Anderson, Joe

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IN THE MATTER OF JOE ANDERSON, TRADING AS THE A & 0 COMPANY COIIIPLAINT, FINDINGS, AND OitDER IN REGARD TO Tile ALLEGED VIOLATION OF SEC. 15 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1014 Docket 3121. Complaint, May 1, 1931-Dectsion, Juice 21, 19J1 Where an individual engaged in compounding, distributing, and selling, in commerce, his "A & 0" pharmaceutical preparation; in udverth;emcnts circulateu among the general public in various forms of printed matter nnd by radio brondca:o;ts and otherwlse-- (a) ltepresented that said product opened the lteud, let one breathe freely, healed irritated membranes, checked fever, etc., and relieved and cured the most stubborn cold when other treatments fulled, and protected one from influf'nza, pneumonia, and serious lung trouble; (b) nf'presented that it gave instant, guaranteed, and effective relief and opened the bowels and cleared the digestive tract, and restorf'd systPlll to normal, and was quicker and safer than pills and 8nlves, and that there was nothing eh;e that acted us quickly and thoroughly; and (c) nepresented that said product was a secret combination of ingredlrnt:> which doctors prescribe for colds, nnd wns hnsP<l on n ~'<'ret formula within his exclusive knowletlge, making product entirely ditr(•rent froJil any other known preparation;

l~ucts being r,;ald 8tutenwnts and reJH'esentntlons were exaggerated, prrpnrutlon in question was not a sure, quirk, and el'l'ectlve rrmrdy and cure tor colds nnd did not relieve the systemic causes tltereof or give instant and thorough relief, check fevf'r, etc., or 11rotect patient fi'Oill influenzn, pneumonia, or other cold complications, was not unique, as claimed, in its action nor based on a secret fo1·mula sponsored by rellnble phystclnn, could 110t with safety be given to any unl all chlldren inllh;criminntciY• was not entirely ditrerent from any other known l11't'puratlou in view of substantially similar composition of many competing products, and rep· re:sentations In question as to nature, cmutive value, awl f'ITrrt of said pr£>paratlon w£>re exaggerat£>d, misleading and decrJltlve; With cnpaelty and tend£>ncy to misll'ad n substantial portion of the lmrchnsing public Into the belief that all said rl'pr£>sentations were true, and into purehnse of said product in such belief!!, and with result that n num· ber of the consuming public, ns a direct consequence of mistnkm nntl <'I'· roneous bellefs thus induced, purchased substantial volume of his said product, and trade was thereby unfnirly diwrted to him from cotnpetltors likewise engaged In dl,;tributlon and sale of like and simllnr pharmnceutlca 1 prepara tlons, and who truthfully repre:;ent ell' crt lvC'n<'ss of their said Jlroducts and results to be obtain<'d from use Uwrt'of; to the injury of competition In commerce:

lleld, That such nets nnd practices W<'rc to the prejndicP of the public and competitors nnd constituted unfair methods of competition. llfr. Joseph 0. Fehr for the Commission.

llfr. Clinton Robb, of Washington, D. C., for respondent. THE A & 0 COl\fPANY 611 Glo Complaint Complaint Pursuant to the provisions of an Act of Congress approved ,September 26, 1914:, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," the Federal Trade Commission, having reason to believe that Joe Anderson, an individual doing business under the trade name of The A & 0 Company, hereinafter referred to as respondent, has been and is Using unfair methods of competition in commerce as "commerce" is defined in said act, and it appearing to said Commission that a Proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as follows:

PARAGRAPH 1. Respondent, Joe Anderson, is an individual doing business under the trade name of The A & 0 Company, with his principal office and place of business located in the city of New llern, State of North Carolina. Respondent, for more than one year last Past, has been, and still is, engaged in the manufacture awl sale of a Pharmaceutical preparation known as "A & 0" which he represents to be an ackqnate treatment for colds. In the course. and conduct of his business respontlent offers said product for sale and sells the sallll:l in commercl:l betw('en th<l State of North Carolina and the several States of the United States, and in the District of Columbia. When said product is sold, rl:lspondent transports same from his Place of business in the State of North Carolina to the purchasers ther('of located in States of the United States other than the State of North Carolina,, and in the District of Columbia. There has bl:len for more than o1w y('ar last past, and still is, a constant curr<lnt of h·ade mHl commerce in said product so manufactured and solu by respondent, between and among the various States of the United States, Qnd in the District of Columbi[t. Respondent is now and for more than one year last past has been engaged in substantial competition with other individuals and with firms, partnerships, and corporations engaged in the manufacture of like and similar prodllcts and in thl:l sale thereof in commerce between and among the Various States of the United States, and in the District of Columbia. PAn. 2. In the course and conduct of his business, as aforesaid, the ~respondent, in soliciting the sale of and in selling his "A & 0," an<.l t~le purpose of creating a demand upon the part of the consuming p he for said product, now causes and for more than one year last rast has caused advertisements to be issued, published, and circulated fo and among the general public of the United States in various s 0 ~~ls of printed matter, by radio broadcasts, and in other ways. In UI Ways and by said means respondent makes and has made to the Corpplaint 25 F. T.C. general public many unfair, false, and misleading statements with reference to the alleged therapeutic value of said product and its effect upon the users thereof, a portion of which is as follows: Opens bowels.

Quicker and safer than pills and salve.

Unconditionally guaranteed.

Gives quick guaranteed relief.

For instant relief take A & 0.

Relieves the most stubborn colds when all other treatments fail. Acts instantly' and thoroughly.

Restores the system to normal order.

Reliable for adults and children.

A & 0 starts giving relief from the first dose. Even the most stubborn colds respond to A & 0. For colds and coughs due to colds, there is absolutely nothing else that acts as quickly nnd thoroughly as A & 0.

A & 0 soothes and heals irritated ml'lnbranes, clears the nasal passages, opens the head, checks fever nnd clears the digestive tract. Colds tear down the l'lystem, subj<•ct you to influenza, pneumonia and serious lung troubles.

The OlliGINAL liquid prescription for colds . , , and did you know that users say A and 0 is, by far, the most efl'<'ctlve colds prescription yet di.~covered? A nnd 0 ifl n s<'cret comhinntlon of ingredil'nts that doctors everywhere prescribe for coldfl.

This grf'llt cold:> prescription is compounded by a S!'cret process and <lifters entirely from any other preparation for colds thc•y've ever tried. A and 0 is O~E cold:i prescription that "WOnKS" I PAn. 3. The statements and reprPsPntn.tions set forth in pamgraph 2 hereof, and many others similar thereto, serve, and have served, as representations on the part of respon<lent to purchasers and prospective purchasers as to the nature of tho product and its t>ffrc· tiveness as a cure and remedy in use. Said representations an' that "A & 0'' opens the lwacl and lets one breathe freely; that it checks iever; that it opens the bowels; that it relieves bodily discomfort and restores the system to normal; that it gives instant, guamntl't'tl or thorough relief; that it relieves and cures the most stub hom colds when other treatments fail; that it starts giving relief fronl the first dose; that it heals irritated membranes, cll•:u·s the nasa 1 passages, clears the digestive tract; that it is quicker und safer thnn pills alld salve; that it protects one from influenza., pm•umonia, or seri~us lung trouble; that it is a secret combination of ingredients which doctors prescribe for colds; that respondent ha:. exclusive knowktlgc of n formula which is the basis of his protluct mHl that it is entirely different from a~1y other known prepar~tion. . d In tt·uth and m fact, respondent's satd product Is not a sure an. quick remedy and cure for colds, nor docs it relieve the syst.eJ11tltlC THE A & 0 COMPANY 613 610 Findings causes of colds. It has no effect on the causatives of colds. It does not give instant and thorough relief nor does it check fever or open the , head and bowels or protect the patient from influenza or pneumonia or other complications of a cold. It is not true that there is absolutely nothing else that acts as quickly and thoroughly as "A & 0," nor is it true that a secret formula is the basis of said product sponsored by reliable physicians. Said preparation can not with safety be given to any and all children indiscriminately. It is not true that said "A & 0" is entirely different from any other known prepamtion, as there are many competing products which contain essentially the same ingredients. In truth and in fact, the representations made by respondent as to the nature, curative value, and effect of his preparation, when used, are grossly exaggerated, false, misleading, and untrue, as said preparation will not accomplish the results claimed for it.

PAn. 4. There are among the competitors of the respondent in interstate commerce, manufacturers and distributors of like and similar products who truthfully advertise and represent the natur£>, merit, and therapeutic value of their respective products. There are also among such coJllpetitors of the respondent, sellers and distributors of like and similar products who do not advertise and otherwise represent ·that such products have the merit or therapeutic Value which they do not have.

PAn. 5. The above alleged acts and practices of respondent have the capacity and tendency to mislead and deceive purchasers and Prospective purchasers into the erroneous beliefs that. respondent's tepres£>ntations set out in paragraph 3 hereof are true and into the Purchase of r£>spondent's product in such beliefs. Thereby trade is unfairly diverted to respondent from respondent's competitors, as ~lereinabove alleged, and as a consequence thereof substantial injury Is done by respondent to competition in commerce as herein described. PAn. G. Said acts and practices of respondent are all to the prejudice of the public and respondent's competitors, and constitute unfair lnethods of competition in commerce within the intent and meaning of Section 5 of an Act of Congress entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for Other purposes," approved Sept£>mber 2G, 1914. REI'ORT, FINDINGS As TO THE FACTs, AND Onder Pursuant to the provisions of an Act of Congress approved Seph'mher 26, 1914, entitled "An Act to create a Federal Trade Com- Inission, to define its powers and duties, and for other purposes," 614 FEDERAL TRADE COMMISSIONI DECISIONS Findings 25F.T.C.

the Federal Trade Commission, on the 1st day of May, A. D., 1937, issued and served its complaint in this proceeding upon respondent, Joe Anderson, an individual doing business under the trade name of The A & 0 Company, charging him with the use of unfair methods of competition in commerce, in violation of the provisions of said act. After the issuance of said complaint and the filing of said respondent's answer thereto, a stipulation as to the facts was entered into by and between Clinton Robb, Esq., attorney for respondent, and W. 'I'. Kelley, Chief Counsel for the Commission, by which it was agreed that, subject to the approval of the Commis- ~ion, the statement of facts so agreed upon should be taken as the facts in this proceeding, and in lieu of testimony in support of the charges stated in the complaint or in opposition thereto; and b;y which stipulation it was further agreed that the Commission might proceed upon said statement of facts to issue its report stating its findings as to the facts (including inferences which it might draw from the said stipulated facts) and its conclusion based thereon, and enter its order disposing of the proceeding without the presentation of arguments or the filing of briefs. Said. stipulation as to the facts has been duly filed. in the office of the Commission, and approved by it. Tl1ereafter, the proceeding came on for final hearing before the Commission in said complaint, .the answer thereto, und the statement of facts as agreed upon in lieu of testimony, briefs and. arguments have been waived, and the Commission, having duly considered the same and being fully advised in the premises, finds that this proceeding is in the intprcst of the public, and makes this its findings as to the facts and its conclusion drawn therefrom:

FINDINGS AS TO THE FACTS PAR.\GRAPII 1. Respondent, Joe Anderson, trad.ing and doing lJUsiness under the trade name of The A & 0 Company, has his principal office and place of business located at New Bern, N. C. He has been for more than one year last past, and is now, engaged in the business of compounding, distributing and selling in commerce, us herein set out, a pharmaceutical preparation known as "A & 0," which he represents to be an adequate treatment for coltls. In the course and conduct of his business, respondent offers said product for sale, and sells the same, in commerce between the St:tte of North Carolina and the several States of the United States, and in the District of Columbia.

When said product is sold, respondent transports it from his plac" of business in the State of North Carolina to the respective purchas· THE A & 0 COMPANY 615 610 Findings ers thereof located at various points in the States of the United States other than the State of North Carolina, and in the District of Columbia. Respondent has at all times maintained a constant current of trade and commerce in said product so manufactured and sold by respondent between and among the various States of the United States, and in the District of Columbia. Respondent is now, and for more than one year last past has been, engaged in substantial competition with other individuals and with firms, partnerships, and corporations engaged in the manufacture of like and similar products, and in the sale thereof in commerce between and among the various States of the United States, and in the District of Columbia. PAn. 2. In directing the operation of his said business, and for the purpose of inducing the purchase of this product, respondent now causes, and for more than one year last past has caused, advertisements to be issued, published, and circulated to and among the genl'ral public of the United States in various forms of printed matter, by radio broadcasts, and in other ways. In said ways and by said means respondent makes, and has made, to the general pub· lie misleading and deceptive statements with reference to the allE>ged therapeutic value of said product and its effect upon the users thereof, a portion of which is as follows: Opens bowels.

Quicker and safer than pills and salve.

Unconditionally guaranteed.

Gives quick guaranteed relief.

For instant relief take A & 0.

Relieves the most stubborn colds when nll other treatments fail. Acts iustantly and thoroughly.

Restores the system to normal order.

Reliable for adults and «;hildren.

A & 0 starts giving relief from the first dose. Even the most stubborn colds respond to A & 0. For colds and coughs due to colds, there is absolutely nothing else that acts as quickly and thoroughly as A & 0.

A & 0 soothes and heals irritated membranl's, clears the nasal passages, OPf'ns the head, checks fever and ci('ars the digestive tract. Colds tear down the system, subject you to influenza, pneumonia, and serious lung troubles.

In June, 1936, the respondent stipulated and agreed with the Federal Trade Commission to discontinue making and advertising t~le foregoing representations and statements, and other representations and statements equivalent thereto in form and substance. ~Inong the statements and representations made by the respondent Since June 12, 1936 have been the following: Findings 2!3 F. T. C. The original liquid prPscrlption for colds • • • and did yon know that users say A & 0 Is, by far, the most effective colds prescription yet discovered? A & 0 is a secret combination ot Ingredients that doctors everywhere prescribe tor colds.

Thl~ great colds prescription is compounded by 11 secret process and differs entirely from any other preparation tor colds thPy've P\'<'r trip<l. A & 0 Is ONE colds prescription that "WORKS"! PAR. 3. The statements and representations set forth in paragraph 2 hereof, and others similar thereto, serve, and have served, as representations on the part of respondent to purchasers and prospective purchasers ns to the nature of his product and its effectiveness as a cure nnd remedy in use. Said representations are that "A & 0" opens the head nncl lets one breathe freely; that it checks fever; that it opens the bowels; that it relieves bodily discomfort and restores the system to normal; that it gives instant, guaranteed or thorough relief; that it relieves and cures the most stubborn colds when other treatments fail; that it starts giving relief from the first dose; that it heals irritntcd membrnnes, clears the nasal passages, clears the digestive tract; that it is quicker nnd safer than pills and salves; that it protects one from influenza, pneumonia, or serious lung trouble, that it is a secret combination of ingredients which doctors prescribe for colds; that respondent has exclusive knowledge of a formula which is the basis of his product and that it is entirely different from any other known preparation. PAn. 4. The said statements nnd representations made by the respondent, as herein s<'t out in paragraph 2, are exaggerated nnd have the capacity and tendency to deceive and mislead purchasers and prospective purchasers of respondent's said product. In truth and in fact, respondent's said pro<luct is not a sure, quick and effective remedy and cure for colds, nor docs it relieve the systemic causes of colds. It has no effect on the causatives of colds. It does not givo instant and thorou~h relief nor does it check fever or open the head nnd bowels, or protect the patient from influenza or pneumonia or other complications of a cold. It is not true that there is absolutely nothing else that acts us quickly nnd thoroughly as "A & 0," nor is it true that a secret formula is the basis of said product sponsored by reliable physicians. Sttid pr£>paration cannot with safety be given to any and all children indiscriminately, nor is it true that said "A & 0'' is entirely different from any other known preparution, ns there are many competing products which contain essentially the same ingredients. In truth nnd in fact, the representations made by respondent as to the nature, curative value, and the effect of his THE A & 0 COMPANY 617 610 Order preparation, when used, are exaggerated, misleading, and deceptive, as said preparation will not accomplish the results claimed for it. PAn. 5. There are, among the respondent's competitors in commerce, as herein described, manufacturers and distributors of like and similar products who truthfully advertise and represent the nature, merit, and therapeutic value of their respective products, and who do not advertise and otherwise represent that such products have merit and therapeutic value which they do not have. PAn. 6. Each and all of the misleading and deceptive statements and rept·esentations made by the respondent, as herein set out, in offering for sale and selling his said product, had and now have a capacity and tendency to mislead a substantial portion of the purchasing public into the erroneous belief that all of said representations are true, and into the purchase of respondent's product in such beliefs. Further, as a direct consequence of the mistaken and erroneous beliefs thus induced by the acts and representations made by the respondent, as hereinabove detailed, n. number of the consuming public have purchased a substantial volume of respondent's product, with the result that trade has been and is unfairly diverted to re- R})ondrnt from rompPtitors likewise engaged in the business of distributing and selling like and similar pharmaceutical preparations Who truthfully represent the effectiveness of their products and the results to be obtained from their use. As a result, injury has been, nnu is now being done, by respondent to competition in commerce, as herein set ont.

CONCLUSION The a foresaill ads and practic<>s of the respondent, Joe .Anderson, an individual doing business unuer the trade name of The A & 0 Company, are to the prejuuice of the public and of respondent's comp<>titors, and constitute unfair methods of competition in comn1erce, within the intent anu meaning of Section 5 of an Act of CongTcss, approved Septe-mber 2G, 1914, entitled "An Act to create a Fede-ral Trade Commission, to define its powers and unties, and for othet· purposes."

ORDJ;;Jt TO CEASE AND DESIST This proceeding having !.wen heard by the Federal Trade Commission upon the complaint of the Commission, the answer ~~f the rrspomlent, and the agreed stipulation of facts entered into l('tween Clinton HoLb, Esq., attorney for respondent hE-rein, and V. T. Kelley, Chief Couns('l for the Commission, which provides, 'nrnong other things, that without further evidence or other inter- 618 FEDERAL TRADE COJI.Il\IISSION DECISIONS Order 25F. T. C.

vening p1·ocedure, the Commission may issue and serve upon the 1·respondent herein findings as to the facts and conclusion based thereon and an order disposing of the proceeding, and the Commission having made its findings as to the facts and conclusion that said respondent has violated the provisions of an Act of Congress, approved September 2G, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes."

It is ordered, That the respondent, Joe Anderson, ar individual doing business under the trade name of The A & 0 Company, his representatives, agents, and employees, in connection with the advertising, offering for sale, and sale and distribution in interstate commerce, or in the District of Columbia, of a pharmaceutical preparation now known as "A & 0," or of said preparation or of uny similar preparation containing substantially the same ingredit>nts, sohl under the same, or under any other, name or names, trase and desist, directly or indirectly, from: Representing in newsfwpers and magazines, and through circulars, <.:atalogues, labels, or in any other form of printed matter, or by radio broadcasting, or in any other way or manner: 1. That said product opens the head, lets one breathe freely, l1eals irritated membranes, clears the nasal passage, checks fever, 1·elieves and cures the most stubborn colds when other treatments fail, protects one from influenza, pneumonia, or serious lung trouble; 2. That said product gives instant, guaranteed, or effective relief, or starts giving relief from the first dose; 3. That said product opens the bowels, clears the digestive tract, restores the system to normal, and is quicker nnd safer than pills and salre;

4. That said product is a secret combination of ingredients which doctors prescribe for colds, and that it is based on a formula within the exclusive knowledge of respondent, making the product entirely different from any other known preparation; and from making any other representation of similar tenor or import.

And it is hereby further ordered<l, That the said respomlent shall, within GO days from the date of the service upon him of this ordel', file with this Commission a report in writing, setting forth the man· ner and form in which he has complied with this order. LECHLER LABORATORIES, INC. 619 Syllabus