Ecology Corporation of America

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In Tue MATTER OF ECOLOGY CORPORATION OF AMERICA, ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT N Docket C-2179. Complaint, Larch 80, 1972—Decision, Afarch 80, 1972. Consent order requiring two Paterson, N.J., corporations selling and distributing Eeolo-G detergent and their New York City advertising agency to cease misrepresenting that their detergent is safe and not hazardous, that no special precautions need be taken when using the detergent, and misrepresenting that any municipal, state or federal agency has approved the label or any feature of their product. ComMPpLAINT 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 the Ecology Corporation of America, a corporation, North American Chemical Corporation, a corporation, and Venet Advertising Inc., a corporation, hereinafter referred to as respondents, have violated the provisions of said Act, and it appearing to the Commission that a proceeding ECOLOGY CORP. OF AMERICA, ET AL. 449;

448 Complaint 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 Ecology Corpor ration of America is a corporation organized, existing and doing business under and by virtue of the laws of the State of New Jersey with its principal office and place of business located at 178 Keen Street, in the city of Paterson, State of New Jersey.

Respondent North American Chemical Corporation is a corpora~ tion organized, existing and doing business under and by virtue of. the laws of the State of New Jersey with its principal office and place of business located at 178 Keen Street, in the city of Paterson, State of New Jersey.

Respondent. Venet Advertising Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Mew Jersey with its principe office and olace of busine: located at 820 Second Avenue, in the city of New York, State New York, Par. 2. Respondents Ecology Corporation and North American, for some tim 1c last past, have been engaged in the manutac- : on of Ecolo- -G detergent, which when shipped to purehe Sers so ated in various states of the United © NT Ne.

Thus responder nts Ecclogy Cerperation and North American - + tain, and at all times mentioned herein have saintamed, a subs course of trace in said detergent 13 * fined in the Federal Trade Comi Respondent Venet Adver been the advertising a rican, and now anc for some ‘tone last past. has prepared .. now and for some time r Ecolorey Corporation and — m ct on ts a lon ° io) io and | placed for publication advert sing material, including but not limited to the adve Using Ferrad to herein, to pron rate the sale of Ecology Corporaticn’s and North Amevrican’s Ecolo-G det Par. 8. Respondents Ecology Comporation and | North Ame all times mentioned herein have been, and now are, in sub competition in commerce, as “commerce” is defined in the Feuer: Trade Commission Act, with individuals, firms and corporations engaged in the sale and distribution of deter gents of the same gener dand nature as that sold by respondents “Ecology Corporation and ne 30 North American.

Pan. 4. In the course and conduct of their business and for the purpose of tung the sale of the said Ecolo-G detergent, respondents caused an advertisement to be published in 48 newspapers in various states of ‘the United States. A copy of the aforesaid advertisement follows:

ECOLOGY CORP. OF AMERICA, ET AL. 451 448 Complaint Par. 5. Through the use of the aforesaid advertisement, respondents represent directly or by implication that: 1. Ecolo-G is safe and in no way hazardous, 2. No special precautions to avoid harm need be taken when using Ecolo-G, 8. The Ecolo-G label has been approved by an agency of the United States Government which has the authority to approve or disapprove detergent labels, 4. The Ecolo-G label as depicted in said advertisement is an accurate reproduction of the Ecolo-G label which has been approved, and 5. The Ecolo-G label, including the phrase “Stop Pollution,” has been approved by an agency of the United States Government which has found that Ecolo-G is helpful in stopping water pollution. Par. 6. In truth and in fact:

1. Ecolo-G is a hazardous substance, within the meaning of that term as used in the Federal Hazardous Substances Act, 2. To avoid harm when using Ecolo-G, the user should take special precautions to avoid swallowing the product and to prevent its coming in contact with the eyes and skin, 8. The Ecolo-G label has not been approved by an agency of the United States Government which has the authority to approve or disapprove detergent labels, but Ecolo-G is required by the Food and Drug Administration under the Federal Hazardous Substances Act to prominently display on its packages cautionary labeling which sets forth the hazards involved in the use of the product, 4. The Ecolo-G label in said advertisement as depicted does not show clearly and conspicuously the cautionary labeling which is required by the Food and Drug Administration under the Federal Hazardous Substances Act and which sets forth the hazards involved in the use of the product, and 5. The Ecolo-G label, including the phrase “Stop Pollution,” has not been approved by any agency of the United States Government which has found that Ecolo-G is helpful in stopping water pollution.

Therefore, the aforesaid advertisement referred to in Paragraphs Four and Five above is false, misleading and deceptive. Par. 7. The use by the respondents of the aforesaid false, misleading and deceptive advertising 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 advertising and repre- Decision and Order 80 F.T.C, sentations were and are true, and into the purchase of a substantial quantity of respondents Ecology Corporation’s and North American’s detergent because of such erroneous and mistaken beliefs. Par. 8. 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 Ecology Corporation’s and North American’s competitors, and constituted, and now constitute, unfair and deceptive acts and practices and unfair methods of competition in commerce, in violation of Section 5 of the Federal Trade Commission Act.

DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondents named in the caption herein, and the respondents having been furnished thereafter with a copy of a draft of complaint which the Bureau of Consumer Protection proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondents with violation of the Federal Trade Commission Act; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondents 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 thereafter considered the matter and having determined that it had reason to believe that the respondents have violated the said Acts, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed agreement, placed such agreement on the public record for a period of thirty (80) days, and received and considered comments, now in further conformity with the procedure prescribed in Section 2.34(b) of its rules, the Commission thereby issues its complaint, makes the following jurisdictional findings, and enters the following order.

1. Respondent Ecology Corporation of America, is a corporation organized, existing and doing business under and by virtue of the laws of the State of New Jersey with its principal office and place of business located at 178 Keen Street, Paterson, New Jersey. ECOLOGY CORP. OF AMERICA, ET AL. 453 448 Decision and Order Respondent North American Chemical Corporation, is a corporation organized, existing and doing business under and by virtue of the laws of the State of New Jersey with its principal office and place of business located at 820 Second Avenue, New York, New York.

Respondent Venet Advertising Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of New Jersey with its principal office and place of business located at 820 Second Avenue, New York, New York. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER I It is ordered, That respondent Ecology Corporation of America, a corporation, its officers, representatives, agents, employees, successors and assigns and respondent North American Chemical Corporation, a corporation, its officers, representatives, agents, employees, successors and assigns directly or through any corporate or other device, in connection with the advertising, offering for sale, sale or distribution of Ecolo-G detergent or any other consumer product in commerce, as “commerce” is defined in the Federal Trade Commission Act, forthwith cease and desist from: 1. Representing, directly or by implication, that Ecolo-G, or any other such product which is a hazardous substance within the meaning of that term as used in the Federal Hazardous Substances Act, is safe and not hazardous, 2. Representing, directly or by implication, that no special precautions to avoid harm need be taken when using Ecolo-G, or any other product which is a hazardous substance within the meaning of that term as used in the Federal Hazardous Substances Act, and 3. Representing in any manner that the United States Government, or any agency thereof, or any state, municipal or local government, or any agency thereof, has approved the label of such product, or any part thereof, or has approved any feature of such product.

II It is ordered, That respondent Venet Advertising Inc., a corporation, its officers, representatives, agents, employees, successors and Decision and Order 80 F.T.C.

assigns, directly or through any corporate or other device, in connection with the advertising, created and prepared by respondent, for Ecolo-G detergent or any other home laundry products used in the cleaning of clothing in commerce, as “commerce” is defined in the Federal Trade Commission Act, forthwith cease and desist from: 1. Representing, directly or by implication, that Ecolo-G, or any other such product which is a hazardous substance within the meaning of that term as used in the Federal Haz ardous Substances Act, is safe and not hazardous, 2. Representing, directly or by implication, that no special precautions to avoid harm need be taken when using Ecolo-G, or any other product which is a hazardous substance within the meaning of that term as used in the Federal Hazardous Substances Act, and 8. Representing in any manner that the United States Government, or any agency thereof, or any state, municipal or local government, or any agency thereof, has approved the label of such product, or any part thereof, or has approved any feature of such product.

III Zt is further ordered, That respondents Ecology Corporation of America and North American Chemical Corporation forthwith cease and desist from disseminating any advertisement for Ecolo-G detergent unless the cautionary statements required by the Food and Drug Administration under the Federal Hazardous Substances Act are clearly and conspicuously disclosed in such advertisement. IV It is further ordered, That all respondent corporations shall forthwith distribute a copy of this order to each of their operating divisions.

It is further ordered, That each respondent notify the Commission at least thirty (80) 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 changes in the corporation which may affect compliance obligations arising out of the order. It 7s further ordered, That each respondent, within sixty (60) days after service upon it of this order, file with the Commission a written report setting forth in detail the manner and form of its compliance with the order.

LORILLARD, ET AL, 455 Complaint