Leo Burnett Company, Inc

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In THE Marrer or LEO BURNETT COMPANY, INC.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket C-2309. Complaint, Nov. 1, 1972—Decision, Nov. 1, 1972 ' Consent order requiring a Chicago, «Illinois, advertising agency for two New York City sugar industry. trade: associations, among other things to cease making false and unsubstantiated weight reduction claims for refined sugar and misrepresenting its nutritional value in weight-reduction dieting. 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 Sugar Information, Inc., Sugar Association, Inc., and Leo Burnett Company, Inc., corporations, hereinafter referred to as respondents, have violated the provisions of said Act, and it appearing to the Commission that a pro- LEO -BURNETT COMPANY, INC. - 725 724 > Complaint ceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as follows: ParacrapH 1. Respondents:Sugar Information, Inc., and Sugar Association, Inc., are trade associations organized, existing. and doing business as corporations under and by virtue.of the laws of the State of New York, with their principal office and place of business located at 254 West 31st Street, New. York, New York. Respondents Sugar Information, Inc., and- Sugar Association, Inc., were organized and are maintained for the purpose of promoting, fostering and advancing the interests of their members who consist of firms engaged. in. businesses relating to the sugar industry, including. but not limited to. growers, refiners,and processors.

Par. 2. Respondent Leo Burnett Company, 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 Prudential Plaza, Chicago, Tlinois. Par. 3. Respondents Sugar Association, Inc., and Sugar Informe tion, Inc., have been and now are engaged in a wide range of activities of mutual interest to their members including but not limited to.the dissemination, publishing, and distribution of advertisements and. promotional material concerning the uses, purposes, utility, characteristics and effects of sugar, which comes within the classification of “food,” as said term is defined in the Federal Trade Commission Act. Par..4. Respondent Leo Burnett Company, Inc., is now, and for ~” some time last past has been, an advertising agency of Sugar Association, Inc., and Sugar Information, Inc., and now and for some time last past, has prepared and placed for publication and has caused the dissemination of advertising material, including but not limited to the advertising referred to herein, to promote the sale of sugar, and products containing sugar, which come within the classification of “food,” as said term is defined in the Federal Trade Commission Act. ' Par. 5. In the course and conduct of their said businesses, respondents have disseminated, and. caused the dissemination of certain advertisements concerning sugar and products containing sugar by the United States mails and by various means in commerce, as “commerce” is defined in the Federal Trade:‘Commission Act, including but not limited to, advertisements inserted in magazines and other advertising media, for the purpose of.inducing and which were likely to induce, directly or indirectly, the purchase of said products; and have disseminated, and caused the dissemination of, advertisements concerning said products by various means, including but not limited to the aforesaid media, for the purpose of inducing and which were likely to 726 FEDERAL. TRADE COMMISSION ‘DECISIONS Complaint 81 FTC:

induce,. directly ‘or. indirectly, the. purchase of said products in com: merce:as “commerce” is defined in the Federal Trade Commission Act. - Par. 6. Typical-of the statements and representations in said’ advertisements, disseminated ‘as ‘aforesaid, but not all inclusive thereof, are the following: ‘[These advertisements are reproduced. in’ “Docket C2808; pp. 713-719, herein.].

Par. .7. Through ‘the use of said. advertisements and others similar thereto ‘not specifically’ set. out. herein, disseminated ‘as aforesaid, ‘re: spondents have represented and are now representing » directly and vy implication,that:.

_A. There is a: reasonable basis from which to conclude that the con: sumption of sugar, and foods containing sugar, such as:soft drinks, ice cream cones, or candy bars, before meals contributes significantly and reliably tothe reduction. of human. weight and to the maintenance. of reduced. human weight. | : :

B. Consumption of sugar ‘and foods containing sugar, such 3 as ‘soft ' drinks, ice cream cones, or candy bars, before meals will result i in reduced daily caloric intake.

- C. Sugar is a uniquely suitable source of energy for persons: attempt: ing to lose weight or to prevent. weight g gain, because it provides more energy per calorie than other foods.

Par. 8. In truth and in fact:

A. Respondents had no reasonable basis from which to conclude — that the consumption of sugar, and foods containing sugar, such as soft drinks, ice cream cones,'or candy bars, before meals contributes: significantly and reliably to the reduction of human weight and to the maintenance of reduced human weight.

B. Consumption of sugar and foods containing sugar such as soft drinks, ice cream cones, or candy bars, before meals may result in increased daily caloric intake.

C. Sugar is not a uniquely suitable source of energy, in terms of the quantity of energy provided per calorie, for persons attempting to lose weight or to prevent weight gain. All food contain the same amount: of energy per calorie, since calories are a measurement. of the energy value of food.

Therefore, the advertisements referred to in Paragraph Six were and are misleading in material respects and constituted, and now constitute, “false advertisements” as that term is defined in the Federal Trade Commission Act, and the statements and representations set forth in Paragraphs Six and Seven were, and are, false, misleading and deceptive.

_ Par. 9. Respondents have: represented, through the usé of the afore= said advertisements and otherwise, directly and by implication, that, LEO5 1 1 1 1 2 1078 446 168 30 63.407017 BURNETT5 1 1 1 1 3 1274 430 186 56 96.441116 COMPANY,5 1 1 1 1 4 1487 450 137 24 46.670326 INC...5 1 1 1 1 5 1861 440 75 37 80.495926 7274 1 1 1 2 0 608 511 819 46 -1 5 1 1 1 2 1 608 528 124 29 37.904888 724.0:5 1 1 1 2 2 1101 507 143 55 96.623650 Decisions 1 1 1 2 3 1261 518 56 33 96.719734 ands 1 1 1 2 4 1333 511 94 40 64.281326 Order2 1 2 0 0 0 607 596 1356 1592 -1 3 1 2 1 0 0 607 596 1328 246 -1 4 1 2 1 1 0 607 596 1328 46 -1 5 1 2 1 1 1 607 599 298 43 63.780735 consumption5 1 2 1 1 2 855 592 54 54 63.780735 of:5 1 2 1 1 3 915 602 109 39 88.638832 sugar.5 1 2 1 1 4 1034 599 191 33 82.327133 and.foods5 1 2 1 1 5 1241 598 201 43 95.152443 containing5 1 2 1 1 6 1450 598 115 42 94.677757 sugars 1 2 1 1 7 1579 598 120 40 95.446960 before5 1 2 1 1 8 1719 592 95 54 0.000000 meals5 1 2 1 1 9 1828 596 39 33 0.000000 ‘is5 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76.871628 have.5 1 2 2 6 4 1142 1076 117 68 50.388336 ‘been:5 1 2 2 6 5 1267 1101 72 33 95.858696 ands 1 2 2 6 6 1362 1112 77 22 95.858696 now5 1 2 2 6 7 1464 1106 68 36 96.704086 are,5 1 2 2 6 8 1556 1101 36 34 96.657875 in5 1 2 2 6 9 1616 1100 206 38 93.176445 substantial5 1 2 2 6 10 1846 1112 88 33 91.218399 com-4 1 2 2 7 0 609 1149 1324 74 -1 5 1 2 2 7 1 609 1149 160 43 79.208504 petition,5 1 2 2 7 2 781 1150 38 40 79.208504 in5 1 2 2 7 3 836 1159 209 38 85.402855 commerce,5 1 2 2 7 4 1050 1151 98 37 96.625908 with5 1 2 2 7 5 1153 1151 256 42 92.411278 corporations,5 1 2 2 7 6 1416 1151 100 32 94.327484 firms5 1 2 2 7 7 1537 1151 68 32 95.562897 ands 1 2 2 7 8 1623 1151 212 68 90.372452 individuals5 1 2 2 7 9 1855 1162 78 61 68.256592 rep-4 1 2 2 8 0 609 1199 776 45 -1 5 1 2 2 8 1 609 1199 172 43 96.986977 resenting5 1 2 2 8 2 790 1211 40 21 96.821976 or5 1 2 2 8 3 836 1193 174 50 96.708885 engaged5 1 2 2 8 4 1001 1211 38 22 96.855034 in5 1 2 2 8 5 1046 1201 60 32 96.855034 thes 1 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Leo5 1 2 3 2 8 1479 1302 153 42 89.352242 ‘Burnett.5 1 2 3 2 9 1646 1301 198 43 88.936287 Company;5 1 2 3 2 10 1850 1302 86 40 0.000000 hic;4 1 2 3 3 0 612 1338 1325 91 -1 5 1 2 3 3 1 612 1350 62 41 96.991028 has5 1 2 3 3 2 683 1338 93 54 96.563637 been,5 1 2 3 3 3 787 1350 72 45 80.668785 and.5 1 2 3 3 4 865 1361 79 31 84.519073 now:5 1 2 3 3 5 943 1350 57 56 4.722687 ‘Is,5 1 2 3 3 6 1001 1351 39 41 96.437225 in5 1 2 3 3 7 1048 1346 206 74 91.611992 substantial5 1 2 3 3 8 1264 1347 233 82 46.096458 competition:5 1 2 3 3 9 1498 1351 38 33 95.337601 in5 1 2 3 3 10 1546 1348 185 66 96.079002 commerce5 1 2 3 3 11 1739 1351 88 62 96.765923 with5 1 2 3 3 12 1836 1346 101 38 96.598129 other4 1 2 3 4 0 613 1400 432 43 -1 5 1 2 3 4 1 613 1400 212 43 96.261307 advertising5 1 2 3 4 2 831 1400 166 43 94.086143 agencies.5 1 2 3 4 3 1043 1435 2 2 0.000000 |;3 1 2 4 0 0 610 1410 1327 385 -1 4 1 2 4 1 0 649 1410 1284 89 -1 5 1 2 4 1 1 649 1449 92 36 87.370453 Par.,5 1 2 4 1 2 755 1452 59 38 75.190964 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1 2 5 6 6 1260 2058 17 29 96.657295 55 1 2 5 6 7 1293 2055 72 33 95.462029 ands 1 2 5 6 8 1375 2058 40 30 95.462029 125 1 2 5 6 9 1428 2055 38 33 96.670296 of5 1 2 5 6 10 1479 2056 59 32 96.993004 thes 1 2 5 6 11 1552 2056 145 32 96.903091 Federal5 1 2 5 6 12 1711 2055 113 33 93.261330 Trades 1 2 5 6 13 1838 2056 99 33 92.482925 Com-4 1 2 5 7 0 614 2101 225 35 -1 5 1 2 5 7 1 614 2101 138 33 96.845390 missions 1 2 5 7 2 762 2103 77 33 92.925995 Act.3 1 2 6 0 0 859 2147 611 41 -1 4 1 2 6 1 0 859 2147 611 41 -1 5 1 2 6 1 1 859 2147 2 2 17.121475 .5 1 2 6 1 2 1077 2154 173 33 69.544067 Decisions 1 2 6 1 3 1264 2166 73 21 96.573334 ANDS 1 2 6 1 4 1350 2154 120 34 95.444427 ORDER2 1 3 0 0 0 613 2237 1331 505 -1 3 1 3 1 0 0 613 2237 1327 303 -1 4 1 3 1 1 0 656 2237 1282 44 -1 5 1 3 1 1 1 656 2237 75 32 96.776772 Thes 1 3 1 1 2 752 2237 230 34 95.238510 Commissions 1 3 1 1 3 1004 2238 132 43 96.785187 having5 1 3 1 1 4 1159 2238 196 34 93.896042 heretofore5 1 3 1 1 5 1378 2240 211 33 96.480423 determined5 1 3 1 1 6 1612 2244 37 29 96.399986 to5 1 3 1 1 7 1671 2240 88 33 96.289078 issues 1 3 1 1 8 1783 2240 46 33 93.300392 its5 1 3 1 1 9 1849 2244 89 29 91.926476 com-4 1 3 1 2 0 616 2286 1323 47 -1 5 1 3 1 2 1 616 2286 113 43 92.970901 plaints 1 3 1 2 2 754 2288 250 43 96.278938 charging5 1 3 1 2 3 943 2282 66 56 96.278938 thes 1 3 1 2 4 1028 2289 208 43 96.364143 respondents 1 3 1 2 5 1259 2291 124 32 96.624634 named5 1 3 1 2 6 1408 2290 37 34 95.564430 in5 1 3 1 2 7 1468 2292 60 32 95.564430 thes 1 3 1 2 8 1550 2291 141 42 96.650879 captions 1 3 1 2 9 1712 2292 119 32 96.630569 hereto5 1 3 1 2 10 1853 2292 86 32 96.066895 with4 1 3 1 3 0 614 2338 1326 47 -1 5 1 3 1 3 1 614 2338 166 33 96.407631 violations 1 3 1 3 2 799 2340 40 32 96.757622 of5 1 3 1 3 3 856 2340 58 32 96.790436 thes 1 3 1 3 4 932 2340 145 33 95.815536 Federal5 1 3 1 3 5 1096 2341 115 33 96.267136 Trades 1 3 1 3 6 1229 2341 228 34 96.521896 Commissions 1 3 1 3 7 1474 2343 79 42 96.476898 Act,5 1 3 1 3 8 1571 2343 69 33 96.476898 ands 1 3 1 3 9 1656 2343 59 33 96.568489 thes 1 3 1 3 10 1732 2343 208 41 95.335648 respondent4 1 3 1 4 0 616 2390 1324 46 -1 5 1 3 1 4 1 616 2390 130 42 96.383263 having5 1 3 1 4 2 759 2390 83 42 96.383263 been5 1 3 1 4 3 855 2391 120 33 96.500900 served5 1 3 1 4 4 990 2391 85 34 96.595116 with5 1 3 1 4 5 1088 2391 112 34 95.933182 notices 1 3 1 4 6 1214 2392 40 33 97.017693 of5 1 3 1 4 7 1267 2393 76 32 96.955482 said5 1 3 1 4 8 1357 2394 267 32 96.486969 determinations 1 3 1 4 9 1637 2394 70 33 96.802628 ands 1 3 1 4 10 1719 2393 85 33 96.033348 with5 1 3 1 4 11 1818 2405 20 21 96.831467 a5 1 3 1 4 12 1851 2405 89 31 96.831467 copy4 1 3 1 5 0 613 2441 1327 46 -1 5 1 3 1 5 1 613 2441 41 32 96.747635 of5 1 3 1 5 2 672 2442 59 31 96.936516 thes 1 3 1 5 3 751 2442 187 42 95.984642 complaints 1 3 1 5 4 957 2442 59 33 96.178070 thes 1 3 1 5 5 1036 2443 228 34 96.154709 Commissions 1 3 1 5 6 1284 2444 164 34 96.692863 intended5 1 3 1 5 7 1466 2448 38 29 96.669243 to5 1 3 1 5 8 1522 2445 98 42 96.809059 issue,5 1 3 1 5 9 1640 2445 157 42 96.300468 together5 1 3 1 5 10 1815 2444 85 33 96.580338 with5 1 3 1 5 11 1919 2456 21 21 97.017197 a4 1 3 1 6 0 614 2489 1005 51 -1 5 1 3 1 6 1 614 2485 160 56 96.560249 proposed5 1 3 1 6 2 792 2489 80 36 96.499947 forms 1 3 1 6 3 895 2494 40 32 96.761581 of5 1 3 1 6 4 943 2494 118 41 93.807266 order;5 1 3 1 6 5 1073 2495 69 32 93.807266 and3 1 3 2 0 0 613 2543 1331 199 -1 4 1 3 2 1 0 655 2543 1288 45 -1 5 1 3 2 1 1 655 2543 76 32 96.716896 Thes 1 3 2 1 2 747 2544 206 41 96.591171 respondents 1 3 2 1 3 971 2545 68 32 96.805748 ands 1 3 2 1 4 1057 2545 135 33 96.491905 counsels 1 3 2 1 5 1210 2545 58 33 96.603943 for5 1 3 2 1 6 1284 2546 59 32 96.315834 thes 1 3 2 1 7 1361 2546 227 35 94.869415 Commissions 1 3 2 1 8 1605 2546 131 42 96.509384 having5 1 3 2 1 9 1750 2546 193 33 96.517197 thereafter4 1 3 2 2 0 613 2594 1326 46 -1 5 1 3 2 2 1 613 2594 160 32 96.080925 executed5 1 3 2 2 2 793 2605 45 22 96.909058 an5 1 3 2 2 3 859 2599 193 38 96.560669 agreements 1 3 2 2 4 1072 2596 202 43 96.024643 containing5 1 3 2 2 5 1293 2608 20 21 92.604752 a5 1 3 2 2 6 1333 2601 139 29 89.473022 consént5 1 3 2 2 7 1492 2599 110 39 92.921356 order,5 1 3 2 2 8 1623 2597 250 33 51.421970 an-admissions 1 3 2 2 9 1891 2598 48 42 97.004868 by4 1 3 2 3 0 615 2644 1326 47 -1 5 1 3 2 3 1 615 2644 59 33 95.982765 thes 1 3 2 3 2 688 2646 204 41 96.404938 respondents 1 3 2 3 3 904 2646 40 33 96.941299 of5 1 3 2 3 4 957 2647 47 32 96.183662 all5 1 3 2 3 5 1017 2647 58 33 96.989555 thes 1 3 2 3 6 1088 2647 255 42 96.594955 jurisdictional5 1 3 2 3 7 1357 2649 90 32 96.863968 facts5 1 3 2 3 8 1459 2653 52 28 96.922165 sets 1 3 2 3 9 1523 2649 99 32 96.908051 forth5 1 3 2 3 10 1633 2649 37 32 96.958801 in5 1 3 2 3 11 1682 2650 57 31 96.222328 thes 1 3 2 3 12 1750 2649 191 42 96.505707 complaint4 1 3 2 4 0 618 2695 1326 47 -1 5 1 3 2 4 1 618 2698 37 30 96.967796 to5 1 3 2 4 2 672 2695 88 33 96.858139 issues 1 3 2 4 3 776 2697 129 41 96.942215 herein,5 1 3 2 4 4 920 2708 21 22 96.987183 a5 1 3 2 4 5 958 2701 180 30 96.486176 statements 1 3 2 4 6 1154 2700 78 31 96.112381 that5 1 3 2 4 7 1249 2700 58 32 96.112381 thes 1 3 2 4 8 1323 2699 141 43 96.829941 signing5 1 3 2 4 9 1478 2701 42 32 97.004288 of5 1 3 2 4 10 1537 2700 74 33 96.300529 said5 1 3 2 4 11 1629 2704 193 38 96.306854 agreements 1 3 2 4 12 1838 2700 30 33 96.332039 is5 1 3 2 4 13 1885 2700 59 33 96.684578 for Decision. and Ordet ' 81 FING.

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 thereafter considered the matter and having determined that it had reason to believe that the respondent had violated the said Act, 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 hereby i issues its complaint, makes the following jurisdictional findings, and enters the following order;

1. Respondent Leo Burnett 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 Prudential Plaza, in the city of Chicago, State of Illinois. _ 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 Leo Burnett Company, Inc., a corporation, and its officers, agents, representatives, employees, successors and assigns, directly or through any corporation, subsidiary, division or other device, in connection with the advertising, offering for sale, sale or distribution of refined sugar forthwith cease and desist from:

1. Disseminating, or causing the dissemination of, any adver- _ tisement by means of the United States mails or by any means in commerce, as “commerce” is defined in the Federal Trade Commission Act, which represents, directly or by implication, that: a) Refined sugar makes any contribution to weight reduction or to the prevention of weight gain, unless there exists .@ reasonable basis from which respondent could draw such a conclusion.

b) Refined sugar supplies food energy uniquely suitable for persons attemping to lose weight or prevent weight gain. c) For purposes of weight reduction or the prevention of ' weight gain, food energy supplied by refined sugar acts other than as a body fuel. .

- LEQ BURNETT COMPANY, INC: =——«———s«729 724 Decision ‘and. Order 2. Disseminating, or causing the dissemination of, any advertisement concerning dieting, undertaken for the purposes of weight reduction or the prevention of weight gain, by means of the United ‘States mails or by any means in commerce, as “commerce” is defined in the Federal Trade Commission Act, which misrepresents, in any manner, the nutritional value of refined sugar. .

It is provided, however, That nothing contained in this order shall - _ be construed as prohibiting accurate representations of refined sugar’s role in and contribution to a balanced diet undertaken for the purpose of weight reduction or for the prevention of weight gain, where supported by competent scientific authority, or as prohibiting accurate representations of any non-nutritional characteristic of refined sugar. A statement as to the qualities or attributes of refined sugar can amount to an implied uniqueness claim if it is made in a context which conveys an impression of uniqueness for refined sugar. However, statements as to the qualities or attributes of refined sugar covered by this order will not constitute a violation thereof for the sole reason that such statements could also be made with respect to other products. 3. Disseminating, or causing the dissemination of, any advertisement by means of the United States mails or by any means for the purpose of inducing or which is likely to induce, directly or indirectly, the purchase of refined sugar in commerce, as “commerce” is defined in the Federal Trade Commission Act, which contains any of the representations, acts or practices prohibited in subparagraph 1 or the misrepresentation prohibited in subparagraph 2 above.

Lt is further ordered, That the respondent shall forthwith distribute a copy of this order to each of its operating divisions. lt is further ordered, That respondent notify the Commission at least 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 the 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.

494-841—73——47 7320 FEDERAL TRADE’ COMMISSION: : DECISIONS | Complaint .. 81 E.T.C.