[Federal Register Volume 59, Number 128 (Wednesday, July 6, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-16275]


[[Page Unknown]]

[Federal Register: July 6, 1994]


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FEDERAL TRADE COMMISSION
[File No. 932 3117]

 

Sears, Roebuck and Co.; 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 
require, among other things, the Illinois-based retail department store 
to comply with the Pre-Sale Availability Rule under the Magnuson-Moss 
Warranty Act, to inform its retail store managers of their compliance 
responsibilities, and to develop and implement a program for 
instructing its sales personnel about the availability and location of 
manufacturers' warranty information.

dates: Comments must be received on or before August 22, 1994.

addresses: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 6th St. and Pa. Ave., N.W., Washington, D.C. 20580.

for further information contact: Jeffrey Klurfeld or Gerald Wright, 
FTC/San Francisco Regional Office, 901 Market St., Suite 570, San 
Francisco, CA. 94103. (415) 744-7920.

Supplementary information: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 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 
Sears, Roebuck and Co., a corporation (``proposed respondent'' or 
``respondent''), and it now appearing that proposed respondent is 
wiling 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 Sears, Roebuck and Co., by its 
duly authorized officer, and counsel for the Federal Trade Commission 
that:
    1. Proposed respondent Sears, Roebuck and Co., is a corporation 
organized, existing, and doing business under and by virtue of the laws 
of the State of New York, with its principal office and place of 
business located at 333 Beverly Road, Hoffman Estates, Illinois 60179.
    2. 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 draft of complaint here attached.
    3. Proposed respondent admits all the jurisdictional facts set 
forth in the draft complaint here attached.
    4. 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.
    5. This agreement shall not become 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 
complaint contemplated thereby, 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 the 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 this proceeding.
    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 complaint and 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 may 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 the agreement may be used 
to vary or contradict the terms of the order.
    7. Proposed respondent has read the proposed complaint and order 
contemplated hereby. It understands that once the order has been 
issued, it will be required to file one or more compliance reports 
showing that 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

    The definitions of terms contained in Sec. 101 of the Magnuson-Moss 
Warranty Act, 15 U.S.C. 2301, and in Rule 702, 16 CFR 702.1, 
promulgated thereunder, shall apply to the terms of this Order.
I
    It is ordered that respondent Sears, Roebuck and Co., a 
corporation, its successors and assigns, and its officers, 
representatives, agents and employees, directly or through any 
corporation, subsidiary, division or other device in connection with 
the sale or offering for sale of any consumer product in or affecting 
commerce, do forthwith cease and desist from failing to make a text of 
any written warranty on a consumer product actually costing more than 
$15 readily available for examination by prospective buyers prior to 
sale through utilization of one or more means specified in 16 CFR 
702.3(a), as amended.
II
    It is further ordered that respondent shall, within thirty (30) 
days of the date of service of this Order, deliver to each current 
retail store manager engaged in the sale of consumer products on behalf 
of respondent, a copy of this Order to cease and desist.
III
    It is further ordered that respondent shall, within thirty (30) 
days of the date of service of this order, instruct all current retail 
store managers engaged in the sale of consumer products on behalf of 
respondent as to their specific obligations and duties under the 
Magnuson-Moss Warranty Act (15 U.S.C. 2301) and this Order.
IV
    It is further ordered that respondent shall, for a period of not 
less than four (4) years from the date of service of this Order, 
instruct all future retail store managers who will be engaged in the 
sale of consumer products on behalf of respondent, before they assume 
said responsibilities for respondent, as to their specific obligations 
and duties under the Magnuson-Moss Warranty Act (15 U.S.C. 2301) and 
this Order.
V
    It is further ordered that respondent shall, within thirty (30) 
days of the date of service of this Order, develop and implement a 
program to instruct its sales personnel about the availability and 
location of warranty information.
VI
    It is further ordered that respondent shall, for a period of not 
less than five (5) years from the date of service of the Order, 
maintain and upon request make available to the Federal Trade 
Commission for inspection and copying (i) copies of all written 
instructions provided by respondent to its retail store managers and 
sales personnel regarding their obligations and duties under the 
Magnuson-Moss Warranty Act (15 U.S.C. 2301) and this Order; (ii) copies 
of signs posted by respondent in its retail store outlets designed to 
elicit prospective buyers' attention to the availability of the text of 
written warranties for review upon request; and (iii) copies of the 
text of written warranties made readily available by respondent's 
retail store outlets for examination by prospective buyers on request.
VII
    It is further ordered that respondent, for a period of six (6) 
years from the date of service of this Order, shall notify the 
Commission at least thirty (30) days prior to any 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 that may affect compliance obligations 
arising out of the Order.
VIII
    It is further ordered that respondent shall, within sixty (60) days 
after service of this Order on it, 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 to a 
proposed consent order from Sears, Roebuck & Co., Hoffman Estates, 
Illinois (``Sears''). Sears is a national chain of retail department 
stores.
    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 proposed order contained in the agreement.
    The complaint alleges that Sears has violated a Rule promulgated by 
the Federal Trade Commission (16 CFR 702.3(a)) pursuant to the 
Magnuson-Moss Consumer Warranty Act (15 U.S.C. Sec. 2301). This Rule 
requires Sears to make manufacturers' warranty information available to 
consumers. The purposes of this Act, and the Rule, are to improve the 
information available to consumers, to prevent deception, and to 
promote competition, in the marketing of consumer product warranties 
offered by manufacturers.
    The Rule, called the ``Pre-Sale Availability Rule,'' gives 
retailers the option of either (1) displaying the text of 
manufacturers' warranties in close proximity to the product display; or 
(2) furnishing the text of manufacturers' warranties to customers upon 
request, and prominently displaying signs advising of the availability 
of such warranties. The complaint alleges that Sears has not complied 
with either of these options.
    The proposed order requires Sears to comply with this Rule, to 
inform its retail store executives of their compliance 
responsibilities, and to develop a program for instructing its sales 
personnel about the availability and location of manufacturers' 
warranty information. Sears will be subject to civil penalties if it 
does not comply 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.
Donald S. Clark,
Secretary.
[FR Doc. 94-16275 Filed 7-5-94; 8:45 am]
BILLING CODE 6750-01-M