[Federal Register Volume 60, Number 208 (Friday, October 27, 1995)]
[Notices]
[Pages 55033-55035]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-26679]



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FEDERAL TRADE COMMISSION
[File No. 943-3277]


Johnson & Johnson Consumer Products Inc.; Consent Agreement With 
Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: 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, among other things, prohibit a New Jersey-based consumer 
products company and its parents corporation (1) from representing, in 
any manner, directly or by implication, the efficacy of any over-the-
counter product--as a contraceptive or as a method of protection 
against the transmission of any sexually-transmitted disease--unless, 
at the time of making any such representation, the companies possess 
and rely upon competent and reliable scientific evidence that 
substantiates such representation; and (2) from misrepresenting in any 
manner, directly or by implication, the existence, contents, validity, 
results, conclusions, or interpretations of any test or study relating 
to any over-the-counter product with a use relating to human 
reproduction, reproductive organs or sexually-transmitted diseases.

DATES: Comments must be received on or before December 26, 1995.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 6th Street and Pennsylvania Avenue, NW, Washington, DC. 
20580.

FOR FURTHER INFORMATION CONTACT:
Linda K. Badger, San Francisco Regional Office, 901 Market Street, 
Suite 570, San Francisco, California 94103. (415) 356-5270.

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 Section 4.9(b)(6)(ii) of the Commission's Rules of 
Practice (16 CFR 4.9(b)(6)(ii)).
    The Federal Trade Commission having initiated an investigation of 
certain acts and practices of Johnson & Johnson Consumer Products, 
Inc., a corporation, and it now appearing that the proposed respondent 
and its parent corporation, Johnson & Johnson, are willing to enter 
into an agreement containing an order to cease and desist from the use 
of the acts and practices being investigated,
    It is hereby agreed by and between Johnson & Johnson Consumer 
Products, Inc., a corporation, by its duly authorized officer, and its 
attorney, and its parent corporation, Johnson & Johnson, and its duly 
authorized officer, and its attorney, and counsel for the Federal Trade 
Commission that:
    1. Proposed respondent Johnson & Johnson Consumer Products, Inc., 
is a corporation organized, existing and doing business under and by 
virtue of the laws of the State of New Jersey, with its office and 
principal place of business located at 1999 Grandview Road, Skillman, 
New Jersey 08588.
    Johnson & Johnson is a corporation organized, existing and doing 
business under and by virtue of the laws of the State of New Jersey, 
with its office and principal place of business located at One Johnson 
& Johnson Plaza, New Brunswick, New Jersey 08933.
    2. Proposed respondent and its parent corporation admit all the 
jurisdictional facts set forth in the draft of complaint.
    3. Proposed respondent and its parent corporation 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. Any claim under the Equal Access to Justice Act.
    4. 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 and its parent 
corporation, 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 the proposed respondent or its parent 
corporation of facts, other than jurisdictional facts, or of violations 
of law as alleged in the draft of complaint.
    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 Section 2.34 of the 
Commission's Rules, the Commission may, without further notice to the 
proposed respondent or its parent corporation, (a) issue its complaint 
corresponding in form and substance with the draft of complaint and its 
decision containing the following order to cease and desist in 
disposition of the proceeding and (b) 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 the proposed respondent's address and to its parent 
corporation's address as stated in this agreement shall constitute 
service. The proposed respondent and its parent corporation waive any 
right they 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. The proposed respondent and its parent corporation have read the 
proposed complaint and order contemplated hereby. The proposed 
respondent and its parent corporation understand that once the order 
has been issued, they will be required to file one or more compliance 
reports showing that they have fully complied with the order. The 
proposed respondent and its parent corporation further understand 

[[Page 55034]]
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

I

    It is ordered that respondent, Johnson & Johnson Consumer Products, 
Inc., a corporation, its parent corporation, Johnson & Johnson, and all 
the other subsidiaries of Johnson & Johnson, their successors and 
assigns (hereinafter collectively ``the companies''), and the 
companies' officers, agents, representatives and employees, directly or 
through any corporation, subsidiary, division or other device, in 
connection with the manufacturing, labelling, advertising, promotion, 
offering for sale, sale or distribution of K-Y Plus Nonoxynol-9 
Spermicidal Lubricant, or any other personal lubricant and/or 
spermicide, in or affecting commerce, as ``commerce'' is defined in the 
Federal Trade Commission Act, do forthwith cease and desist from making 
any representation, directly or by implication, relating to:
    A. The failure rate of any method of contraception due to defects, 
misuse, or any other cause;
    B. Any such product's ability to provide protection against the 
development of tiny holes in condoms during use;
    C. Any such product's ability to provide protection against HIV and 
other viruses; or
    D. The health-related benefits of any such product; unless, at the 
time of making any such representation, the companies possess and rely 
upon competent and reliable scientific evidence that substantiates such 
representation. For the purposes of this Order, ``competent and 
reliable scientific evidence'' shall mean those tests, analyses, 
research, studies or other evidence based on the expertise of 
professionals in the relevant area, that have 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.

II

    It is further ordered that the companies and their officers, 
agents, representatives and employees, directly or through any 
corporation, subsidiary, division or other device, in connection with 
the manufacturing, labelling, advertising, promotion, offering for 
sale, sale or distribution of any ``food,'' ``drug'' or ``device,'' as 
those terms are defined in Section 15 of the Federal Trade Commission 
Act, 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, the efficacy 
of any over-the-counter product as a contraceptive or as a method of 
protection against the transmission of any sexually-transmitted 
disease, unless, at the time of making any such representation, the 
companies possess and rely upon competent and reliable scientific 
evidence that substantiates such representation.

III

    It is further ordered that the companies and their officers, 
agents, representatives and employees, directly or through any 
corporation, subsidiary, division or other device, in connection with 
the manufacturing, labelling, advertising, promotion, offering for 
sale, sale or distribution of any over-the-counter product with a use 
relating to human reproduction, reproductive organs or sexually-
transmitted diseases, 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 existence, contents, validity, results, conclusions, or 
interpretations of any test or study.

IV

    It is further ordered that for five (5) years after the last date 
of dissemination of any representation covered by this Order, the 
companies 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.

V

    It is further ordered that the companies notify the Commission at 
least thirty (30) days prior to any proposed change in the companies 
such as 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 arising out of the Order.

VI

    It is further ordered (1) that respondent Johnson & Johnson 
Consumer Products, Inc., shall, within ten (10) days from the date of 
service of this Order upon it, distribute a copy of this Order to each 
of its operating divisions, to each of its managerial employees, and to 
each of its officers, agents, representatives or employees engaged in 
the preparation, review or placement of advertising or other materials 
covered by this Order, and (2) that the parent corporation, Johnson & 
Johnson, shall, within ten (10) days from the date of service of this 
Order upon it, distribute a copy of this Order to each of its and of 
its subsidiaries' officers, agents, representatives or employees 
engaged in the preparation, review of placement of advertising of any 
over-the-counter product with a use relating to human reproduction, 
reproductive organs or sexually-transmitted diseases.

VII

    It is further ordered that this Order will terminate twenty years 
from the date of its issuance, or twenty years from the most recent 
date that the United States or the Federal Trade Commission files a 
complaint (with or without an accompanying consent decree) in federal 
court alleging any violation of the Order, whichever comes later; 
provided, however, that the filing of such complaint will not affect 
the duration of:
    A. Any paragraph in this Order that terminates in less than twenty 
years;
    B. This Order's application to any respondent that is not named as 
a defendant in such complaint; and
    C. This Order if such complaint is filed after the Order has 
terminated pursuant to this paragraph.
    Provided further, that if such complaint is dismissed or a federal 
court rules that the respondent did not violate any provision of the 
Order, and the dismissal or ruling is either not appealed or upheld on 
appeal, then the Order will terminate according to this paragraph as 
though the complaint was never filed, except that the Order will not 
terminate between the date such complaint is filed and the later of the 
deadline for appealing such dismissal or ruling and the date such 
dismissal or ruling is upheld on appeal.

VIII

    It is further ordered that the companies shall, within sixty (60) 
days from the date of service of this Order upon them, and at such 
other times as the Commission may require, file with 

[[Page 55035]]
the Commission a report, in writing, setting forth in detail in the 
manner and form in which they have complied with this Order.

IX

    It is further ordered that nothing in this Order shall prohibit the 
companies from making any representation for any drug that is permitted 
in labeling for any such drug under any tentative final or final 
standard promulgated by the Food and Drug Administration, or under any 
new drug application approved by the Food and Drug Administration.

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 Johnson & 
Johnson Consumer Products, Inc. Its parent corporation, Johnson and 
Johnson, although not a respondent, also agreed to be bound by the 
terms of the consent order. Both parent and subsidiary are New Jersey 
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.
    Johnson & Johnson Consumer Products, Inc., manufacturers and sells 
baby care products, personal care products for adults, and bandages. 
This matter concerns this company's ``Condom Insurance'' advertisements 
for its ``K-Y Plus Brand Spermicidal Lubricant with NonOxynol-9'' (``K-
Y Plus''). In these advertisements, Johnson & Johnson CPI promote the 
use of K-Y Plus with condoms as ``insurance'' to protect against 
unwanted pregnancies, and HIV and other sexually transmitted diseases 
(``STDs'') in case of condom failure. The ads warn consumers to use K-Y 
Plus because one in six condoms allegedly fails.
    The Commission's complaint charges that respondent's advertising 
contained false and/or unsubstantiated representations regarding the 
failure rate of condoms and the effectiveness of K-Y Plus. 
Specifically, the complaint alleges that the respondent falsely 
represented that scientific tests or studies show that up to eighteen 
and one half percent of condoms will fail, leaving users vulnerable to 
pregnancy and sexually transmitted diseases. The complaint also alleges 
that the respondent made unsubstantiated claims that: (1) One out of 
six condoms develops tiny holes during use which are big enough for 
sperm, HIV and other viruses to pass through; (2) one out of six 
condoms fails due to mistake in using condoms or through the 
development of tiny holes during use; (3) K-Y Plus provides protection 
against the development of tiny holes in condoms during use; and (4) K-
Y Plus provides protection against HIV and other viruses.
    The proposed consent order contains provisions designed to remedy 
the violations charged and to prevent the respondent or its parent 
corporation from engaging in similar acts and practices in the future. 
Part I of the proposed order would prohibit the companies from making 
any of the unsubstantiated claims delineated above, or any other claims 
of a health-related benefit, for K-Y Plus or any other spermicide and/
or lubricant, unless at the time of making them, they possess and rely 
upon competent and reliable evidence, which when appropriate must be 
competent and reliable scientific evidence.
    Part II of the proposed order includes fencing-in relief, 
prohibiting the companies from representing, in any manner, directly or 
by implication, the efficacy of any over-the-counter product as a 
contraceptive or as a method of protection against the transmission of 
any sexually-transmitted disease, unless, at the time of making any 
such representation, the companies possess and rely upon competent and 
reliable scientific evidence that substantiates such representation.
    Part III of the proposed order prohibits the companies from 
misrepresenting in any manner, directly or by implication, the 
existence, contents, validity, results, conclusions, or interpretations 
of any test or study relating to any over-the-counter product with a 
use relating to human reproduction, reproductive organs or sexually-
transmitted diseases.
    The proposed order also requires the companies to maintain 
materials relied upon to substantiate claims covered by the order; to 
provide a copy of the consent agreement to all employees or 
representatives involved in the preparation and placement of the 
company's advertisements, as well as to all company executives and 
marketing and sales managers; 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.
Donald S. Clark,
Secretary.

Concurring Statement of Commissioner Mary L. Azcuenaga in Johnson & 
Johnson Consumer Protects Inc. File No. 943 3277

    In concur in the acceptance of the proposed consent agreement for 
public comment except to the extent that the proposed order imposes 
obligations on Johnson & Johnson (the parent company of the respondent 
Johnson & Johnson Consumer Products Inc.), which is not named in the 
accompanying complaint.

[FR Doc. 95-26679 Filed 10-26-95; 8:45 am]
BILLING CODE 6750-01-M