[Federal Register Volume 59, Number 128 (Wednesday, July 6, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-16275]
[[Page Unknown]]
[Federal Register: July 6, 1994]
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FEDERAL TRADE COMMISSION
[File No. 932 3117]
Sears, Roebuck and Co.; 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
require, among other things, the Illinois-based retail department store
to comply with the Pre-Sale Availability Rule under the Magnuson-Moss
Warranty Act, to inform its retail store managers of their compliance
responsibilities, and to develop and implement a program for
instructing its sales personnel about the availability and location of
manufacturers' warranty information.
dates: Comments must be received on or before August 22, 1994.
addresses: Comments should be directed to: FTC/Office of the Secretary,
Room 159, 6th St. and Pa. Ave., N.W., Washington, D.C. 20580.
for further information contact: Jeffrey Klurfeld or Gerald Wright,
FTC/San Francisco Regional Office, 901 Market St., Suite 570, San
Francisco, CA. 94103. (415) 744-7920.
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 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
Sears, Roebuck and Co., a corporation (``proposed respondent'' or
``respondent''), and it now appearing that proposed respondent is
wiling to enter into an agreement containing an order to cease and
desist from the acts and practices being investigated.
It is hereby agreed by and between Sears, Roebuck and Co., by its
duly authorized officer, and counsel for the Federal Trade Commission
that:
1. Proposed respondent Sears, Roebuck and Co., is a corporation
organized, existing, and doing business under and by virtue of the laws
of the State of New York, with its principal office and place of
business located at 333 Beverly Road, Hoffman Estates, Illinois 60179.
2. This agreement is for settlement purposes only and does not
constitute an admission by proposed respondent that the law has been
violated as alleged in the draft of complaint here attached.
3. Proposed respondent admits all the jurisdictional facts set
forth in the draft complaint here attached.
4. 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;
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. All claims under the Equal Access to Justice Act.
5. 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 this proceeding.
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 Sec. 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 of complaint here attached 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 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
The definitions of terms contained in Sec. 101 of the Magnuson-Moss
Warranty Act, 15 U.S.C. 2301, and in Rule 702, 16 CFR 702.1,
promulgated thereunder, shall apply to the terms of this Order.
I
It is ordered that respondent Sears, Roebuck and Co., a
corporation, its successors and assigns, and its officers,
representatives, agents and employees, directly or through any
corporation, subsidiary, division or other device in connection with
the sale or offering for sale of any consumer product in or affecting
commerce, do forthwith cease and desist from failing to make a text of
any written warranty on a consumer product actually costing more than
$15 readily available for examination by prospective buyers prior to
sale through utilization of one or more means specified in 16 CFR
702.3(a), as amended.
II
It is further ordered that respondent shall, within thirty (30)
days of the date of service of this Order, deliver to each current
retail store manager engaged in the sale of consumer products on behalf
of respondent, a copy of this Order to cease and desist.
III
It is further ordered that respondent shall, within thirty (30)
days of the date of service of this order, instruct all current retail
store managers engaged in the sale of consumer products on behalf of
respondent as to their specific obligations and duties under the
Magnuson-Moss Warranty Act (15 U.S.C. 2301) and this Order.
IV
It is further ordered that respondent shall, for a period of not
less than four (4) years from the date of service of this Order,
instruct all future retail store managers who will be engaged in the
sale of consumer products on behalf of respondent, before they assume
said responsibilities for respondent, as to their specific obligations
and duties under the Magnuson-Moss Warranty Act (15 U.S.C. 2301) and
this Order.
V
It is further ordered that respondent shall, within thirty (30)
days of the date of service of this Order, develop and implement a
program to instruct its sales personnel about the availability and
location of warranty information.
VI
It is further ordered that respondent shall, for a period of not
less than five (5) years from the date of service of the Order,
maintain and upon request make available to the Federal Trade
Commission for inspection and copying (i) copies of all written
instructions provided by respondent to its retail store managers and
sales personnel regarding their obligations and duties under the
Magnuson-Moss Warranty Act (15 U.S.C. 2301) and this Order; (ii) copies
of signs posted by respondent in its retail store outlets designed to
elicit prospective buyers' attention to the availability of the text of
written warranties for review upon request; and (iii) copies of the
text of written warranties made readily available by respondent's
retail store outlets for examination by prospective buyers on request.
VII
It is further ordered that respondent, for a period of six (6)
years from the date of service of this Order, shall notify the
Commission at least thirty (30) days prior to any 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 that may affect compliance obligations
arising out of the Order.
VIII
It is further ordered that respondent shall, within sixty (60) days
after service of this Order on it, 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 to a
proposed consent order from Sears, Roebuck & Co., Hoffman Estates,
Illinois (``Sears''). Sears is a national chain of retail department
stores.
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 proposed order contained in the agreement.
The complaint alleges that Sears has violated a Rule promulgated by
the Federal Trade Commission (16 CFR 702.3(a)) pursuant to the
Magnuson-Moss Consumer Warranty Act (15 U.S.C. Sec. 2301). This Rule
requires Sears to make manufacturers' warranty information available to
consumers. The purposes of this Act, and the Rule, are to improve the
information available to consumers, to prevent deception, and to
promote competition, in the marketing of consumer product warranties
offered by manufacturers.
The Rule, called the ``Pre-Sale Availability Rule,'' gives
retailers the option of either (1) displaying the text of
manufacturers' warranties in close proximity to the product display; or
(2) furnishing the text of manufacturers' warranties to customers upon
request, and prominently displaying signs advising of the availability
of such warranties. The complaint alleges that Sears has not complied
with either of these options.
The proposed order requires Sears to comply with this Rule, to
inform its retail store executives of their compliance
responsibilities, and to develop a program for instructing its sales
personnel about the availability and location of manufacturers'
warranty information. Sears will be subject to civil penalties if it
does not comply 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. 94-16275 Filed 7-5-94; 8:45 am]
BILLING CODE 6750-01-M
