Fonawin Corporation

Cigarette companies advertising, without health warning disclo_ sure, via recorded telephonic advertising messages, provided no interstate calls are involved held illegal. [File No. 783 7010,

Fonawin Corporation, August 18, 1978]
Advisory Opinion Letter
August 18, 1978
Dear Mr. Schaftel:

The Commission has decided that consideration of the course of action you have proposed is appropriate. Your proposal raises the question, in substance, whether cigarette companies may legally advertise, without a health warning disclosure,* via recorded telephonic advertising messages, provided no interstate calls are involved. The Commission’s conclusion is that they may not. The Commission understands that your company, Fonawin Corporation, under an exclusive contract with the Offtrack Betting Corporation of New York (OTB) operates a recorded telephone answering service (60 second recorded announcements) that provides horse racing results. The announcement service is supported: by commercial advertising messages included within such recordings. Technology reportedly exists to separate out the non-toll intrastate aspect of this service, so that no interstate calls would receive cigarette advertising messages and thus the Federal Communica- . tions Commission has advised your client that this activity is not within its jurisdiction. You advise that, for the most part, persons calling the service are “bettors.” Because persons under 18 are not eligible to place bets with OTB, you urge that the proposed cigarette advertising would have little, if any exposure to children. It is the Commission’s opinion that the proposed advertising would be within the jurisdictional reach of the Federal Trade Commission Act. By advertising cigarettes to the public and failing to disclose that cigarette smoking is dangerous to health, the cigarette manufacturer-advertisers would be representing thereby, directly or by implication, that cigarettes are not dangerous to health. Although this activity is not covered by the Commission’s order in Lorillard, et al, 80 F.T.C. 455 (1972), the principles articulated in those orders apply here. A failure or refusal to make such disclosure in the proposed advertising would, in the Commission’s view, violate * “Warning: The Surgeon General Has Determined That Cigarette Smoking Is Dangerous To Your Health.”

Section 5 of that Act which declares that unfair methods of competition and unfair or deceptive acts or practices in or affecting

commerce are unlawful.
By direction of the Commission.
Fourth Letter of Request
- May 15, 1978