[Federal Register Volume 68, Number 198 (Tuesday, October 14, 2003)]
[Notices]
[Pages 59182-59183]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-25902]


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FEDERAL TRADE COMMISSION

[File No. 002 3000]


America Online, Inc., 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 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 October 23, 2003.

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 in the 
SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Michael Ostheimer or Heather Hippsley, 
FTC, Bureau of Consumer Protection, 600 Pennsylvania Avenue, NW., 
Washington, DC 20580, (202) 326-2699 or 326-3285.

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 September 23, 2003), on the World Wide Web, at http://www.ftc.gov/os/2003/09/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 email 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

[[Page 59183]]

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, subject to final 
approval, an agreement containing a consent order from America Online, 
Inc. (``AOL'') and its wholly owned subsidiary, CompuServe Interactive 
Services, Inc. (``CompuServe'').
    The proposed consent order has been placed on the public record for 
thirty (30) days for receipt 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 the respondents' Internet access services. 
According to the FTC complaint, most subscribers to AOL's Internet 
service who wanted to cancel their service called AOL's customer 
service department. The responsibilities of AOL's customer service 
representatives included trying to retain subscribers who requested 
cancellation of their Internet service. The complaint alleges that AOL 
failed to implement appropriate measures to ensure that all customers' 
requests for cancellation were properly executed and that as a result, 
in numerous instances, subscribers who requested cancellation were not 
cancelled and continued to be charged monthly service fees. According 
to the complaint, this constituted an unfair business practice.
    The complaint further alleges that AOL and CompuServe developed the 
``CompuServe $400 Rebate program'' whereby consumers received a $400 
cash rebate toward the purchase of an eligible computer, if they 
contracted for three years of CompuServe Internet service. In 
connection with the rebate program, respondents promised to provide 
rebate checks within 8-10 weeks, and in some cases, 45 days. According 
to the complaint, after receiving rebate requests in conformance with 
the offer, respondents extended the time period in which they would 
deliver the rebates without consumers agreeing to this extension of 
time and failed to deliver the rebates to consumers within the promised 
time period. According to the complaint, this constituted an unfair 
business practice.
    The proposed consent order contains provisions designed to prevent 
AOL and CompuServe from engaging in similar acts and practices in the 
future. Specifically, Parts I and II address the cancellation of any 
Internet or online service, or any other product or service sold by 
means of a continuity program. Part I of the proposed order requires 
respondents to establish and maintain appropriate measures for ensuring 
that consumers' requests for cancellation of any such service or 
continuity program are promptly processed and that billing will cease 
prior to the next billing cycle.
    Part II.A. of the proposed order prohibits respondents from 
continuing to charge any subscriber who has requested cancellation of 
any covered service or continuity program, even if the subscriber is 
recorded as having agreed to continue to be a subscriber, unless 
respondents first obtain the subscriber's express informed consent. For 
the subscriber's consent to be deemed ``informed,'' the respondents 
must clearly and conspicuously disclose, before the subscriber 
consents, certain specified information, including a description of the 
pricing plan to which the subscriber is agreeing.
    Part II.B. requires that respondents send a confirmation notice to 
any subscriber who has requested cancellation of any Internet or online 
service and who is recorded as having agreed to continue to be a 
subscriber. The notices are to be sent by first class mail in envelopes 
with ``IMPORTANT: Confirmation of continued service'' printed on the 
front. The notices confirm that consumers have agreed to continue their 
service, inform them of the terms of their continued service, and give 
them the opportunity to send back a cancellation request form, if they 
do not wish to continue their service. Part II.C. requires that 
respondents cancel the service of any subscriber who returns the 
cancellation request form.
    Part II.D. provides that respondents refund fees to certain 
subscribers who return the cancellation request form. Subscribers are 
to be given refunds if they return the form within thirty days of the 
mailing of the confirmation notice and do not use the service for any 
significant period of time after they were recorded as having agreed to 
continue as subscribers.
    Part II.E. requires that respondents send a confirmation notice to 
any subscriber who has requested cancellation of any continuity program 
other than Internet or online service and who is recorded as having 
agreed to continue to be a subscriber. If the subscriber has an active 
Internet or online service account with respondents, the notice can be 
sent by e-mail. Otherwise, it is to be sent by first class mail. Part 
II.F. requires that respondents provide a method through which 
subscribers who are notified pursuant to Part II.E. are able to cancel 
via telephone or U.S. mail.
    Part III addresses the delayed rebates allegation and applies to 
respondents' offering of a rebate in connection with Internet or online 
service. Part III.A. prohibits the respondents from making any 
representation about the time in which any such rebate will be mailed, 
or otherwise provided to purchasers, unless they have a reasonable 
basis for the representation at the time it is made. Part III.B. 
prohibits respondents from failing to provide any such rebate within 
the time specified or, if no time is specified, within thirty days.
    Parts IV through VII of the proposed order are reporting and 
compliance provisions. Part VIII 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 the agreement and proposed order or to modify in any 
way their terms.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 03-25902 Filed 10-10-03; 8:45 am]
BILLING CODE 6750-01-P