[Federal Register Volume 64, Number 126 (Thursday, July 1, 1999)]
[Notices]
[Pages 35666-35668]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16706]
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FEDERAL TRADE COMMISSION
[File No. 9823182]
Melinda R. Sneed 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 receive on or before August 30, 1999.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
Room 159, 600 Pennsylvania Avenue, NW, Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT: Judith A. Shepherd, Dallas Regional
Office, Federal Trade Commission, 1999 Bryan Street, Suite 2150,
Dallas, TX 75201, (214) 979-9383.
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 field 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
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electronic copy of the full text of the consent agreement package can
be obtained from the FTC Home Page (for June 24, 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, 600
Pennsylvania Avenue, NW, Washington, DC. 20580, either in person or by
calling (202) 326-3627.
Public comment is invited. Comments should be directed to: FTC/
Office of the Secretary, Room 159, 600 Pennsylvania Avenue, NW,
Washington, DC 20580. Two paper copies of each comment should be filed,
and should be accompanied, if possible, by a 3\1/2\ inch diskette
containing an electronic copy of the comment. 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, subject to final
approval, an agreement to a proposed Consent Order (``proposed order'')
from Melinda Sneed and John Sneed, doing business as Arthritis Pain
Care Center.
The proposed consent order has been placed on the public record for
sixty (60) days for the 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 will decide whether it should withdraw from the agreement
or make final the agreement's proposed order.
This matter concerns advertisements on the Internet, audio
cassettes, and print advertisements provided to consumers and
prospective distributors, for a product called ``CMO,'' described as a
form of cetylmyristoleate, purportedly useful in the treatment of cure
of arthritis and other diseases. CMO is said to be a fatty acid ester,
extracted from beef tallow, which regulates the immune system.
Purportedly, the substance, in one or two courses of treatment, each
lasting less than three weeks, permanently relives the symptoms of
osteoarthritis and rheumatoid arthritis and reverses the effects of the
disease. CMO is also claimed to be useful for the treatment,
mitigation, prevention, and cure of most forms of arthritis and a
number of other diseases.
The Commission's complaint charges that the proposed respondents
engaged in deceptive advertising in violation of Sections 5 and 12 of
the FTC Act by making unsubstantiated claims that their CMO products:
(1) Are effective in the mitigation, treatment, prevention, and cure of
most forms of arthritis, including rheumatoid arthritis and
osteoarthritis; (2) provide permanent relief from symptoms of
arthritis, including pain, impaired mobility, swelling, and joint
deformities; (3) are as effective as or superior to prescription
medications in the treatment of arthritis and the relief of arthritis
symptoms; (4) are completely safe and without adverse side effects; and
(5) are effective in the treatment of multiple sclerosis, lupus,
emphysema, chronic bronchitis, silicone breast disease, cancer, benign
prostate hyperplasia, hypertention, hypotension, and cardiac
arrhythmia.
The complaint further alleges that the proposed respondents made
false claims that (1) clinical studies prove that their CMO products
are a safe and effective treatment for arthritis; and that (2) studies
were conducted at the national Institutes of Health that prove that CMO
reverses the effects of arthritis.
The complaint further alleges that proposed respondents engaged in
a deceptive practice by representing that John Sneed is an endorser of
their CMO products, without adequately disclosing that Mr. Sneed, at
the time of his endorsement, had a material connection with
respondents' CMO products in that he had a financial interest in
Arthritis Pain Care Center and received a financial benefit from
respondents' sales of the product.
The proposed order contains provisions designed to remedy the
violations charged and to prevent proposed respondents from engaging in
similar acts in the future.
Paragraph 1 of the proposed order prohibits proposed respondents
from making any representation that CMO or any similar product: (1) Is
effective in the mitigation, treatment, prevention, or cure of
arthritis, including rheumatoid arthritis and osteoarthritis; (2)
provides permanent relief from symptoms of arthritis, including pain,
impaired mobility, swelling, or joint deformities; (3) is as effective
or as superior to prescription medications in the treatment of
arthritis or the relief or arthritis symptoms; (4) is completely safe
or has no adverse side effects; or (5) is effective in the treatment of
multiple sclerosis, lupus, emphysema, chronic bronchitis, silicone
breast disease, cancer, benign prostate hyperplasia, hypertension,
hypotension, or cardiac arrhythmia, unless, at the time the
representation is made, respondents possess and rely upon competent and
reliable scientific evidence that substantiates the representation.
Paragraph II of the proposed order prohibits proposed respondents
from making any representations about the performance, safety,
efficacy, or health benefits of CMO or any other food, drug, dietary
supplement, or program, unless the claims are substantiated by
competent and reliable scientific evidence.
Paragraph III of the proposed order provides that proposed
respondents are not prohibited from making representations which are
specifically permitted by regulations of the Food and Drug
Administration pursuant to the Nutrition Labeling and Education Act of
1990. Paragraph IV of the proposed order provides that proposed
respondents are not prohibited from making representations for a drug
that are permitted under tentative final or final standards issued by
the Food and Drug Administration or under any new drug application
approved by that agency.
Paragraph V of the proposed order prohibits proposed respondents
from misrepresenting the existence, contents, validity, results,
conclusions, or interpretations of any test, study, or research.
Paragraph VI of the proposed order prohibits proposed respondents
from representing that the experience represented by any user
testimonial or endorsement of any product or program represents the
typical or ordinary experience of members of the public who use the
product or program, unless the representation is true, and competent
and reliable scientific evidence substantiates that claim, or
respondents clearly and prominently disclose either: (1) What the
generally expected results would be for users or the product or
program; or (2) the limited applicability of the endorser's experience
to what consumers may generally expect to achieve, that is, that
consumers should not expect to experience similar results.
Paragraph VII of the proposed order requires proposed respondents
to disclose clearly and prominently, and in close proximity to the
endorsement, any material connection between a person providing an
endorsement of any product or program and any respondent or other
individual or entity manufacturing, labeling, advertising, promoting,
offering for sale, selling, or distributing such product or program. A
``material connection'' is a relationship that might materially affect
the weight or credibility of the endorsement and
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would not reasonably be expected by consumers.
Paragraph VIII of the proposed order requires that proposed
respondents: (1) Not disseminate to any distributor any material
containing any representations prohibited by the order; (2) not
authorize any distributor to make any representations prohibited by the
order; (3) send a required notice to each distributor with whom
proposed respondents have done business since January 1, 1996,
requesting that the distributor cease using any advertising or
promotional materials containing unsubstantiated claims for CMO,
requesting distributors not to make unsubstantiated oral
representations, informing the distributor of this settlement,
attaching a copy of this proposed complaint and order, and not
including any other documents in the mailing; (4) for a period of three
(3) years following service of the order, send the required notice to
each distributor who has not previously received the notice; the
notices shall be sent within one week of the first shipment of
respondents' products to the distributor; (5) require distributors to
submit to proposed respondents all advertising and promotional
materials and claims for any products or programs covered by the order
for review prior to their dissemination and publication, and not
authorize distributors to disseminate materials and claims unless they
comply with the order, or furnishing to distributors marketing
materials that do not contain representations prohibited by the order
and requiring the distributors to submit for review all advertising and
promotional materials for a particular product covered by the order
that contain representations that are not substantially similar to the
materials most recently provided by proposed respondents; and (6)
monitor distributors' advertising and promotional activities,
immediately terminate the right of any distributor who disseminates
advertisements or marketing material or makes oral representations
prohibited by the order, and immediately provide information to the
Federal Trade Commission about any such distributor and the materials
used. ``Distributor'' is defined in the proposed order to mean any
purchaser or transferee of a product covered by the order who acquires
product from proposed respondents, with or without consideration, and
who sells, or who has sold, such product to other sellers or to
consumers, including individuals, retail stores, or catalogs. Paragraph
IX of the proposed order requires proposed respondents to retain for
five (5) years after the last correspondence to which they pertain and
to make available to the Federal Trade Commission on request, copies of
all notification letters and other communications with distributors
relating to the requirements of Paragraph VIII.
Paragraph X of the proposed order contains record keeping
requirements for materials that substantiate, qualify, or contradict
covered claims and requires proposed respondents to keep and maintain
all advertisements and promotional materials containing any
representation covered by the proposed order. In addition, Paragraph XI
requires distribution of a copy of the consent decree to current and
future officers and agents. Further, Paragraph XII requires the filing
of a compliance report.
Finally, Paragraph XIII of the proposed order provides for the
termination of the order after twenty 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, or to modify in any
way their terms.
By direction of the Commission.
Benjamin I. Berman,
Acting Secretary.
[FR Doc. 99-16706 Filed 6-30-99; 8:45 am]
BILLING CODE 6750-01-M
