[Federal Register Volume 61, Number 76 (Thursday, April 18, 1996)]
[Notices]
[Pages 16922-16924]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-9553]



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FEDERAL TRADE COMMISSION
[File No. 952-3336]


Young & Rubicam, Inc.; 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 or deceptive acts or practices and unfair methods of 
competition, this consent agreement, accepted subject to final 
Commission approval, would prohibit, among other things, the New York 
City-based advertising agency from making broad pollution-removal 
claims for Ford Motor Company's MicronAir Filtration System, and 
substantially similar cabin air filtration system, or any household air 
filtration system. The Consent Agreement settles allegations that Young 
& Rubicam, in their advertising campaigns for several 1995 models of 
Ford automobiles, made false claims about the extent to which the 
MicronAir Filtration System can remove air pollutants in automobile 
passenger cabins.

DATES: Comments must be received on or before June 17, 1996.

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

FOR FURTHER INFORMATION CONTACT:

Linda K. Badger, Federal Trade Commission, San Francisco Regional 
Office, 901 Market Street, Suite 570, San Francisco, CA 94103, (415) 
356-5270;
    Jeffrey Klurfeld, 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: Young & Rubicam Inc., a corporation; File No. 
952-3336.

Agreement Containing Consent Order To Cease and Desist

    The Federal Trade Commission having initiated an investigation of 
certain acts and practices of Young & Rubicam Inc. (``Young & 
Rubicam''), a corporation, and it now appearing that the 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 Young & Rubicam, a corporation, 
by its duly authorized officer, and its attorney, and counsel for the 
Federal Trade Commission that:
    1. Proposed respondent Young & Rubicam is a corporation organized, 
existing and doing business under and by virtue of the laws of the 
State of New York, with its office and principal place of business 
located at 285 Madison Avenue, New York, New York 10017.
    2. Proposed respondent admits all the jurisdictional facts set 
forth in the draft of complaint.
    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 the proposed respondent that the law has 
been violated as alleged in the draft Complaint, or that the facts as 
alleged in the draft Complaint, other than 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 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 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. The 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. The proposed respondent has read the proposed complaint and 
order contemplated hereby. The proposed respondent 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. 
The 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.

[[Page 16923]]

Order

I

    It is ordered that respondent, Young & Rubicam, a corporation, its 
successors and assigns, and its officers, and respondent's agents, 
representatives and employees, directly or through any corporation, 
subsidiary, division or other device, in connection with the 
advertising or promotion of the MicronAir Filtration System as 
configured in the 1995 Lincoln Continental and the 1995 Mercury 
Mystique 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, directly or 
by implication, that such products remove virtually all pollutants. For 
the purposes of this Order, ``substantially similar product'' shall 
mean any automotive cabin air filter which is an electrostatic filter, 
consisting of layers of non-woven fabric, with at least one layer that 
has been electrically charged.

II

    It is further ordered that respondent, Young & Rubicam, a 
corporation, its successors and assigns, and its officers, and 
respondent's agents, representatives and employees, directly or through 
any corporation, subsidiary, division or other device, in connection 
with the advertising or promotion of any household or automotive cabin 
air filter, 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 efficacy of any such product in reducing or removing pollutants, 
unless such representation is true, and at the time of making such 
representation, respondent possesses and relies upon competent and 
reliable scientific evidence, that substantiates such representation. 
For 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 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.
    Provided, however, that it shall be a defense hereunder that the 
respondent neither knew nor had reason to know of an inadequacy of 
substantiation for the representation.

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 written complaints from consumers.

IV

    It is further ordered that respondent notify the Commission at 
least thirty (30) days prior to any proposed change in the corporate 
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 the 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 or 
employees engaged in the preparation or review of advertising or other 
materials covered by this Order.

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 Young & 
Rubicam Inc. (``Young & Rubicam''), a New York 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.
    Young & Rubicam is an advertising agency which has prepared 
advertisements for Ford Motor Company (``Ford'') and the Lincoln-
Mercury Dealers Associations (``LMDAs''). Young & Rubicam has prepared 
and disseminated advertising materials to promote the sale of Ford's 
Mercury Mystique and Lincoln Continental automobiles. These 
advertisements have included claims regarding the efficacy of the 
``MicronAir Filtration System,'' a cabin air filter installed in 
Mercury Mystique and Lincoln Continental automobiles.
    The Commission's complaint charges that Young & Rubicam has 
prepared advertisements for the MicronAir Filtration System which 
contain the false representation that this filter removes virtually all 
pollutants likely to be encountered by a driver. The complaint alleges 
that the MicronAir Filtration System does not, in fact, remove 
virtually all such pollutants. For example, the filter has no effect on 
gaseous pollutants, such as hydrocarbons, carbon monoxide, and nitrogen 
oxides. Furthermore, the

[[Page 16924]]

complaint alleges that Young & Rubicam knew or should have known that 
this claim was false.
    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 
prohibits the respondent from claiming that the ``MicronAir Filtration 
System'' as configured in the 1995 Lincoln Continental or 1995 Mercury 
Mystique, or any substantially similar product, removes virtually all 
pollutants.
    Part II of the proposed order prohibits the company from making any 
representation, in any manner, directly or by implication, about the 
efficacy of any household or cabin air filter in reducing or removing 
pollutants, unless such representation is true, and at the time of 
making such representation, respondent possesses and relies upon 
competent and reliable scientific evidence, that substantiates such 
representation. Part II provides Young & Rubicam a defense to liability 
if it neither knew or had reason to know of an inadequacy in the 
substantiation for the representation.
    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; 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. 96-9553 Filed 4-17-96; 8:45 am]
BILLING CODE 6750-01-M