[Federal Register Volume 64, Number 51 (Wednesday, March 17, 1999)]
[Notices]
[Pages 13205-13206]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-6486]
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FEDERAL TRADE COMMISSION
[File No. 992-3025]
R.J. Reynolds Tobacco Company; 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
compliant 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 May 17, 1999.
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: Joel Winston or Beth Grossman, FTC/S-
4002, Washington, DC 20580. (202) 326-3153 or 326-3019.
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 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 sixty (60) 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 March 3,1999), on the World Wide Web, at ``http://www.ftc.gov/os/
actions97.htm.'' A paper copy can be obtained from the FTC Public
Reference Room, Room H-130, Sixth Street and Pennsylvania Avenue, NW,
Washington, DC 20580, either in person or by calling (202) 326-3627.
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)).
Analysis of Proposed Consent Order to Aid Public Comment
The Federal Trade Commission has accepted an agreement to a
proposed consent order from R.J. Reynolds Tobacco Company
(``Reynolds'').
The proposed consent order has been placed on the public record for
sixty (60 days for receipt 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 or make final the agreements' proposed order.
This matter involves an alleged deceptive representation for
Winston cigarettes, that Reynolds has advertised do not contain
additives. According to the FTC complaint, through these
advertisements, Reynolds represented that smoking Winston cigarettes,
because they contain no additives, is less hazardous to a smoker's
health than smoking otherwise comparable cigarettes that contain
additives. The complaint alleges that Reynolds did not have a
reasonable basis for the representation at the time it was made. Among
other reasons, according to the complaint, the smoke from Winston
cigarettes, like the smoke from all cigarettes, contains numerous
carcinogens and toxins.
The proposed consent order contains provisions designed to prevent
Reynolds from engaging in similar acts and practices in the future.
Part I of the order requires Reynolds to include the following
clear and prominent disclosure in certain advertising for its Winston
cigarettes: No additives in our tobacco does NOT mean a safer
cigarette. (The order requires a similar disclosure in advertising for
other tobacco products Reynolds advertises as having no additives.) The
disclosure must be included in all advertising for Winston no-additive
cigarettes, regardless of whether that advertising contains a ``no
additives'' claim, for a period of one year beginning no later than
July 15, 1999. The disclosure must be included in all Winston
advertising that represents (through such phrases as ``no additives''
or ``100% tobacco'') that the product has no additives, for the
duration of the order. This Part also contains certain exemptions from
the disclosure requirement:
Advertisements not required to bear the Surgeon General's
health warning;
Certain ads for bona fide events or teams sponsored by
Winston which contain neither a ``No additives'' claim nor any other
selling message or product description; and
If Reynolds possesses scientific evidence demonstrating
that its ``no additives'' cigarette poses materially lower health risks
than other cigarettes of the same type.
Part I also specifies the manner in which the disclosure must be
made, which is exemplified by two model advertisements attached to the
order. In general, the disclosure must be within a rectangular box that
is no less than 40% of the size of the box containing the Surgeon
General's warning.
Part II of the order requires Reynolds to instruct each of its
sales representatives to remove or sticker, with the applicable
disclosure, any advertisement displayed in a retail establishment
representing that Winston cigarettes have no additives. All such
actions must be completed by July 15, 1999.
Part III-VII of the order require Reynolds to keep copies of
relevant advertisements and materials substantiating claims made in the
advertisements; to provide copies of the order to certain of its
personnel; to notify the Commission of changes in the composition or
formula of Winston cigarettes that may affect the order; to notify the
Commission of changes in corporate structure; and to file compliance
reports with the Commission. Part VIII provides that the order will
terminate after twenty (20 years under certain circumstances.
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 to modify in any way
their terms.
[[Page 13206]]
By direction of the Commission.
Donald S. Clark,
Secretary.
Concurring Statement of Commissioner Orson Swindle
R.J. Reynolds Tobacco Co., File No. 992-3025
I have voted to accept this consent agreement for public comment
because the remedies, including corrective statement in Winston
Advertisements for one year, are warranted by the facts of this case.
The nationwide advertising campaign for ``no additives'' Winston
cigarettes, launched in August 1997, is unusually extensive. Based on
my reading of the record, I am convinced that many consumers interpret
ads containing express ``no additives'' claims to mean that Winstons
are not as harmful as other cigarettes, and such health claim is
presumably important to consumers in their purchasing decisions. Based
on the extent and magnitude of the ongoing ad campaign and the
demonstrated strength of the implied health claim, I am willing to
infer that the claim will linger in the minds of consumers for one year
absent a corrective statement. I am particularly concerned about a
lingering effect of the ads because of the well-recognized health risks
of smoking. Under these circumstances, I support the corrective
advertising remedy contained in the proposed consent order.
[FR Doc. 99-6486 Filed 3-16-99; 8:45 am]
BILLING CODE 6750-01-M
