The Dahlberg Company

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IN THE MATTER OF THE DAHLBERG COMPANY ET AI,.

CONSBN'J SETTLE,;J,fI,NT IN UEGARU TO TI-IE ALLEGED VIOL,\TION 01' THE FEDERAL TRADE COMJ\lission ACT , Apr. 111.54 Docket 6143. Complaint, No"V. , 195.1--J)cciwion "'here a corporation and its three otteers, engage,t in the interstate sale and distribution of their "Dahlberg rI'ru- Sonic Canal IjJarphone, ,,,bich was sold as an aeeessory or attachment for hearing aids aud was designed to be inserted in the ear canal; in advertising in newspapers and cirenlars and other media (a) Falsely represented that. said device would jit the ear callaIs of all persons and that when inserted in the ear canal, it was hidden and out of sight; (b) falsely represented that it had been accepted by the American Medieal Association; and (c) Falsely represented that it was so constructed that it would fit all hearing aids:

Helll That such acts and praetiees, nuder the circnrnstances set forth, were all to the prejudice and injury of the public and l'onstituted unfair and deceptive acts and practices in commerce.

Before MT. James A. Pw' cell hearing examiner'. Jfr. Oharles S. ()ox for the Commission. , II domey Pal1le'' of 1\ inTleapolis, Mi !lll. Mackall, OT011//18e, 1I100re for respondents.

CONSENT Sural. MENT 1 Pursuant to the provisions of the Federal Tracie Commission Act , H)53, issued andthe Federal Trade Commission, on November 18 subsequently served its complaint on the respondents named in the caption hereof, charging them with Tlnfair tlnd deceptive acts and practices, in "violation of the provisions of saiel Ad. Hespondents desiring that this proceeding bc disposed of by the Consent Settlement procedure in Rule V of the Commission s Rules of Practice, solely fol' the purposes of this proceeding, and review there. , :md the enforcement of the order consented to, and conditioned upon the Commission s Hc,ceptanc,e of the Consent Settlement here- 1 The Commission s "Notice" announcing and promulgating the consrnt settlement as published herewith, follows:

.rile con ult settlement tendcred by the parties in this proceeding, a copy of which is and onlered entered 5served herev..'ith, ,vas accepted by the Commis:-iod on April 27, 1954, of record as the Commission s findings as to the facts, conclusion, and order in disposition of tills proccediJlg.

The time for fiing report of romp1iance pursuant to the nforesaW order rnns from the date Pi" ('rvicc lH-reof.

THE DAHLBERG CO. ET AL. 939 938 Findings inafter set forth, and in lieu of the answer to said complaint hereto. fore filed and which upon acceptance by the Commission of this settlement, is to be withdrawn from the record, hereby: 1. Admit all the jurisdictional allegations set forth in the complaint. 2. Consent that the Commission may enter the matters hereinafter set forth as its findings as to the facts, conclusion, and order to cease and desist. It is understood that respondents, in consenting to the Commission s entry of said findings as to the facts, conclusion and order to cease and desist, specifically refrain from admitting or denying that they have engaged in any of the acts or practices stated thereint.o be in violation of law.

:1. Agree that according to information furnished by respondent The Dahlberg Company, the name of one of the vice presidents of said corporation was Lester V. "Vilbrecht but that this information was In error and that the correct name of this individual named in the complaint as LesterW. Vilbrecht is Lester L. "Yilbrecht. It is fur. name Lester L. Yilbrecht may be incor.ther agreed that the cOITed porated in the following consent settlement with the same force and effect asif the correct name had been incorporated in the complaint. 4. The parties recognize that while respondents' advertisements set out in Paragraph 4 of the complaint state that their device, when inserted in the ear canal, is completely hidden and out of sight, Paragraph 5 of the complaint does not specifically charge that respondems have o represented.

The parties further recognize that Paragraph 6 of the complaint expressly alleges that such representations ate misleading in material respects and constitute "false advertisements" as that term is defined in the Federal Trade Commission Act and construe the complaint as having raised the issue as to the misleading nature of such representations.

Ii. Agree that this consent settlement may be set aside in whole or in part under the conditions and in the manner provided in Para. graph (f) of Rule V of the Commission s Rules of Practice. The admitted j urisclictional facts, the statement of thc acts and practices which the Commission had reason to believe were unlawful the conclusion based thereon, and the order to cease and desist, all of which respondents consent may be entered.d herein in final disposition of this proceeding, are as follows:

FINDINGS AS TO THE FACTS PIiRAGP.APH 1. Respondent, The Dahlberg Company, is a corpora. tion organized, existing, and doing business by virtue of the laws of the State of Minnesota, with its offce and principal place of business Findings 50 F. T. C.

located at Golden Valley in the City of Minneapolis 22, State of Minnesota. Individual respondents Kenneth H. Dahlberg, Arnold R. Dahlberg, John Palmer, and Lester L. W'ilbrecht, are president, vice president and treasurer, secretary, and vice president in charge of engineering, respectively, of respondent, The Dahlberg Company, a corporation. All of said individual respondents, except John Palmer have acted, and now act, in conjunction with each other in formulating, directing and controlling the business, acts, practices and policies of said corporate respondent, including the advertising claims made directly and indirectly by said respondent, The Dahlberg Company, a corporation.

Respondent John Palmer executed an affdavit to the effect that he has not in the past and does not now, nor will he in the future, engage in the general business activities of the respondent, The Dahlberg Company, a corporation; he has had no occasion to determine the policy for the day-to-day practices of said corporate respondent, nor has he participated in policy decisions regarding the advertising methods or materials of said corporate respondent. By reason of the matter set out in said affdavit the Commission finds that the said complaint, insofar as it relates to the respondent .T ohn Palmer as an individual and as an offcer of respondent, The Dahlberg Company, a corporation, should be dismissed. The word respondents" as hereinafter used does not include .John Palmer. PAR. 2. Respondents, for more than two years last past, have been engaged in the sale and distribution of a device designated as "Dahlberg Tru-Sonic Canal Earphone. Said device consists of a tip, a length of clear plastic tubing, an adaptor and a receiver, plus a wire cord with a plug attachment. It is sold as an accessory or attachment for hearing aids and designed to be inserted in the ear canal. Re. spondents sell said device through distributors located in various States of the United States.

PAR. 3. Respondents cause said device, when sold to be transported from its place of busiJH'sS in the State of Minnesota to purchasers thereof located in various States of the United States and, at all times mentioned herein, have maintained a course of trade in commerce among and between the various States of the United States. PAIL 4. In the conduct oJ the aforesaid business, respondents have disseminated and caused the dissemination of advertisements concerning their said device by the United States mails and by various other means in commerce, as "commerce" is defined in the Federal Trade Commission Act, including, but not limited to, advertisements inserted in newspapers and circulars and in other advertising media for the purpose of inducing and which were Jikely to induce, directly THE DAHLBERG CO. ET AL. 941 938 indings or indirectly, the purchase of their said device; and respondents have also disseminated and caused the dissemination of advertisements concerning tlwir said device by various-means for the purpose of inducing, and which were likely to induce, directly or indirectly, the purchase of their said device in commerce, as "commerce " is defined in the Federal Trade Commission Act. Among and typical of the statements contained in said advertisements, disseminated as aforesaid, a,'e thc following:

DRJAW or just HARD OF HJ;JAIU;\G' Now a new invention, the Dahlberg Canal Earphone, a feature of the Dahlberg hearing device, helps you hear and hides your deafness too * . * (Drawing of outer ehr with diagram Tile BEST NEWS YET for the indicating the placement of the HARD OF HEARING Dahlberg Tru-Sonie Canal Earphone NEW Dahlherg 'lru.Sonic Canal in Ear Canal) Earphone No ear mold ! its any ear! Kear-natural Hearing! Yes, it's true! We now offer the world' s first real aid-power receiver small enough to fit inside your ear' * * And it' s out of sight! Completely hidden! . . DON' T WAIT! 'thy IT TODAY! YOU'LL thril to a new and com. pletely different hearing experience. Dahlberg Hearing Aids are accepted by the American Medical Association.

Out of sight! No earmold! Fits any ear-all hearing aids. PAR. 5. Through the use of the aforesaid statements and others of the same import, but not specifically set forth, respondents repre. sented that their "Dahlberg Tru-Sonie Canal Earphone" will fit the ear canals of all persons; that when inserted in the car canal, said device is hidden and out of sight; that said device has been accepteel by the American Medical Association; and that said device is so constructed that it wil fit all hearing aids. PAR. 6. The said advertisements are misleading in material respects and constitute "false advertisements" as that term is defined in the Federal Trade Commission Act. In truth and in fact, the "Dahlberg Tru.Sonic Canal Earphone" will not fit all sizes of ear canals. Said device, when inserted into the ear canal, is not hidden nor out of sight. Said device has not been accepted by the American Medical Association. It is not so constructed that it wil fit all hearing aids. PAR. 7. The use by the respondents of the foregoing false, misleading and deceptive statements and representations has had, and now has, the tendency and capacity to mislead and deceive a substantial portion of the purchasing public into the erroneous and mistaken belief that said statements and representations are true, and to induce Order 50:F.. T. C. a substantial portion of the purchasing public, because of such erroneous and mistaken belief, to purchase respondents' said device. CONCLDSION The aforesaid acts and practices of respondents, as herein found are all to the prejudice and injury of t.he public and constitute unfair and deceptive acts and practices in con1merce within the intent and meaning of t.he Federal Trade Commission Act. OjWEH '10 CE, \SE AND DESIST It is of'dwrerl That respondent, The Dahlberg Company, a corpo. ration, and it.s offcers, respondents Kenneth H. D" hlberg, Arnold H. Dahlberg and LesterL. "\Vilbrecht., individually and as offcers of said corporate.ion, and respondents' agent.s, representat.ives and employees directly or through any corporate or ot.her device, in connection' wit.h t.he offering for sale, sale and distribution of the device designated as t.he "Dahlberg Tru-Sonic Canal Earphone " 01' any device of sub. stantially similar charaet.er, whether sold under the same name or any other name, do forthwith.h cease and desist from, directly or indirectly: 1. Disscminat.ing 01' causing to be disseminat.ed by means of the United Stat.es mails or by any means in commerce, as "commerce " is defined in the .Federal Trade Commission Act, any advertisement which represents, diredly or t.through inference t.hat said device: (a) 'Will fit the ear canals of all persons; (b) Is hidden or out. oJ sight w hen inserted in the ear canal; (c) Has been accepted by the American Medical Association; (d) Will fit all hearing aids.

. Disseminating or causing to be disseminat.ed by any means for the purpose of inducing or which is likely to induce, directly or in. directly, the purchase of said device in commerce, as "commerce " is defined in the Federal Trade Commission Act, any advert.isement which contains any of the representations prohibited in paragraph above.

It is further o'llend. That the complaint be, and it is hereby dio. missed against respondent .John Palmer, individually and as an offcer of respondent, The Dahlberg Company, a corporation. It is That the respondents shall, within sixty (60) fUTtheT ordend days after service upon them of t.his order, file with t.he Commission a report. in writing setting forth in detail the manner and form j which they have complied with this order.

The Dahlberg Company, a corporation, rhe DAHLBERG CO. ET AL. 943 938 Order By (Sgd) I(enneth H. Dahlberg, President.

(Sgd) Kenneth H. Dahlberg KENNETH H. DAHLBERG (Sgd) Arnold R Dahlberg ARNOLD R. DAHLBERG (Sgd) Lester L. Wilbrecht LESTER L. 'VILBRIi;CHT Individually and as officers of The Dahlberg Company.

March 12, 1954.

The foregoing consent settlement is hereby accepted by the Federal Trade Commission and ordered entered of record on this the 27th day of April 1954.

944 FEDERAL TRADE COMMISSION DfJCISIONS Order 50 F. T. C.