[Federal Register Volume 60, Number 29 (Monday, February 13, 1995)]
[Notices]
[Pages 8237-8239]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-3542]
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FEDERAL TRADE COMMISSION
[File No. 942 3029]
Orchid Technology; Proposed Consent Agreement With Analysis To
Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement.
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SUMMARY: In settlement of alleged violations of federal law prohibiting
unfair acts and practices and unfair methods of competition, this
consent agreement, accepted subject to final Commission approval, would
prohibit, among other things, a California-based company from falsely
representing that any of its computer peripheral products had been
rated, reviewed or endorsed by any person or publication, and from
misrepresenting the results of any test, study or evaluation in
connection with marketing its computer peripheral equipment. The
consent agreement also would require the respondent to possess
competent and reliable evidence to substantiate performance claims.
DATES: Comments must be received on or before April 14, 1995.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
Room 159, 6th Street and Pennsylvania Avenue NW., Washington, D.C.
20580.
FOR FURTHER INFORMATION CONTACT:
Matthew Gold or Jeffrey Klurfeld, San Francisco Regional Office,
Federal Trade Commission, 901 Market St., Suite 570, San Francisco, CA
94103. (415) 744-7920.
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 following 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. Public comment is invited. Such
comment 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)).
Agreement Containing Consent Order To Cease and Desist
The Federal Trade Commission having initiated an investigation of
certain acts and practices of Orchid Technology, a corporation,
(``proposed respondent''), and it now appearing that the proposed
respondent is willing to enter into an agreement containing an order to
cease and desist from the use of the acts and practices being
investigated,
It is hereby agreed by and between Orchid Technology, a
corporation, by its duly authorized officer, and its attorney, and
counsel for the Federal Trade Commission that:
1. Proposed respondent Orchid Technology is a corporation
organized, existing and doing business under and by virtue of the laws
of the State of California, with its office and principal place of
business located at 45365 Northport Loop West, Fremont, California
94538.
2. Proposed respondent admits all the jurisdictional facts set
forth in the draft of complaint.
3. Proposed respondent waives:
a. Any further procedural steps;
b. The requirement that the Commission's decision contain a
statement of findings of fact and conclusions of law; and
c. All rights to seek judicial review or otherwise to challenge or
contest the validity of the order entered pursuant to this agreement.
4. This agreement shall not become part of the public record of the
proceeding unless and until it is accepted by the Commission. If this
agreement is accepted by the Commission, it, together with the draft of
complaint contemplated thereby, will be placed on the public record for
a period of sixty (60) days and information in respect thereto publicly
released. The Commission thereafter may either withdraw its acceptance
of this agreement and so notify the proposed respondent, in which event
it will take such action as it may consider appropriate, or issue and
serve its complaint (in such form as the circumstances may require) and
decision, in disposition of the proceeding.
5. This agreement is for settlement purposes only and does not
constitute an admission by proposed respondent of facts, other than
jurisdictional facts, or of violations of law as alleged in the draft
of complaint.
6. This agreement contemplates that, if it is accepted by the
Commission, and if such acceptance is not subsequently withdrawn by the
Commission pursuant to the provisions of Section 2.34 of the
Commission's Rules, the Commission may, without further notice to
proposed respondent, (a) issue its complaint corresponding in form and
substance with the draft of complaint and its decision containing the
following order to cease and desist in disposition of the proceeding
and (b) make information public in respect thereto. When so entered,
the order to cease and desist shall have the same force and effect and
may be altered, modified or set aside in the same manner and within the
same time provided by statute for other orders. The order shall become
final upon service. Delivery by the U.S. Postal Service of the
complaint and decision containing the agreed-to order to proposed
respondent's address as stated in this agreement shall constitute
service. The proposed respondent [[Page 8238]] waives any right it may
have to any other manner of service. The complaint may be used in
construing the terms of the order, and no agreement, understanding,
representation, or interpretation not contained in the order or the
agreement may be used to vary or contradict the terms of the order.
7. The proposed respondent has read the proposed complaint and
order contemplated hereby. The proposed respondent understands that
once the order has been issued, it will be required to file one or more
compliance reports showing that it has fully complied with the order.
The proposed respondent further understands that it may be liable for
civil penalties in the amount provided by law for each violation of the
order after it becomes final.
Order
Definition
For purposes of this Order, the term ``computer peripheral
equipment'' shall mean graphics cards, sound cards, adaptor cards,
memory expansion cards, or other hardware products that enhance the
capability and performance of personal computers.
I
It is ordered that respondent Orchid Technology, a corporation, its
successors and assigns, and its officers, agents, representatives and
employees, directly or through any corporation, subsidiary, division or
other device, in connection with the manufacturing, labelling,
advertising, promotion, offering for sale, sale or distribution of the
Celsius Windows Accelerator, or other computer peripheral equipment, in
or affecting commerce, as ``commerce'' is defined in the Federal Trade
Commission Act, do forthwith cease and desist from representing, in any
manner, directly or by implication, that such product has been rated,
endorsed, recommended, reviewed or evaluated by any person or
publication, unless such is the case.
II
It is further ordered that respondent Orchid Technology, a
corporation, its successors and assigns, and its officers, agents,
representatives and employees, directly or through any corporation,
subsidiary, division or other device, in connection with the
manufacturing, labelling, advertising promotion, offering for sale,
sale, or distribution of the Celsius Windows Accelerator, or other
computer peripheral equipment, in or affecting commerce, as
``commerce'' is defined in the Federal Trade Commission Act, do
forthwith cease and desist from misrepresenting, in any manner,
directly or by implication, the existence, contents, validity, results,
conclusions, interpretations or purpose of any test or study.
III
It is further ordered that respondent Orchid Technology, a
corporation, its successors and assigns, and its officers, agents,
representatives and employees, directly or through any corporation,
subsidiary, division or other device, in connection with the
manufacturing, labelling, advertising, promotion, offering for sale,
sale, or distribution of the Celsius Windows Accelerator, or other
computer peripheral equipment, in or affecting commerce, as
``commerce'' is defined in the Federal Trade Commission Act, do
forthwith cease and desist from making any representation, in any
manner, directly or by implication, about the performance or attributes
of any such product, unless such representation is true and, at the
time of making such representation, respondents possess and rely upon
competent and reliable evidence, which when appropriate must be
competent and reliable scientific evidence, that substantiates such
representation. For purposes of this provision, ``competent and
reliable scientific evidence'' shall mean tests, analyses, research,
studies or other evidence based on the expertise of professionals in
the relevant area, that has been conducted and evaluated in an
objective manner by persons qualified to do so, using procedures
generally accepted in the profession to yield accurate and reliable
results.
IV
It is further ordered that for five (5) years after the last date
of dissemination of any representation covered by this Order,
respondent, or its successors and assigns, shall maintain and upon
request make available to the Federal Trade Commission for inspection
and copying:
A. All materials that were relied upon in disseminating such
representation; and
B. All tests, reports, studies, surveys, demonstrations or other
evidence in its possession or control that contradict, qualify, or call
into question such representation, or the basis relied upon for such
representation, including complaints from consumers.
V
It is further ordered that respondent shall notify the Commission
at least thirty (30) days prior to any proposed change in the
respondent such as dissolution, assignment, or sale resulting in the
emergence of a successor corporation, the creation or dissolution of
subsidiaries, or any other change in the corporation which may affect
compliance obligations arising under this Order.
VI
It is further ordered that respondent shall, within ten (10) days
from the date of service of this Order upon it, distribute a copy of
this Order to each of its officers, agents, licensees, representatives,
independent contractors, and employees involved in the preparation and
placement of advertisements or promotional materials, or who is in
communication with customers or prospective customers, or who has any
responsibilities with respect to the subject matter of this Order.
VII
It is further ordered that respondent shall, within sixty (60) days
from the date of service of this Order upon them, and at such other
times as the Commission may require, file with the Commission a report,
in writing, setting forth in detail the manner and form in which it has
complied with this Order.
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 respondent Orchid
Technology, a California 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 and take other appropriate action or make
final the agreement's proposed order.
This matter concerns the advertising of the ``Celsius/VLB Windows
Accelerator,'' a circuit board that both increases the speed at which a
personal computer displays complex graphical images, and improves the
quality of the graphical images. The Commission's complaint charges
that respondent's advertising represented that excerpts from computer
periodical reviews referred to the Celsius, when, in fact, they
referred to products manufactured by Orchid's
competitors. [[Page 8239]]
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 prohibits respondent from falsely
representing that any computer peripheral equipment, as defined in the
order, has been rated, endorsed, recommended, reviewed or evaluated by
any person or publication.
As fencing-in relief, Part II of the proposed order prohibits
respondent, when advertising computer peripheral equipment, from
misrepresenting the existence, contents, validity, results,
conclusions, interpretations or purpose of any test or study. Part III
provides that, if respondent makes any representation about the
performance or attributes of any computer peripheral equipment, the
representation must be true and respondent must possess competent and
reliable evidence, which when appropriate must be competent and
reliable scientific evidence, to substantiate the representation.
The proposed order also requires respondent to maintain materials
relied upon to substantiate claims covered by the order; to provide a
copy of the consent agreement to its employees involved in the
preparation and placement of respondent's advertisements, or in
communication with respondent's customers or prospective customers; to
notify the Commission of any change in the 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.
Donald S. Clark,
Secretary.
[FR Doc. 95-3542 Filed 2-10-95; 8:45 am]
BILLING CODE 6750-01-M
