Encyclopaedia Britannica, Inc

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IN THE MATTER OF ENCYCLOPAEDIA BRITANNICA, INC., ET AL.

Docket 8908. Interlocutory Order, Oct. 24, 1973. Order denying respondents’ motion for interim suspension of adjudicatory proceeding, pending Commission ruling on their petition for initiation of proceedings for adoption of trade regulation rule governing business of selling encyclopedia and other educational books through in-home sales presentations.

Appearances For the Commission: Irvin D. Steinman, Donald L. Bachman, Paul L. Chassy and Lemuel W. Dowdy.

For the respondent: Mayer, Brown & Platt, Chicago, III. ORDER DENYING MOTION FOR INTERIM SUSPENSION OF ADJUDICATORY HEARING By motion filed October 12, 1973, and certified to the Commission by the administrative law judge on October 18, 1978, respondents have requested an interim suspension of the adjudicatory proceedings in this matter. The basis for the motion is a petition filed by Encyclopaedia Britannica, Inc., with the Commission under Section 1.15 of the Commission’s Procedures and Rules of Practice for initiation of proceedings for the adoption of a trade regulation rule governing the business of selling encyclope- 1Section 3.22 provides (a) Presentation and Disposition.—During the time a proceeding is before an administrative law judge, all motions therein, except those filed under § 3.42(g2) {disqualification of law judge], shall be addressed to the administrative law judge, and if within his authority shall be ruled upon by him. Any motion upon which the admin’strative law judge has no authority to rule shall be certified by him to the Commission with hie recommendation * * *.”

Statement 83 F.T.C.

prize) was based on the facts in that case, not on a general rule of law. Among other things, the Commission noted that the entire promotional offer appeared in one issue of the Reader’s Digest magazine with coupons bearing the winning numbers seeded among copies of that issue. There was no affirmative claim that the offer was limited to a relatively select group. The Commission believed that most participants would be acquainted with the fact that the Reader’s Digest is a widely selling magazine with millions of readers.* This, the Commission reasoned, “should have dispelled any notion * * * that the participant had been ‘selected out’ to receive an entry coupon or that the sweepstake was confined to a small geographical area” (Slip Opinion, p. 10) [82 F.T.C. 234, 259].

In contrast, according to the complaint against Longines, that company’s sweepstake promotion was sent through the mail headed with the bold-print representation: “SPECIAL LIMITED SWEEPSTAKES * * * BECAUSE YOU HAVE BEEN SE- LECTED FOR THIS INVITATION” (Complaint, p. 5) [79 F.T.C. 964, 967]. The complaint alleges, however, that in truth respondent distributed the advertising material and sweepstake offer to millions of individuals and that it did not disclose that its sweepstakes were often conducted over a period of one year or more, thereby further lessening the opportunity to win. In my opinion, it is certainly within the realm of possibility that had the Longines’ complaint been adjudicated, the Commission might have found that Longines falsely represented or suggested that participants in its promotion had a “reasonable opportunity” to win a prize as alleged in Paragraph 6(g) of the complaint. Furthermore, the Commission might have decided that it would not be sufficient simply to prohibit Longines from stating that the number of participants was limited, but that disclosure of odds or number of participants was also necessary to safeguard against future innuendo or abuses. “[T]hose caught violating the Act must expect some fencing in.” Federal Trade Commission v. National Lead, 352 U.S. 419, 431 (1957). In any event, in passing on this petition we are entitled to presume that such could have been the outcome, and I find nothing in the D. L. Blair decision which would be inconsistent with such result. Therefore, I do not concur in the Commission’s decision to modify the order against Longines. * The fact that there were some 20 million copies distributed was also shown on the front cover of all Reader’s Digest magazines.