[Federal Register Volume 59, Number 184 (Friday, September 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: X94-10923]
[[Page Unknown]]
[Federal Register: September 23, 1994]
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FEDERAL TRADE COMMISSION
[File No. 922 3236]
Hyde Athletic Industries, 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 Massachusetts footwear marketer from
misrepresenting the extent to which any footwear is made in the United
States, and would require the respondent to maintain materials relied
upon for any country of origin representations and to distribute copies
of the Commission order to its operating divisions and certain company
officials.
DATES: Comments must be received on or before November 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:
C. Steven Baker, Chicago Regional Office, Federal Trade Commission, 55
East Monroe St., Suite 1437, Chicago, IL. 60603. (312) 353-8156.
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 the 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 Hyde Athletic Industries, Inc., a
corporation (``proposed respondent''), and it now appearing that
proposed respondent is willing 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 Hyde Athletic Industries, Inc.,
by its duly authorized officer, and its attorney, and counsel for the
Federal Trade Commission that:
1. Proposed respondent Hyde Athletic Industries, Inc., is a
corporation organized, existing and doing business under and by virtue
of the laws of the State of Massachusetts, with its principal office or
place of business at 13 Centennial Industrial Park Drive, Peabody,
Massachusetts 01960.
2. Proposed respondent admits all the jurisdictional facts set
forth in the draft of complaint here attached.
3. 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.
4. This agreement shall not become a 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 the complaint contemplated hereby, 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 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 that the law has been
violated as alleged in the attached draft complaint or that the facts
as alleged in the attached draft complaint, other than the
jurisdictional facts, are true.
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 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 might 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 in the agreement may be used to vary or
contradict the terms of the order.
7. Proposed respondent has read the complaint and the order
contemplated hereby. It understands that once the order has been
issued, it will be required to file one or more compliance reports
showing 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, Hyde Athletic Industries, Inc., a
corporation, its successors and assigns, and its officers, agents,
representatives, and employees, directly or through any corporation,
subsidiary, division, or other device, in connection with the
manufacturing, labeling, advertising, promotion, offering for sale,
sale, or distribution of any footwear in or affecting commerce, as
``commerce'' is defined in the Federal Trade Commission Act, do
forthwith cease and desist from misrepresenting, in any manner,
directly or by implication, the extent to which any such footwear is
made in the United States.
Provided, however, that a representation that any such footwear is
made in the United States will not be in violation of this Order so
long as all, or virtually all, of the component parts of the footwear
are made in the United States and all, or virtually all, of the labor
in assembling the footwear is performed in the United States.
Provided further, however, respondent will not be in violation of
this Order in connection with the manufacturing, labeling, advertising,
promotion, offering for sale, sale, or distribution of any such
footwear, where such footwear is made or assembled in one country in
whole or in part of materials made in another country, if the country
of origin representation for such footwear is made through any of the
following truthful representations:
A. ``Made (or assembled) in `X' (country) of `Y' (country)
components''; or
B. ``Made (or assembled) in `X' (country) of domestic and foreign
components''; or
C. ``Made (or assembled) in `X' (country) of primarily (or mostly)
foreign and some domestic components''; or
D. ``Made (or assembled) in `X' (country) of primarily (or mostly)
domestic and some foreign components''; or
E. ``Made (or assembled) in `X' (country) of foreign components;''
F. ``Built in `X' (country) of imported components.''
For purposes of this provision, where the unqualified term
``domestic'' is used to indicate components made in the United States,
such components shall comprise a significant portion of the production
costs of the footwear.
II
It is further ordered that respondent may continue to deplete its
existing inventory of footwear and footwear packaging printed or
labeled prior to the date of service of this Order without violating
the terms of this Order, provided that respondent itself does not sell
or distribute any such inventory more than ninety (90) days after the
date of service of this Order.
III
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
representations; and
B. All tests, reports, studies, surveys, demonstrations, or other
evidence in its possession or control that contradict, qualify, or call
into question such representation, or the basis relied upon for such
representation, including complaints from consumers.
IV
It is further ordered that the respondent shall distribute a copy
of this Order to each of its operating divisions and to each of its
officers, agents, representatives, or employees engaged in the
preparation or placement of advertisements, promotional materials,
product labels or other such sales materials covered by this Order.
V
It is further ordered that respondent shall notify the Commission
at least thirty (30) days prior to any proposed change in the
corporation such as a 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 which may affect
compliance obligations under this Order.
VI
It is further ordered that respondent shall, within sixty (60) days
after service of this Order upon it, and at such other times as the
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 Hyde
Athletic Industries, Inc.
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 country of origin claims made by the
respondent for its ``Saucony'' brand footwear, which appeared in
respondent's advertising and on labeling for certain of its footwear.
The Commission's complaint charges that respondent represented that
Saucony footwear is made in the United States, that is, that all, or
virtually all, of the component parts of the footwear are made in the
United States, and all, or virtually all, of the labor in assembling
the footwear is performed in the United States. The complaint alleges
that this claim is false and misleading because a substantial amount of
Saucony footwear is assembled in foreign countries of foreign component
parts, and a substantial amount of Saucony footwear assembled in the
United States consists largely of foreign component parts.
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 the respondent from misrepresenting, directly or by
implication, the extent to which any footwear is made in the United
States. Part I provides, however, that a made in the USA claim will not
violate the order if all or virtually all of the parts and labor are of
domestic origin. It also contains a safe harbor provision that
specifies language respondent can use when making a country or origin
disclosure for footwear that is made or assembled in one country in
whole or in part of materials made in another country.
Part II of the proposed consent order provides that the respondent
may continue to deplete its existing inventory of footwear and footwear
packaging printed or labeled prior to the date of service of this
order, provided that the respondent itself does not sell or distribute
that inventory more than ninety (90) days after the date of service of
the order.
The remaining parts of the proposed consent order require the
respondent to maintain materials relied upon in disseminating any
country of origin representations, to distribute copies of the order of
each of its operating divisions and to certain company officials, to
notify the Commission of certain changes in corporate structure, and to
file one or more compliance reports.
The standard set forth in the complaint and proposed order for an
unqualified ``Made in the USA'' (or the like) claim is that all or
virtually all of the parts and labor used in the manufacture of the
product must be of domestic origin. This standard is consistent with
Commission case precedent,\1\ certain other statutes enforced by the
Commission,\2\ and extrinsic evidence obtained by the Commission
regarding consumer perceptions of ``Made in the USA'' claims.\3\ The
Commission would be interested in receiving any information relevant to
its current standard for ``Made in USA'' claims, including information
on the competitive and other effects of this standard and on consumer
perceptions of country of origin claims.
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\1\See, e.g., Windsor Pen Corp., 64 F.T.C. 454 (1964); Joseph H.
Meyer Bros., 47 F.T.C. 49 (1950); Vulcan Lamp Works, Inc., 32 F.T.C.
7 (1940). The Commission's advisory opinions have also set forth
this standard. See, e.g., Advisory Opinion No. 215, Misrepresenting
Hoist as ``Made in U.S.A., '' 73 F.T.C. 1321 (1968).
\2\Wool Products Labeling Act, 15 U.S.C. 68-68j (1973 & Supp.
1994); Textile Fiber Products Identification Act, 15 U.S.C.
Secs. 70-70k (1972 & Supp. 1994).
\3\Study on Country of Origin Advertising (Feb. 1991). The
Commission has determined to place this study on the public record
for review by interested parties.
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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.
Benjamin I. Berman,
Acting Secretary.
[FR Doc. 23582 Filed 9-22-94; 8:45 am]
BILING CODE 6750-01-M
