[Federal Register Volume 63, Number 248 (Monday, December 28, 1998)]
[Notices]
[Pages 71478-71479]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-34226]


-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION

[File No. 9723063]


General Signal Power Systems, Inc.; Analysis To Aid Public 
Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

-----------------------------------------------------------------------

SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or

[[Page 71479]]

deceptive acts or practices of unfair methods of competition. The 
attached Analysis to Aid Public Comment describes both the allegations 
in the draft complaint that accompanies the consent agreement--that 
would settle these allegations.

DATES: Comments must be received on or before February 26, 1999.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 600 Pa. Ave., NW, Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Matthew D. Gold or Linda K. Badger, 
San Francisco Regional Office, Federal Trade Commission, 901 Market 
Street, Suite 570, San Francisco, California 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 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 complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(for December 21, 1998), on the World Wide Web, at ``http://
www.ftc.gov/os/actions97.htm.'' A paper copy can be obtained from the 
FTC Public Reference Room, Room H-130, 600 Pennsylvania, NW, 
Washington, DC 20580, either in person or by calling (202) 326-3627. 
Public comment is invited. Such comments or reviews 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, subject to 
final approval, to a proposed consent order from General Signal Power 
Systems, Inc., a Wisconsin 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 or make final the agreement's proposed 
order.
    General Signal Power Systems, Inc. (``GSPS''), through its 
division, Best Power, manufactures and markets computer-related 
products, including the ``Patriot'' and ``Fortress'' uninterruptible 
power systems (``UPS''). Uninterruptible power systems are devices that 
protect consumer appliances, such as personal computers, from damage 
resulting from power disturbances or power failures.
    The Commission's complaint charges the GSPS's advertising contained 
false and unsubstantiated claims regarding the extent to which these 
devices can reduce a consumer's computer problems. Specifically, the 
complaint alleges that GSPS made unsubstantiated claims that: (1) Best 
Power products can reduce computer problems, such as crashed networks, 
crashed hard drives, faulty data transmissions, read/write errors, 
premature failure of components, system lockups, corrupted or lost 
data, by up to 80%; (2) Best Power products can reduce computer and 
network downtime up to 80%; (3) 80% of a typical computer's downtime is 
due to power problems, rather than to hardware or software problems; 
and (4) a Patriot or Fortress UPS can reduce the number of calls for 
computer service by 82%.
    The Commission's complaint also alleges that GSPS made a false 
claim that a five-year power quality study showed that the number of 
calls for computer service dropped 82% after installation of a UPS. In 
fact, the complaint states that the 82% figure cited in the 
advertisements was taken from a one-time customer survey. Moreover, the 
complaint alleges that the underlying consumer survey offered to 
support the claim that consumers experienced an 82% reduction in 
computer problems after the installation of a Patriot or Fortress UPS 
was not competent and reliable. As an example, the complaint alleges 
that this consumer survey only considered the experience of purchasers 
of UPSs which feature a ``ferroresonant transformer.'' UPSs which 
include this feature provide a higher degree of protection from power 
disturbances than do the Patriot or Fortress models shown in the 
advertisements at issue.
    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 
would prevent GSPS from making any representations regarding UPSs, or 
any substantially similar product, about: (1) The ability of any such 
product to reduce computer and network downtime; or (2) The extent to 
which any such product reduces the number of calls for computer 
service, unless it possesses and relies upon competent and reliable 
scientific evidence that substantiates the representations.
    To remedy GSPS's misrepresentations regarding the consumer survey, 
part II of the proposed order prohibits GSPS from misrepresenting, in 
any manner, expressly or by implication, the existence, contents, 
validity, results, conclusions or interpretations of any test, study, 
or research regarding any product. As fencing-in relief, Part III of 
the proposed order would require the company to possess and rely upon 
competent and reliable evidence to substantiate any claim regarding the 
benefits, performance, or efficacy of any computer-related product.
    Finally, the proposed order requires the respondent to maintain 
materials relied upon to substantiate claims covered by the order; to 
provide copies of the order to certain personnel of the respondent; 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.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 98-34226 Filed 12-24-98; 8:45 am]
BILLING CODE 6750-01-M