[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