[Federal Register Volume 61, Number 59 (Tuesday, March 26, 1996)]
[Notices]
[Pages 13199-13202]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-7292]



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FEDERAL TRADE COMMISSION
[File No. 952-3478]


Johnson & Collins Research, Inc. and Gregor A. Von Ehrenfels; 
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 laws 
prohibiting unfair acts and practices and unfair methods of 
competition, this consent agreement, accepted subject to final 
Commission approval, would prohibit the Minneapolis-based company from 
making false or unsubstantiated representations in future 
advertisements for weight-loss booklets or for other weight-loss 
products or programs. The consent agreement settles allegations that 
Johnson & Collins's advertisements for the Total Body Reshaping System 
and the Super Total Body Shaping System (``TBR System''), which 
appeared in magazines directed at teenage girls, failed to disclose 
that the TBR System consisted primarily of booklets containing advice 
on dieting and exercising.

DATES: Comments must be received on or before May 28, 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, Federal Trade Commission, S-4002, 6th and Pennsylvania 
Ave., NW., Washington, DC, 202-326-3153.
Richard L. Cleland, Federal Trade Commission, S-4002, 6th and 
Pennsylvania Ave., NW., Washington, DC, 202-326-3088.

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)).

Before Federal Trade Commission

[File No. 952-3478]
    In the Matter of Johnson & Collins Research, Inc., a 
corporation, and Gregor A. Von Ehrenfels, individually and as an 
officer of said corporation; Agreement Containing Consent Order to 
Cease and Desist.

    The Federal Trade Commission, having initiated an investigation of 
certain acts and practices of Johnson & Collins Research, Inc., a 
corporation, and Gregor A. Von Ehrenfels, individually and as an 
officer of said corporation, hereinafter sometimes referred to as 
proposed respondents, and it now appearing that proposed respondents 
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 & Collins Research, 
Inc., by its authorized officer, and Gregor A. Von Ehrenfels, 
individually and as an officer of said corporation, and their attorney, 
and counsel for the Federal Trade Commission that:
    1. Proposed respondent Johnson & Collins Research, 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 5115 Excelsior Blvd., in the City of 
Minneapolis, State of Minnesota 55416.
    Proposed respondent Gregor A. Von Ehrenfels is an officer of said 
corporation. Individually or in concert with others, he participates in 
and/or

[[Page 13200]]
formulates, directs, and controls the acts and practices of said 
corporation and his address is the same as that of said corporation.
    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 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 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 of facts, other than 
jurisdictional facts, or of violations of law as alleged in the draft 
of 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 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 complaint and decision containing the agreed-to order to proposed 
respondents' address as stated in this agreement shall constitute 
service. Proposed respondents 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. Proposed respondents have read the proposed complaint and order 
contemplated hereby. They 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. 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

    For purposes of this Order;
    1. ``Clearly and prominently'' shall mean as follows: (a) In a 
television or videotape advertisement, the disclosure shall be 
presented simultaneously in both the audio and video portions of the 
advertisement. The audio disclosure shall be delivered in a volume and 
cadence and for a duration sufficient for an ordinary consumer to hear 
and comprehend it. The video disclosure shall be of a size and shade, 
and shall appear on the screen for a duration, sufficient for an 
ordinary consumer to read and comprehend it.
    (b) In a print advertisement, the disclosure shall be in a type 
size, and in a location, that are sufficiently noticeable so that an 
ordinary consumer will see and read it, in print that contrasts with 
the background against which it appears. In multipage documents, the 
disclosure shall appear on the cover or first page.
    (c) In a radio advertisement, the disclosure shall be delivered in 
a volume and cadence sufficient for an ordinary consumer to hear and 
comprehend it.
    2. ``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 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.
    3. ``Weight-loss product'' shall mean any product or program 
designed or used to prevent weight gain or to produce weight loss, 
reduction or elimination of fat, slimming, or caloric deficit in a user 
of the product or program.

I

    It is ordered that respondents, Johnson & Collins Research, Inc., a 
corporation, its successor and assigns, and its officers; and Gregor A. 
von Ehrenfels, individually and as an officer of Johnson & Collins 
Research, Inc.; and respondents' agents, representatives and employees, 
directly or through any partnership, corporation, subsidiary, division 
or other device, in connection with the manufacturing, advertising, 
packaging, labeling, promotion, offering for sale, sale, or 
distribution of Total Body Reshaping System, Super Total Body Reshaping 
System, or any substantially similar 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 such product does not require dieting.

II

    It is further ordered that respondents, Johnson & Collins Research, 
Inc., a corporation, its successors and assigns, and its officers; and 
Gregor A. von Ehrenfels, individually and as an officer of Johnson & 
Collins Research, Inc.; and respondents' agents, representatives and 
employees, directly or through any partnership, corporation, 
subsidiary, division or other device, in connection with the 
manufacturing, advertising, packaging, labeling, promotion, offering 
for sale, sale, or distribution of any weight-loss 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:
    A. Such product is effective in causing fast and significant weight 
loss;
    B. Such product is effective in reducing body fat or cellulite;
    C. Such product is effective in causing weight loss, fat reduction, 
or increased muscle tone in specific, desired areas of the body;
    D. Such product is effective in burning excess calories, modifying 
caloric intake, or converting food into energy instead of fat; or
    E. Such product has any effect on users' weight, body size or 
shape, body measurements, appetite,
unless, at the time of making such representation, respondents possess 
and rely upon competent and reliable scientific evidence that 
substantiates the representation.

III

    Nothing in Parts I and II of this Order shall prohibit respondents 
from making

[[Page 13201]]
representations which promote the sale of books and other publications, 
provided that, the advertising only purports to express the opinion of 
the author or to quote the contents of the publication; the advertising 
discloses the source of the statements quoted or derived from the 
contents of the publication; and the advertising discloses the author 
to be the source of the opinions expressed about the publication. This 
Part shall not apply, however, if the publication or its advertising is 
used to promote the sale of some other product as part of a commercial 
scheme.

IV

    It is further ordered that respondents, Johnson & Collins Research, 
Inc., a corporation, its successors and assigns, and its officers; and 
Gregor A. von Ehrenfels, individually and as an officer of Johnson & 
Collins Research, Inc.; and respondents' agents, representatives and 
employees, directly or through any partnership, corporation, 
subsidiary, division or other device, in connection with the 
manufacturing, advertising, packaging, labeling, promotion, offering 
for sale, sale, or distribution of Total Body Reshaping System, Super 
Total Body Reshaping System, or any substantially similar 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, that any 
such product has any effect on weight or body size, unless respondents 
disclose, clearly and prominently, that such product consists primarily 
of a booklet or pamphlet containing information and advice on weight 
loss.

V

    It is further ordered that respondents, Johnson & Collins Research, 
Inc., a corporation, its successors and assigns, and its officers; and 
Gregor A. von Ehrenfels, individually and as an officer of Johnson & 
Collins Research, Inc.; and respondents' agents, representatives and 
employees, directly or through any partnership, corporation, 
subsidiary, division or other device, in connection with the 
manufacturing, advertising, packaging, labeling, promotion, offering 
for sale, sale, or distribution of any weight-loss 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, that any 
such weight-loss product has any effect on weight or body size, unless 
they disclose, clearly and prominently, that dieting and/or increasing 
exercise is required to lose weight; provided however, that this 
disclosure shall not be required if respondents possess and rely upon 
competent and reliable scientific evidence demonstrating that the 
weight-loss product is effective without either dieting or increasing 
exercise.

VI

    It is further ordered that respondent, Johnson & Collins Research, 
Inc., shall:
    A. Within thirty (30) days after service of this Order, provide a 
copy of this Order to each of respondent's current principals, 
officers, directors, and managers, and to all personnel, agents, and 
representatives having sales, advertising, or policy responsibility 
with respect to the subject matter of this Order; and
    B. For a period of five (5) years from the date of issuance of this 
Order, provide a copy of this Order to each of respondent's future 
principals, officers, directors, and managers, and to all personnel, 
agents, and representatives having sales, advertising, or policy 
responsibility with respect to the subject matter of this Order who are 
associated with respondent or any subsidiary, successor, or assign, 
within three (3) days after the person assumes his or her 
responsibilities.

VII

    It is further ordered that 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 or its staff 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 respondent, Johnson & Collins Research, 
Inc., shall notify the Federal Trade Commission at least thirty (30) 
days prior to any proposed change in its corporate structure, including 
but not limited to dissolution, assignment, or sale resulting in the 
emergence of a successor corporation, the creation or dissolution of 
subsidiaries or affiliates, the planned filing of a bankruptcy 
petition, or any other corporate change that may affect compliance 
obligations arising out of this Order.

IX

    It is further ordered that respondent, Gregor A. von Ehrenfels, 
shall, for a period of three (3) years from the date of issuance of 
this Order, notify the Commission within thirty (30) days of the 
discontinuance of his present business or employment and of his 
affiliation with any new business or employment involving the 
advertising, offering for sale, sale, or distribution of any weight-
loss product. Each notice of affiliation with any new business or 
employment shall include respondent's new business address and 
telephone number, current home address, and a statement describing the 
nature of the business or employment and his duties and 
responsibilities.

X

    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.

XI

    It is further ordered that respondents shall, within sixty (60) 
days after service of this Order, and at such other times as the 
Federal Trade 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.

[[Page 13202]]


Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission has accepted an agreement to a 
proposed consent order from proposed respondents Johnson & Collins 
Research, Inc. and Gregor A. von Ehrenfels, an officer of the 
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.
    This matter concerns advertising for ``Total Body Reshaping 
System'' and ``Super Total Body Reshaping System'' (collectively 
referred to herein as ``TBRS''). These products are booklets or 
pamphlets containing advice on dieting and exercise in order to achieve 
weight loss and body toning. The advertisements ran in teen-oriented 
magazines.
    The Commission's complaint charges that proposed respondents 
falsely represented that users of the TBRS are not required to 
consciously diet to lose weight. The complaint also alleges that 
proposed respondents lacked a reasonable basis when they made the 
following claims: (1) TBRS is effective in causing fast and significant 
weight loss; (2) TBRS is effective in significantly reducing body fat 
and cellulite; (3) TBRS is effective in causing weight loss, fat 
reduction, and increased muscle tone in specific, desired areas of the 
body; and (4) TBRS is effective in burning excess calories, modifying 
caloric intake, and converting food into energy instead of fat. 
Finally, the complaint alleges that, in light of their representations, 
proposed respondents' failure to disclose in advertisements that TBRS 
consists only of booklets or pamphlets containing advice concerning 
techniques for reducing caloric intake and/or increasing exercise, and 
that reducing caloric intake and/or increasing exercise is required to 
lose weight, was a deceptive practice.
    The proposed consent order contains provisions designed to remedy 
the violations charged and to prevent proposed respondents from 
engaging in similar acts in the future.
    Part I of the proposed order prohibits proposed respondents from 
representing that TBRS, or any substantially similar product, does not 
require dieting. Part II requires proposed respondents to possess 
competent and reliable scientific evidence before making any of the 
representations alleged to be unsubstantiated in the complaint for any 
weight-loss product; as well as any representation that any such 
product has any effect on users' weight, body size or shape, body 
measurements, or appetite.
    Part III of the proposed order provides that nothing in Parts I and 
II prohibits proposed respondents from making representations which 
promote the sale of books and other publications, provided that, the 
advertising only purports to express the opinion of the author or to 
quote the contents of the publication; the advertising discloses the 
source of the statements quoted or derived from the contents of the 
publication; and the advertising discloses the author to be the source 
of the opinions expressed about the publication. Part III does not 
apply to any publication or its advertising that is used to promote the 
sale of some other product as part of a commercial scheme.
    Part IV prohibits proposed respondents from representing that TBRS, 
or any substantially similar product, has any effect on weight or body 
size, unless they disclose clearly and prominently that the product 
consists solely of a booklet or pamphlet containing information and 
advice on weight loss. Part V requires proposed respondents to disclose 
that diet or exercise are required to lose weight in connection with 
any representation about the effect of weight-loss product on weight or 
body size, unless they have competent and reliable scientific evidence 
to the contrary.
    Part VI requires Johnson & Collins Research to distribute a copy of 
the order to certain current and future company personnel. Part VII 
requires proposed respondents to maintain, for five years, all 
materials that support, contradict, qualify, or call into question any 
representations they make that are covered by the proposed order. Under 
Part VIII of the proposed order, Johnson & Collins Research is required 
to notify the Federal Trade Commission at least thirty days prior to 
any proposed change in its corporate structure that may affect 
compliance with the order's obligations. Part IX requires that Gregor 
A. von Ehrenfels, for a period of three years, notify the Commission of 
his affiliation with any new business or employment involving the 
advertising, offering for sale, sale, or distribution of any weight-
loss product. Part X provides for the termination of the order after 
twenty years under certain circumstances. Part XI obligates proposed 
respondents to file compliance reports with the Commission.
    The purpose of this analysis is to facilitate public comment on the 
proposed order, and 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. 96-7292 Filed 3-25-96; 8:45 am]
BILLING CODE 6750-01-M