(b)(6)(ii)).

Agreement Containing Consent Order To Cease and Desist

    The Federal Trade Commission having initiated an investigation of 
certain acts and practices of America's Favorite Chicken Company, a 
corporation (``proposed respondent''), and it now appearing that 
proposed respondent is willing to enter into an agreement containing an 
order to cease and desist from the acts and practices being 
investigated,
    It is hereby agreed by and between America's Favorite Chicken 
Company, by its duly authorized officer, and its attorney, and counsel 
for the Federal Trade Commission that:
    1. Proposed respondent America's Favorite Chicken Company, is a 
corporation organized, existing and doing business under and by virtue 
of the laws of the State of Minnesota with its principal office or 
place of business at Six Concourse Parkway, suite 1700, Atlanta, 
Georgia 30328.
    2. Proposed respondent admits all the jurisdictional facts set 
forth in the draft of complaint here attached.
    3. Proposed respondent waives:
    a. Any further procedural steps;
    b. The requirement that the Commission's decision contain a 
statement of findings of fact and conclusions of law;
    c. All rights to seek judicial review or otherwise to challenge or 
contest the validity of the order entered pursuant to this agreement; 
and
    d. All claims under the Equal Access to Justice Act.
    4. This agreement shall not become a part of the public record of 
the proceeding unless and until it is accepted by the Commission. If 
this agreement is accepted by the Commission, it, together with the 
draft of the complaint contemplated hereby, will be placed on the 
public record for a period of sixty (60) days and information in 
respect thereto publicly released. The Commission Thereafter may either 
withdraw its acceptance of this agreement and so notify proposed 
respondent, in which event it will take such action as it may consider 
appropriate, or issue and serve its complaint (in such form as the 
circumstances may require) and decision, in disposition of the 
proceeding.
    5. This agreement is for settlement purposes only and does not 
constitute an admission by proposed respondent that the law has been 
violated as alleged in the attached draft complaint or that the facts 
as alleged in the attached draft complaint, other than the 
jurisdictional facts, are true.
    6. This agreement contemplates that, if it is accepted by the 
Commission, and if such acceptance is not subsequently withdrawn by the 
Commission pursuant to the provisions of Sec. 2.34 of the Commission's 
Rules the Commission may without further notice to proposed respondent: 
(1) issue its complaint corresponding in form and substance with the 
draft of complaint here attached and its decision containing the 
following order to cease and desist in disposition of the proceeding, 
and (2) make information public in respect thereto. When so entered, 
the order to cease and desist shall have the same force and effect and 
may be altered, modified or set aside in the same manner and within the 
same time provided by statute for other orders. The order shall become 
final upon service. Delivery by the U.S. Postal Service of the decision 
containing the agreed-to order to proposed respondent's address as 
stated in this agreement shall constitute service. Proposed respondent 
waives any right it might have to any other manner of service. The 
complaint may be used in construing the terms of the order, and no 
agreement, understanding, representation, or interpretation not 
contained in the order or in the agreement may be used to vary or 
contradict the terms of the order.
    7. Proposed respondent has read the complaint and the order 
contemplated hereby. It understands that once the order has been 
issued, it will be required to file one or more compliance reports 
showing it has fully complied with the order. Proposed respondent 
further understands that it may be liable for civil penalties in the 
amount provided by law for each violation of the order after it becomes 
final.

Order

Definitions
    For purposes of this Order, the following definitions shall apply:
    The term ``product or package'' means any product or package, 
including, but not limited to, any item used by respondent to contain, 
serve, or package goods, offered for sale, sold or distributed to the 
public by respondent, its successors and assigns; and also means any 
such product or package sold or distributed to the public by third 
parties under private labeling agreements with respondent, its 
successors and assigns.
    The term ``competent and reliable scientific evidence'' means 
tests, analyses, research, studies or other evidence based on the 
expertise of professionals in the relevant area, that has been 
conducted and evaluated in an objective manner by persons qualified to 
do so, using procedures generally accepted in the profession to yield 
accurate and reliable results.

I

    It is ordered that respondent, America's Favorite Chicken Company, 
a corporation, its successors and assigns, and its officers, agents, 
representatives, and employees, directly or through any corporation, 
subsidiary, division, or other device, in connection with the 
manufacturing, labeling, advertising, promotion, distribution, or use 
of any product or package in or affecting commerce, as ``commerce'' is 
defined in the Federal Trade Commission Act, do forthwith cease and 
desist from misrepresenting, in any manner, directly or by implication, 
the extent to which any such product or package is capable of being 
recycled or the extent to which recycling collection programs for such 
product or package are available.

II

    It is further ordered that respondent, America's Favorite Chicken 
Company, a corporation, its successors and assigns, and its officers, 
agents, representatives, and employees, directly or through any 
corporation, subsidiary, division, or other device, in connection with 
the manufacturing, labeling, advertising, promotion, distribution, or 
use of any product or package in or affecting commerce, as ``commerce'' 
is defined in the Federal Trade Commission Act, do forthwith cease and 
desist from representing, in any manner, directly or by implication, 
that any product or package offers any environmental benefit, unless at 
the time of making such representation, respondent possesses and relies 
upon competent and reliable evidence, which when appropriate must be 
competent and reliable scientific evidence, that substantiates such 
representation.

III

    It is further ordered that for five (5) years after the last date 
of dissemination of any representation covered by this Order, 
respondent, or its successors and assigns, shall maintain and upon 
request make available to the Federal Trade Commission for inspection 
and copying:
    A. All materials that were relied upon in disseminating such 
representations; and
    B. All tests, reports, studies, surveys, demonstrations, or other 
evidence in its possession or control that contradict, qualify, or call 
into question such representation, or the basis relied upon for such 
representation, including complaints from consumers.

IV

    It is further ordered that the respondent shall distribute a copy 
of this Order to each of its operating divisions and to each of its 
officers, agents, representatives, or employees engaged in the 
preparation and placement of advertisements, promotional materials, 
product labels or other such sales materials covered by this Order.

V

    It is further ordered that respondent shall notify the Commission 
at least thirty (30) days prior to any proposed change in the 
corporation such as a dissolution, assignment, or sale resulting in the 
emergence of a successor corporation, the creation or dissolution of 
subsidiaries, or any other change in the corporation which may affect 
compliance obligations under this Order.

VI

    It is further ordered that respondent shall, within sixty (60) days 
after service of this Order upon it, and at such other times as the 
Commission may require, file with the Commission a report, in writing, 
setting forth in detail the manner and form in which it has complied 
with this Order.
Analysis of Proposed Consent Order To Aid Public Comment
    The Federal Trade Commission has accepted an agreement, subject to 
final approval, to a proposed consent order from respondent America's 
Favorite Chicken Company.
    The proposed consent order has been placed on the public record for 
sixty (60) days for reception of comments by interested persons. 
Comments received during this period will become part of the public 
record. After sixty (60) days, the Commission will again review the 
agreement and the comments received and will decide whether it should 
withdraw from the agreement and take other appropriate action or make 
final the agreement's proposed order.
    This matter concerns environmental claims made on the labels of 
packaging used to contain respondent's food products. The Commission's 
complaint charges that respondent made false and unsubstantiated claims 
that its packaging was recyclable after ordinary use. In fact, the 
complaint alleges, while the respondent's packaging is capable of being 
recycled, the vast majority of consumers cannot recycle it because 
there are virtually no collection facilities that accept food 
contaminated paper packaging for recycling.
    The proposed consent order contains provisions designed to remedy 
the violations charged and to prevent the respondent from engaging in 
similar acts and practices in the future. The proposed order extends to 
all products or packages that are used by the respondent to package its 
food products or that are sold to the public.
    Part I of the proposed consent order prohibits the respondent from 
misrepresenting the extent to which any product or packaging is capable 
of being recycled or the extent to which recycling collection programs 
for such products or packaging are available. Part II of the proposed 
order prohibits the respondent from misrepresenting the environmental 
benefit of any product or packaging it uses unless at the time such 
representation is made the respondent possesses and relies upon 
competent and reliable evidence that substantiates the representation.
    The remaining parts of the proposed consent order require the 
respondent to maintain materials relied upon to substantiate claims 
covered by the order, to distribute copies of the order to each of its 
operating divisions and to certain company officials, to notify the 
Commission of any changes in corporate structure that might affect 
compliance with the Order, and to file one or more compliance reports.
    The purpose of this analysis is to facilitate public comment on the 
proposed consent order. It is not intended to constitute an official 
interpretation of the agreement and proposed order or to modify in any 
way their terms.
Donald S. Clark,
Secretary.
[FR Doc. 94-9629 Filed 4-20-94; 8:45 am]
BILLING CODE 6750-01-M