[Federal Register Volume 61, Number 235 (Thursday, December 5, 1996)]
[Notices]
[Pages 64526-64527]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-30943]
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FEDERAL TRADE COMMISSION
[File No. 932-3180]
Phaseout of America, Inc.; Products & Patents, Ltd.; 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 require, among other things, the Lynbrook,
New York-based company to possess competent and reliable scientific
evidence to substantiate all claims about the performance, efficacy, or
benefits of any smoking-cessation or cigarette-modification product.
The agreement also prohibits the company from making claims challenged
as false in the future. The agreement settles allegations that
advertising claims for PhaseOut, a device marketed as helping smokers
to stop smoking and making cigarettes less harmful are unsubstantiated.
DATES: Comments must be received on or before February 3, 1997.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
Room 159, 6th St. and Pa. Ave., N.W., Washington, D.C. 20580.
FOR FURTHER INFORMATION CONTACT: Lesley Anne Fair, Federal Trade
Commission, S-4002, 6th and Pennsylvania Ave., NW, Washington, DC
20580. (202) 326-3081. Shira Modell, Federal Trade Commission, S-4002,
6th and Pennsylvania Ave., NW, Washington, DC 20580. (202) 326-3116.
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 above-captioned 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. The following Analysis to Aid
Public Comment describes the terms of the consent agreement, and the
allegations in the accompanying complaint. An electronic copy of the
full text of the consent agreement package can be obtained from the
Commission Actions section of the FTC Home page (for November 14,
1996), on the World Wide Web, at ``http://www.ftc.gov/os/actions/htm.''
A paper copy can be obtained from the FTC Public Reference Room, Room
H-130, Sixth Street and Pennsylvania Avenue, N.W., Washington, D.C.
20580, either in person or by calling (202) 326-3627. 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)).
Analysis of Proposed Consent Order To Aid Public Comment
The Federal Trade Commission has accepted an agreement to a
proposed consent order from Phaseout of America, Inc. and Products &
Patents, Ltd. This matter concerns advertising for PhaseOut, a device
which punches one or more small holes in cigarettes and which was
advertised as both aiding in smoking cessation and making cigarettes
less harmful.
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.
The Commission's complaint in this matter challenges three sets of
representations made by respondents regarding the performance of
PhaseOut: its ability to reduce smokers' intake of smoke constituents,
allow smokers to quit smoking, and reduce health risks for smokers who
continue smoking.
According to the Commission's complaint, the respondents made
unsubstantiated representations that PhaseOut reduces by certain
specified percentages the amount of nicotine, tar, and carbon monoxide
that smokers, get, and does so without changing a cigarette's taste or
draw; and that smokers using PhaseOut will not compensate for its
effects by increasing the number of cigarettes they smoke per day. The
complaint also alleges that the respondents misrepresented that a
particular study conducted at The Johns Hopkins University proves that
PhaseOut significantly reduces the amount of tar, nicotine, and carbon
monoxide smokers get under normal smoking conditions. According to the
complaint, the study was conducted under carefully controlled
conditions that did not reflect how smokers actually smoke. The
complaint explains that the study did not take into account
compensatory smoking--the tendency of some smokers who switch to lower
yield cigarettes to smoke more cigarettes or to smoke each one more
intensively (e.g., taking bigger or more frequent puffs), often without
realizing it.
The complaint further alleges that the respondents made
unsubstantiated representations that PhaseOut enables smokers to quit
and to do so without withdrawal symptoms; and that the respondents
falsely claimed that PhaseOut's effectiveness in enabling smokers to
quit smoking is proven by the Johns Hopkins study.
The complaint also alleges that the respondents made
unsubstantiated representations that PhaseOut significantly reduces the
risk of smoking-related health problems, including lung cancer and
heart disease, for smokers who continue to smoke and that it also
provides immediate health benefits including reduced congestion,
coughing or windedness. The complaint further challenges the related
misrepresentation that the Johns Hopkins study proves that smokers who
use PhaseOut and continue to smoke significantly reduce their risk of
smoking-related health problems.
In addition, the complaint alleges that the respondents represented
without substantiation that testimonials contained in advertisements
for PhaseOut reflect the typical or ordinary experience of consumers
who use the product.
The proposed consent order contains provisions designed to remedy
the violations charged and to prevent the respondents from engaging in
similar acts and practices in the future.
Part I of the order prohibits the respondents from making the
representations challenged as false in the proposed complaint about the
Johns Hopkins study's findings concerning PhaseOut.
[[Page 64527]]
Part II requires respondents to possess competent and reliable
scientific evidence to substantiate claims that any smoking-cessation
or cigarette-modification product: (A) reduces the amount of nicotine,
tar, carbon monoxide, or any other component of cigarette smoke that
smokers get from smoking a cigarette; (B) is effective in enabling or
helping smokers to quit smoking; (C) reduces the risk of smoking-
related health problems for smokers who continue to smoke; (D) reduces
the amount of nicotine, tar, carbon monoxide, or any other component of
cigarette smoke that smokers get without changing a cigarette's taste
or draw; (E) is effective in enabling or helping smokers to quit
smoking without withdrawal symptoms; or (F) provides immediate health
benefits, such as reduced congestion, coughing or windedness, for
smokers who continue to smoke. Part II also requires respondents to
possess competent and reliable scientific evidence to substantiate
claims that smokers using any such product will not compensate for the
product's effects by increasing the number of cigarettes they smoke per
day.
Part III requires respondents to possess competent and reliable
scientific evidence to substantiate any performance, benefit or
efficacy claims for smoking-cessation or cigarette- modification
products.
Part IV prohibits the respondents from misrepresenting the
existence, contents, validity, results, conclusions, or interpretations
of any test or study.
Part V requires respondents either to possess competent and
reliable scientific evidence to substantiate claims that any
endorsement reflects the typical or ordinary experience of consumers
who use the product; or to clearly and prominently disclose either: a)
what the generally expected results would be, or b) that consumers
should not expect to experience similar results.
Part VI requires respondents to send a postcard to identifiable
past purchasers of PhaseOut notifying them of the Commission's action
in this case and advising them that PhaseOut has not been proven to
reduce the risk of smoking-related diseases or to make cigarettes
``safer.'' Part VI also requires respondents to send a letter to their
purchasers for resale requesting the names and addresses of their
customers and notifying them that if the purchasers for resale do not
stop using advertising and promotional materials containing claims
covered by this order, the respondents are required to stop doing
business with them. Part VII requires the respondents to maintain for
five years copies of all communications with consumers and purchasers
for resale pursuant to the terms of Part VI.
The proposed order also requires respondents to maintain materials
relied upon to substantiate the claims covered by the order, to
distribute copies of the order to certain current officers and
employees, 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 the respondents 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.
Donald S. Clark,
Secretary.
[FR Doc. 96-30943 Filed 12-4-96; 8:45 am]
BILLING CODE 6750-01-P