[Federal Register Volume 76, Number 194 (Thursday, October 6, 2011)]
[Notices]
[Pages 62066-62067]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-25884]


=======================================================================
-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION

[File No. 112 3084]


Phusion Projects, LLC, et al.; Analysis of Proposed Consent Order 
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 deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the draft 
complaint 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 November 2, 2011.

ADDRESSES: Interested parties may file a comment online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Phusion Projects, File 
No. 112 3084'' on your comment, and file your comment online at https://ftcpublic.commentworks.com/ftc/phusionprojectsconsent, by following 
the instructions on the web-based form. If you prefer to file your 
comment on paper, mail or deliver your comment to the following 
address: Federal Trade Commission, Office of the Secretary, Room H-113 
(Annex D), 600 Pennsylvania Avenue, NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Janet Evans (202-326-2125) or Carolyn 
L. Hann (202-326-2745), FTC, Bureau of Consumer Protection, 600 
Pennsylvania Avenue, NW., Washington, DC 20580.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Sec.  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 October 3, 2011), on the World Wide Web, at http://www.ftc.gov/os/actions.shtm. 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.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before November 2, 
2011. Write ``Phusion Projects, File No. 112 3084'' on your comment. 
Your comment--including your name and your state--will be placed on the 
public record of this proceeding, including, to the extent practicable, 
on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the Commission tries to 
remove individuals' home contact information from comments before 
placing them on the Commission Web site.
    Because your comment will be made public, you are solely 
responsible for making sure that your comment does not include any 
sensitive personal information, like anyone's Social Security number, 
date of birth, driver's license number or other state identification 
number or foreign country equivalent, passport number, financial 
account number, or credit or debit card number. You are also solely 
responsible for making sure that your comment does not include any 
sensitive health information, like medical records or other 
individually identifiable health information. In addition, do not 
include any ``[t]rade secret or any commercial or financial information 
which is obtained from any person and which is privileged or 
confidential,'' as provided in Section 6(f) of the FTC Act, 15 U.S.C. 
46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). In particular, do 
not include competitively sensitive information such as costs, sales 
statistics, inventories, formulas, patterns, devices, manufacturing 
processes, or customer names.
    If you want the Commission to give your comment confidential 
treatment, you must file it in paper form, with a request for 
confidential treatment, and you have to follow the procedure explained 
in FTC Rule 4.9(c), 16 CFR 4.9(c).\1\ Your comment will be kept 
confidential only if the FTC General Counsel, in his or her sole 
discretion, grants your request in accordance with the law and the 
public interest.
---------------------------------------------------------------------------

    \1\ In particular, the written request for confidential 
treatment that accompanies the comment must include the factual and 
legal basis for the request, and must identify the specific portions 
of the comment to be withheld from the public record. See FTC Rule 
4.9(c), 16 CFR 4.9(c).
---------------------------------------------------------------------------

    Postal mail addressed to the Commission is subject to delay due to

[[Page 62067]]

heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/phusionprojectsconsent by following the instructions on the web-
based form. If this Notice appears at http://www.regulations.gov/#!home, you also may file a comment through that Web site.
    If you file your comment on paper, write ``Phusion Projects, File 
No. 112 3084'' on your comment and on the envelope, and mail or deliver 
it to the following address: Federal Trade Commission, Office of the 
Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue, NW., 
Washington, DC 20580. If possible, submit your paper comment to the 
Commission by courier or overnight service.
    Visit the Commission Web site at http://www.ftc.gov to read this 
Notice and the news release describing it. The FTC Act and other laws 
that the Commission administers permit the collection of public 
comments to consider and use in this proceeding as appropriate. The 
Commission will consider all timely and responsive public comments that 
it receives on or before November 2, 2011. You can find more 
information, including routine uses permitted by the Privacy Act, in 
the Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

Analysis of Agreement Containing Consent Order To Aid Public Comment

    The Federal Trade Commission has accepted, subject to final 
approval, an agreement containing a consent order from Phusion 
Projects, LLC, Jaisen Freeman, Christopher Hunter, and Jeffrey Wright 
(the ``respondents''). 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 the agreement or make final the agreement's 
proposed order.
    This matter involves the marketing for Four Loko, a fruit-flavored 
malt beverage product. Four Loko contains 11% to 12% alcohol by volume 
(``ABV'') and is sold in a 23.5 oz can. The respondents promoted Four 
Loko through product packaging, Internet advertising including fan 
photo contests, and print solicitations to potential distributors.
    According to the FTC complaint, the respondents represented in its 
marketing materials that a 23.5 oz can of 11% or 12% ABV Four Loko: (a) 
Contains the alcohol equivalent to one or two regular, 12 oz beers, and 
(b) could safely be consumed in its entirety on a single occasion. The 
complaint alleges that both claims are false or misleading because a 
23.5 oz can of 11% ABV Four Loko contains alcohol equivalent to 4.3 
regular beers and a 23.5 oz can of 12% ABV Four Loko contains alcohol 
equivalent to 4.7 regular beers. In addition, the complaint alleges 
that the respondents' failure to disclose these facts was deceptive, in 
light of their representation that a can of Four Loko contained a 
single serving.
    The proposed consent order contains provisions designed to prevent 
the respondents from engaging in similar acts and practices in the 
future. Parts I and II apply to the defined term, ``covered flavored 
malt beverages.'' Part I prohibits the corporate respondent and 
controlling respondents (generally defined as the individual 
respondents, when such individual(s) is, or collectively are, a 
significant shareholder or directly or indirectly manage or control any 
entity) from offering for sale, selling, or distributing Four Loko or 
any other covered flavored malt beverage in a container that provides 
more than 1.5 oz of ethanol (approximately two and one half (2\1/2\) 
regular beers) unless the label discloses, clearly and conspicuously, 
the following statement:
    ``This can [or bottle] has as much alcohol as [ ] regular (12 oz, 
5% alc/vol) beers.''
    Part I sets forth specific approved fonts and font sizes, placement 
requirements (for both cans and bottles larger and smaller than 12 oz), 
and a formula for calculating the number of regular beers in the 
container. This part also provides that the second set of brackets 
shall be replaced by the number of 0.6 oz servings of ethanol in the 
product. Part I is designed to address the allegedly false 
representation that Four Loko contains the alcohol equivalent to one or 
two regular, 12 oz beers. The disclosure requirement is designed to 
alert consumers to the actual number of servings of alcohol in the 
container.
    Part II of the proposed order further prohibits, commencing six (6) 
months after date of issuance of the order, the corporate respondent 
and controlling respondents from offering for sale, selling, or 
distributing Four Loko or any other covered flavored malt beverage in a 
container that provides more than 1.5 oz of ethanol unless the 
container is resealable.
    Together, Parts I and II of the proposed order are designed to 
address the allegedly false representation that Four Loko can safely be 
consumed on a single occasion. The disclosure requirement is designed 
to alert consumers to the number of servings of alcohol in the 
container, and the resealability requirement makes it possible for 
consumers to drink a portion of the container's content and to save 
some for later.
    Part III of the proposed order prohibits the respondents from 
misrepresenting the alcohol content of any alcohol beverage product. 
Part III also prohibits the respondents from depicting in advertising 
any alcohol beverage product containing more than 1.5 oz of ethanol 
being consumed directly from the container. This provision also 
addresses the respondents' representation that a can of Four Loko can 
be safely consumed on a single occasion. This prohibition provides a 
clear standard for compliance by the respondents and for enforceability 
by the FTC.
    Part IV of the proposed order states that the order does not 
prohibit the respondents from making any representation about any 
alcohol beverage product that is specifically required by regulation or 
order by the U.S. Department of Treasury Alcohol and Tobacco Tax and 
Trade Bureau pursuant to the Federal Alcohol Administration Act.
    Parts V through IX of the proposed order require the respondents to 
keep copies of relevant advertisements and materials substantiating 
claims made in the advertisements; to provide copies of the order to 
its personnel; to notify the Commission of changes in corporate 
structure that might affect compliance obligations under the order; to 
notify the Commission of changes in any of the individual respondents' 
business or employment that might affect compliance obligations under 
the order; and to file compliance reports with the Commission. Part X 
provides that the order will terminate after twenty (20) 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. 2011-25884 Filed 10-5-11; 8:45 am]
BILLING CODE 6750-01-P