[Federal Register Volume 67, Number 155 (Monday, August 12, 2002)]
[Notices]
[Pages 52485-52487]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-20334]


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FEDERAL TRADE COMMISSION

[File No. 022 3095]


Philips Electronics North America Corporation; Analysis To Aid 
Public Comment

AGENCY: Federal Trade Commission.

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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 accompanies 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 September 3, 2002.

ADDRESSES: Comments filed in paper form should be directed to: FTC/
Office of the Secretary, Room 159-H, 600 Pennsylvania Avenue, NW., 
Washington, DC 20580. Comments filed in electronic form should be 
directed to: [email protected], as prescribed below.

FOR FURTHER INFORMATION CONTACT: Linda Badger or Matthew Gold, Federal 
Trade Commission, Western Regional Office, 901 Market St., Suite 570, 
San Francisco, CA 94103. (415) 848-5151 or (415) 848-5176.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), 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 thirty (30) 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 August 5, 2002), on the World Wide Web, at ``http://www.ftc.gov/os/2002/08/index.htm.'' A paper copy can be obtained from the FTC 
Public Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW., 
Washington, DC 20580, either in person or by calling (202) 326-2222.
    Public comments are invited, and may be filed with the Commission 
in either paper or electronic form. Comments filed in paper form should 
be directed to: FTC/Office of the Secretary, Room 159-H, 600 
Pennsylvania Avenue, NW., Washington, DC 20580. If a comment contains 
nonpublic information, it must be filed in paper form, and the first 
page of the document must be clearly labeled ``confidential.'' Comments 
that do not contain any nonpublic information may instead be filed in 
electronic form (in ASCII format, WordPerfect, or Microsoft Word) as 
part of or as an attachment to e-mail messages directed to the 
following e-mail box: [email protected]. Such comments will be 
considered by the Commission and will be available for inspection and 
copying at its principal office in accordance with Sec. 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 with Philips Electronics North America 
Corporation (``Philips''). Philips manufactures, advertises, labels, 
offers for sale, sells, and distributes consumer electronic equipment 
and other electronic products to the public. Through its division, 
Philips Consumer Electronics North America, Philips manufactures, 
advertises, labels, offers for sale, sells, and distributes computer 
peripheral equipment, such as CD-rewritable drives and computer 
monitors.
    The proposed consent order has been placed on the public record for 
thirty (30) days for reception of comments by interested persons. 
Comments received during this period will become part of the public 
record. After thirty (30) 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.
    This matter concerns cash rebate offers that Philips made to 
consumers who purchased computer peripheral products. The complaint 
alleges that respondent engaged in deceptive and unfair practices 
relating to these rebate offers. Specifically, the complaint alleges 
that respondent falsely represented that it would deliver cash rebates 
to purchasers of its computer peripheral products within eight weeks. 
For its promotions offered through its division, Philips Consumer 
Electronics North America, from January 2001 to January 2002, over 
fifty thousand consumers experienced delays of up to six months or 
more. The rebates at issue ranged from $20 to $100 in value.
    The complaint further alleges that, in the advertising and sale of 
its computer peripheral products, Philips offered to deliver rebates in 
eight weeks to consumers who purchased a Philips computer peripheral 
product and submitted a rebate form with proof of purchase. After 
receiving rebate requests in conformance with this offer, Philips 
unilaterally extended the time period in which it would deliver the 
rebates to consumers without consumers agreeing to this extension of 
time. According to the complaint, this constituted an unfair business 
practice.
    The proposed consent order contains provisions designed to prevent 
Philips from engaging in similar acts and practices in the future. Part 
I applies to Philips' marketing of personal computer or personal 
computer-related product sold to consumers, including but not limited 
to, monitors, speakers, sound cards, CD-RW drives, DVD+RW drives, and 
multimedia projectors. With regard to these products, Part I.A. 
prohibits the respondent from misrepresenting the time in which it will 
mail any cash rebate or any credit towards future purchases. Parts I.B. 
and I.C. prohibit Philips from failing to provide any such rebate 
within the time specified, or if no time is specified, within thirty 
days.
    Part I.D. prohibits the respondent from violating the Federal Trade 
Commission's Trade Regulation Rule Concerning Mail or Telephone Order 
Merchandise (the ``Mail Order Rule'') if it offers rebates in the form 
of merchandise. Part I.E. addresses rebates in the form of services or 
other consideration that the Mail Order Rule does not cover. That 
provision requires the respondent to provide the rebate in the time 
specified, or within thirty days if no time is specified, unless the 
respondent offers the purchaser the option of consenting to the delay 
or canceling the rebate request and promptly receiving reasonable cash 
compensation instead of the promised rebate. Part I.F. requires that 
the company not ``misrepresent, in any manner, expressly or by 
implication, any material terms of any rebate program, including the 
status of or reasons for any delay in providing any rebate.''
    Part II of the proposed order is a redress provision which requires 
the company to pay out all valid rebates requests that are due or past 
due as of the date of service of the order. This provision also 
requires the respondent to send a rebate to any eligible consumer who 
contacts the respondent or the FTC for a period of 60 days after 
service of the order.
    Parts III through VI of the proposed order are reporting and 
compliance provisions. Part VII is a provision, ``sunsetting'' the 
order after twenty years, with certain exceptions.
    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.
Benjamin I. Berman,
Acting Secretary.
[FR Doc. 02-20334 Filed 8-9-02; 8:45 am]
BILLING CODE 6750-01-M