[Federal Register Volume 65, Number 96 (Wednesday, May 17, 2000)]
[Notices]
[Pages 31322-31324]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-12382]


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FEDERAL TRADE COMMISSION

[File No. 972 3234]


J&R Research Corp., et al.; Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the draft 
complaint that accomplishes the consent agreement and the terms of the 
consent order--embodied in the consent agreement--that would settle 
these allegations.

DATES: Comments must be received on or before July 12, 2000.

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

FOR FURTHER INFORMATION CONTACT: Matthew Gold or Linda Badger, Federal 
Trade Commission, 901 Market St., Suite 570, San Francisco, CA. 94103. 
(415) 356-5276 or 356-5275.

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

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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 May 11, 2000), on the World Wide Web, at ``http://www.ftc.gov /
ftc/formal.htm.'' A paper copy can be obtained from the FTC Public 
Reference Room, Room H-130, 600 Pennsylvania Avenue, NW, Washington, DC 
20580, either in person or by calling (202) 326-3627.
    Public comment is invited. Comments should be directed to: FTC/
Office of the Secretary, Room 159, 600 Pennsylvania, Ave., NW, 
Washington, DC 20680. Two paper copies of each comment should be filed, 
and should be accompanied, if possible, by a 3\1/2\ inch diskette 
containing an electronic copy of the comment. 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, subject to 
final approval, to a proposed consent order from J & R Research, Inc., 
and its principal, Gerald G. McCarthy (``respondents''). Respondents 
were general partners in a distributorship of Kaire International, 
Inc., a multi-level marketing company. Respondents also created and 
marketed to Kaire distributors audio tapes and other promotional 
materials touting a Kaire product containing pycnogenol, a substance 
derived from the bark of the maritime pine tree.
    The proposed consent order has been placed on the public record for 
sixty (60) days for the 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 any 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.
    Respondents' advertisements claimed that pycnogenal could mitigate 
or cure the effects of numerous diseases or disorders. The proposed 
complaint alleges that respondents could not substantiate claims that 
pycnogenol: (1) Alleviates rheumatoid arthritis, osteoarthritis and 
rheumatism; (2) reduces the amount of insulin needed to treat diabetes; 
(3) treats and/or improves health disorders associated with diabetes, 
including neuropathy, retinopathy, osteomyelitis, circulatory problems 
and heart problems; (4) helps treat lupus, Parkinson's Disease, 
multiple sclerosis and fibromyalgia; (5) treats or improves digestive 
disorders, including Crohnes Disease and irritable bowel syndrome; (6) 
helps prevent strokes and the reoccurrence of strokes; (7) dramatically 
improve physical disabilities caused by stroke; (8) dramatically helps 
prevent heart disease, inlcuding arterial sclerosis; (9) reduces blood 
pressure; (10) dramatically improves and helps prevent circulatory 
problems, including phlebitis, thrombophlebitis, blood clots, and 
varicose veins; (11) dramatically promotes the shrinkage of tumors and 
helps prevent tumor formation; (12) treats cancer and/or prolongs the 
life of cancer victims; (13) reduces or eliminates inflammation of the 
prostate; (14) eliminates or reduces the incidence of asthma attacks 
and symptoms caused by allergies; (15) improves eyesight and treats 
disorders of the retina; (16) helps rebuild joints and soft tissue; 
(17) greatly accelerates the healing time of injuries; (18) improves or 
cures skin conditions such as psoriasis and acne; (19) treats Attention 
Deficit Disorder and Attention Deficit Hyperactive Disorder; (20) 
reduces or eliminates the need for medication in individuals with 
Attention Deficit Disorder and Attention Deficit Hyperactive Disorder; 
and (21) is twenty times more protective as an antioxidant than Vitamin 
C, and fifty times more protective than Vitamin E.
    The complaint further alleges that respondents falsely claimed that 
scientific research demonstrates that pycnogenol products can alleviate 
or cure many of these diseases or disorders. Finally, the complaint 
alleges that respondents could not substantiate its claim that 
testimonials from consumers appearing in the advertisements for 
pycnogenol products reflect the typical or ordinary experience of 
members of the public who use pycnogenol products.
    Part I of the proposed consent order would require respondents, 
when advertising pycnogenol or any other food, drug, or dietary 
supplement, to possess competent and reliable scientific evidence 
before making any of the claims that were alleged as unsubstantiated in 
the complaint. Part II of the proposed order would require respondents 
to possess competent and reliable scientific evidence before making any 
claim regarding the benefits, performance, or efficacy of any food, 
drug, or dietary supplement. Part III of the proposed order would 
prevent respondents from misrepresenting the existence, contents, 
validity, results, conclusions, or interpretations of any test, study, 
or research in an advertisement for any product.
    Part IV of the proposed order addresses claims made through 
endorsements or testimonials. Under Part IV, respondents may make such 
representations if they possess and rely upon competent and reliable 
evidence that substantiates the representations; or the respondents 
must disclose either what the generally expected results would be for 
users of the advertised products, or the limited applicability of the 
endorser's experience to what consumers may generally expect to 
achieve. The proposed order's treatment of testimonial claims is in 
accordance with the Commission's ``Guides Concerning Use of the 
Endorsements and Testimonials in Advertising,'' 16 CFR 255.2(a).
    Part V of the proposed order contains language permitting 
respondents to make drug claims that have been approved by the FDA 
pursuant to either a new drug application or a tentative final or final 
standard. Part VI states that respondents would be permitted to make 
claims that the FDA has approved pursuant to the Nutrition Labeling and 
Education Act of 1990.
    Part VII of the proposed order requires respondents to retain, and 
make available to the Commission upon request, all advertisements and 
promotional materials containing any representation covered by the 
order, as well as any material that it relied upon in disseminating the 
representation and any materials that contradict, qualify, or call into 
question the representation.
    The remainder of the proposed order contains standard requirements 
that respondents distribute the order to relevant personnel, that the 
corporate respondent notify the Commission of any changes in corporate 
structure that might affect compliance with the order; that the 
individual respondent notify the Commission of changes in his 
employments status, and that respondents file one or more reports 
detailing their compliance with 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

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the agreement and proposed order, or to modify in any way their terms.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 00-12382 Filed 5-16-00; 8:45 am]
BILLING CODE 6705-01-M