Eversharp, Inc.

Text (OCR of the scan at left; may contain errors)

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

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket 7811. Oomplaint, Mat.. 10, 1960-Decision, Sept. 30, 1960 Consent order requiring the manufacturer of "Schick" safety razors and razor blades and its advertising agency to cease use of deceptive television dell" onstrations purporting to prove that the Schick razor was safer than other safety razors, disparaging competitive razors, and misrepresenting harmful consequences that might result from use of the latter. COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that Eversharp, Inc., a corporation, and E. E. Ettinger, individually and as an officer of said corporation, and Compton Advertising, Inc., a corporation, and John Hise, individually and as an officer of said corporation, and Alex I-Ioffman, individually and as an account executive of Compton Advertising, Inc., hereinafter referred to as respondents, have vio~ lated the provisions of said Act, and it appearing to the 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. R.respondent Eversharp, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware with its principal place of business located at 350 Fifth Avenue, New York, N.

Respondent E. E. Ettinger is a vice president of said corporate respondent and insofar as the allegations of this complaint are concerned was responsible for, or active in, the practices of said corporate respondent Eversharp, Inc. tlis address is 8510 ""Varner Drive, Culver City, Calif.

PAR. 2. Respondent Compton Advertising, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of New Yor1\: with its principal place of business located at 625 :Madison Ayenue, New York, N.Y. This corporate respondent is the advertising agency of the respondents referred to. in paragraph 1 and prepares and places for publication and dissemi- Complaint 57 F.:T.

nation advertising material, including but not limited to that hereinafter set forth, to promote the sale of Schick safety razors and safety razor blades.

Individual respondent John Hise is a vice president, and individual respondent Alex Hoffman is an account executive of the corporate respondent Compton Advertising, Inc., and insofar as the allegations of this complaint are concerned, were responsible for, or active in, the practices of said corporate respondent. The address of these individual respondents is the same as that of the corporate respondent.

PAR. 3. Respondent Eversharp, Inc., is now, and for some time last past has been, engaged in the business of manufacturing, selling and distributing safety razors and safety razor blades sold under the brand name "Schick", and now causes said Schick safety razors and safety razor blades, when sold, to be transported from its factories in various cities to wholesalers, distributors and retailers located in various States of the United States and in the District of Columbia and maintains and at all times mentioned herein has maintained, a substantial course of trade in said products in commerce, as "commerce" is defined in the Federal Trade Commission Act.. PAR. 4. Respondents Eversharp, Inc., and E. E. Ettinger are now and have been at all times mentioned herein, in substantial competition, in commerce, with corporations, firms and individuals in the sale of safety razors and razor blades.

Respondents Compton Advertising, Inc., and John I-lise and Alex Hoffman are now, and have been at all times mentioned herein, in substantial competition, in commerce, with corporations, firms and individuals engaged in the advertising business. PAR. 5. In the course and conduct of its business and for the purpose of inducing the sale of its Schick safety razors and safety razor blades, respondents Eversharp, Inc., and E. E. Ettinger, with the aid and direct participation of respondents Compton Advertising, Inc., John I-lise and Alex I-I 0 fl'm an, have advertised said Schiele safety razors and razor blades by means of demonstrations and various statements used in connection there,with in television broac1casts transmitted by television stations located in various states of the United States and in the District of Columbia having sufllcient power to carry such broadcasts :1cross state lines. Among and typical, but not all inclusive, of said demonstrations and the statements used in connection therewith, are the following: . . . . .

EVERSHARP, INC., ET AL. 843 841 Complaint Tit,1e.: "Heavyweight Champion Video Audio Open on MCU of Johansson in shower. SFX: Out. He has just finished shaving and Johansson: (D. ) Sa palilig Ni has a towel around his neck. He kan raka Er i duschaen. Right, holds up a Schick Safety Razor as . Bud Palmer! he caus out.

-Cut 'to CD of Bud Palmer. He is Palmer: (D. ) Right, Ingo. That' holding a boxing glove and waves Ingemar Johansson, World's Heavytoward Johansson. weight champion. He just said, in Swedish, the Schick Safety Razor is so safe you can shave in the shower.

Pull back as Johansson comes into Slip this glove on Ingo and I'll show scent' next to Palmer, wearing you why the new modern Schick fighter s robe and still has towel Safety Razor is so sate. around his neck. Palmer slips glove on Johansson s hand.

Cut. to CD exposed edge of Matador First, let's compare it with this old Hazar. Pencil indicates exposed style round head razor, where blade corner. . (See Exhibit 1 attached) corners are unprotected. Cut to CD of boxing glove as Palmer Palmer: (V. ) Look! If that can runs Matador Blade corner across happen to this glove, think what it cutting glove surface. (See Ex- could happen to your face. hibits 2, 3 and 4 attached) .Tohansson: (V. ) No thanks! Palmer puts down Matador and picks Palmer: (D. V. ) But, Schick shields up a Schick Safety Razor. He holds blade corners. it up. Super: "Shielded blade corners" as he runs thumb over edge.

Palmer runs Schick safety razor (V. . no danger of nicks or across it. It doesn t cut the glove. scrapes, Cut back to two shot of Johan~on (D. ) Shave with confidence. . . :md Palmer. Switch to Schick Safety razor. Johansson: You know Bud, I live near the Schick factory in Sweden.

Palmer (D. ) That's where we make our fine Swedish steel blades.

They re the sharpest ever! Dissolve to shower set. " So safe you Yet, so safe you can shave in the can shave in the shower, on glass shower. Schick Safety Razor one buck with blades. with "Schick Safety Ilazor . . . still still only only 1 :00 with blades." Man in BG shaYing in shower.

The exhibits referred to above are made a part of this complaint by reference.

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Complaint 57 F.

PAR. 6. Through the use of the aforesaid demon~tration and the statements used in connection therewith, and others of similar import not specifically set out herein, respondents represent, directly and by implication, that said demonstration is a valid portrayal the danger in actual use of competitive so-called round head razors. PAR. 7. The said demonstration and the statements and representations used in connection therewith are false, misleading and deceptive. In truth and in fact, said demonstration is not a valid portrayal of any danger in actual use of competitive so-called round head razors since said demonstration does not duplicate, in any manner, the conditions of actual use.

The use by the respondents of said demonstration, including the statements and representations used in connection therewith, has the tendency and capacity to unduly frighten and alarm prospective purchasers of competitive razors with respect to consequences which may result from the use of said competitive razors. Further, the use by respondents of said demonstration ~ and the statements and representations used in connection therewith, constitutes disparagement of said competitive razors. PAR. 8. The use by the respondents of the aforesaid invalid demonstration and the false, misleading and deceptive statements and representations used in connection therewith 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 were and are true, and into the purchase of a substantial quantity of respondent Eversharp, Inc. s Schick safety razors and safety razor blades because of such erroneous and mistaken belief. As a result thereof, substantial trade has been and is being unfairly diverted to respondents from their competitors and substantial injury has been and is being clone to competition in commerce.

PAR. 9. The aforesaid acts and practices of respondents, as herein alleged, were, and are, all to the prejudice and injury of the public and of respondents' competitors, ~Uld constituted, and no\\" constitute unfair and deceptive acts and practices and unfair methods of competition, in commerce, within the intent and meaning of the Fe-dem Trade Commission Act.

ilfT. FTederick ill cal anus for the Commission. 1fT. Sidney Da.vis of New Y 01'1\: , N. , by ilh' . RoueTt L. La8kcy, for respondents Eversharp, Inc., and E. E. Ettinger. Dulle and Landis of New Y o1'k, X. Y., by JIi'. Da.'vid B. Lal/di.~ for respondents Compton Advertising, Inc.: John J-lise and Alex I-Ioffman.

EVERSHARP , INC. , ET AL. 847 Decision INITIAL DECISION BY EVERETT F. HAYCRAFT, HEARING EXAMINER On ~larch 10, 1960, the Federal Trade Commission issued its complaint against the above-named respondents charging them with violating the provisions of the Federal Trade Commission Act in connection with the advertising and sale of safety razors and safety razor blades sold under the brand name of "Schick." On July 25, 1960, respondents and their attorneys and counsel supporting the complaint entered into an agreement containing a consent order to cease and desist in accordance with Section 3.25 (a) of the Rules of Practice and Procedure of the Commission. It is set out in the agreement that individual respondent Alex Hoffman was formerly an account executive of the corporate respondent Compton Advertising, Inc., but is no longer connected with said corporation, and it was agreed that the complaint should be dismissed as to this individual in his capacity as account executive.

Under the agreement, the respondents admit the. jurisdictional facts alleged in the complaint. The said agreement includes a waiver by the respondent of all rights to challenge or contest the validity of the order issuing in accordance. therewith; and recites that the agreement shall not become a part of the oflicial record unless and until it becomes a part of the decision of the Commission; that it is for settlement purposes only and does not constitute an admission by the respondents that they have violated the law as alleged in the complaint. The hearing examiner finds that the content of the said agreement meets all the requirements of Section 3.25 (b) of the Rules: of Practice.

This proceeding having now come on for final consideration by thc' hearing examiner on the complaint and the aforesaid agreement for consent order, and it. appearing that said agreement provides for an appropriate disposition of this proceeding as to all parties, the aforesaid agreement is hereby accepted and is ordered filed upon becoming part of the Commission decision in accordance with Section 3.21 of the Rules of Practice; and in consonance with the terms of said agreement, the hearing examiner makes the following jurisdictional findings and order:

1. R.respondent Eversharp, Inc., is a corporation organized, existing and doing business under and by virtu~ of the la"s of the State of Delaware, with its principal place of business located at 350 Fifth \.venlll' ~ Ne", York, :X.

Respondent E. E. Ettinger is a. vice president of said corporate responde.nt and insofar as the allegations of the complaint are concerned was responsible for, or active in, the practices of said COf- Order :37 F. porate respondent, Eversharp, Inc. Ris address is 8510 'Varner Drive, Culver City, Calif.

Respondent Compton Advertising, Inc., is a corporation, organized, existing and doing business under and by virtue of the laws .of the State of New York with its principal place of business lo- 'cated at 625 :Madison Avenue, New York, N. Individual respondent John Rise is a vice president of the respondent Compton Advertising, Inc., and his address is the same as that of said corporate respondent. It appears that respondent John Rise signed the aforesaid agreement as John A. Rise, Jr. The address of the individual respondent Alex Hoffman is 15 Oak Crest Road, Darien, Conn.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents hereinabove named. The complaint states a cause of action against said respondents under the Federal Trade Commission Act, and this proceeding is in the interest of the public.

ORDER I t is ordered That respondents Eversharp, Inc., a corporation, and its officers, and E. E. Ettinger, individually and as an officer of said corporation, and Compton Advertising, Inc., a corporation, and its officers, and John Rise, individually and as an officer of said corporation, and Alex Hoffman, individually, and respondents' representatives, agents and employees, directly or through any corporate or other device, in connection with the advertising, offering for sale blades in com-sale or distribution of safety razors and safety razor merce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Using any pictorial presentation or demonstration purporting to prove or representing as proving, that the Schick safety razor or any other safety razor of substantially similar design, is safer, than other safety razors, in actual use, when such pictorial presentation or demonstration does not in fact so prove. 2. Disparaging by untruthful statements or any misleading deceptive method, safety razors competitive with those of respond- , de.monstration, orent Eversharp, Inc., by any pictorial presentation in any other manner.

3. :Misrepresenting, directly or by implication, in any manner, any consequence that may result in the actual use of safety razors competitive with those of respondent Eversharp, Inc. It is fu.rther ordend That the complaint be, and the same hereby , dismissed as to the responde,nt Alex lIoflman as an account. execntiye. of Compton Advertising, Ine.

, CARL "V. HERRMANN , INC. , ET AL. 849 84.1 Complaint DECISION OF 'l'HECO:MMISSION AND ORDER TO FILE REPORT OF COMPLIANCE Pursuant to Section 3.21 of the Commission s Rules of Practice, the initial decision of the Commission s Rules of Practice, the initial decision of the hearing examiner shall, on the 30th day of September 1960, become the decision of the Commission; and, accordingly: I t is orde'/'ed That respondents herein 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 complied with the order to cease and desist.