[Federal Register Volume 61, Number 41 (Thursday, February 29, 1996)]
[Notices]
[Pages 7795-7797]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-4693]



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FEDERAL TRADE COMMISSION
[File No. 942-3202]


Nordic Track, 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 
bar the Chaska, Minnesota-based corporation from misrepresenting 
weight-loss study results and would require it to have competent and 
reliable evidence to back up weight loss, weight maintenance, and 
related claims for any exercise equipment it sells. The Commission had 
alleged that Nordic Track made false and unsubstantiated weight loss 
and weight maintenance claims in advertising its cross-country ski 
exercise machine.

DATES: Comemnts must be received on or before April 29, 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:
Jeffrey Klurfeld or Kerry O'Brien, Federal Trade Commission, San 
Francisco Regional Office, 901 Market Street, Suite 570, San Francisco, 
CA 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)).

    In the matter of NordicTrack, Inc., a corporation. File No: 942-
3202.

Agreement Containing Consent Order to Cease and Desist

    The Federal Trade Commission having initiated an investigation of 
certain acts and practices of NordicTrack, Inc., a corporation, and it 
now appearing that NordicTrack, Inc., a corporation, hereinafter 
sometimes referred to as proposed respondent, is 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 NordicTrack, Inc., by its duly 
authorized officer, and its attorney, and counsel for the Federal Trade 
Commission that:
    1. Proposed respondent NordicTrack, Inc. is a corporation 
organized, existing, and doing business under and by virtue of the laws 
of the State of Minnesota, with its office and principal place of 
business located at 104 Peavey Road, in the City of Chaska, State of 
Minnesota.
    2. Proposed respondent admits all the jurisdictional facts set 
forth in the draft of complaint here attached. 

[[Page 7796]]

    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; 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 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 the proceeding.
    5. This agreement is for settlement purposes only and does not 
constitute an admission by proposed respondent of facts, other than 
jurisdictional facts, or of violations of law as alleged in the draft 
complaint here attached.
    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 
proposed respondent, (a) 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 (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 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

I.

    It is ordered that respondent NordicTrack, Inc., 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, labelling, 
advertising, promotion, offering for sale, sale, or distribution of any 
exercise equipment 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:
    A. The percentage of its customers who have successfully lost 
weight;
    B. The percentage of its customers who have successfully maintained 
weight loss;
    C. The number of pounds lost by its customers;
    D. The percentage of weight loss maintained by its customers;
    E. The rate or speed at which its customers have experienced weight 
loss;
    F. The length of time its customers must use such product to 
achieve weight loss;
    G. The comparative efficacy of any other weight loss method or 
methods; or
    H. The benefits, efficacy, or performance of such product in 
promoting weight loss or weight loss maintenance;
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 
the representation. For the purposes of this Order, ``competent and 
reliable scientific evidence'' shall mean 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 respondent NordicTrack, Inc., 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, labelling, advertising, promotion, offering for sale, 
sale, or distribution of any exercise equipment 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 implications, the existence, contents, validity, 
results, conclusions, or interpretations of any test, study, or survey 
relating to weight loss, weight loss maintenance or comparisons with 
the efficacy of other weight loss methods.

III.

    It is further ordered that for three (3) 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 
representation; 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 respondent shall notify the Commission 
at least thirty (30) days prior to any proposed change in the 
respondent 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 this Order.

V.

    It is further ordered that respondent 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 officers, agents, representatives, 
independent contractors, and employees involved in the preparation and 
placement of advertisements or promotional materials, or who is in 

[[Page 7797]]
communication with customers or prospective customers, or who has any 
responsibilities with respect to the subject matter of this Order; and 
for a period of five (5) years, from the date of issuance of this 
Order, distribute a copy of this Order to all of respondent's future 
such officers, agents, representatives, independent contractors, and 
employees.

VI.

    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 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.

VII.

    It is further ordered that respondent shall, within sixty (60) days 
from the date of 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 
NordicTrack, Inc., (``NordicTrack'') a Minnesota corporation.
    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.
    NordicTrack manufacturers and distributes various exercise 
equipment to consumers, including its cross-country ski exercisers. The 
Commission's complaint charges that respondent's advertising contained 
false or unsubstantiated representations relating to the weight loss 
and weight maintenance experience of NordicTrack owners. Specifically, 
the complaint alleges that the respondent did not possess adequate 
substantiation for claims that: (1) seventy or eighty percent of those 
who purchased a NordicTrack cross-country ski exerciser to lose weight 
lost an average of seventeen pounds; (2) eighty percent of those who 
purchased a NordicTrack cross-country ski exerciser to lose weight and 
lost weight using it maintained all of their weight loss for at least a 
year; (3) eighty percent of those who purchased a NordicTrack cross-
country ski exerciser to lose weight maintained all of their weight 
loss at least a year; and (4) consumers who use NordicTrack cross-
country ski exercisers for twenty minutes a day, three times per week, 
lose an average of eighteen pounds in twelve weeks. In addition, the 
compliant alleges that the respondent falsely represented that it had 
competent and reliable research or studies which prove these claims.
    The complaint alleges that respondent based its success rate claims 
on studies which suffered from various methodological flaws. For 
example, the results of the studies reflect the experiences of only a 
highly selected population of purchasers who were able to integrate the 
NordicTrack cross-country ski exerciser into their regular, weekly, 
exercise regime. One such study involved putting thirty-eight 
participants through a rigorous twelve-week exercise program. 
Respondent based weight-loss claims on the average weight loss 
experienced by the twenty participants (53 percent) able to complete 
the program. The studies also failed to take into account changes in 
the dietary habits of purchasers. Furthermore, the studies were based 
on self-reported body weights, unadjusted for bias, which may yield 
inaccurate results.
    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. Part I of the proposed order 
would prohibit the company from making any claim for any exercise 
equipment regarding: (1) the percentage of its customers who have 
successfully lost weight; (2) the percentage of its customers who have 
successfully maintained weight loss; (3) the number of pounds lost by 
its customers; (4) the percentage of weight loss maintained by its 
customers; (5) the rate or speed at which its customers have 
experienced weight loss; (6) the length of time its customers must use 
such product to achieve weight loss; (7) the comparative efficacy of 
any other weight loss method or methods; or (8) the benefits, efficacy, 
or performance of such product in promoting weight loss or weight loss 
maintenance, unless at the time of making them, they possess and rely 
upon competent and reliable evidence.
    Part II of the proposed order prohibits the company from 
misrepresenting in any manner, directly or by implication, the 
existence, contents, validity, results, conclusions, or interpretations 
of any test, study or survey relating to weight loss, weight loss 
maintenance or comparisons with the efficacy of other weight loss 
methods.
    The proposed order also requires the respondent 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.
[FR Doc. 96-4693 Filed 2-28-96; 8:45 am]
BILLING CODE 6750-01-M