Sydnee, Inc.

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IN THE MATTER OF SYDNEE, INC., ET AL.

CONSENT Order, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket 6681. Co'm,plaint, Nov. 1956-Decision, July 27, 1957 Consent order requiring a corporate seller in Chicago to cease representing falsely by statements and depictions in advertising and on labels and packaging, that its domestic perfumes and colognes were made in France and that excessive fictitious prices were its customary retail prices; and by simulation of the script, paclwging, shape of bottle, and trade name of certain nationnJIy advertised and accepted products, that its perfumes and colognes were such preferred products; Similar order entered by default against four individuals with places of business at Miami and Miami Beach, Fla. , cooperating with the aforesaid concern.

INITI..-\L DECISION AS TO R.ESPO~DENT SYDNEE, INC. AND AS TO SIDNEY BELMONT AND :MILDRED BELMONT Afr. Everett F. Haycraft hearing examiner. Jfr. 1Villia7n A. SO1nen for the Commission. 311'. Samuel 111organ of Chieago~ Ill. , for respondents, Sydnee Inc., Sidney Belmont and :Mildred Belmont. The Federal Trade Commission, on November 27 , 1956, issued its complaint against the respondents named in the caption hereof charging them with the dissemination in commerce of advertisements containing false and misleading representations with respect to their perfumes and c.olognes, and charging that the use of such advertisements constituted unfair and deceptive acts and praetiees and unfair methods of competition in commerce within the intent and meaning of the Federal Trade Commission Ad.

The Commission in its complaint alleged that respondents had been for some time last past engaged in the business of selling various perfumes and colognes which are cosmetics as defined in the Federal Trade Commission Act and that said respondents had caused such products to be shipped in interstate. commerce to purehasers thereof located in various states of the LJnited States. It ,,"as further alleged that in the course and conduct of their business respondents have disseminated advertisements concerning their said prodllets by the United States mails and by various means in commerce ~uch as newspaper.rs~ periodicals, and cireulars wherein respondents made statements which were misleading in material respeets and constidefined in the Federaltuted false advertisements as that term is 5285;i-60- Decision 54 F.

Trade Commission Act. It was alleged in this connection that the prices set out in said advertisements were fictitious and greatly excess of the prices at which respondents said products were usually or customarily sold at retail and that said respondents represented that said products were compounded or imported from Franee when as a matter of fact they were manufactured or compounded in the United States. And it was further alleged that said products were sold in packages which simulated the paekages and trade names of certain nationally advertised products when in truth and in fact. said products were not the nationally advertised products as indicated. On l\larch 25 , 1957, corporate respondent Sydnee, Ine., and individual respondents Sidney Belmont and ::\Iilclred Bell1lont~ their counsel, and counsel supporting the complaint herein entered into an Agreement Containing Consent Order To Cease And Desist which was approved by the Director and the Assistant Direetor of the Commission s Bureau of Litigation, and thereafter submitted to the hearing examiner for consideration.

The agreement identifies respondent Sydnee., Inc., as a corporation existing and doing business under and by virtue of the laws of the State of Illinois; respondent Sidney Belmont, as nn indiyidua 1 and president of saiel corporate respondent; and respondent ~lildred Belmont, as an individual and secretary of said corporate respondent. Said corporate and individual respondents hate their offices and principal place. of business located at 1414 South ,Ynbash Avenue Chicago, Illinois.

In the agreement, respondent Sydnee, Inc., and respondents Sidney Belmont and :JIilclred Belmont admit all the jurisdictional facts alleged in the complaint and agree that the record may be taken as if findings of jurisdictional facts had been duly made in nceordnnce with such allegations.

Said respondents in the agreement waived any and all further procedural steps before the hearing examiner and the Commission; the making of findings of fad or conclusions of law; and all of the rights they may have to challenge or contest the validity of the order to cease and desist entered in accordance with the agreement. It ,,'as further agreed that the record on "which the initial decision and the decision of the Commission shall be. based, insofar as they relate to the respondent Sydnee., Inc., and respondents Sidney Belmont and l\Iilclred Belmont, shall c.consist solely of the complaint :md of thethe apoeement; that the. agree.ment shall not become a part of the decision ofoffteial record unless and until it becomes a part :mc1 desist, as contained inthe Commission; that the order to cease the agreement, shall have the same force and effect as if entered SYDNEE, INC., ET AL. 141 139 Order after a full hearing, and may be altered, modified, or set aside in the manner provided for other orders; that the complaint herein may be used in construing the terms of said order; and that the agreement is for settlement purposes only and does not constitute an admission by corporate respondent Sydnee, Ine., and individual respondents Sidney Belmont and J\Iildred Belmont, that they have violated the law as alleged in the complaint.

After consideration of the allegations of the complaint, and the provisions of the agreement and the proposed order, the hearing examiner condudes that such order constitutes a. satisfactory disposition of this proceeding, insofar as it relates to respondent Sydnee Ine., and respondents Sidney Belmont and :Mildred Belmont. Accordingly, in consonance with the terms of the aforesaid agreement. and with sections 3.21 and 3.25 of the Hules of Praetiee, the hearing: examiner aeeepts the Agreement Containing Consent Order To Cease: And Desist; finds that the Commission has jurisdiction over the; respondent Sydnee, Ine., and respondents Sidney Belmont and 1\1ildred Belmont, and over their acts and practices as alleged in the complaint; and finds that this proceeding is in the public interest. Therefore It ~s ordered That respondents Sydnee, Inc. , a corporation ~ and its oflicers, and Sidney Belmont and ~Iildred Belmont, individually and as officers of said corporation, nnd respondents agents, representatives and employees, directly or through any corporate or other device, in connection with the oflering for sale, sale or distribution of perfumes, colognes and allied products, do fortlnyith cease and desist from, directly or indirectly:

1. Disseminating or causing to be disseminated any advertisement by means of the United States mails or by any means in commerce as "commerce~' is defined in the Fede,ral Trade Commission Aet, for the purpose of inducing or which is likely to induce, directly or indirectly, the purchase of said products, which adve-rtisement: (a) Contains or lists prices or amounts which purport to be, or may be accepted to be retail prices, when such prices or amounts are in excess of the prices at which the products refe-rred to are llsual1y and cllstomarily sold at retail.

(b) Uses the words or terms "by Yvonne Yvonne by Syc1nee" or "Svdnee' " or an" other words or terms indieative of French origin, as a corporate or trade name, 01' as n part thereof or any name, word, te-rm or depiction, indicative of French origin in connection with products manufactured or compounded in the United States, unless it is dearly and conspicuously l'evealecl in im- , ,, , ,, Order 54 F.

mediate connection and conjunction therewith that such products are manufactured or compounded in the United States. (C) Hepresents that products manufactured or compounded in the United States are manufactured in France. (d) Contains depictions which simulate the seript, wrapping, packaging, shape of bottle or trade names, or any other simulations ,of nationally advertised, preferred and accepted perfumes, eolognes ,or allied products.

2. Disseminating or causing to be disseminated any advertisement by any means, for the purpose of inducing or which is likely to induce, directly or indirectly, the purchase of said p,roduets, in commerce, as "commerce" is defined in the Federal Trade Commission Act, whi('.h advertisement contains any repl esentations or depietions prohibited by Paragraph 1 of this order.

It is fwrther onlered That respondents Sydnee, Inc., a corporation, and its officers, and Sidney Belmont and ~~filclred Belmont, individually and as officers of said corporation, and respondent' agents, representatives and employees, directly or through any corpol' ate or other device, in connection with the offering for sale, sale or distribution of perfumes, colognes and allied products, in commeree, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Setting out prices or amounts on the label or in the labeling of their products hieh purport to be, or may be accepted to be, retail prices hen sneh prices or amounts are in excess of the prices at which such products are usually and customarily sold at retail. 2. Using the words or terms "by Yvonne Yvonne Sydne~\' or " Sydnee, " or any other words or terms indieati,-e of Frenc.h origin, as a corporate or trade nanle, or as a part thereof, or any name, word, term or depiction indicntiye of Freneh origin connection ,with products mnnllfact111'ed or compounded in the United States on the labels or in the labeling of their products unless it is clearly and conspiel.lously reyealed in immediate eonneetion and conjunction therewith that such products are manufaetnred and compounded in the United States.

3. Hepresenting on the la.bels or in the labeling that products manufaetnred or compounded in the. United States nre manufactured or compounded in France.

L!, Simulating the trade name and script. on the label or in the labeling or in any other manner, 01' simulating the wrapping, packaging, shape of bottle, or other characteristics of nationally arhertisec1, preferred and accepted perfumes, colognes or allied prodllets. ,,,, SYDNEE, INC., ET AL. 143 139 Decision DECISION OF THE CO):Il\fISSION AND ORDER TO FILE REPORT OF COMPLIANCE Pursuant to Section 3.21 of the Commission s R.ules of Practice the initial decision of the hearing examiner shall, on the 27th day of July, ID57, become. the decision of the Commission; and, accordingly: 1 t is ordered That respondents Sydnee, Inc., a corporation; and Sidney Belmont and :Mildred Belmont, in(li,-ic1ually and as ofiicers of said corporation, shall, within sixty (60) days after service upon them of this order, file with the Commission a report in writing setting forth in detail the manner and form in which they have eol11plied with the order to cease and desist. INITIAL DECISIO~ AS TO INDIVID"LL-\L RESPONDENTS I-L~ROLD SHAI~IRO SHIRLEY SH"\PIRO, BEN SHAPIRO AND l\lary :MAHEU 311'. Everett F. Haycraft hearing examiner. 1117' lVillia1n A. Som.e1's for the Commission. No appearance on behalf of respondents.

The Fe.dernl Trade Commission, on K ovember 27 , 1956, issued its complaint against the respondents named in the caption hereof which ,,-ns duly served upon them, charging them with the dissemination in commerce of advertisements containing false and m1slending representations with respect to their perfumes and colognes an(l nJlegjng that the use of such advertisements constituted unfair and deceptive acts and practices and unfair methods of competition in commerce within the meaning and intent of the Federal Trade Commission Act.

Hespondents I-Iarold Shapiro, Shirley Shapiro, Ben Shapiro, and l\iary ~lnhen have been and are now active in a. personal and financial ,yay in respondent Sydnee, Inc.., and cooperate and have cooperated ith the officials thereof in the promotion and sale of its products. Furt her, at present and heretofore, said respondents have by various devices initiated and carried on the acts and practices hereinafter found, and other similar nets and practices. The last known address of respondents I-Iarold Shapiro and Shirley Shapiro is 133 South Royal Poinciana Boulevard, )fiami, Florida, and that. of respondents , l\fiamiBen Shapiro and l\lary l\lahell is 5455 North Bay H.oac1 Beaeh, Florida.

After due notice, hearings ,were held in ,Yashington, D. , on )Iarch :) nn(1 15 , 19:37, to give respondents :111 opportunity to appear and show cause ,vhy an order to cease and desist should not be entered against them. The respondents under consideration herein neither answered nor appeared at any hearing; and at. the second 144 FEDERAL TRADE COl\fMISSION DECISIONS Findings 54 F.

hearing the attorney in support of the complaint requested the hearing examiner to enter an order declaring respondents Harold Shapiro, Shirley Shapiro, Ben Shapiro, and l\Iary :Maheu in default which request was granted on the record as to said respondents. Accordingly, the following findings, conclusions and order are entered :

FINDINGS OF FACT ARAGRAPH 1. Said respondents are now, and for some time last past, have been engaged in the business of selling various perfumes and colognes, which are cosmetics as "cosmetic" is defined in the Federal Trade Commission Act, and have caused and are causing said products when sold to be shipped to purchasers thereof located in various States of the United States other than the States in which such shipments originate. Said respondents maintain, and at all times in question have maintained, a substantial course of trade in said products, in commerce, among and between various States of the Unite. States.

PAR. 2. Said respondents, in the course and condnet. of their businesses, have disseminated, are disseminating, and have caused the dissemination of ach-ertisements concerning their said products by the United States mails and by various means in commerce, as " commerce" is defined in the Federal Trade Commission Ad, which advertisements were or are likely to induce, directly or indirectly, the purchase of their said products, in commerce, as "commerce defined in the Federal Trade Commission .Act. By means of snell statements and depietions, the said achertisements inserted in ne',spapers and periodicals, in cirenlars, and in other advertising media, disseminated as aforesaid, respondents have falsely represented, directly and by implication: 1. That certain of their products have been sold or are being sold at various prices, thereby representing that such prices "-ere the usual and customary retail prices of their products; 2. Thro1wh the use of Freneh names or words, such as " Yvonne by Sydnec Yvonne " and "Sydney:s " that said products were and are compounded in and imported from Franee; and 3. By simnlation of the script, packaging, shape of bottle and trade nflmes of certain nationally advertised, accepted and preferred products, and by depictions and words, that their products ,,-ere and are nctuflny such nationally ach-ertised, accepted and preferred products.

PAIL 3. Said advertisements were and 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: SYDNEE, INC., ET AL. 145 139 Order 1. The prices set out in the advertisements were and are fictitious and greatly in excess of the prices at which respondents' products were usually or customarily sold at retail. 2. Respondents' products were neither compounded nor imported from Franee, but were manufadured or compounded in the United States. "'\Vhile some imported ingredients may have been contained in the essence used in compounding or manufacturing some of respondents' products, the major portion of ingredients was of domestic ongm.

3. R.respondents' products were not the 11nationally advertised, accepted and preferred products that their script, wrapping, packaging, shape of bottle and trade names indicated them to be. The dissemination of the advertisements containing the false, misleading, and deceptive statements and depietions hereinbefore set out and the use of the practices hereinbefore described have had, and now have, the tendency and capacity to mislead and deceive the purchasing public into the erroneous and mistaken belief that such representations and statements were and are true; and that such practices and acts cause and have caused substantial numbers of the purchasing public, because of such erroneous and mistaken belief to purchase substantial quantities of the products of respondent Sydnee, Inc. As a result of the praetiees hereinbefore stated, trade has been and is being unfairly diverted to the aforesaid respondents from their eompetitors, and substantial injury has been done and is being done to competition in commerce.

CON CL USIONS The aforesaid, acts and practices, as herein found, were and are all to the prejudice and injury of the public and of respondents competitors, and constitute unfair and deceptive acts and practices and unfair methods of competition, in commerce, within the intent and meaning of the Federal Trade Commission Act; and Since respondents have presented neither answer nor appearance under the default provisions of R.ule 3.7 (2) (b) of the Commission ules of Practice, the hearing examiner deeJares and fmds that respondents I-Iarold Shapiro, Shirley Shapiro, Ben Shapiro, and l\fary l\1aheu are in default. Therefore.

It is o1Ylered That respondents I-Iar01d Shapiro, Shirley Shapiro Ben Shapiro, and :\Iary ~Iahe. , individually and as representatives and employees of respondent Sydnee., Ine., directly or through any corporate or other device, in eonneetion with the offering for sale , ,, Order 54 F.

sale; or distribution of perfumes, colognes, and allied produds, do forthwith cease and desist from, directly or indirectly: 1. Disseminating or causing to be disseminated any advertisement by means of the United States mails or by any means in commerce as "commerce" is defined in the Federal Trade Commission Aet, for the purpose of inducing or which is likely to induce, directly or indirectly, the purchase of said products, "which advertiseme,nt: (a) Contains or lists prices or amounts "which purport to be, or may be accepted to be, retail prices, when such prices or amounts are in excess of the prices at "which the products referred to are usually and customarily sold at retail.

(b) Uses the "ords or terms "by Yvonne " "Yvonne Sydnee " or "Sydnee. " or any other words or terms indicative of Freneh origin, as a corporate or trade name, or as a part thereof or any name, "ord, term or depiction, indicative of French origin in connection "ith products manufactured or compounded in the United States, unless it is clearly and conspicuously revealed in immediate connection and eonjunction therewith that such products are manufactured or compounded in the United States. (c) R.represents that products manufactured or compounded in the' United States are manufactured in Franee. (d) Contains depictions which simulate the script, "Tapping, paelmging, shape of bottle or trade names, or any other simulations of national)y advertised, preferred and accepted perfumes, colognes or allied products.

2. Disseminating or causing to be disseminated any advertisement by any means, for the purpose of incluc.ing or which is likely to induce, directly or indirectly, the purchase of said products, in eommerc.e, as "commerce" is defined in the Federal Trade Commission Ac.t, which advertisement contains any representatiolls or depletions prohibited by Paragraph 1 of this order.

It is f'llrthe?' onle?' That respondents IIarold Shapiro, Shirley Shapiro, Ben Shapiro, and :Mary ~Iaheu, individually and as representatives and employees of Sydnee, Inc., directly or through any corporate or other device, in connection ,,-ith the offering for sale sale, or distribution of perfumes, colognes, and anied products, do forth",ith cease and desist from, directly or indirectly: 1. Setting out. prices or amounts on the label or in the labeling of their products which purport to be, or may be acce.pted to be, retail prices, 'Then such prices or amounts are in excess of the prices at which such products are usually and customarily sold at retail. 2. Using the words or terms "by Yvonne Yvonne Sydnee " or "Sydnee' " or any other words or terms indieative of French origin, as a corporate or trade name, or as a part thereof, or SYDNEE , lnc. , ET AL. 147 139 Decision any name, word, term or depiction indicative of Frenc.h orlgnl in connection with products manufactured or c.ompounded in the United States on the labels or in the. labeling of their products unless it is clearly and conspieuously reveal.led in immediate c.connection and conjunct.ion therewith that such products are manufactured and compounded in the United States.

3. Representing on the labels or in the labeling that products manufactured or compounded in the United States are manufactured or c.ompounded in France.

4. Simulating the trade name. and script on the label or in the labeling or in any other manner, 01' simulating the wrapping, packaging, shape of bottle, or other c.harac.teristics of nationally advertised, preferred and accepted perfumes, colognes or allied products. DECISIO)/ OF THE COl\BIISSIOX ..:\.ND ORDER TO FILE REPORT OF CO)IPLIANCE Pursuant to Seetion 3.21 of the Commission s Rules of Prac.tiee the initial decision of the hearing examiner shall, on the 27th day of July, 1957, become the decision of the Commission; and, acc.ordingly: It is o?Ylered That respondents I-Iarold Shapiro, Shirley Shapiro Ben Shapiro and :Mary :Maheu, individually, shall, within sixty (60) days after serviee upon them of this order, file with the Commission a report in writing setting forth in detail the manner and form in which they have eomplied with the order to cease and desist. 148 FEDERAL TRADE COl\IMISSION 1 ECISIONS Decision 54 F.