E. I. Du Pont De Nemours & Company

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In ron Matrer oF E. I. ppPONT pe NEMOURS & COMPANY CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket 8870, Complaint, November 12, 1971—Decision, July 24 1972. Consent order requiring a Wilmington, Delaware, manufacturer and marketer of automotive antifreeze described as Zerex Antileak Antifreeze to cease advertising, selling or distributing any such product which causes damage in or on vehicles in or on which it is used unless it discloses, among other things, that damage can or might occur or identifies any make or model of vehicles in or on which such product causes damage; and to cease advertising, selling or distributing any such product unless such product has been tested to determine whether the product will cause damage in or on the vehicles in or on which it is used.

ComMPrLaInT 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 E. I dupont de Nemours & Company, a 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:

ParacrarH 1. E. I. dupont de Nemours & Company is a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware, with its principal offices and place of business 494-841—73——12 170 FEDERAL . ‘TRADE : COMMISSION. DECISIONS Gomplaint 81 ¥F.T.C.

located at. 1007 Market Street, in. the city of Wilmington, State of Delaware. ee ‘Par. 2. Respondent. i is: ‘now, and: for. some, time. last past, has. been engaged in the manufacture, sale. and distribution of an automotive antifreeze described as Zerex Antileak. Antifreeze. Said product con- — sists of an ethylene glycol solution mixed with. polystyrene particles, which act as the antileak ingredient... m4 Par. 3. In the course and conduct. of its. business. as: aforesaid, respondent. now. causes, and for sometime last past has caused, its said product; when sold,.to: be shipped.to purchasers thereof. located: :in “warious other 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 product in commerce, as “commerce” is defined in the Federal Trade Commission Act. Par. 4. Respondent at all times mentioned herein has been and now is in substantial competition in commerce with individuals, firms and corporations engsged in the sale and distribution of automotive antifreeze.

Par. 5. In the course and conduct of its business, and for the purpose of inducing the sale of its said product, respondent extensively employs.advertising-in-national and regional magazines and other publications and on network and local television and radio and through various other outlets, including point of sale displays. . Par. 6. In the course and conduct of its business as. aforesaid, 1 respondent represented in advertisements and on its. labels that Lorex was effective in the sealing of leaks in automotive cooling systems, without stating or disclosing the fact that said product when used in automotive cooling systems could cause damage to the system or component parts thereof.

Par. 7, In the further course and conduct of its business as aforesaid, and following the marketing and advertising of Zerex Antileak Antifreeze, respondent received information from various sources by which it knew, or had reason to believe, that the use of said product under normal operating conditions could cause damage to various parts or components of automotive cooling systems: Notwithstanding its possession of such knowledge or reason to believe, respondent continued to market and advertise said product without disclosing to the purchasing public, in its advertisements and on its labels, the fact that the use of | Zerex Antileak Antifreeze could cause damage to automotive cooling systems.

Par. 8. In the further course and conduct: of its business as aforesaid, respondent introduced ‘its Zerex Antileak’ Antifreeze onto the EK... puPONT’ pe NEMOURS ‘AND COMPANY 171 169°: : :Decision.and Order market. and’ advertised it for: use in automotive.cooling systems without having conducted or obtained scientific tests that: were adequate to éstablish' whether or not said: product: would or could cause damage to automotive cooling systems under ordinary conditions of use.’ Par. 9. By: marketing. and advertising its product Zerex Antileak Antifreeze for use in. automotive cooling systems, respondent’ represented, directly or by implication; thatisaid product would not damage the automotive cooling systems.in which it was used, under‘ ordinary conditions of use, and respondent: further represented, and does iow represent, directly or:by implication, that prior to the marketing and advertising of Zerex, it conducted: or obtained scientific tests: ‘thatin were adequate.to establish that such damage: would not occur: Therefore, the advertisements referred ‘to in: Paragraphs Six; Seven and Eight.above were false and misleading and the acts. and practices referred to in saidParagraphs: constitute. unfair and. deceptive acts and, practices. Furthermore, the marketing of said ‘product’ without prior-tests adequate:to establish that. would not cause damage under ordinary conditions of use andthe failure to disclose :clearly and: ¢onspicuously. in all: ‘advertisements: for, and labels and: packaging’ of said product what damage could oceur-was.and is an-unfair act and: practice _in violation of Section 5 of the Federal Trade Commission ‘Act.’ Par. 10. The use by respondent of the aforesaid false and misleading advertisements and. unfair and deceptive acts and practices had the tendency and ¢apacity to mislead‘and deceive a substantial portion of the purchasing public into the erroneous and mistaken belief that said product. would not cause-damage to automotive cooling systems under ordinary conditions of use; and that respondent had conducted or obtained scientific tests that were adequate to establish that said product would not cause damage to automotive cooling systems under ordinary conditions of use, and into the purchase of substantial quantities of respondent’s Zerex Antileak Antifreeze by reason. of said erroneous and mistaken belief.

. Par. 11. The aforesaid acts and practices of respondent, a 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 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 Commission having issued its complaint on November 12, 1971, charging the respondent named in the caption hereof with violation of 172 FEDERAL TRADE COMMISSION: DECISIONS Decision and Order 81 F.T.C.

the Federal Trade Commission Act, and respondent having been served with a copy ofthatcomplaint;and. ;

The Commission having duly determined upon motion duly certified to the Commission that, in the circumstances presented, the: public interest would be served by waiver here of the provisions of Section 2.34(d) of its rules, that the consent order procedure shall not be available after issuance of complaint; and: Meg Respondent and counsel for the complaint having thereafter executed an agreement containing a consent order, an admission by respondent of all jurisdictional facts set forth in the complaint, a ‘statement that:the signing of the agreement by respondent 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 provisionally accepted same, and the agreement containing consent having thereupon been placed on the public record for a period of thirty (30) days, now in further conformity.with the procedure prescribed in‘ Section 2.34(b) of its rules, the Commission makes the following jurisdictional findings and enters the following order: 1. Respondent E. I. dupont de Nemours & Company 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 1007 Market Street, Wilmington, Delaware. 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 I It is ordered, That respondent E. I. dupont de Nemours & Company, a corporation, its officers, representatives, agents and employees, directly or through any corporate or other device, in connection with the advertising, offering for sale, sale and distribution of any retail consumer automotive product in commerce, as “commerce” is defined in the Federal Trade Commission, Act, do forthwith cease and desist from:

(a) Advertising, offering for sale, selling or distributing any such product which, when used in its intended manner and under ordinary conditions of use, causes damage in or on the vehicles in or on which it is so used, unless respondent makes a clear and conspicuous disclosure in all its advertising for such product (except E. I. DUPONT. DE NEMOURS AND COMPANY 173 Decision and Order point of purchase materials that merely identify the product) that damage can or might occur, or identifies any make or model of vehicles in or on which such product causes damage when so used and makes a clear and conspicuous disclosure that such product should not be used in or on those vehicles, and further on all its labels for such product makes a clear and conspicuous disclosure that damage can or might occur and clearly and conspicuously sets forth the nature of such damage and any procedures which can be utilized to prevent such damage. Provided, however, That it shall be a defense in any enforcement proceeding instituted. hereunder for respondent to establish it neither knew nor had reason to know that when such product was so used damage would occur, or for respondent to show that the instances of damage upon which the enforcement proceeding was predicated were unique or isolated instances, and were of such a nature that it could not be reasonably anticipated that such damage would result to a class or group of vehicles, or for respondent to establish that within sixty (60) days of thé date that respondent knew or had reason to know that when such product was so used damage would occur, respondent ceased disseminating any product with any label, not complying with the terms of this order; and © (b) advertising, offering for sale, selling or distributing any such product which is first distributed after the effective date of this order, unless such product has been subjected to tests designed and executed in a manner reasonably calculated to determine whether such product when used in its intended manner and under ordinary conditions of use will cause damage in or on the vehicles in or on which it is so used, or unless respondent has in its possession prior to such distribution other studies, documentation or data reasonably calculated to determine whether such use of product will cause such damage, the results of which tests, studies, documentation or other data are maintained in writing. It The labeling provisions of this order shall apply to all products which are packaged sixty (60) days or more after the date upon which this order becomes effective.

It It is further ordered, That the respondent corporation shall forthwith distribute a copy of this order to each of its operating divisions or departments.

174 FEDERAL: TRADE. COMMISSION’ DECISIONS Decision and Order; 81 F.T.C.

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 i im the corporation which may affect compliance obligations arising out: of the order. - It is further ordéred, That respondent 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 i in 1 which it has complied with the order. to: ‘cease ‘and: desist. . “Is THE: Marin or SAM ZIAS, INC, ‘Br AL.

CONSENT ORDER,. ‘ETC, 3:5 1 4 1 1 5 1207 1408 57 54 52.783279 DN,5 1 4 1 1 6 1284 1391 116 75 95.908821 REGARDS 1 4 1 1 7 1411 1402 64 60 75.518829 TO.5 1 4 1 1 8 1481 1394 86 63 88.574112 THE,5 1 4 1 1 9 1583 1396 157 59 95.826096 ALLEGED,5 1 4 1 1 10 1754 1396 185 53 39.349197 VIOLATIONS 1 4 1 1 11 1960 1395 53 46 83.544441 oF5 1 4 1 1 12 2028 1419 73 21 96.159081 THEA 1 4 1 2 0 792 1448 1264 67 -1 5 1 4 1 2 1 792 1498 2 2 12.031563 ;5 1 4 1 2 2 807 1470 166 45 0.000000 FEDERAL,5 1 4 1 2 3 977 1453 113 60 89.014336 ‘TRADES 1 4 1 2 4 1087 1513 2 2 67.782486 |5 1 4 1 2 5 1118 1452 207 63 94.782547 COMMISSIONS 1 4 1 2 6 1342 1448 74 60 96.583176 ANDS 1 4 1 2 7 1423 1452 84 62 55.630783 THES 1 4 1 2 8 1517 1458 76 55 91.044922 FURS 1 4 1 2 9 1598 1455 181 56 84.560585 PRODUCTS,5 1 4 1 2 10 1787 1455 173 53 96.885239 LABELING5 1 4 1 2 11 1969 1469 87 40 88.085487 ACTS2 1 5 0 0 0 904 1527 1072 82 -1 3 1 5 1 0 0 904 1527 1072 82 -1 4 1 5 1 1 0 904 1527 1072 82 -1 5 1 5 1 1 1 904 1542 126 60 61.166206 ‘Dockets 1 5 1 1 2 1038 1537 119 62 0.000000 0-225.5 1 5 1 1 3 1148 1602 2 3 19.316444 -5 1 5 1 1 4 1176 1530 165 79 84.665710 Complaint,5 1 5 1 1 5 1346 1534 82 65 0.000000 Taly5 1 5 1 1 6 1431 1533 44 71 72.104546 2,5 1 5 1 1 7 1485 1527 257 76 46.695457 1972—Décision,5 1 5 1 1 8 1747 1542 77 53 61.305222 Fully5 1 5 1 1 9 1829 1530 42 65 67.136047 2,5 1 5 1 1 10 1872 1536 104 64 81.052422 1972. Consent order requiring a New York City manufacturer of fur products te to cease misbranding and deceptively invoicing its merchandise. Complain? Pursuant to the provisions of the Federal Trade Commission Act and the Fur Products Labeling Act, and by virtue of the authority vested in it by said Acts, the Federal Trade Commission, having reason to believe that Sam Zias, Inc., a corporation, and Sam Zias and George Makos, individually and as officers of said corporation, hereinafter referred to as respondents, have violated the provisions of said Acts and the rules and regulations promulgated under.the Fur Products Labeling 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 Sam Zias, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of New York.

Respondents Sam Zias and George Makos are officers of the corporate respondent. They formulate, direct and control the policies, acts and practices of the corporate respondent including those hereinafter set forth.

‘SAM ZIAS, INC, BT AL. 175 174 Complaint — Respondents are manufacturers of fur products with their office: and principal place of business located at 214 W. 29th Street, New York, New York.

Pan. 2. Respondents are now and for some time last past have been engaged in the introduction into commerce, and in the manufacture. for introduction ‘into commerce, and in the sale, and offering for sale’ in commerce, and in the transportation and distribution in commerce, — of fur products; and have manufactured for sale, sold, offered for sale, transported and distributed fur products which have been made in whole or in part. of furs which have been shipped and received in commerce, as the terms “commerce,” “fur” and “fur product” are defined in the Fur Products Labeling Act.

Par. 3: Certain: of said fur products were misbranded in that they were not labeled as required under the provisions of Section 4(2) of the Fur Products Labeling Act and in the manner and form prescribed by the rules and.regulations promulgated thereunder. Among such'misbranded fur products, but not limited thereto, were fur products without labels as required. by said Act. Par. 4. Certain of said products were misbranded in violation of the Fur Products Labeling Act in that.they were not labeled in accordance with rules and regulations promulgated thereunder in the following respects:

(a) The term “natural” was not used on labels to describe fur products which were not pointed, bleached, dyed, tip-dyed, or otherwise artificially colored, in violation of Rule 19(g) of said rules and regulations.

(b) Required item numbers were not set forth on labels, in violation of Rule 40 of said rules and regulations.

(c) The true animal name of the fur used in such fur products was not shown on labels in violation of Rule 5 of said rules and regulations. (d) Required information on labels was described in abbreviated form and not spelled out fully, in violation of Rule 4 of said rules and regulations.

Par. 5. Certain of said products were falsely and deceptively invoiced by the respondents in that they were not invoiced as required by Section 5(b) (1) of the Fur Products Labeling Act and the rules and regulations promulgated under such Act. Among such falsely and deceptively invoiced fur products, but not limited thereto, were fur products covered by invoices which failed to disclose that the fur contained in the fur products was bleached, dyed or otherwise artificially colored, when such was the fact. Par. 6. Certain of said fur products were falsely and deceptively Decision and Order 81 F.T.C.

invoiced in violation of the Fur Products Labeling Act in that they were not invoiced in accordance with the rules and regulations promulgated thereunder in the following respects: (a) The term “natural” was not used on invoices to describe fur products which were not pointed, bleached, dyed, tip-dyed or otherwise artificially colored, in violation of Rule 19(g) of said rules and regulations.

(b) Required item numbers were not set forth on invoices, in violation of Rule 40 of said rules and regulations. (c) Required information on invoices was described in abbreviated form and not.spelled out fully, in violation of Rule.4 of said rules and regulations.

Par. 7. The aforesaid acts and practices of respondents, as herein alleged, are in violation of the Fur Products Labeling Act and the rules and regulations promulgated thereunder and constitute unfair _ methods of competition and unfair and deceptive acts and practices in.commerce undér 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 hereof, and the respondents having been furnished thereafter with a copy of a draft of complaint which the New York Regional Office 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 Fur Products Labeling 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 agrevment 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 consent agreement and placed such agreement on the public record for a period of thirty (30) days, now in further conformity with the procedure prescribed in Section 2.34(b) of its rules, the Commission SAM ZIAS, INC., ET AL. 177 174 Decision and Order hereby issues its complaint, makes the following jurisdictional findings, and enters the following order :

1. Respondent Sam Zias, Inc., is a corporation, organized, existing and doing business under and by virtue of the laws of the State of New York with its office and principal place of business located at 214 © West 29th Street, New York, New York.

Respondents Sam Zias and George Makos are officers of said corporation and their address is the same as that of the corporation. They formulate, direct and control the acts, practices and policies of said corporate respondent.

2. The Federa] Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER It is ordered, That the respondents Sam Zias, Inc., a corporation, its successors and assigns, and its officers, and Sam Zias and George Makos, individually and as officers of said corporation, and respondents’ representatives, agents and employees, directly or through any corporation, subsidiary or other device in connection with the introduction, or manufacture for introduction, into commerce, or the sale, advertising or offering for sale in commerce, or the transportation or distribution in commerce, of any fur product; or in connection with the manufacture for sale, sale, advertising, offering for sale, transportation or distribution of any fur product which is made in whole or in part of fur which has been shipped and received in commerce; or in connection with the introduction into commerce, or the transportation or distribution in commerce, of any fur, as the terms “commerce,” “fur” and “fur product” are defined in the Fur Products Labeling Act, do forthwith cease and desist from: A. Misbranding any fur product by:

1. Failing to affix a label to such fur product showing in words and in figures plainly legible all of the information required to be disclosed by each of the subsections of Section _ 4(2) of the Fur Products Labeling Act.

2. Failing to set forth the term “natural” as part of the information required to be disclosed on a label under the Fur Products Labeling Act and the rules and regulations promulgated thereunder to describe such fur product which is not pointed, bleached, dyed, tip-dyed, or otherwise artificially colored.

3. Failing to set forth on a label the item number or mark assigned to such fur product.

Decision and Order 81 F.T.C.

4; Failing to.set forth on a label-the true animal name of the fur used insuch fur product.

_ 5. Setting forth information required under the For Prodnets Labeling Act and the rules and. regulations promulgated thereunder in abbreviated form on. a label pertaining to such fur product.

, B. Falsely or deceptively i invoicing any, fur product by: A Failing to furnish an invoice, as the term ‘ “invoice” is defined in the Fur Product Labeling Act, showing i in words and figures plainly legible all the information required to. be disclosed by each of the subsections of Section 5 (P) (1). of the Fur Products Labeling Act.

2. Representing, directly or by implication, on an invoice _ that the fur contained, in such fur product is natural when such fur is pointed, bleached, p dyed, tip- “dyed, or otherwise -artifically colored.

8. Failing to set forth on an invoice the item number or ‘ mark assigned to such product.

4, Setting forth information required under: the Fur Prod- “ucts Labeling Act and the:rules and regulations promulgated 's thereunder in abbreviated form on an invoice pertaining to such fur product.

It is further ordered, That the individual respondents named herein promptly notify the Commission of the discontinuance of their present business or employment and of their affiliation with a new business or employment. Such notice shall include respondents’ current business or employment in which they are engaged as well as description of their duties and responsibilities.

It is further ordered, That respondents 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 i in the corporation which may affect compliance obligations arising out of the order. 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 respondents 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 contained herein. .;LEEMOR. IMPORT. CORP., ET AL. 179 Complaint