[Federal Register Volume 64, Number 126 (Thursday, July 1, 1999)]
[Notices]
[Pages 35661-35662]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16709]
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FEDERAL TRADE COMMISSION
[File No. 9823177]
Body Systems Technology, Inc. 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 received 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: Donald D'Amato, New York Regional
Office, Federal Trade Commission, 150 William Street, Suite 1300, New
York, NY 10038, (212) 264-1223.
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
(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 from Body Systems
Technology, Inc. (``BST''), a corporation, and William E. Chace and
James D. Davis, individually and as officers of the corporation
(``proposed respondents'').
The proposed consent order has been placed on the public record for
sixty (60) days for the 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 comments received and will decide whether it should
withdraw from the agreement and take appropriate action or make final
the agreement's proposed order.
This matter involves proposed respondents' making of health-related
advertising claims on the Internet and elsewhere for their shark
cartilage capsules, una de gato capsules, and una de gato liquid. The
proposed complaint alleges that BST and its two principal officers
violated Section 5 of the Federal Trade Commission Act (``FTC Act'') by
making the following unsubstantiated claims: BST's una de gato products
are or are likely to be an effective treatment of cancer, HIV/AIDS, and
arthritis; and BST's shark cartilage capsules are effective in the
prevention and treatment of cancer. The proposed complaint also alleges
that the proposed respondents violated Section 5 of the FTC Act by
falsely representing that research studies show that BST's una de gato
products are or are likely to be an effective treatment of cancer, HIV/
AIDs,
[[Page 35662]]
and arthritis; and by falsely representing that published laboratory
studies prove that BST's shark cartilage capsules are effective in the
prevention and treatment of cancer.
Paragraph I of the proposed consent order prohibits proposed
respondents from representing that BST's shark cartilage capsules or
any other product or program is effective in the prevention of cancer
or is effective in the treatment of cancer 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 consent order prohibits proposed
respondents from representing that BST's una de gato capsules, BST's
una de gato liquid, or any other product or program is or is likely to
be an effective treatment of cancer, is or is likely to be an effective
treatment of HIV/AIDS, or is or is likely to be an effective treatment
of arthritis unless, at the time the representation is made, proposed
respondents possess and rely upon competent and reliable scientific
evidence that substantiates the representation.
Paragraph III of the proposed consent order prohibits for any food,
dietary supplement, drug, or any program, representations about the
health benefits, performance, efficacy, or safety of such product or
program, unless, at the time the presentation is made, proposed
respondents possess and rely upon competent and reliable scientific
evidence that substantiates the representation.
Paragraph IV of the proposed consent order prohibits for any
product or program, misrepresentations about the existence, contents,
validity, results, conclusions, or interpretations of any test, study,
or research.
Paragraph V of the proposed consent order allows proposed
respondents to make any representation that is specifically permitted
in the labeling for any product by regulations promulgated by FDA
pursuant to the Nutrition Labeling and Education Act of 1990.
Paragraph VI of the proposed consent order allows proposed
respondents to make any representation for any drug that is permitted
by the FDA in the drug's labeling.
Paragraph VII of the proposed consent order governs proposed
respondents' notification, termination, and monitoring requirements
with respect to BST distributors. Proposed respondents are required to
send a letter to distributors that informs then that it is against the
law to make false claims about any BST product or program or to make
health-related claims about any product or program of BST that are not
substantiated by competent and reliable scientific evidence. The letter
further states that distributors must agree not to use, rely on, or
distribute any advertising or make oral representations containing
false or unsubstantiated claims. Further, distributors must agree to
submit all advertising to BST for approval prior to dissemination. The
letter informs distributors that failure to comply with these terms
will result in immediate termination, and if BST believes that the
distributor has made false or unsubstantiated claims it will report the
violation to the Federal Trade Commission. The proposed respondents are
required to have their distributors sign, date, and return the letter
as a condition of remaining a distributor.
Paragraph VIII is a record-keeping provision that requires proposed
respondents to maintain records of all notification letters sent to
distributors, communications between respondents and distributors
referring or relating to the requirements of Paragraph VII, and any
other materials created pursuant to Paragraph VII of the proposed
order.
Paragraph IX of the proposed consent order requires the proposed
respondents to provide full refunds for a specified period of time to
all purchasers of their shark cartilage capsules, una de gato capsules,
and una de gato liquid identifiable prior to the time the respondents
stopped making, and took aggressive steps to stop its distributors from
making, the alleged deceptive claims.
Paragraph X of the proposed order requires the proposed respondents
to provide the FTC with a monitoring report detailing the steps
respondents have taken to comply with the redress requirements.
Paragraph XI of the proposed order contains record keeping
requirements for materials that substantiate, qualify, or contradict
claims covered by the proposed order. Paragraph XII of the proposed
order requires distribution of a copy of the order to current and
future officers and agents. Paragraph XIII provides for Commission
notification upon a change in the corporate respondent and Paragraph
XIV requires Commission notification when the individual respondent
changes his business or employment. Paragraph XV requires the proposed
respondents to keep and maintain all records demonstrating compliance
with the terms and provisions of the order. Paragraph XVI provides for
the termination of the order 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 or to modify in any
way their terms.
By director of the Commission.
Benjamin I. Berman,
Acting Secretary.
[FR Doc 99-16709 Filed 6-30-99; 8:45 am]
BILLING CODE 6750-01-M
