Metromedia, Inc

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In the Marter or METROMEDIA, INC.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF » THE FEDERAL TRADE COMMISSION ACT Docket C-1864. Complaint, Feb. 17, 1971—Decision, Feb. 17, 1971 Consent order requiring a New York City compiler of mailing lists used by direct-mail advertisers and merchandisers: to céase misrepresenting the purpose or use of information sought by its questionnaire, offering for sale or using its “Metromail Hlites” mailing list or other list derived therefrom, provided that the term “questionnaire” as used herein shall mean any solicitation of information to be used in a mailing list. _ 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 Metromedia, Inc., a Complaint . 18 F.T.C.

corporation, hereinafter referred to as respondent, has violated 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:

Paracrary 1. Respondent Metromedia, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware, with its principal office and place of business at 277 Park Avenue, New York, New York. O. E. McIntyre, Inc., was a corporation initially incorporated, existed and did business under the laws of the State of New York with its principal office and place of business located at 1199 Prospect Avenue, Westbury, New York. On or about February 25, 1966, said corporation was acquired by the corporate respondent as a subsidiary thereof. On or about September 29, 1967, said subsidiary corporation was merged into the corporate respondent and became a division thereof. At all times mentioned herein, the corporate respondent has been responsible for and has formulated, directed and controlled the acts and practices of said O. E. McIntyre both as a subsidiary corporation and as a division of said corporate respondent.

Par. 2. Respondent is now, and for some time last past has been, engaged in the business of constructing, developing and maintaining mailing lists of varied and diverse composition and purpose; and in the advertising, offering for sale, sale and distribution of such mailing lists to distributors, jobbers, wholesalers, retailers and to other merchandisers engaged in direct-mail advertising and selling; and in the sale of its services in the promotion of the merchandise and services of others; and in the use of such mailing lists in the advertising, offering for sale, sale and distribution of merchandise and services, produced by respondent, to distributors, jobbers, wholesalers, retailers or directly to the public.

Par. 3. In the course and conduct of its business as aforesaid, respondent now causes, and for some time last past has caused its mailing list construction, development and maintenance activity, including survey questionnaires and other updating mailings, to be sent by United States mail from its place of business in the State of New York to persons located in various other States of the United States, and at all times relevant hereto has maintained substantial and extensive commercial intercourse in connection with its numerous and various products and services among and between the several States of the United States, and maintains, and at all times METROMEDIA, INC. 333 331 Complaint mentioned herein has maintained, a substantial course of trade in such mailing lists, products and services in commerce, as “commerce” is defined in the Federal Trade Commission Act. Par. 4. In the course and conduct of its aforesaid business, and for the purpose of compiling and constructing its so-called “Metromail Elites” list, respondent devised and mailed to approximately four million persons a form letter and questionnaire as follows: O. E. McIntyre, Inc., A Merromepra Company, .

Westbury, N.Y., March 10, 1967.

Here ‘is ‘ari opportimity for you to win fabulous gifts—holiday vacations in London: or Paris," new cars; color’“TV sets, and Polaroid cameras—a total of 1,111 gifts in all! ; ee ;

All you have to do is to send in this. questionnaire in the enclosed postage paid envelope—nothing else is needed. The questionnaire is short and easy to fill out. There is nothing to buy, and we assure you that no salesman will call OM YOUR cen emits ete tmuenenne ~This questionnaire. is being-sent-te a-number- of people in your area: to’ obtain information about habits and characteristics of people living in different sections of the country. You have.been. selected as one of. the people in ‘your community to participate in this project. And, as an expression of our thanks for your cooperation, you will have the opportunity to win one of these 1,111 magnificent gifts:.. . . . Fe ee: , . 1 1967.Coupe DeVille Cadillac 2 1967 Ford Mustangs; . ee 10 Round-Trip. Flights For Two From New York To Paris With a Room ‘For Two Weeks At The Famed Grand Hotel . ‘ --L0 Round-Trip Flights For Two From New York To London With A Room For Two Weeks At The Famed Hotel Cavandish . 10. Color Television Console Sets Over 1,000 Polaroid Color Cameras (In The $40 To $60 Range) , To be eligible to win one of these prizes, all you have to do is to send in ‘this questionnaire in the enclosed envelope—mnothing else is needed. Not all questions on the questionnaire need be answered, but we must have your ques- ‘tionnaire if you want to be included in the drawing for these gifts. All questionnaires postmarked on or before May 1, 1967, and received by May 10, 1967 ‘will be included in the drawing.

On May 25, 1967, the lucky winners will be selected at random from the names of all those who returned a questionnaire. We hope you will be one of them! .

We know you will want to participate. We hope you will want to complete the questionnaire, and we think you will find it interesting. But make sure you are eligible for the drawing by mailing back the questionnaire as soon as possible. No postage is needed on the envelope—merely seal it and. drop it in a mail box. , Thanks again for your assistance and good luck! Cordially, Lorence E. Moore, Executive Vice-President, Complaint 78 F.T.C.

0. ISINTV EE, law Bess dury, New Yuric PLEASE CHECK on WRITE IN AD ANSWER.TO FACIL QUESTION, YOUR COOPERATION 1S APPRECIATE Ja. Da youhavea ccler TV set? YES O 9-1 Nog -2 3s theres phonograph, hi-f or.stervo set in your home? YES O nog -s 2a, Do you or anyone elee in your family have any.notel, restaurant, gasoline or other ezedit cards? Free YES 9 10- NO O-+5 (IF NO, PLEASE SKIP TO Q. 3a) d (IF YES) s Please name the creilic cards: YOURSELF:

OTHER FAMILY MEMBERS:

3a, Do you or anyone else in youx family have charge in depar tor I stores? YES 0 10-7 NG O-@ (QF NO, PLEASE SKIP TO Q. 4a) nt {IF YES) z Please tell mein which stores: > :

‘YOURSELF:

OTIER FAMILY MEMBERS:

da. Da you or either family memb bscrib: to any fies? YES 0 11-2" NOOO -0 (IF NO, PLEASE SKIP TO Q. 4c} } Which magazines are received in yout home by aubscription? (PLEASE WRITE THEIR NAMES} ©. Which magazines, if any, are purchased regulerly at a newsstand? NONE C i2-0 & Does yourfamilyhaveadogorcat? HAVE “HAVE DON'T HAVE DOG BD 131 CAT (1-2 BROTHO-3 EITHER 2 & Which. if any, of the following appliances are used in your household? RB How old isthis . What Mak {PLEASE CHECK THOSE USED IN COLUMN A) particular applianee? Is This | (CHECK ONE POX) Appliance?) A. USE THIS 5 YEARS © ~. OVER ; APPLIANCE OR LESS 3 YEARS AUTOMATIC WASHING MACHINE O 1 O 15-1 0 161 AUTOMATIC CLOTHES DRYER O12 O 18-2 oO 162 ———— AUTOMATIC DISHWASHER ous O 16-8 - 0168 ——e ee HOME PREEZER UNIT ow O 184 D164 ener REFRIGERATOR : aus O 165 oO 16s seereeennenenncene ‘WINDOW AIR CONDITIONER : Os O 186 D 166 in erento CENTRAL AIR CONDITIONING O17 O 16-7 BD 16-7 NONE'OF ABOVE © oO wy ;

Complaint .

Ga. Do you or any, member of thix household own a car? SE Pu. INQ. 7b AND TION 8) NO.O-¥ (IF NO, PLEASE GO TO QUESTION . | vb. How many ¢ ears docg the Lamily OWN? 02) ececesmaneeseessneen sn 24- & INFORMATION ON AUTOS OWNED BY FAMILY. PLEASE ENTER INFORMATION FOR EACH CAR WiICIT IN THE FAMILY OWNS, PLEASE INCLUDE THOSE WHICH MAY BE OWNED BY TEEN-AGERS OR YOUS LIVI. NG AT. HOME, FIRST SECOND THIRD ‘FOURTIL CAR CAR, CAR CAR 25- Bi. 27+ MAKE: 26- 32. 38.

‘21. 38- 39.

YEAR: 2B. SM 40- STATION STATION STATION STATION WAGON 1) 29-2 WAGON 0 35-1 WAGON DO 41-1 WAGON BODY SEDAN’ O° -2 | SEDAN O -2} SEDAN OQ -2 | SEDAN STYLE: HARDTOPQ. -3 | HARDTOP -3 | HARDTOP 3 | HARDTO3 ‘ OTHER (Specify):- | OTHER (Specify): OTHER (Speelfy) : OTHER ( Was this car bought NEW O 290 NEW OD 35-0 NEW 0 410 NEW new or used? USED OF -x USED OQ =x USED QO =x USED sHiEAGE} 30. 36- a2 9a. Have you ever flown on a commercial airline? : : YES Oj 43-1 ‘NO 1] -2 (IF NO, PLEASE SKIP TO @. 20) b. About how many airpiane trips have yon taken in the past22 months? (RECORD AS ROUND TRIPS OR ONE-WAY Tf ROUND TRIPS:. 44 ONE-WAY TRIPS: . &S- © How many of these trips wero within the United States and how many outside of continental United Statea? WITHIN US.- : QUTSIDE UNITED STATES ROUND TRIPS: .... — ROUND TRIPS: ..

ONE-WAY TRIPS: 46 ONE-WAY TRIPS; ......-—~ 47° 2 Aad, about how many airplane trips do you plan to take in the next 12 months? ROUND TRIPS: ~~ ONE-WAY TRIPS: 48- 10a. Have you or any members.of your family ever requested or ordered any of the following items by mail? (PLEASE CHECK ALL ITEMS REQUESTED OR ORDERED BY MAIL) MEMBERSHIP IN BOOK CLUBS 0 49-1 TRAVEL INFORMATION MEMBERSHIP IN RECORD CLUBS Oo 2 MERCHANDISE CATALOGS. MAGAZINE SUBSCRIPTIONS G 3 CLOTHING HOUSEHOLD KITCHEN APPLIANCES [] -4 GIFT FRUIT/CHEESE OR TREES, PLANTS, SHRUBS, BULBS SPECIAL FOOD PRONUCTS of 9o0A8- FLOWER/VEGETABLE SEEDS oO 35 FILM PROCESSING 1. Have you or any members of your family ever ordered any other items by mail? YES O 60-1 NOOO (IF NO, PLEASE SKIP TO Q 1: ©. What were they? 21, Which sports, if any, do you lly partiel; in? 52- Ne Complaint 78 ¥F.T.C.

32a. Yocluding yourself, how many menders fn your family ore living fn your house at the presknt time? a BI b. What is the-sex of each? (PLEASE CHECK UNDER b BELOW) © And what is the age group of each member of the famiiy? (PLEASE CHECK CORRECT. AGE GROUP FOR EACH PERSON} b. SEX ¢ AGE Und 2 Ss 25- _ 5- 5 3 Male Female ia se O 54-1 o-w.. . O33 O4 O83 G+ “C-a of 0383 oO4 Ct O-2 O83 C+ O%8 Of O77 O8 Os Qo Cir O-2 -- ~~ 053° -O2°°03 O86 OF Ce Os go Ost O28 - O88 O4 OF OF OF O8 Ge Ow Ds oO o%833 O~ OF OF OF O82 O88 Oo C 59-1 O-2 G 693 oA 0-5 a 6 o7 O8 Oo. on Cor oO-2 o0os O4 OF OF O7 Os O89 OD OG 61-1 0-2 D 613 oA oO. o-6 o-7 os os ao xcunseue o-2 DO 62s o4 os Of Oo7 O8 69 OF O 63-1 oz O83 o-« os O6 o-7 os 0-9 aa What was.the last grade you completed.in school?.. (CHECK ONLY ONE BOX-—THE. LAST GRADE COMPLETED) ‘GRADE SCUOOL: 0-dth GRADE 0) sé-1 5-Tth GRADE Oo. 2 FINISHED Cc 8 HIGH SCHOOL: Ist - 3rd YEAR f+. FINISHED os: COLLEGE: 1st. 3rd YEAR os. FINISHED [aes BEYOND ~ | : . : ;

COLLEGE: ______ 1 OR MORE YEARS 8 me 33a. What $s the employment status of the head of your household? EMPLOYED BY. A COMPANY o 65-1 (PLEASE : UNEMPLOYED DO -t) (PLEASE SELY-EMPLOYED ANSWER RETIRED O -5}SkKIP TO EMPLOYED 3Y GOVERNMENT FI 3 Q.23b,c,d) HOUSEWIFE oO 4)Q14) . d& What type of A ori does the head of your household work for—that is, what does this company make orca? 66~ 2 - ‘6% & What iz the spécise position or occupation of the head of your household at this company? & @ About how many employces axe at the i busi location where the ead of your household works? UNDER 6 O 70-1 5:24 O -2 25-99 3 3 100-999 O -4 1,000 OR OVER 11 -$ ” 4& + Please give me your best estimate of the total Income of your family for the year 1966, (In addition to salaries, include all aources, 1e., interest, dividendz, ete.) (PLEASE CHECK ONE) UNDER: $5.00 coo oO 7-2 $10,000 - $14,999 o «4 ‘ $5,000 - $7.9: go -2 $15,000-$21.999 OS. 38,000 - $9, reed o 3 $25,006 & OVER oO +4 ‘¥Sa. Do'you own or rent yourkome? QWN (J 72-1 RENT O -2 (IF RENT, PLEASE SKIP TO Q, 16a) b. Isita multiunit crasingleunithouse? MULTI [J 724 SINGLE O 3 e. How old is this house— that is, about how long ago was it baiit? wanes XL EARS IZ d. Is most or all of this house made of brick orstone? YES ( 74-1 NO O -2a How is your house heated — by hot air, hot water or steam, or other? HOT AIR © 75-1 HOT WATER OR STEAM Qj -2 OTHER GO 3 f. What type of fuel do you use in your home-—oil, gas, electric, coal or other? OIL © 75-6 GAS 0 -7, ELECTRIC O 3 COAL’ -9 OTHER © -0 2. And, about what would you say is the-approximate size of your loz? . less than % ACRE () 76-1 *% to 4 ACRE a 2 %tol ACRE 3 over LACRE 2-4 ‘36a. In the past 10 years how ww times, if any, have you and your fazaily moved? NOT AT ALL (] -X (PLEASE SKIP Q. 16b) 41.

“(NUMBER oF TIMES) 3B. When did you move most recently? — (PLEASE SPECIFY YEAR) THANKS VERY MUCH FOR YOUR COOPERATIONI DON'T FORGET—PLEASE MAIL THIS BACK TO US REFORE MAY 1, 1967 AND YOU MAY BE ONE OF THE LUCKY 1,111 WINNERS! Ie the name and address on the label correct? If not, please PRINT IN your correct name, mamegnd address below: NAME;

ADDRESS:

+ CITY: Z a STATE: ZIP CODES nnncmnnnne METROMEDIA, INC. 337 331 Complaint Par. 5. By and through the use of the form letter and questionnaire hereinabove reproduced and set forth in its entirety, and with particular reference to that portion of said form letter which reads: All you have to do is to send in this questionnaire in the enclosed postage paid envelope—nothing else is needed. The questionnaire is short and easy to fill out. There is nothing to buy, and we assure you that no salesman will call on you.

respondent represented, directly or by implication, that the response thereto and the information sought by said questionnaire was for a purpose other than the sale of merchandise or services and that the addressee would not be importuned to purchase merchandise and services.

Par. 6. In truth and in fact, the responses to and the information sought by said questionnaire were for the express purpose of compiling mailing lists to be used for selling merchandise and services to. those persons who responded to said questionnaire and those who responded were, and are, importuned to purchase merchandise and services.

Therefore, the statements and representations as sct forth in Paragraphs Four and Five hereof were, and are, false, misleading and deceptive.

Par. 7. Furthermore, it was an unfair practice and a false, misleading and deceptive act and practice for respondent to seek to elicit responses in the manner aforesaid and to fail to disclose clearly and conspicuously the purpose for which the information contained on said questionnaire was being requested, and to fail to disclose that it was in the business of compiling mailing lists which are for sale or rent to mail-order advertisers and sellers of merchandise and services, and that the information requested would be used, together with the name and address of the addressee in the compiling of such lists.

In the absence of such disclosure, addressees would have no reason to suspect that respondent would use their responses in the above-described manner. A substantial portion of the purchasing public has a preference that their names not appear on mailing lists. This preference arises out of various individual and personal reasons such as, but not limited to, the unauthorized invasion of personal privacy; being subjected to the repeated importuning of promoters, advertisers and sellers of merchandise, services and schemes; and being exploited by respondent and the users of said “Metromail Elites” mailing list.

Therefore, the aforesaid statements, representations, acts and practices were, and are, unfair, false, misleading and deceptive. Decision and Order 78 F.T.C.

Par. 8. In the course and.conduct of their aforesaid business, and at all times mentioned herein, respondent has been and is now in substantial competition, in commerce, with corporations, firms and indiyiduals engaged in the compilation, use and sale of mailing lists and in the dizect-mail advertising business of the same general kind and nature as the respondent.

Par. 9. The use by respondent of the aforesaid unfair acts and false, misleading and deceptive statements, representations and practices, and the failure of respondent to disclose the true nature, purpose and use of the information sought by the survey questionnaire has had, and now has the tendency and capacity to mislead members of the public being surveyed by like or similar survey questionnaires, and to inconvenience, importune and harass persons who may not wish to have their names used and to be exploited thereby. Par. 10. The aforesaid acts and practices of respondent, as herein alleged, were and are all to the prejudice and injury of the public -and of respondent’s competitors, and constituted, and now constitute, unfair methods of competition in commerce and unfair and deceptive acts and practices in commerce in violation of Section 5 of the Federal Trade Commission Act.

Drciston AND ORDER The Commission having heretofore determined to issue its com- ‘plaint charging the respondent named in the caption hereof with vi- ‘olation of the Federal Trade Commission Act, and the respondent having been served with notice of said determination and with a copy of the complaint the Commission intended to issue, together with a proposed form of order; and The respondent and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondent of all the jurisdictional facts set forth in the complaint to issue herein, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondent that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission’s Rules; and , The Commission having considered the agreement and having accepted same, and the agreement containing consent order having thereupon been placed on the public record for a period of thirty (30) days and having duly considered the comments filed thereafter pursuant to Section 2.34 (b) of its Rules, now in further conformity with the procedure prescribed in such Rule, the Commission hereby METROMEDIA, INC. 339 331 Decision and Order issues its complaint in the form contemplated by said agreement, makes the following jurisdictional findings, and enters the following order:

1. Respondent Metromedia, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware, with its office and principal place of business located at 277 Park Avenue, in the city of New York, State of New York. - 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 It is ordered, That respondent Metromedia, Inc., a corporation, and its officers, agents, representatives and employees, directly or through any corporate or other device, in connection with the construction, development, maintenance, advertising, offering for sale, sale or use of. respondent’s “Metromail Elites” mailing list, or any other of respondent’s mailing lists, in commerce, as “ecommerce” is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Representing, directly or by implication, that any. information sought by respondent. by any questionnaire, in connection with the compilation or construction of mailing lists used by respondent in connection with the advertising or sale of merchandise or services is for any purpose other than the compilation of mailing lists to be so used; or misrepresenting, in any manner, the purpose or intent or the use of any information sought by any questionnaire.

2. Falsely representing that addressees of any questionnaire will not be importuned to purchase merchandise or services. 3. Failing, clearly and conspicuously, and at the outset, to state in each oral or written questionnaire of respondent to persons who are or may be prospective addressees for inclusion on or in any mailing list or other compilation of addressees, the following: :

“We are in the business of compiling mailing lists which we may use ourselves, or which may be used by direct mail advertisers. The information which you furnish us by filling out this questionnaire may be used, together with your name and address, in compiling such lists,”

4. Advertising, offering for sale, sale or use by respondent or others of respondent’s “Metromail Elites” mailing list, or any other mailing list derived directly therefrom. Decision and Order 78 F.T.C.

Provided, however, That the term “questionnaire,” as used in this order, shall mean any inquiry for or solicitation of information, whether written, oral or by any other means, from addressees or prospective addressees for inclusion on or in any mailing lists or other compilation of addressees, by any division or subsidiary of respondent which is, or hereafter may be, in the business of compiling mailing lists for direct-mail advertisers, for the purpose or with the result of constructing or developing for respondent any mailing list or other compilation of addressees.

It is further ordered, That the respondent corporation shall forthwith distribute a copy of this order to each of its operating divisions. , It is further ordered, That respondent notify the Commission at least thirty (30) days prior to any proposed change in the corporate respondent, such as dissolution, assignment or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries or any other change in the corporation which may affect compliance obligations arising out of this order. It is further 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 this order.