[Federal Register Volume 61, Number 41 (Thursday, February 29, 1996)]
[Notices]
[Pages 7795-7797]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-4693]
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FEDERAL TRADE COMMISSION
[File No. 942-3202]
Nordic Track, Inc.; Consent Agreement With Analysis to Aid Public
Comment
AGENCY: Federal Trade Commission.
ACTION: 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
bar the Chaska, Minnesota-based corporation from misrepresenting
weight-loss study results and would require it to have competent and
reliable evidence to back up weight loss, weight maintenance, and
related claims for any exercise equipment it sells. The Commission had
alleged that Nordic Track made false and unsubstantiated weight loss
and weight maintenance claims in advertising its cross-country ski
exercise machine.
DATES: Comemnts must be received on or before April 29, 1996.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
Room 159, 6th St. and Pa Ave., NW., Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT:
Jeffrey Klurfeld or Kerry O'Brien, Federal Trade Commission, San
Francisco Regional Office, 901 Market Street, Suite 570, San Francisco,
CA 94103. (415) 356-5270.
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
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)).
In the matter of NordicTrack, Inc., a corporation. File No: 942-
3202.
Agreement Containing Consent Order to Cease and Desist
The Federal Trade Commission having initiated an investigation of
certain acts and practices of NordicTrack, Inc., a corporation, and it
now appearing that NordicTrack, Inc., a corporation, hereinafter
sometimes referred to as 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 NordicTrack, Inc., by its duly
authorized officer, and its attorney, and counsel for the Federal Trade
Commission that:
1. Proposed respondent NordicTrack, Inc. is a corporation
organized, existing, and doing business under and by virtue of the laws
of the State of Minnesota, with its office and principal place of
business located at 104 Peavey Road, in the City of Chaska, State of
Minnesota.
2. Proposed respondent admits all the jurisdictional facts set
forth in the draft of complaint here attached.
[[Page 7796]]
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
complaint here attached.
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 here attached 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. Proposed respondent 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. Proposed respondent has read the proposed complaint and order
contemplated hereby. It 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. 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
I.
It is ordered that respondent NordicTrack, Inc., 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 any
exercise 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:
A. The percentage of its customers who have successfully lost
weight;
B. The percentage of its customers who have successfully maintained
weight loss;
C. The number of pounds lost by its customers;
D. The percentage of weight loss maintained by its customers;
E. The rate or speed at which its customers have experienced weight
loss;
F. The length of time its customers must use such product to
achieve weight loss;
G. The comparative efficacy of any other weight loss method or
methods; or
H. The benefits, efficacy, or performance of such product in
promoting weight loss or weight loss maintenance;
unless, at the time of making such representation, respondent possesses
and relies upon competent and reliable evidence, which when appropriate
must be competent and reliable scientific evidence, that substantiates
the representation. For the purposes of this Order, ``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 have 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.
II.
It is further ordered that respondent NordicTrack, Inc., 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 any exercise 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 implications, the existence, contents, validity,
results, conclusions, or interpretations of any test, study, or survey
relating to weight loss, weight loss maintenance or comparisons with
the efficacy of other weight loss methods.
III.
It is further ordered that for three (3) 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.
IV.
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 out of this Order.
V.
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, representatives,
independent contractors, and employees involved in the preparation and
placement of advertisements or promotional materials, or who is in
[[Page 7797]]
communication with customers or prospective customers, or who has any
responsibilities with respect to the subject matter of this Order; and
for a period of five (5) years, from the date of issuance of this
Order, distribute a copy of this Order to all of respondent's future
such officers, agents, representatives, independent contractors, and
employees.
VI.
It is further ordered that this Order will terminate twenty years
from the date of its issuance, or twenty years from the most recent
date that the United States or the Federal Trade Commission files a
complaint (with or without an accompanying consent decree) in federal
court alleging any violation of the Order, whichever comes later;
provided, however, that the filing of such a complaint will not affect
the duration of:
A. Any paragraph in this Order that terminates in less than twenty
years;
B. This Order's application to any respondent that is not named as
a defendant in such complaint; and
C. This Order if such complaint is filed after the Order has
terminated pursuant to this paragraph.
Provided further, that if such complaint is dismissed or a federal
court rules that the respondent did not violate any provision of the
Order, and the dismissal or ruling is either not appealed or upheld on
appeal, then the Order will terminate according to this paragraph as
though the complaint was never filed, except that the Order will not
terminate between the date such complaint is filed and the later of the
deadline for appealing such dismissal or ruling and the date such
dismissal or ruling is upheld on appeal.
VII.
It is further ordered that respondent shall, within sixty (60) days
from the date of service of this Order upon it, 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
NordicTrack, Inc., (``NordicTrack'') a Minnesota 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.
NordicTrack manufacturers and distributes various exercise
equipment to consumers, including its cross-country ski exercisers. The
Commission's complaint charges that respondent's advertising contained
false or unsubstantiated representations relating to the weight loss
and weight maintenance experience of NordicTrack owners. Specifically,
the complaint alleges that the respondent did not possess adequate
substantiation for claims that: (1) seventy or eighty percent of those
who purchased a NordicTrack cross-country ski exerciser to lose weight
lost an average of seventeen pounds; (2) eighty percent of those who
purchased a NordicTrack cross-country ski exerciser to lose weight and
lost weight using it maintained all of their weight loss for at least a
year; (3) eighty percent of those who purchased a NordicTrack cross-
country ski exerciser to lose weight maintained all of their weight
loss at least a year; and (4) consumers who use NordicTrack cross-
country ski exercisers for twenty minutes a day, three times per week,
lose an average of eighteen pounds in twelve weeks. In addition, the
compliant alleges that the respondent falsely represented that it had
competent and reliable research or studies which prove these claims.
The complaint alleges that respondent based its success rate claims
on studies which suffered from various methodological flaws. For
example, the results of the studies reflect the experiences of only a
highly selected population of purchasers who were able to integrate the
NordicTrack cross-country ski exerciser into their regular, weekly,
exercise regime. One such study involved putting thirty-eight
participants through a rigorous twelve-week exercise program.
Respondent based weight-loss claims on the average weight loss
experienced by the twenty participants (53 percent) able to complete
the program. The studies also failed to take into account changes in
the dietary habits of purchasers. Furthermore, the studies were based
on self-reported body weights, unadjusted for bias, which may yield
inaccurate results.
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
would prohibit the company from making any claim for any exercise
equipment regarding: (1) the percentage of its customers who have
successfully lost weight; (2) the percentage of its customers who have
successfully maintained weight loss; (3) the number of pounds lost by
its customers; (4) the percentage of weight loss maintained by its
customers; (5) the rate or speed at which its customers have
experienced weight loss; (6) the length of time its customers must use
such product to achieve weight loss; (7) the comparative efficacy of
any other weight loss method or methods; or (8) the benefits, efficacy,
or performance of such product in promoting weight loss or weight loss
maintenance, unless at the time of making them, they possess and rely
upon competent and reliable evidence.
Part II of the proposed order prohibits the company from
misrepresenting in any manner, directly or by implication, the
existence, contents, validity, results, conclusions, or interpretations
of any test, study or survey relating to weight loss, weight loss
maintenance or comparisons with the efficacy of other weight loss
methods.
The proposed order also requires the respondent to maintain
materials relied upon to substantiate claims covered by the order; to
provide a copy of the consent agreement to all employees or
representatives involved in the preparation and placement of the
company's advertisements, as well as to all company executives and
marketing and sales managers; to notify the Commission of any changes
in 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. 96-4693 Filed 2-28-96; 8:45 am]
BILLING CODE 6750-01-M
