[Federal Register Volume 60, Number 128 (Wednesday, July 5, 1995)]
[Notices]
[Pages 35027-35029]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-16446]
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FEDERAL TRADE COMMISSION
[File No. 932-3144]
Good News Products, Inc.; 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 Hamilton, Michigan company from
misrepresenting the nutrient content of eggs or products containing egg
yolks, and from making health claims about such products without
scientific evidence to substantiate the claims.
DATES: Comments must be received on or before September 5, 1995.
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:
Phoebe Morse, Boston Regional Office, Federal Trade Commission, 101
Merrimac Street, Suite 810, Boston, Massachusetts 02114-4719. (617)
424-5960.
SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Sec. 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
Sec. 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 Good News Products, Inc., a corporation,
and it now appearing that Good News Products, Inc., 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 Good News Products, Inc., by its
duly authorized officer, and counsel for the Federal Trade Commission
that:
1. Proposed respondent Good News Products, Inc. is a corporation
organized, existing and doing business under and by virtue of the laws
of the State of Michigan with its office and principal place of
business located at East Washington & M-40, Hamilton, Michigan 49419.
2. Proposed respondent admits all the jurisdictional facts set
forth in the draft complaint.
3. Proposed respondent waives:
(a) Any procedural steps;
(b) The requirement that the Commission's decision contain a
statement of findings of fact and conclusions of law;
(c) All rights to seek judicial review or otherwise to challenge or
contest the validity of the order entered pursuant to this agreement;
and
(d) Any claim under the Equal Access to Justice Act.
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
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.
6. The 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: (1) Issue its complaint corresponding in form and
substance with the draft complaint and its decision containing the
following order to cease and desist in disposition of the proceeding;
and (2) 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 rights 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 Good News Products, Inc., a
corporation, its successors and assigns, and its officers; and
respondent's agents, representatives and employees, directly or through
any corporation, subsidiary, division or other device, in connection
with the labeling, advertising, promotion, offering for sale, sale, or
distribution of eggs or any food containing egg yolk in or affecting
commerce, as ``food'' and ``commerce'' are defined in the Federal Trade
Commission Act, do forthwith cease and desist from misrepresenting, in
any manner, directly or by implication, through numerical or
[[Page 35028]]
descriptive terms or any other means, the absolute or comparative
amount of total fat, saturated fat or any other nutrient or ingredient
in such food.
II.
It is further ordered that respondent Good News Products, Inc., a
corporation, its successors and assigns, and its officers; and
respondent's agents, representatives and employees, directly or through
any corporation, subsidiary, division or other device, in connection
with the labeling, advertising, promotion, offering for sale, sale, or
distribution of eggs or any food containing egg yolk in or affecting
commerce, as ``food'' and ``commerce'' are defined in the Federal Trade
Commission Act, do forthwith cease and desist from making any
representation, in any manner, directly or by implication:
A. About the absolute or comparative effect on such food on heart
disease or heart disease risk factors;
B. About the absolute or comparative effect of such food on serum
cholesterol; and
C. About the absolute or comparative health benefits of such food,
unless at the time of making such representation, respondent possesses
and relies upon competent and reliable scientific evidence
substantiating the representation. For 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 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.
III.
Nothing in this Order shall prohibit respondent from making any
representation that is specifically permitted in labeling for eggs or
any food containing egg yolk by regulations promulgated by the Food and
Drug Administration pursuant to the Nutrition Labeling and Education
Act of 1900.
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 their possession or control that contradict, qualify or
call into question such representation, or the basis relied upon for
such representation, including complaints from consumers and complaints
or inquiries from governmental organizations.
V.
It is further ordered that respondent shall, within thirty (30)
days after service upon it of this Order, distribute a copy of the
Order to each of the respondent's operating divisions, to each of its
licensees, to each of its managerial employees, and to each of its
officers, agents, representatives or employees engaged in the
preparation or placement of advertising or other materials covered by
this Order and shall secure from each such person a signed statement
acknowledging receipt of this Order.
VI.
It is further ordered that respondent, or its successors and
assigns, shall promptly terminate its licensing agreement with any
licensee if respondent has actual knowledge or knowledge fairly implied
on the basis of objective circumstances that such licensee is engaging
in acts or practices that respondent is prohibited from engaging in
under Parts I and II of this Order, unless such licensee immediately
ceases engaging in such acts or practices.
VII.
It is further ordered that respondent, its successors and assigns,
shall notify the Commission at least thirty (30) days prior to any
proposed change in the corporate respondent, including but not limited
to dissolution, assignment or sale resulting in the emergence of a
successor corporation, the creation or dissolution of subsidiaries or
affiliates, or any other corporate change that may affect compliance
obligations arising out of this Order.
VIII.
It is further ordered that respondent shall, within sixty (60) days
after service of this Order, and at such other items as the Federal
Trade 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 Good News
Products, Inc. (``Good News Products'').
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 claims made by Good News Products in its
advertising and promotional materials for eggs.
The Commission's complaint alleges that Good News Products engaged
in unfair or deceptive practices in connection with the advertising of
its eggs. According to the complaint, Good News Product falsely
represented that its eggs are significantly lower in both saturated fat
and total fat than ordinary eggs.
The complaint also alleges that Good News Products falsely
represented that it had a reasonable basis for claims that the omega-3
fatty acids in Good News Eggs will have a positive effect on risk
factors for heart disease, such as atherosclerosis, high blood
cholesterol levels and high blood pressure, and on rheumatoid
arthritis, and that they may decrease blood cholesterol.
Finally, the complaint alleges that Good News Products falsely
represented that it had a reasonable basis for its claim that, because
Good News Eggs are lower in saturated fat than ordinary eggs, they will
increase blood cholesterol levels less than ordinary eggs.
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 Good News Products from misrepresenting the absolute or
comparative amount of total fat, saturated fat or any other nutrient or
ingredient in eggs or any food containing egg yolk.
Part II of the proposed order prohibits respondent from making any
claims about the health benefits, including the absolute or comparative
effect on heart disease or heart disease risk factors, of eggs or foods
containing egg yolk unless, prior to making such claim, Good News
Products has competent and reliable
[[Page 35029]]
scientific evidence to substantiate the claims.
Part III of the proposed order specifically allows respondent to
make any representation permitted in labeling by the Food and Drug
Administration for food under the Nutrition Labeling and Education Act
of 1990.
Part IV of the proposed order requires Good News Products to
maintain copies of all materials relied upon in making any
representations covered by the order.
Part V of the proposed order requires respondent to distribute
copies of the order to its licensees and to various officers, agents
and representatives.
Part VI of the proposed order requires Good News Products to
terminate its licensing agreement with any licensee that it has reason
to know is engaged in practices that respondent is prohibited from
engaging in under parts I and II of the order.
Part VII of the proposed order requires respondent to notify the
Commission of any changes in corporate structure that might affect
compliance with the order.
Part VIII of the proposed order requires respondent to file with
the Commission one or more reports detailing compliance with the order.
The purpose of this analysis is to facilitate public comment on the
proposed consent 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. 95-16446 Filed 7-3-95; 8:45 am]
BILLING CODE 6750-01-M
