[Federal Register Volume 59, Number 102 (Friday, May 27, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-13042]


[[Page Unknown]]

[Federal Register: May 27, 1994]


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FEDERAL TRADE COMMISSION
[File No. 932 3053]

 

Amoco Chemical Company, et al.; 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, two Delaware corporations from 
misrepresenting the extent to which any polystyrene cup, plate, and 
other food service product of packaging material is capable of being 
recycled or the extent to which recycling collection programs are 
available, and from representing that such products offer any 
environmental benefit unless they possess competent and reliable 
scientific evidence that substantiates the claim.

DATES: Comments must be received on or before July 26, 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: Timothy Hughes, 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

    In the Matter of: Amoco Chemical Company, and corporation, and 
Amoco Foam Products Company, a corporation.

    The Federal Trade Commission having initiated an investigation of 
certain acts and practices of proposed respondents Amoco Chemical 
Company, a corporation, and Amoco Foam Products Company, a corporation, 
and it now appearing that proposed respondents are 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 Amoco Chemical Company and Amoco 
Foam Products Company, by their duly authorized officers, and counsel 
for the Federal Trade Commission that:
    1. Proposed respondents Amoco Chemical Company and Amoco Foam 
Products Company are corporations organized, existing and doing 
business under and by virtue of the laws of the State of Delaware. 
Amoco Chemical Company dominates and controls the acts and practices of 
its wholly-owned subsidiary, Amoco Foam Products Company.
    The proposed respondent Amoco Chemical Company has its principal 
offices or place of business at 200 East Randolph Drive, Chicago, 
Illinois 60680. The proposed respondent Amoco Foam Products Company has 
its principal offices of place of business at 400 Northridge Road, 
Atlanta, Georgia 30350.
    2. Proposed respondents admit all the jurisdictional facts set 
forth in the draft of complaint here attached.
    3. Proposed respondents waive:

    (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 
respondents, 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 respondents 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 
respondents, (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 
respondents' address as stated in this agreement shall constitute 
service. Proposed respondents waive any right they 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 respondents have read the complaint and the order 
contemplated hereby. They understand that once the order has been 
issued, they will be required to file one or more compliance reports 
showing they have fully complied with the order. Proposed respondents 
further understand that they 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 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.
    The term product or packaging material means any product or 
packaging material that is offered for sale, sold or distributed to the 
public by respondents, their successors and assigns, under any brand 
name of respondents, their successors and assigns; and also means any 
product or packaging material sold or distributed to the public by 
third parties under private labeling agreements with respondents, their 
successors and assigns.
I
    It is ordered that respondents, Amoco Chemical Company, a 
corporation, and Amoco Foam Products Company, a corporation, their 
successors and assigns, and their officers, representatives, agents, 
and employees, directly or through any corporation, subsidiary, 
division, or other device, in connection with the advertising, 
labeling, promotion, offering for sale, sale, or distribution of any 
polystyrene food service product or polystyrene packaging material 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:

    (1) Any such product or packaging material is capable of being 
recycled; or,
    (2) Recycling collection programs for such product or packaging 
material are available.
II
    It is further ordered that respondents, Amoco Chemical Company, a 
corporation, and Amoco Foam Products Company, a corporation, their 
successors and assigns, and their officers, representatives, agents, 
and employees, directly or through any corporation, subsidiary, 
division, or other device, in connection with the advertising, 
labeling, promotion, offering for sale, sale, or distribution of any 
plastic food service product or plastic packaging material 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 such product or packaging 
material offers any environmental benefit, unless at the time of making 
such representation, respondents possess and rely 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, 
respondents, or their 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 
representation; and
    B. All tests, reports, studies, surveys, demonstrations, or other 
evidence in their 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 respondents shall distribute a copy of 
this Order to each of their operating divisions and to each of their 
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 respondents shall notify the Commission 
at least thirty (30) days prior to any proposed change in the 
corporations 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 corporations which may 
affect compliance obligations under this Order.
VI
    It is further ordered that respondents shall, within sixty (60) 
days after service of this Order upon them, 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 they have 
complied with this Order.

Analysis of Consent Order to Aid Public Comment

    The Federal Trade Commission has accepted an agreement, subject to 
final approval, to a proposed consent order from respondents Amoco 
Chemical Company and Amoco Foam Products Company, Delaware 
corporations.
    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 the labeling and advertising of Amoco 
polystyrene cups, plates and other food service products. The 
Commission's complaint in this matter alleges that Amoco falsely 
represented that the polystyrene cups, plates and other food service 
products are recyclable. In fact, the complaint alleges, the 
polystyrene food service products are not recyclable because there are 
only a few collection facilities nationwide that will accept them for 
recycling.
    The proposed consent order contains provisions designed to remedy 
the violations charged and to prevent the respondents from engaging in 
similar acts and practices in the future.
    Part I of the proposed order requires that respondents cease and 
desist from misrepresenting, in any manner, directly or by implication, 
with respect to any polystyrene food service product or packaging 
material the extent to which it is capable of being recycled or to 
which recycling collection programs are available.
    Part II of the proposed order provides that if the respondents 
represent in advertising or labeling that any plastic food service 
product or packaging material offers any environmental benefit, they 
must have a reasonable basis consisting of competent and reliable 
evidence, which when appropriate must be competent and reliable 
scientific evidence, that substantiates the claims.
    The proposed order also requires respondents to maintain materials 
relied upon to substantiate the claims covered by the order, to 
distribute copies of the order 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 reports detailing 
compliance with the order.
    The purpose of this analysis is to facilitate public comment on the 
proposed order. It is not intended to constitute an official 
interpretation of the agreement and proposed order or to modify in any 
way their terms.
Benjamin I. Berman,
Acting Secretary.
[FR Doc. 94-13042 Filed 5-26-94; 8:45 am]
BILLING CODE 6750-01-M