[Federal Register Volume 60, Number 238 (Tuesday, December 12, 1995)]
[Notices]
[Pages 63717-63720]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-30216]
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FEDERAL TRADE COMMISSION
[File No. 942-3012]
Safe Brands Corporation, Warren Distribution, Inc. and ARCO
Chemical Company; 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
prohibit Safe Brands, the manufacturer of Sierra antifreeze, Warren
Distribution, its parent company, and ARCO, the supplier of the
principal ingredient in Sierra antifreeze, from making unsubstantiated
claims about the safety and environmental benefits of Sierra. They
would also be required to put a statement on Sierra containers
cautioning consumers that it may be harmful if swallowed. The
Commission alleged that the companies had claimed, without adequate
substantiation, that Sierra is absolutely safe for people and pets,
that Sierra is generally safer for the environment than conventional
antifreezes because it is biodegradable, and that Sierra and its
container are recycled.
DATES: Comments must be received on or before February 12, 1996.
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:
Joel Winston, Bureau of Consumer Protection, Federal Trade Commission,
S-4002, 6th Street & Pennsylvania Ave., NW., Washington, DC 20580 (202)
326-3153; Michael Dershowitz, Bureau of Consumer Protection, Federal
Trade Commission, S-4002, 6th Street & Pennsylvania Ave., NW.,
Washington, DC 20580 (202) 326-3158.
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)).
United States of America Before Federal Trade Commission
In the Matter of Safe Brands Corporation, a corporation, Warren
Distribution, Inc., a corporation, and ARCO Chemical Company, a
corporation.
[File No. 942 3012]
Agreement Containing Consent Order to Cease and Desist
The Federal Trade Commission having initiated an investigation of
certain acts and practices of proposed respondents Safe Brands
Corporation, a corporation, Warren Distribution, Inc., a corporation,
and ARCO Chemical 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 Safe Brands Corporation, Warren
Distribution, Inc., and ARCO Chemical Company, by their duly authorized
officers, and their attorneys, and counsel for the Federal Trade
Commission that:
1. Proposed respondent Safe Brands Corporation is a corporation
organized, existing and doing business under and by virtue of the laws
of the State of Nebraska. It is a wholly-owned subsidiary of proposed
respondent Warren Distribution, Inc. Proposed respondent Warren
Distribution, Inc. is a corporation organized, existing and doing
business under and by virtue of the laws of the State of Nebraska.
Proposed respondents Safe Brands Corporation and Warren Distribution,
Inc. have their principal offices or places of business at 727 South
13th Street, Omaha, Nebraska 68102.
Proposed respondent ARCO Cemical Company is a corporation
organized, existing and doing business under and by virtue of the law
of the State of Delaware with its principal office or place of business
at 3801 West Chester Pike, Newtown Square, Pennsylvania 19073.
[[Page 63718]]
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; and
(c) All rights to seek judicial review or otherwise to challenge or
contest the validity of the order entered pursuant to this agreement.
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 education, 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 complaint here attached and its decision
containing the following order to cease and desist in deposition 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 proposed 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
Definition
For purposes of this Order, the following definition shall apply:
``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 respondents, Safe Brands Corporation, a
corporation, Warren Distribution, Inc., a corporation, and ARCO
Chemical 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 antifreeze, coolant, or deicer
product 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 will not harm the environment, is less harmful to the
environment than other products, or 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.
II
It is further ordered that respondents, Safe Brands Corporation, a
corporation, Warren Distribution, Inc., a corporation, and ARCO
Chemical 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 antifreeze, coolant, or deicer
product in or affecting commerce, as ``commerce'' is defined in the
Federal Trade Commission Act, do forthwith cease and desist from making
any representation, in any manner, directly or by implication, about
the safety or relative safety of such product for humans or animals
unless, at the time of making such representation, respondents possess
and rely upon competent and reliable scientific evidence that
substantiates such representation.
III
It is further ordered that respondents, Safe Brands Corporation, a
corporation, Warren Distribution, Inc., a corporation, and ARCO
Chemical 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 labeling, offering for sale, sale, or distribution
of any propylene glycol-based antifreeze or coolant product in or
affecting commerce, as ``commerce'' is defined in the Federal Trade
Commission Act, shall disclose on the front of the container of all
such products the following:
``See Back Panel for CAUTIONARY INFORMATION''
and shall disclose on the back of the container of all such products
the following:
``CAUTIONARY INFORMATION: This Product MAY BE HARMFUL IF SWALLOWED.
STORE SAFELY AWAY FROM CHILDREN AND PETS. Do not store in open or
unlabeled containers.''
Each disclosure shall be in a conspicuous and prominent place on
the container, in conspicuous and legible type in contrast by
typography, layout, or color with all other printed material on the
container. The disclosure on the back of the container shall be
surrounded by a one (1) point rule. The disclosure on the front of the
container and the first two sentences of the disclosure on the back of
the container shall be in type at least as large as the largest print
type on the back of the container, but, in any case,
[[Page 63719]]
no smaller than ten (10) point type. The words ``CAUTIONARY
INFORMATION'' on the front and back of the container shall be in bold
type. The last sentence of the disclosure on the back of the container
shall be in type at least as large as the type in which the majority of
the printed material on the back of the container is printed.
The back of the container shall also contain the following
statement, printed in type at least as large as the type in which the
majority of the printed material on the back of the container is
printed:
``Clean up any leaks or spills.''
IV
It is further ordered that respondents, Safe Brands Corporation, a
corporation, Warren Distribution, Inc., a corporation, and ARCO
Chemical 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 antifreeze, coolant, or deicer
product 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 my implication, the level of
vehicular engine protection provided by any such product, unless at the
time of making such representation, respondents possess and rely upon
competent and reliable scientific evidence that substantiates such
representation.
V
It is further ordered that respondents, Safe Brands Corporation, a
corporation, Warren Distribution, Inc., a corporation, and ARCO
Chemical 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 antifreeze, coolant, or deicer
product 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:
A. Any such product or its package is capable of being recycled;
or,
B. Recycling collection programs for such product or its package
are available.
VI
It is further ordered that the provisions of this Order shall not
apply to any label or labeling printed prior to the date of service of
this Order and shipped by respondents to distributors or retailers
prior to one hundred (100) days after the date of service of this
Order.
VII
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.
VIII
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.
IX
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, assigned, 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.
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 a 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.
It is further ordered that respondents shall, within sixty (60)
days later 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.
Benjamin I. Berman,
Acting Secretary.
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 Safe
Brands Corporation, Warren Distribution, Inc., and ARCO Chemical
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 the labeling and advertising of Sierra
Antifreeze-Coolant (``Sierra''), a propylene glycol-based automobile
antifreeze marketed by Safe Brands Corporation and its parent company,
Warren Distribution, Inc. The Commission's complaint in this matter
alleges that ARCO Chemical Company sold the propylene glycol (``PG'')
used in the manufacture of Sierra and provided information for,
participated in the preparation of, paid for, and reviewed and/or
approved Sierra advertising and promotional materials. The complaint
also alleges that ARCO Chemical itself disseminated advertisements
under its own name for PG antifreeze generally.
The Commission's complaint charges that the respondents claimed in
advertising and promotional materials
[[Page 63720]]
that compared to conventional, ethylene glycol-based antifreeze (``EG
antifreeze''), Sierra and other PG antifreezes are safer for the
environment generally. According to the complaint, although respondents
had a reasonable basis that Sierra and other PG antifreezes, compared
to EG antifreeze, are less toxic, and therefore safer for that part of
the environment that is composed of humans, pets, and wildlife that may
accidentally ingest it, respondents did not substantiate their claim
that Sierra and other PG antifreezes are safer for the environment
generally (e.g., the air, water, soil, plants, or aquatic life). The
complaint also alleges that respondents represented without adequate
substantiation that Sierra and other PG antifreezes are absolutely safe
for the environment after ordinary use and that because Sierra and
other PG antifreezes are biodegradable, they are absolutely safe for
the environment after ordinary use. The complaint states that one
reason these claims are unsubstantiated is that used antifreeze,
whether EG or PG-based, may contain lead and/or other substances that
are hazardous to the environment.
Furthermore, the complaint charges that the respondents represented
without adequate substantiation that Sierra and other PG antifreezes
are absolutely safe for people and pets. The complaint also charges
that respondents claimed without adequate substantiation that because
Sierra and other PG antifreezes contain PG--an ingredient designated by
the Food and Drug Administration as ``generally recognized as safe''
and which is found in foods, drugs, cosmetics, and pet foods--they are
absolutely safe for people and pets. According to the complaint,
although respondents had a reasonable basis that Sierra and other PG
antifreezes are safer than EG antifreeze, respondents lacked
substantiation for the claim that they are absolutely safe.
In addition, the complaint alleges that the respondents made the
unsubstantiated representation that compared to conventional, EG
antifreeze, Sierra provides superior automotive protection from
freezing temperatures, boil-overs, and corrosion.
Finally, the complaint charges that the respondents falsely and
without adequate substantiation represented that Sierra antifreeze and
its plastic container are recyclable. In fact, the complaint alleges,
while both Sierra and its container are capable of being recycled, the
vast majority of consumers cannot recycle either of them because there
are few collection facilities nationwide that accept PG antifreeze or
high-density polyethylene plastic antifreeze containers 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 the respondents to cease and
desist from representing that any antifreeze, coolant, or deicer
product will not harm the environment, is less harmful to the
environment than other products, or offers any environmental benefit,
unless the respondents possess competent and reliable evidence, which
when appropriate must be competent and reliable scientific evidence,
that substantiates the representation.
Part II of the proposed order requires the respondents to cease and
desist from making any representation about the safety or relative
safety for humans or animals of any antifreeze, coolant, or deicer
product, unless they possess competent and reliable scientific evidence
that substantiates the representation.
Part III of the proposed order requires that the respondents print
the following two statements on the back of containers of all PG
antifreeze or coolant products: ``CAUTIONARY INFORMATION: This Product
MAY BE HARMFUL IF SWALLOWED. STORE SAFELY AWAY FROM CHILDREN AND PETS.
Do not store in open or unlabeled containers'' and ``Clean up any leaks
or spills.'' On the front of all such containers the following must be
disclosed: ``See Back Panel for CAUTIONARY INFORMATION.'' Part III also
specifies the manner in which these disclosures must be made.
Part IV of the proposed order requires the respondents to cease and
desist from making any representation about the level of vehicular
engine protection provided by any antifreeze, coolant, or deicer
product, unless the respondents possess competent and reliable
scientific evidence that substantiates the representation.
Part V of the proposed order requires that the respondents cease
and desist from misrepresenting the extent to which any antifreeze,
coolant, or deicer product or its package is capable of being recycled
or the extent to which recycling collection programs are available.
Part VI of the proposed order provides that, for up to 100 days
after the service of the order, respondents may continue to ship
products from existing stock in containers with nonconforming labeling.
The proposed order also requires the 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 order also contains a
provision stating that it will terminate after twenty (20) years absent
the filing of a complaint against respondents alleging a violation of
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.
[FR Doc. 95-30216 Filed 12-11-95 8:45 am]
BILLING CODE 6750-01-M