[Federal Register Volume 61, Number 161 (Monday, August 19, 1996)]
[Notices]
[Pages 42904-42906]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21029]
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FEDERAL TRADE COMMISSION
[File No. 952-3231]
Grey Advertising, 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 misrepresenting the fat, saturated
fat, cholesterol, or calories in any frozen yogurt, frozen sorbet, and
most ice cream products. The consent agreement settles allegations
stemming from Grey's role in a commercial for The Dannon Company's
``Pure Indulgence'' frozen yogurt. The Commission had alleged that the
commercial falsely implied that some of the flavors in the Pure
Indulgence line were low in fat and calories and were lower in fat than
ice cream.
DATES: Comments must be received on or before October 18, 1996.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
Room 159, 6th St. and Pennsylvania Avenue, N.W., Washington, D.C.
20580.
FOR FURTHER INFORMATION CONTACT: Elaine Kolish, Federal Trade
Commission, 6th and Pennsylvania Avenue, NW, S-4302, Washington, DC
20850. (202) 326-3042.
Justin Dingfelder, Federal Trade Commission, 6th and Pennsylvania
Avenue, NW, S-4302, Washington, DC 20850. (202) 326-3017.
Rosemary Rosso, Federal Trade Commission, 6th and Pennsylvania
Avenue, NW, S-4002, Washington, DC 20850. (202) 326-2174.
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 pubic 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)).
Agreement Containing Consent Order to Cease and Desist
The Federal Trade Commission having initiated an investigation of
certain acts and practices of Grey Advertising, Inc., a corporation
(``proposed respondent''), and it now appearing that proposed
respondent is 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 Grey Advertising, Inc., by its
duly authorized officer, and its attorney, and counsel for the Federal
Trade Commission that:
1. Proposed respondent Grey Advertising, Inc. is a corporation
organized, existing and doing business under and by virtue of the laws
of the State of New York with its principal office or place of business
at 777 Third 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 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
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
[[Page 42905]]
an admission by 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 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
respondent, (1) issue its complaint corresponding in form and substance
with the draft complaint 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 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 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 respondent has read the proposed complaint and the
order contemplated hereby. It understands that once the order has been
issued, it will be required to file one or more compliance reports
showing 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 Grey Advertising, 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
advertising, promotion, offering for sale, sale, or distribution of any
frozen yogurt, frozen sorbet or ice cream product (excluding all other
food or confection products in which ice cream is an ingredient
comprising less than fifty percent of the total weight of the involved
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, through
numerical or descriptive terms or any other means, the existence or
amount of fat, saturated fat, cholesterol, or calories in any such
product. If any representation covered by this Part either directly or
by implication conveys any nutrient content claim defined (for purposes
of labeling) by any regulation promulgated by the Food and Drug
Administration, compliance with this Part shall be governed by the
qualifying amount for such defined claim as set forth in that
regulation.
II
Nothing in this Order shall prohibit respondent from making any
representation that is specifically permitted in labeling for any
frozen yogurt, frozen sorbet or ice cream by regulations promulgated by
the Food and Drug Administration pursuant to the Nutrition Labeling and
Education Act of 1990.
III
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 a dissolution, assignment, or sale resulting in the
emergence of a successor corporation, the creation or dissolution of
subsidiaries, or any other change in the respondent which may affect
compliance obligations arising under this Order.
IV
It is further ordered that respondent shall, within thirty (30)
days after service of this Order, distribute a copy of this Order to
each of its operating divisions and to each of its officers, agents,
representatives, or employees engaged in the preparation or placement
of advertisements or other materials covered by this Order.
V
It is further ordered that for five (5) 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:
1. All materials that were relied upon in disseminating such
representation; and
2. 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, and complaints or
inquiries from governmental organizations.
VI
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 then 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
after service of this Order, 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 Grey Advertising, Inc.
(``Grey'') concerning advertising claims made by Grey for Dannon Pure
Indulgence frozen yogurts. In a related matter, the Commission has also
accepted, subject to final approval, and separately placed on the
public record, an agreement to a proposed consent order from Grey
involving Grey's role is creating advertising for Hasbro, Inc.'s
Colorblaster Design Toy.
[[Page 42906]]
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 days, the Commission will again review the
agreement and the comments received and will decide whether it should
withdraw from the agreement or make final the agreement's proposed
order.
According to the complaint, advertising created by Grey for Dannon
Pure Indulgence frozen yogurt falsely represented that the frozen
yogurt was low in fat, low in calories, and lower in fat than ice cream
when certain flavors of the yogurt were not. The complaint further
alleges that Grey knew or should have known that these claims were
false and misleading. A separate consent order with The Dannon Company,
Inc. resolving allegations about the same advertisement was issued by
the Commission on March 18, 1996. Docket No. C-3643.
The proposed consent order contains provisions designed to remedy
the violations charged and to prevent Grey from engaging in similar
acts and practices in the future.
Part I of the proposed order prohibits Grey from misrepresenting
the existence or amount of fat, saturated fat, cholesterol or calories
in any frozen yogurt, frozen sorbet or ice cream product (excluding all
other food or confection products in which ice cream is an ingredient
comprising less than fifty percent of the total weight of the involved
product). Part I also requires that any representation covered by that
Part that conveys a nutrient content claim defined for labeling by any
regulation of the Food and Drug Administration (``FDA'') must comply
with the qualifying amount set forth in that regulation.
Part II of the proposed order provides that representations that
would be specifically permitted in food labeling, under regulations
issued by the FDA pursuant to the Nutrition Labeling and Education Act
of 1990, are not prohibited by the order.
The proposed order also requires Grey to maintain materials relied
upon to substantiate the claims covered by the order, to distribute
copies of the order to its operating divisions and 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 in federal court, by either the United States
or the FTC, of a complaint against Grey alleging a violation of the
order.
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 any of
their terms.
Benjamin I. Berman,
Acting Secretary.
[FR Doc. 96-21029 Filed 8-16-96; 8:45 am]
BILLING CODE 6750-01-M