American Chicle Co

Text (OCR of the scan; may contain errors)

AMERICAN CHICLE CO. 1625

Decision In tor Marrer or

AMERICAN CHICLE CO.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE

FEDERAL TRADE COMMISSION ACT

Doeket 6791. Complaint, May 18, 1957—Decision, May 17, 1958 Consent. order requiring a distributor in Long Island City, N.Y., to cease repre senting falsely in advertising by television that its drug preparation “Rolaids” was endorsed generally by the medical profession and that stomach acid is cnpable of burning a hole in a cloth napkin. Myr. Daniel J. Murphy and Mr. Thomas A. Sterner supporting the complaint.

Mr. H. Thomas Austern and Mr. Henry P. Sailer of Covington & Burting, of Washington, D.C. and Wr, £. VY. Aoore of Long Island City, N.Y., for respondent.

Twittan Decision ny Jonnx B. Pornpesver, Hearing EXAMINER The complaint in this proceeding alleges that. the American Chicle Co., a2 corporation, hereinafter referred to as respondent, violated the provisions of the Federal Trade Commission Act by the use of alleged false advertising in a film which was telecast over television broadcasting stations at the direction of respondent, advertising the merits of its preparation “Rolaids.”

After issuance and service of the complaint the respondent filed an answer, admitting the jurisdictional allegations contained therein but denying the other allegations. Thereafter, hearings were held and the receipt. of evidence and testimony in support of the complaint was completed.

Before beginning the presentation of testimony in behalf of respondent, respondent, its cornsel, and counse] supporting the complaint entered into agreement for a consent. order. The proposed order contains prohibitions with respect. to all violations of the act. specifically alleged in the complaint with the exception of the allegation contained in paragraph 6(2) thereof. As to this allegation, respondent, its counsel, and counsel supporting the complaint recommend that. same be dismissed without prejudice for the reason that this allegation refers to an interpretation based wpon the chemical neutralizing properties of the preparation and not. to its therapeutic efficacy, and the prohibitions contained in the proposed order which pertain to the remainder of the film complained about. effectively achieve the purposes of the complaint with respect. to that. film. The agreement has been approved by the Director and the Assistant Director of the Bureau of Litigation and, with the exception noted above, disposes of all issues in the proceeding. The pertinent. provisions of the agreement are as follows: Respondent. admits all jurisdictional facts; the complaint. may be used in construing the terms of the order; the order shall have the same force and effect as if entered after a full hearing and the said agreement shall not become a part. of the official record of the proceeding unless and until it becomes a part. of the decision of the Commission: the record herein shall consist solely of the complaint and the agreement: respondent waives the requirement that the decision must contain a statement of findings of fact and conclusion of Jaw; respondent. waives further procedural steps before the hearing examiner and the Commission, and the order may be altered, modified, or set aside in the manner provided by statute for other orders; respondent waives any right. ‘to challenge or contest. the validity of the order entered in accordance with the agreement and the signing of said agreement. is for settlement purposes only and does not constitute an admission by respondent that it has violated the law as alleged in the complaint. Upon consideration of the allegations of the complaint, the provisions of the agreement and the proposed order, the hearing examiner is of the opinion that said order constitutes a satisfactory settlement. and disposition of the matters complained about. in this proceeding and the acceptance thereof will be in the public interest. Accordingly, the hearing examiner accepts such agreement, makes the following jurisdictional findings and issues the following order:

JURISDICTIONAL FINDINGS

1. Respondent, American Chicle Co., is a corporation existing and doing business under the Jaws of the State of New Jersey, with its office and principal place of business located at 30-30 Thomson Avenue, Long Island City, N.Y.

2. The Federal Trade Commission has jurisdiction of the subject. matter of this proceeding and of the respondent, and the proceeding is in the public interest.

ORDER

Tt is ordered, That the respondent American Chicle Co., a corporation, and its officers, agents, representatives, and employees, directly or through any corporate or other device, in connection with the offering for sale, sale, or distribution of the preparation Rolaids, or any other preparation of similar composition or possessing substantially similar properties whether sold under the same name or under any other name, do forthwith cease and desist from:

1. Disseminating, or causing to be disseminated, by means of the United States mails or by any other means in commerce, as “commerce” js defined in the Federal Trade Commission Act, any advertisement which represents, directly or by implication that:

(a) Stomach acid or concentrated stomach acid is capable of burning a hole in a cloth napkin;

(b) By the use of a white coat or any other object, device, or words indicative of the medical profession, that doctors or the medical profession recommend Rolaids, unless the representation is limited to numbers of doctors not greater than has been ascertained to be the fact.

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 in commerce, as “commerce” is defined in the Federal Trade Commission Act, of said product, which advertisement contains any of the representations prohibited in paragraph 1 hereof.

It is further ordered, That subparagraphs 6(2) and 7(2) of the complaint be, and the same hereby are, dismissed, without. prejudice. DECISION OF TITE COMALISSION AND ORDER TO FILE REPORT OF COMPLIANCE Pursuant to section 8.21 of the Commission’s rules ef practice, the initial decision of the hearing examiner shall, on the 17th day of May 1958, become the decision of the Commission; and, accordingly:

It is ordered. That. the respondent herein shall within sixty (60) days after service upon it of this order, file with the Commission a report in writing setting forth in detail the manner and form in which it. has complied with the order io cease and desist.