Standard Oil Company of California

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IN THE MATTER OF STANDARD OIL COMPANY OF CALIFORNIA, Iet AL.

CONSENT OHDEH, ETC., IN HEGAHD TO ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket 8827. Compla' int, Dec. 1!J70 Decision, Noi, , 197 Consent order requiring a San Francisco, Calif" distributor of gasoline and other petroleum products and its New York City advertising agency, among other things to cease misrepresenting that the 310 additive in its Chevron gasoline wil produce pollution-free exhaust. The order further dismisses certain subparagraphs of paragraphs Five and Six of the complaint.

Appearances For the Commission: Fauster Vittone and Jean F. Greene. For the respondents: Turner H. McRaine, .lames Michael, William Miller, Gary H. Anderson, Roland W. Selman, Pillslyury, Madison & Sutro for Standard Oil Company of Caliornia, San Francisco, Calif. William D. Greene, La'Uence P. J. Bonaguidi, Burns, Van Kirk, Greene & Kafer for Batten, Barton, Durstine & Osborn, Inc., New York, N. and David .1. McKean, McKean, Whitehead Wilson Wash., D. COMPLAINT Pursuant to the provisions ofthe 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 Standard Oil Company of California, a corporation, and Batten, Baron, Durstine & Osborn, Inc., a corporation hereinafter referred to as respondents, have 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: PAHAGHAPH 1. Respondent Standard Oil Company of California is a corporation organized, existing and doing business under and by virue of the laws of the State of Delaware, with its principal office and place of business located at 225 Bush Street, San l:'rancisco, Calif. Respondent Batten, Barton, Durstine & Osborn, Inc., is a corporation organied, existing and doing business under and by virtue of tbe laws of the State of New York, with its principal office and place of business located at 383 Madison A venue, N ew York, N. Y. Petitions for review were fied by Standard Oil of California "11 Fehruary 1., 197" and Ratten, Harton, DurHtinE' & Osborn, Ine. on February 14 W7" in the Coort of Appeal for th" Ninth Circuit Complaint 84 F.

PAR. 2. Respondent Standard Oil Company of California is now, and for some time past has been, engaged in the sale and distribution of gasoline and other petroleum products under the trade name Chevron and other names to the public.

Respondent Batten, Barton, Durstine & Osborn, Inc. is now and for some time past has been an advertising agency of Standard Oil Company of California; and now prepares and places, and for some time past has prepared and placed for publication, advertising material including but not limited to the advertising referred to herein, for the purpose of promoting the sale of respondent Standard Oil of Caliornia s Chevron gasolines with F -310.

P AH. 3. Respondent Standard Oil Company of California in the course and conduct of its business as aforesaid now causes and for some time past has caused its said products, when sold, to be shipped from its place of business in the State of Caliornia to purchasers thereof located in varous other States of the United States, and maintains, and at all times mentioned herein has maintained, a substantial couse of trade in said products in commerce, as "commerce" is defined in the Federal Trade Commission Act.

P AU. 4. In the course and conduct of their businesses as aforesaid and for the purose of inducing tbe purchase of Cbevron gasolines containing F-31O, trademark for a polybutene amine gasoline detergent additive, the respondents have made, and are now making, numerous statements and representations in advertisements publisbed in newspapers and magazines and in other promotional material, and by means of television and radio broadcasts.

Typical of tbe statements and representations contained in said advertisements, but not all inclusive, are tbe following: TELEVISION SCOTT CARPENTER: I'm Scott Carpenter, We re attaching a dear balloon to this car to show you one of the most meaningful gasoline achievements in history. The balloon is filling with dirty exhaust emissions that go into the air and waste mileage. Now Standard Oil of California has accomplished the development of a remarkable gasoline adtlitive, Formula 1"-310, that reduces exhaust emissions from dirty engines. The same car, after just six tanksful of Chevron with F -310; no diry smoke, cleaner air. A major break-through to help solve one of today s critical problems. And since diry exhaust is wasted ga:.;line, F-310 keeps good mileage from going up in smoke. Cleaner air better mileage - Chevron with F - 1O urns dirty smoke into good, clean mileage, There isn car on the road that shouldn t bc using it" NEWSPAPERS AND MAGAZINES Announcing The Most Long Awaited Gasoline Development in History! Remarkable Gasoline Breakthrough From the Hcsearch Laboratories of Standard Oil. 1401 Complaint Tests * * -* showed that Chevron gasolines with F -::n0 reduced unburned hydorcarbon and carbon monoxide emissions dramatically. Clearly this is a major step towards solving one of today s most urgent probJcms.

There isn t a car on tbe road that shouldn t be using it. Two such advertisements are reproduced and attached hereto as attachments # 1 and #2.

.,., ..,.,._.,.. .. .,.,..,,,.,,,,,.+..;, ..,.,_,.,, . ....,, , ,,: .,., .._. ., ,..... .,. ....,,,,_.,..., ;., . Complaint 84 ". BEFORE AFTER F-310 ' o' .r ".. ' 'O C_.' ',_u..,,0, New F-310 in Chevron gasolines turns dirt exhaust into good clean mileage.

Chevron Chevron \\ jth F-3IQ, There isnt a caron rhe road that shouldn t be using it. STANDARD OIL COMPANY OF CALIFORNIA .., .. .., \\; .. . .. p, . . . . . ... . .. . . . ,, ,:f\ '(V sOljttes ,(\tP Ct: ,.C. 'o j!, if t(p'S 'l"" ",\C goo ",0"\(\\\ t e L\'"

(\t\;,,t t"e\ \"c\lo "l "e'" \ o , c\;e"",,,,,\t\;f? O\\. Op. M.. - S"p.

1406 FEDEUAL TUADE COMMISSION DECISIONS Initial Decision 84I" P AU. 5. By and through the use of the statements, representations and demonstrations set out in Paragraph Four above, and others of similar import not specifically set out herein, respondents have represented and are now representing that:

1. F-31O additive in Cbevron gasolines is a revolutionary development in the reduction of air pollution;

2. Chevron gasolines containing F -310 additive produce motor vehicle exhaust which is generally pollution-free;

3. Tbe use of Chevron gasolines containing F -310 additive wil significantly reduce tbe total amount of air pollution; 4. The use of Chevron gasolines containing F-310 additive will significantly reduce air pollution caused by motor vehicles; 5. The use of Cbevron gasolines containing F-310 additive will significantly reduce emissions of carbon monoxide and unburned hydrocarbons from every motor vehicle in which they are used; 6. The balloon and bag demonstrations pictured in respondents' advertising attached hereto as # 1 and #2, and in certain of respondents television advertisements, constitute proof or accurately or visually demonstrate that Chevron gasolines containing F -310 additive reduce motor vehicle emissions of unburned hydrocarbons and carbon monoxide, and significantly reduce air pollution caused by motor vehicles; 7. Every motor vehicle wil emit black exhaust in tbe manner pictured in respondents' advertisements attached hereto as #1 and #2, and in certain of respondents' television advertisements, if operated on motor fuel other than Chevron gasolines containing F -310 additive; 8. The building identified as Standard Oil Company of California Research Center in advertisements attached hereto as # 1 and #2, and in certain of respondents' television advertisements, is owned, occupied or used for research by respondent Standard Oil Company of California; 9. The machine pictured in certain of respondents' televi$ion advertising is used by tbe federal government to measure the total amount of pollution emitted by a motor vehicle;

10. Respondents had conducted or had had others conduct tests or demonstrations which proved or substantiated representations made for F-31O additive in their advertisements attached hereto as #1 #2 and in certain of their television and radio advertisements, before publication or dissemination of such advertisements; these representations include, but are not limited to, the following: (a) Chevron gasolines containing F -310 additive produce motor vehicle exhaust which is genrally pollution-free; (b) The use of Chevron gasolines containing F -310 additive will significantly reduce the total amount of air pollution; and wil significantly reduce air pollution caused by motor vehicles; and wil significantly , 1401 Initial Decision reduce emissions of carbon monoxide and unburned hydrocarbons from every motor vehicle in which they are used;

(c) Every purchaser of Chevron gasolines containing F-a1O additive wil obtain significantly better mileage by or through the use of such gasolines than can be obtained by or through the use of any other commercially available gasoline;

11. F-31O additive or Chevron gasolines containing F-310 additive wil clean or keep clean all engines and engine components. P AU. 6. In truth and in fact:

1. F -310 additive in Chevron gasolines is not a revolutionary development in the reduction of air pollution;

2. Chevron gasolines containing F-31O additive do not produce motor vehicle exhaust which is generally pollution-free; such exhaust contains among other things, unburned hydrocarbons, carbon monoxide, nitrogen oxides, and particulates, all of which are pollutants; 3. The use of Cbevron gasolines containing F -310 wil not significantly reduce the total amount of air pollution; F-31O additive has no effect upon industrial and other non-motor vehicle sources of air pollution, and does not significantly reduce air pollution caused by motor vehicles;

4. The use of Chevron gasolines containing F-31O additive wil not significantly reduce air pollution caused by motor vehicles; F -alo additive has litte, if any, effect upon, for example, nitrogen oxides and lead particulates, which are air pollutants; in addition, exhaust from motor vehicles using Chevron gasolines contains, among other things, unburned hydorcarbons and carbon monoxide, which are air pollutants; 5. The use of Cbevron gasolines containing F-31O additive wil not significantly reduce emissions of carbon monoxide and unburned hydrocarbons from every motor vehicle in which they are used; 6. The balloon and bag demonstrations pictured in respondents' advertisements attached hereto as #1 and #2, and in certain of respondents' television advertisements, do not constitute proof or accurately or visually demonstrate that Chevron gasolines containing F-310 additive reduce motor vehicle emissions of unburned hydrocarbons and carbon monoxide; motor vehicle emissions of unburned hydrocarbons and carbon monoxide are relatively colorless. Neither do such demonstrations constitute proof or accurately or visually demonstrate that Chevron gasolines containing F -310 additive significantly reduce air pollution caused by motor vehicles; among other things, the black exhaust was produced by an atypical1y dirty engine, and the "clear motor vehicle exhaust pictured is not generally free of air pollutants; it contains, among other things, unburned hydorcarbons, carbon monox- 1408 FEDEUAL TUADE COMMISSION DECISIONS Initial Decision 84 F. ide, nitrogen oxides, and lead particulates, all of which contribute to air pollution;

7. Every motor vehicle wil not emit black exhaust in the manner pictured in respondents' advertisements attached hereto as #1 and #2 and in certain of respondents' television advertisements, if operated on motor fuel other than Chevron gasolines with F -310 additive. 8. The building identified as Standard Oil Company of California Chevron Research Center in respondents' advertisements attached hereto as # 1 and #2, and in certain of respondents' television advertisements, is not owned, occupied, or used for research by respondent Standard Oil Company of California; the building pictured is the Hiverside County Court House, located in Palm Springs, California; 9. The machine pictured in certain of respondents' televisionadvertising is not used by the federal government to measure the total amount of pollution emitted by a motor vehicle; 10. Respondents had not conducted or had others conduct tests or demonstrations which proved or substantiated representations made for F -310 additive in their advertisements attached hereto as #1 and , and in certain of their television and radio advertisements, before publication or dissemination of such advertisements; these representations include, but are not limited to, the following: (a) Chevron gasolines containing F-31O additive produce motor vehicle exhaust which is generally pollution-free; (b) The use of Chevron gasolines containing F-310 additive will significantly reduce tbe total amount of air pollution; and wil significantly reduce air pollution caused by motor vehicles; and wil significantly reduce emissions of carbon monoxide and unburned hydrocarbons from every motor vehicle in which they are used;

(c) Every purchaser of Chevron gasolines containing F-310 additive wil obtain significantly better mileage by or through the use of such gasolines than can be obtained by or through the use of any other commercially available gasoline;

11. F-310 additive or Chevron gasolines containing F-310 additive wil not clean or keep clean all engines and engine components; F -310 additive reduces the accumulation of deposits in the carburetor and in or on certain other engine components.

Therefore, the aforesaid statements, representations, and demonstrations set forth in Paragraphs Four and Five were and are false, misleading, and deceptive.

PAR. 7. In the course and conduct of its business as aforesaid, and at all times mentioned herein, respondent Standard Oil Company of California has been and is now in substantial competition in commerce with corporations, firms and individuals in the sale of gasolines and other , 1401 Initial Decision petroleum products of the same general kind and nature as that sold by respondent.

In the course and conduct of its business as aforesaid, and at all times mentioned herein, respondent Ratten, Barton, Durstine & Osborn, Inc. has been, and is now, in substantial competition, in commerce with corporations, firms and individuals in the advertising business. P AU. 8. The use by respondents of the aforesaid false, misleading and deceptive statements, representations and demonstrations has had, and now has, the capacity and tendency to mislead members of the purchasing public into the erroneous and mistaken belief that said statements representations and demonstrations were and are true and into the purchase of substantial quantities of Chevron gasolines with F' -310 by reason of said erroneous and mistaken belief. PAR. 9. 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' competitors and com,tituted, 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.

INITIAL DECISION BY ELDON P. SCHRUI' , ADMINISTRATIVE LAW JUDGE APHIL 25, 1973 Preface The following abbreviations are hereinafter used: Standard-Respondent Standard Oil Company of California; BBD&O- Respondent Batten, Barton, Durstine & Osborn, Inc. Chevron Research-The Chevron Research Company, including its personnel at the research center in Richmond, California; Compl.- Complaint. Paragraphs and sub-paragraphs of the complaint wil be designated as in this example: Five- subparagraph :1 of paragraph Five of the complaint;

Ans. Answer to the Complaint;

Tr.- Transcript of testimony;

CX-Commission exhibit;

RXS or RSX--Respondent Standard's exhibit;

Stip.Fact-A fact stipulated to by the parties, most of which are contained in RXS- 1l3 and in the Transcript (Tr. 859-862); Stip.Evid-Documentary evidence stipulated into the record by the parties, most of which is contained in RXS-1l4. All emphasis and underscoring herein has been added unless otherwise indicated.

1410 FEDEUAL TUADE COMMISSION DECISIONS Initial Decision 84 F. STATEMENT OF THE PROCEEDINGS The complaint in this matter charges the respondents with violating Section 5 of the Federal Trade Commission Act in the national advertising and sale to the consumer public of Chevron brand gasoline containing the additive 31O. Following extensive prehearing conferences hearings were held in Wash., D. , San Francisco and Los Angeles Calif.

The official record consists of some 6 000 pages of transeript and approximately 500 documentary and physical exhibits of voluminous and complicated technical content. No members of the consumer public as such were called as witnesses by complaint counsel to testify to the public understanding of the purported meaning of the challenged advertising as alleged in the complaint. The names of the many witnesses testifying and their testimony are found in the official transcript as follows:

1. Wash., D. : Mar. 27 - Mo,r, , 1972. John M. Miler, Houston, Tex. Project Director, Marplan Research Inc., McCann-Ericson Advertising Agency. Called as a witness by complaint counsel. Tr, 951-1058 Glenn C, Messer, Chesterland, Ohio. Director of Marketing Services, Marschalk Company advertising agency. Called as a witness by complaint counsel Tr. 1059-1177 Wiliam Weitzman, New York, N.Y. Manager of Consumer Advertising Research, Atlantic-Richfield Company. Called as a witness by complaint counsel. Tr. 1177- 1206 Brian T. Hitch, Atlanta, Ga. Manager of Marketing, Planning and Hesearch, UP Oil Corporation. Called as a witness by complaint counsel. Tr. 1207-1236 Arthur Levy, Worthington, Ohio. Senior Fellow, Atmospheric Chemistry and Combustion Systems Division, Battelle Mcmorial Institute. Called as a witness by complaint counsel. Tr. 1252-1404 Palmer B. Stickney, Columbus, Ohio. Ph.D, in Physical Chemistry; employed in research of rubber damage due to air pollution, Battelle Memorial Institute. Called as a witness by Tr, 1404-1427complaint counsel.

II. San Francisco, Cali/.: Apr, 18 - Apr. , 1972. Lyndon R. Babcock, Jr., Chicago, IJ. Ph, D. in Air Research Engineering; employed teaching" environmental engineering with relation to air pollution, University of Il. Called as a witness by complaint counsel. Tr. 1526- 1704 Lawrence Light, V.P, of respondent BBD & O. Ph.D, in psychology and responsible for marketing research and evaluation of opinion surveys and techniques. Called as a witness 1721-1875by respondent BBD & O. Tr.

J. Roy Bardsley, Portland, Ore. President, Bardsley and Haslacher, Marketing and Public Opinion Research. Called as a witness by complaint counsel. Tr. 1920C - 1920Z- James Cormack, Senior Analyst, Consumer Research, Standard Oil Company of California. Called as a witness by respondent Standard Oil. Tr, 1920Z-12- 1920Z- 1401 Initial Decision III. LOR Angeles, Calif: Apr. 27 - May S, 1.972. Joseph Behar, Riverside, Calif. Ph.D. in Chemistry; Asst. Research Chemist and Asst. Director of Project Clean Air, University of Calif. Statewide Air Pollution Research Center. Called as a witness by complaint counsel. Tr, 1923-2065 Joseph Byrne, LOB Angeles, Calif. V.I-. of Marketing, Wcstern Region, Union Oil Company of California. Called as a witness by complaint counsel. Tr. 2144-2154 Russell P. Sherwin, M. , Los Angeles, Calif. Professor of Pathology, lJniv. of Southern Calif" School of Medicine, specializing in medical area of lung; diseases. Called as a witness Tr, 2235-2312by complaint counsel.

Albert S. Bush, Northridge, Calif. Professor in School of Engineering and Applied Science; Professor in School of Public Health, UCLA; Head of UCLA Air Pollution Test Facilty and Air Pollution Laboratory. Caned as a witness by complaint counsel. Tr, 2; 40-2432 James E. Edinger, Los Angeles, Calif, Ph. D. and Associate Professor of Meteorology, Univ. of Calif., in conducting research in air pollution problems from meteorological aspect. Called as a witness by complaint counsel. Tr. 2434-2502 Stanley N, Rokaw, M.D" Los Angeles, Calif. Specializes in medical area of chest diseases with research in pulmonary physiology and air pollution effects on human health. Called as a witness by complaint counsel. Tr. 2507-2574 John Chipman, Anaheim, Calif. Supervising Engineer, Air Resources Board, State of Calif., formerly with County of Los Angeles, Air Pollution Control District. Called as a 2577-2790witness by complaint counsel. Tr.

IV. Wash., D. : May 17 - May 1972. Robert N. Rickles, Stamford, Conn. Ph.D. Chemical Eng;ineering; Executive Director for the Institute of Public Transportation, New York City, formerly Commissioner of Air Resources, New York City, Called as a witness by complaint counsel. Tr. 2800-2899 Thaddeus J. Murawski, M. , Schenectady, New York. Employed as consultant to the Director of Air Resources, Department of Health, New York State. Called as a witness hy 2902-2955complaint counsel. Tr, Robert F. Carroll, M. , Delmar, N.Y. Professor of Preventive and Community Medicine Chairman of the Department, Albany Medical College, Called as a witness by complaint 2957-3003counsel.Kenneth 0, Mils, Saline, Mich. General Manager, LaboratoryTr.Equipment Corporation Mooresvile, Ind. Former positions included Acting Director, Division of Motor Vehicle Pollution Control, HEW, and an assignment to provide Federal technical assistance to the California Motor Vehicle Pollution Control Board. Called as a witness by complaint 3026-3154 Waltercounsel.W. Heck, Raleigh, N.C. Ph,D. in Botany; in charge ofTr.the research on the effects of air pollution on vegetation, Environmental Research Center, Triangle Park, N.C. Called Tr. :3157-3194as a witness by complaint counsel. W, Hurn, Bartlesvile, Okla, Research Supervisor, Fuels Combustion Research Projects S. Burcau of Mines, Encrgy Research Center, Bartlesvile, Okla, Called as a witness by Tr, il196-3344complaint counsel.

Aubrey P. Altschuller, Chapel Hil, N.C. Ph.D. in Physical Chemistry; Director of Division Initial Decision 84 F. of Chemistry and Physics, National Et1vironmentall esearch Center, EPA, Triangle Park C. Called as a witness by complaint counsel. Tr. 3365-3420 Willam H. Megonell, Springfield, Va, Director of the Division of Stationary Source Enforcement, EPA , Rockvi!e, Md. Called as a witness by complaint counsel. Tr. 342:1-:34,58 V. San Francisco, Calif: Au,q. 15 - Aug. 24, 197'2, F:neas D. Kane, EI Cerrito, Calif. Ph,D. in Mechanical Engineering; V.P, of respondent Standard Oil and responsible for all company research programs. During the period of the development of the gasolirie additive F-310 was President of Chevron Research Company, Called as a witness hy respondent Standard Oil. '11'. 3482-3657 Robert K. Stone, Kensington, Calif. Senior Staff Engineer, Chevron Research Company and V.P. of company for fuels and asphalt. Called as a witness by respondent Standard Oil. Tr, 365 3816; 3H30-3896; :3H98-4113; 42615-4350 Gary H. Anderson, EI Cerrito, Calif. Attorney associated with Pillsbury, Madison & Sutro Asst. trial counsel for respondent Standard Oil and called as a witness hy senior lrial 3S16-3824Johncounsel.Harkins, Redlands, Calif. V.P. of Scott Research Laboratories,Tr.Inc, which has been involved in the air pollution field since 1959. Witness had overall supervision and control of certain tests relating to the gasoline additive F -310. Called as a witness hy respondent 4115-4226Standard Oil. Tr,Willam L. Faith, San Marino, Calif. Ph.D, in Chemical Engineering and a consulting chemical engineer dealing with air pollution problems. Called as a witness by respondent 4227-4268RobertStandardL. Chass, Beverly Hils, Calif, Air PolJutionOiLControl OffcerTr.for the Los Angeles County Air Pollution Control District. Called as a witness by respondent Standard Oil. Tr. 1;)52-4445 Everett ugene Spitler, Novato, Calif. Ph. D. in Mechanical Engineering with minor in statistical design analysis of experiments. Manager of the Fuels Division of Chcvron Research Company, Richmond, Calif. Called as a witness by respondent Standard Oil. Tr. 4446-4123; 1980-49H3; 6168-6223 Robert Gordon Anderson, Terra Linda, Calif. Ph. n. in Organic Chemistry; one of the inventors of the patents on the gasoline additive F-:HO. Presently is assistant. to the President of Chevron Uesearch Company. Called as a witness hy respondent Standard Oil Tr. 4726-4738 Frank T. Fenton, San Rafael, Calif. Asst. Advertising Manager, Standard Oil Company of California. Called as a witness by respondent Standard Oil. Tr, 47:8-4857 Robert A, Schneider, Cincinnati, Ohio. Senior V,P, of Burke Marketing Research Corporation, a consumer research organization primarily known for the testing of television commercials. Called as a witness by respondent Standard Oil. Tr. 4858-491; Martin K. Starr, New York, N.Y. Ph.D, in Business Administration; Professor of Business Administration, Graduate School of Columbia University; President, The Eddington Group, Incorporated, a market analytic company dealing in computer symbolizations consumer marketing studies and consumer behavior in the aggregate. Called as a witness by respondent Standard Oil. Tr. 1915-4936 1. Thomas Clark, Avon Lake, Ohio. V.P. of respondent BBD & 0 in Cleveland, Ohio, and formerly account supervisor for Standard Oil of California account Te: advertising campaign for the gasoline additive F-:nO, Called as a witness by respondent Standard Oil. Tr, 4937-4980 1401 Initial Decision Philip Samuel Myers, Madison, Wisc. Ph. D, in Mechanical Engineering; Professor of Mechanical Engineering, University of Wisconsin; received Corning Memorial Award for service and expertise in the fields of fuels and engines, and is a former national president of the Society of Automotive Engineers. Caned as a witness by respondent Standard Oil. Tr. fiOOO-5156; 6224-6241 Max M. Hoensch, Birmingham, Mich. Automotive consultant, mainly in the field of emissions; formerly, among other related positions, a staff engineer with Chrysler and chief test and development l nginf!er wit.h Chevrolet. Called as a witness by respondent 5157-5188VI.StandardWashington, D, : Sept. 14 - Sept. 27 1.972,Oil Tr. William L. Kent, Fullerton, Calif. Senior Research Associate, Union Research Center Union Oil Company- Called as a witness by complaint counsel Tr. fi212-5253 Robert. W, Snyder, Aurora, Ohio. Supervisor, Petroleum Product Development and R&D Services, Research and Engineering Department, Standard Oil Company of Ohio. Caned as a witness by complaint counsel. Tr. 5259-5316 Ralph C. Stahman, Ann Arbor, Mich. 13ranch Chief, Test and Evaluation Brauch charged with testing new motor vehicle emissions control concepts, EPA. Caned as a witness by Tr, 5325-5404complaint counselCarl G. Beard, Charleston, W. Va. Director of West Virginia Air Pollution Control Commission, Called as a witness by complaint counsel. Tr, 5411-5441 Francis G. Bollo, Houston, Tex. Manager of Research and Development, SheJi Oil Company, Called as a witness by complaint counsel. Tr. f)1: 5181 Theodor D. Sterling, West Vancouver, British Columbia, Canada. Ph.D. and formerly Professor of Rio-Statistics and Director of Medical Computer Center, University of Cincinnati, Ohiu; Professor in Department of Applied Mathematics, Washingt.on University, St. Louis, Mo.; now Director of Computer Science Program, Simon Fraser University in Canaoa, CaHed as a witness by complaint counsel Tr. 5484-5683 Robert Ferber, Champaign, 111. Ph,D. and Research Professor of Economics and Business Administration, also Director of the Survey Research Laboratory, University of lliriois; Editor of the .Journal of the American Statistical Association. Called as a witness by Tr, 5(j J7-5R47complaint counsel.

Wiliam Kruskal, Chicago, Il. Ph,D. in Mathematical Statistics; Professor of Statistics and Chairman of the Department of Statistics, University.y of Chicago. Called as a witness by 5857-5900.complaint counsel. Tr.

R, White, Raleigh C. Senior Statistician, Research Triangle Inst.itute; witness has been employed in the designing of test programs related t.o automobile exhaust emissions conducted by the EPA. Called as a witness by respondent Standard Oil. Tr. 5906-5976 Alfred G. Cattaneo, Berkeley, Calif. Doctor of Engineering Sciences, Institute of Technology, KarJsruhe, Germany; formerly with the Technical Advisory Committee of the California Air Resources Board. Called as a witness by complaint counsel. Tr. 5988-6163 All counsel were afforded full opportunity to be heard, to examine and cross-examine all witnesses presented, and to introduce such evidence as provided for under Section 3.43(b) of the Rules of Practice for Adjudicative Proceedings. The demeanor and the credibility to be accorded all witnesses testifying have been observed and determined in the findings of fact and conclusions made in this initial decision. 1414 FEDEUAL TUADE COMMISSION DECISIONS Initial Decision 84 F. Complaint counsel have submitted proposed findings of fact, conclusions and order numbering 482 pages together with a 92 page supporting legal memorandum. Counsel for respondent Standard Oil have submitted proposed findings of fact, conclusions, order and brief in support thereof consisting of 182 pages. Additionally submitted by respondent Standard Oil, with copy to complaint counsel, is a 3 volume appendix of 722 pages in support of respondent Standard Oil's proposed 419 findings of fact. Counsel for respondent BBD & 0 have submitted proposed findings of fact, conclusions, order and supporting brief of 24 pages overall. Said counsel state for the purposes of their submissions that respondent BBD & 0 adopts the proposed findings and appendix thereto as submitted by respondent Standard Oil. Proposed findings of fact and conclusions, orders and supporting legal memoranda, replies thereto and oral argument thereon by respective counsel for the parties have been fully considered. All pending motions by the parties not heretofore ruled upon and not granted in substance in this initial decision are hereby denied.

Proposed findings of fact and conclusions submitted by the respective parties and not adopted in form or substance in this initial decision are hereby rejected as being either irrelevant, immaterial, not necessary of determination and disposition under the pertinent issues, being undu)y cumulative, or of insufficient support contra to the greater weight of the substantial credible and reliable factual testimony and exhibits of record in this matter.

After carefully reviewing the entire record in this matter as hereinbefore described and based on said record and the observation of all witnesses testifying, the following findings of fact and conclusions therefrom are made and the following order issued: FINDINGS OF FACT 1. Respondent Stal"dard Oil Company of California 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 located at 225 Bush Street, San Francisco, Calif. (Complaint, Paragraph One; Standard's Answer, Paragraph 2).

2. Respondent Standard Oil Company of California is now, and for some time past has been, engaged in the sale and distribution of gasoline and other petroleum products under the trade name Chevron and other names to the public (Complaint, Paragraph Two; Standard's Answer Paragraph 3).

a. Respondent Standard Oil Company of California in the course and conduct of its business as aforesaid now causes and for some time past 1401 Initial Decision has caused its said products, when sold, to be shipped from its place of business in the State of California to purchasers thereof located in varous other States of the United States, and maintains, and at all times mentioned herein has maintained, a substantial course of trade in said products in commerce, as "commerce" is defined in the Federal Trade Commission Act (Complaint, Paragraph Three; Standard's Answer, paragraph 4).

4. Respondent Batten, Barton, Durstine & Osborn, Inc., is a corporation organized, existing and doing business under and by virue of the laws of the State of New York, with its principal office and place of business located at 38:3 Madison Avenue, New York, N.Y. (Complaint Paragraph One; Standard's Answer, Paragraph 2, BBD&O's Amended Answer, Paragraph One).

5. Respondent Batten, Baron, Durstine & Osborn, Inc. is now and for some time past has been an advertising agency of Standard Oil Company of California; and now prepares and places, and for some time past has prepared and placed for publication, advertising material including but not limited to the advertising referred to herein, for the purpose of promoting the sale of respondent Standard Oil Company of California Chevron gasolines with F -310 (Complaint, Paragraph Two; Standard' Answer, Paragraph 3; RBD&O's Amended Answer, Paragraph Two). 6. Respondent BBD&O admits that it is an advertising agency in competition with other advertising agencies and it is in interstate commerce within the meaning of tbe Federal Trade Commission Act (BBD&O' s Amended Answer, Paragraph Seven).

7. From the outset (Tr. 6(j- , 4638), complaint counsel have stated that the complaint's charges are limited to the original B' 310 advertisments that were run beginning in Jan. 1970 (Tr. 6(;:1-64); for example complaint counsel stated "it is the original advertisements which the Commission s complaint is concerned with, and those would be on RXS- , those advertisements for the most par would be contained on pages 1 through 6" (Tr. 665). The initial advertisements consist of a series of five television commercials, identified as the Balloon (RXS- , p. 2), Bag (RXS-4, p. 2), Torch (RXS- , p. 1), Meter (RXS- , p. 3) and Garage Door (RXS- , p. :1) and the companion radio and printed media advertisements. The record contains the actual television fims (RXS-3), radio scripts and copies ofthe printed advertisements (RXS- , RXS-5). Storyboards of the television commercials, containing photographs of the televised scenes with the accompanying audio statements, are in RXS- , pp. 1-:3; as indicated in that exhibit, the words overlaid on some of the photographs, so-called "supers " did not appear in tbe original advertisements but were added in June 1970. Attachments 1 and 2 to the com- 575- 956 O- LT - 76 - 90 1416 FEOEUAL TUADE COMMISSION DECISIONS Initial Decision 84 F. plaint are reproductions of the bag and balloon ad vertisements used in the printed media.

8. In determining whether the advertisements make the representations alleged in the complaint challenged in this proceeding, they must be examined one by one and as a whole; examined not only for any explicit representations ofthe type alleged, but also for any statements or depictions which may be said to imply the alleged representations; and the capacity ofthe advertisements to deceive should be judged upon the net impression of the advertisements evaluated from the perspective of tbe audience to whom they were directed. Advertisements concerning gasolines for automobiles are directed to persons who own or operate automobiles, and such persons are of intelligence sufficient to allow them to obtain drivers' licenses, and to allow them to understand and observe traffc laws and other items of that nature (Tr. 2101). Complaint counsel called no witnesses to testify as to the meanings of the advertisements, for the point that they represented or were understood by the public to have the meanings alleged in Paragraph Five of the complaint. The only evidence complaint counsel offered for this purose was consumer surveys- That evidence cannot be relicd upon for the purpose of providing the meaning or public understanding of the F- 310 advertisements. Therefore, this administrative law judge must examine tbe challenged advertisements themselves to determine their meaning (Tr. 208-09; Federal Trade Commission s Organization, Procedures and Rules of Practice, g14; Fedeml Employed D1:slributing Company, Inc., et al. 56 VT.C. 550, 555-56 (I!J59)). There is a substantial difference in meaning between " reduces haust emissions" and "reduces all pollutants in exhaust emissions." The fOnTer was used in the advertisements; the latter was not. The former does not include the latter; the latter does embrace the former. The advertisements must be judged as they are, not as complaint counsel would want them to appear.

Where the challenged advertisements identify particular types of pollutants in motor vehicle exhaust emissions, which it is represented the use of Chevron gasolines with F-31O will reduce, the only two types named are unburned hydrocarbons and carbon monoxide (e. attachments 1 and 2 to the complaint). None of the challenged advertisements represented that F-310 would reduce any pollutants in motor vehicle exhaust emissions, other than hydrocarbons and carbon monoxide; more particularly, no advertisement claimed F-;UO would reduce exhaust emissions of nitrogen oxides or lead particulates (RXS- , RXS-5); indeed, the "Facts" advertisement, published in May 1970, stated (RXS- 28):

;

1401 Initial Decision 310 IS BY NO MEANS THE TOTAL SOLUTION TO THE AIR POLLUTION PROBLEM. It reduccs hydrocarbon and carbon monoxirie emissions. It has no bencficiaJ effect on emissions of nit.rogen oxides, or of lead particulates, and this we have never daimed.

9. Guidance is found ln the cases and principles summarized in Federal Employees' Distributing Company, Inc. , et at. 56 F. C. 550, 557 (1959):

In the following findings with respect to what t.he advertisements of respondents in question woulci mean, the hearing examiner has given consideration to the foregoing principles as well as the following ones: "(W)whatever statements are marie, must he taken with and accepted in their ordinary sense. DeFores!.s Tmin'ing, Inc. v. YT.C. (C. A. 7 1948), 1:34 F.:!d Hn), 821. "WonJs mean what they are intended and understood to mean. Bennett de v, C. (C. , 1952), 200 F,2d 1;2 :W3. The Commission cannot. interpoJate language into advertising that is not there in order to construe it as mislead. ing. Int€'lrwl'onat PO, ls Corp. v. C. (C. A. 7, 1943), 13:1 F.2d 8H:), 888. "Advert.isements must be considered in their entirety and as they would he read by those to whom they appeal." AWlClwry v. C, (C. A, 7, 1 j42), 132 F.2d 165 , 167. See also Fm'd Motor Co. v. C. (C. A. 6, 1!!4l), 120 F.2d 175, 1H2 cnl den1r,d :n4 U.S. 668. "The important question to be resolved is the impression given by the advertisement as a whole * * * (A)advertisements which create a false imprf'ssion, although Jitera11y true, may be prohibited. Rhodes PlwTmacal . v. 208 F.2d: , 387, and authorities cited. If the advertising has a capacity and tendency to deceive there is no requirement that anyone be actually deceived, or that there was an intent to deceive. The complaint herein adds words to the chaUenged advertisements and deletes words which do appear in the advertisements. In particular the words Teduces exhaust emlssions from dirty eng.ines or the words laJ 'reduction of exhaust emissions from dirty engines appear in each of the chaUen!(ed advertisements, but these words are either omitted, or other words of a different meaning are substituted therefor, in parag-aph five of the complaint- The chaUenged advertisements do not represent, either directly or by implication, that F-310 reduces all pollutants in motor vehicle exhaust much less that it eliminates aU such pollutants, or other asserted automotive poUutants. The actual representations are that usc of F-3JO wiu significantly reduce exhaust emissions from dirty engines." In some instances, notably in conjunction with references to the Scott Research Laboratories tests, the representation is in terms of "sharply reduces (attachment No. 1 to the complaint) or reduces "dramaticaUy" (attachment No. 2 to the complaint); in no instance is the representation stated in terms of "eliminates" exhaust emissions, or in any comparable terms the implication of which is equivalent to total removal. While variously stated in the chaUenged advertisements, the central theme of the representations is consistently the same, namely that the use of F- HO will (1) 1418 FEDEUAL TUADE COMMISSION DECISIONS Initial Decision R4 F.

reduce, not eliminate, exhaust emissions (2) from dirty engines, as the following examples demonstrate:

A. The Torch TV commercial (RXS- , p. I) states: " formula F-31O that reduces exhaust emissions from diry engines. B. The Bag TV commercial (RXS- , p. 2) states: "a significant step in the reduction of exhaust emissions from dirty engines. C. The Balloon TV commercial (RXS-4, p. 2) states: "Formula F-:no that reduces exhaust emissions from dirty engines. D. The Meter TV commercial (RXS-4, p. 3) states " F -810 reduces exhaust emissions from diry engines" and "A significant step towards solving one of today s major problems.

E. The Garage Door TV commercial (RXS- , p. 3) states F -310 "has accomplished the reduction of exhaust emissions from dirty engines. F. Radio Announcement No. I (RXS- , p. 4) states: the testing proved "F -310 sharply reduced exhaust emissions entering the air from dirty engines.

G. Radio Announcement No. 2 (RXS-4, p. 7) states: "a remarkable gasoline breakthrougb * * * substantially reduces exhaust emissions entering the air from dirty engines a significant step towards solving one of today s major problems.

H. Attachment No. I to the complaint is representative of the Bag, and attachment No. 2 is representative of the Balloon, advertisements in newspapers and magazines. Both state (with immaterial differences): Tests conducted by Scott Research Laboratories, an independent research group, showed that Chevron gasolines with F -810 reduced unburned hydrocarbon and carbon monoxide exhaust emissions dramatically. Clearly, this is a major step towards solving one of today s most llrgent problems.

The advertisements then continue with explanations of how excessive exhaust emissions of unburned hydrocarbons and carbon monoxide occur in dirty engines which have accumulated mileage and buildup of deposits.

A case in point is Internationall'a1ts Corp. v. FTC 13:3 F.2d 88:J (7 Cir. 1943), where petitioner advertised that its automobile muffer prevents" rust and corrosion (133 F.2d at R8). Tbe Commission interpreted the word "prevents" to refer to "permanent" protection against rust or corrosion (133 F.2d at 885). The Seventh Circuit held the Commission had gone too far:

The petitioner never represented that the finish on its mufflers would prevent rust permanently, The word pf!"/wnent.y interpoJated by t.he Commis:;ion. * * * Th(, Commission cannot interpolate into the petitioner s representation:; words not there, and then find the petitioner !"ruilty of misrepresentation becausp the petitioner s product dops not meet the Commission s revised representations. The word "prevents" is a word of , , , , p. , 1401 Initial Decision common understanding, and the common acceptation of this word carries no connotation ofpennancncy. The petitioner will be presumed to have used the word in its oridinary and commonly accepted understanding, in thc absence of any showing to the contrary, Without the word "pcrmanently " interpolatf'd, there is no misrepresentation. The word " perm ancntly" is the Commission s word, not the petitioner s. The petitioner answers for its own representations, and not those of the Commission (133 F.2d at &35-86). Similarly in Heinz W. Kircher, tla Unive-re Company, 63 VT.C. 1282 Docket 8538 (1963), the Commission found that the claim of "invisibility for an inconspicuous swimming aid was not deceptive: To be surc Swim-Ezy" is not invisible or impalpable or dimensionless, and to anyone who so understood the representation, it would be false. It is not likely, however, that many prospective purchasers would take the representation thus in its Jiteral sense. True as has been reiterated many times, the Commission s responsibility is to prevent deception of the bruJljble and credulous, as well as the cautious and knowledgeable (see, e. ChaTlr of the Ritz. Di l. Cm' v, FTC 14: 2d 676 (2d Cir. 1914). This princ.iph, loses its validity, Iwweve1' if a is applied .u.'I/:ritically or p'U, hed to an absurd exb.eme. advertiser cannot be charged with liability in respect of every conceivable misconception however outlandish, to which his representations might be subject among the fooJish or feeble-minded. Some people, because of ignorance or incomprehension, may be misled hy even a scrupulously honest claim, Pcrhaps a few misguided souls believe, for example, that all "Danish pastry" is made in Denmark, Is it thf'efore, an actionahle deception to advertise "Danish pastry" when it is made in this country ! Of course not. A representation does not become "false and deceptive" merely because it wil be unreasonably misunderstood hy an insignificant and unrcprpsentative segment of the class of persons to whom the representation is addressed (Final Order and Opinion, 63 F. C. 1282, 1289-90 (Nov. 7 196)).

Tbe above principles have also been applied in two recent decisions. In the Pfizer, Inc. case,* the Commission reemphasized that its responsibility to prevent deception of the gullible and credulous, as well as the cautious and knowledgeable loses its validity; however, if it is applied uncritically or pushed to an absurd ex treme in respect of every conceivable misconception, however outlandish, to which (the) representations migbt be subject among the foolisb or feeble-minded" (Op. 13-13a). And in ITT Continental Baking com.pany, Inc. fWonder Bread), (1972) Docket No. 8860 Initial Decision, pp. 75- , the administrative law judge rejected the interpretations of the ad vertisements alleged in the complaint and stated:

Complaint counsel' s case was based upon a false assumption (to wit, the respondents advertising said certain things which it did not say either directly or by implication) * * * 10. Nowhere in the challenged F- IO advertisements is it represent- , either directly or by implication, that the use of Chevron gasolines . Commission Opi"ion July IJ , 1972, Do ket No- Hl1!J lii1 F' Co 2;j, f;,j. (S"e also, oral argument in tlw presenl matter, Mar. 2H.a"d 2'J,197::1 1420 FEDERAL TUADE COMMISSION DECISIONS Initial Decision 84 F. with F-alo would reduce all causes and all sources of air pollution, much less is it represented that :nO would reduce or have any "effect upon industrial and other nonmotor vehicle sources of air pollution." Even the most cursory examination of the advertisements discloses that the claims for F -alo are limited to exhaust emissions of motor vehicles and that the only pollutants specifcal1y claimed to be reduced are hydrocarbons and carbon monoxide.

Ai pollution from steel mils and industrial plants (Tr. 175- , :i52), power plants (Tr. 207, :i52), home heating units (Tr. 207, :i52), and agricultural burning (Tr. 352), have also been urged by complaint counsel These assertions are a challenge to logic. Common sense suggests that persons living in areas with serious air pollution problems caused by industrial or other nonmotor vehicle sources, would, if anything, more readily recognize that reducing exhaust emissions from motor vehicles could have no effect on such other sources of air pollution. Glenn C. Messer, a witness called by complaint counsel as an expert in market research, was cross-examined regarding- the representations made in the initial F-alo newspaper advertisements (Messcr 1113). He recognized that the F-310 representations "only related to the car" and testified (Messer 1114):

Q. Did you get any impression from the advertisements that F-:nO would do anything but operate on the exhaust emission from motor vehicles? A. No.

Q. You didn t gain any impression from reading the advertisements that there was any claim that F-310 would reduce other causes of air pollution? By "other " I mean nonautomotive causes, A. No.

Q. When you characterized the advertisements in this Forward as saying "helps toward cleaner air," did you gain any impression from the advertisements that F-3IO would totally eliminate all types of automobile air pollution? A. No; not at all.

Q. It was simply going to be a help to reduce it'! A. A cont.ributor.

Much of the evidence which complaint counsel offered in this regard was directed towards showing the existence of areas where pulp mills cement plants, swamp gas or other nonmotor vehicle sources were the principal causes of air pollution. Moreover, existence of such conditions is a matter of common kuowledge. In fact, Standard offered to stipulate durng prehearing conferences that "there are local conditions in some areas of the country where local or nearby sources of air pollution other than from motor vehicles are so great" that the "total elimination of all motor vehicles" in "those localities would not eliminate, nor reduce the major causes of air pollution in such localities" (Tr. 848- 885, 889, 892- 93).

, , 1401 Initial Decision 11. Such localized conditions do not detract from the importance of reducing air pollution from motor vehicles. Federal regulations controlling motor vehicle emissions are equally applicable in such localities as they are wbere the automobile is the major contributor to air pollution. The interstate character of air pollution was recognized by Congress enacting laws to control air pollution on a nat.ional basis. The Stipulated Evidence establishes:

The need to control motor vehicle pollution nationally was recognized by the Conb'Tcss when it adopted the 1965 amendments to the Clean Air Act. In enacting this lcgislation the Congress took into account the 1:nter, tate nature of the p1"biem in ju, tifyinq the ne"d for u"n'iJrmn nat.ir;n-1mrle cot/,lrol standards. (Stip. Eviet RXS-1l4, p. 22 of CX-9l). And further "the occurrence of air pollution in other areas of the Unitl"d States manifested the need for action on a natimu.uide seaJe." (RXS-1l4, item 6 of CX-73) Under congressional authority regulations were issued controlling on a national basis * * * emissions of hydrocarbons and carbon monoxide" commencing with 1968 model cars (CX- , p. 22; RXS-22a, b; Megonnell 3452-53). Indeed, the Stipulated Evidence establishes the urgency" of the need for immediate adoption of "national standards The urge'ncyof the need to ameliorate problems of air pollution in general and those associated specifically with automotive emissions requ.i1' ed that national standards be established i'/lmediately upon adoption of the Motor Vehicle Air Pollution Control Act (RXS- 1l4, item 2 of CX- 162, entitled "Automotive Air Pollution Pifth Report of the Secretary of Health, Education and Welfare to the Congress of the United States, dated Dec. 196fi, p. 3).

National control of automotive air pollution is in par grounded in the fact that motor vehicles and air pollution are transient and often migrate from area to area. Dr. Joseph Bebar, a witness called by complaint counsel, stated that he devoted much of his time and effort to studying the movement of air pollution from one locale to another (Behar 1924- 1956-74). Complaint counsel's witness Willam H. Megonnel1 testified that New York charges New Jersey is a source of its pollution, and New Jersey blames New York (Megonnel1 8442). And complaint counsel's witness Dr. Walter Heck testified that the effect on vegetation of pollutants emitted from automobiles is not limited to the local area where the pollutants are formed, because:

As your air mass moves over the countryside the primary pollutants are continuously forming secondary pollutants. In addition, they are having primary pollutants added to them as they move across the countryside.

, there is a continuous production of the secondary pollutants from the primary po1Jl.tants in the air.

Q. When you talk about moving across the countryside, how Jarge an area are we talking about, then'! A. As an example: in the eastern parts of the United States we have seen injuries at least 100 miles from major urban .sources and that is about as far as you can get from a major urban source in the east (Heck :H69-70). 1422 FEDEUAL TRADE COMMISSION DECISIONS Initial Decision 84 F. Another ilustration of the need for and importance of nationwide control of automotive air pollution is found in the uncontradicted testimony of complaint counsel's witness, William H. Megonnell of the Envionmental Protection Agency. He testified on cross-examination that congressional controls of automobile emissions apply throughout the country, notwithstanding the fact that there are local areas where tbe automobile is an insignifcant contributor to air pollution (Megonne1l 3452). The reason for national regulation was stated by Mr. Megonne1l as follows: "(IJn the field of public health there is a well-established principle that you regulate based on the worst situation" (Megonne1l 3452). The stipulated evidence is in accord with Mr. Megonne1l's testimony:

The pulicy which will prevail in thC'estabIishment of new eudssion daudards un a nationalle-vel is one which wil recognize the needs of the most susceptible members of the population at risk and the quality of air where the risk is highest (RXS-114, item 1 of CX-162, entitled "Automotive Air Pollution - Fifth Report of the Secretary of Health Education, and Welfare to the Congress of the United States, dated December 196(;, p. 2), 12. Complaint counsel offered a number of exhibits as surveys of public opinion. None of these surveys was conducted for the purpose of eliciting consumer reaction to any allegation of the complaint, nor were any of these surveys conducted to evaluate consumers' understanding of respondents' advertising. After carefully reviewing each of these exhibits, and the testimony of the witnesses Weitzman, Messer, Miller Hitch, Light, Cormack, Bardsley, Starr and Schneider, it must be concluded that none of these exhibits constitutes probative evidence of the allegations of the complaint. Due to the diverse nature of these survey exhibits, it is appropriate first to consider certain matters which are of general application. The testimony of the witnesses Starr, Scbneider and Light is most helpful in this regard, and it is concluded that they are well qualified as experts in the field of marketing and consumer research.

At the outset, none of complaint counsel's survey exhibits was designed to measure consumers' understanding or interpretation of re spondents' advertisements and the evidence is conclusive that none can properly be used for that purpose. Next, these exhibits do not reflect consumers' responses to the interviewers' questions; instead, all rcsponses have been grouped under general, catch-a1l phrases or categories called "codes" or "coded responses." Thus, the language reflected in the codes is not intended to and does not necessarily reflect the opinion or statement of even a single consumer. For the same and other reasons the numerical summary of individual responses (expressed in percent of those interviewed whose responses fall within a particular category) 1401 Initial Decision cannot be relied upon as evidence of consumer understanding of Standard' s advertisements. Further, uncontradicted evidence establishes that the results stated in some of the surveys are unreliable and misleading because of the infuences of competitive advertising and adverse publicity.

Surveys are designed for specific purposes or objectives and depending upon the objective, different questions wiu be asked (Starr 4918; Schneider 4866, 4868-69). The evidence is uncontradicted that a survey conducted for one purpose cannot be relied upon to serve a different purose. As the witness Schneider testified (Tr. 488): Market researchers especially avoid that, and have great difficulty in keeping others from doing it. It is rather easy to try and extrapolate a number from a report and use it for some other purpose. But it is very dangerous, And 1 think any researchers who have to deal with brand managers in a company, for example, find that the most difficult part of their job is getting rest'arch to be used properly.

So it is a danger, and rcsearchers are very aware that you can only use a research project for the purpose for which it was originally intended, because these are not aljpurpose studies in that the information could be used for many ways. You have to have one purpose, one objective, And you satisfy that objective with a particular design of a rest'arch project. And it is information that is only uscful to that end. The witnesses Scbneider and Star confirmed this conclusion (Schneider 4908; Starr 4921-22). For example, a tracking survey designed to measure brand awareness or brand switching is a totaUy different type of study than a survey to measure consumer understanding of advertisements (Schneider 4864- , 4901- , 4860; Light 1799-1800; Starr 4927 4921- , 4924-26).

None of the surveys offered by complaint counsel was conducted for the purpose of measuring consumer understanding or interpretation of the F-310 advertising, and none, therefore, can be used for that purpose. Furher, none of the surveys sought responses to the F-310 advertisements as a whole; aU such questions were oriented toward specific slogans or copy lines, and therefore it is "impossible" as Dr. Star testified, to rely upon tbe responses as proof of how consumers understood the actual advertisements (Starr 4924-25). In evaluating consumer understanding, Dr. Starr explained, it is essential that the question be presented in the full context of the advertisemen t (Tr. 4925); rt1here is ample documented psychologieal evidence that people respond differently to hits and pieces than ftoJ the entire advertisement. (TJo remove anyone pip.ce of it and test it in isolation from the others runs counter to aU classical theory of psychology, consumer research, and all other aspects.

In each of complaint counsel's surveys (Light, 1824-25), consumer responses are summarized in the form of "codes general, catch-all Initial Decision 84 F. phrases (Light 1747-52; Bardsley 1920Z- , 1920G- , 1920K, 1920T-W). The codes are simply:

a label that a research reporter found convenient to use, it doesn t mean that any respondent at all used those very words and, in fact, it is likely * * * that for some of those codes not a single respondent used any of those words (Light 1754, 1807- , 1750, 1753 1815).

For example, in CX- 147, Table 13- , the reported results might be erroneously interpreted to show that 17 percent of the consumers responded to the interviewer s question by answering "complete combustion." As Dr. Light explained (Tr. 1807): This is a good example of a code * * * probably nobody used that phrase, hut the researcher used the phrase to represent what a lot of people might have said. I am pretty darn certain nobody did say such a thing, we just don t get that kind of language from consumers. The fact that 17 percent of them said it, 1 am sure 17 did not, and I am pretty positive none did.

The same kind of interpretation would apply on a1l of the codes. These are codes, these are convenient labels, they are words of the researcher and t.hey are not the words oj the consumer.

Additional examples are discussed throughout the record (e. Light 1807- , 1814- , 1824- , 1750; Bardsley 1920V through 1920W; Messer 1122-24; Weitzman 1201).

Each of the survey exhibits quantifies consumers' responses aggregates the responses and assigns a percentage figure thereto. The percentage figures reported, however, cannot be used as evidence to establish that the stated percentage of the general population has the same understanding or would respond to the same question in the same manner. Respondents have raised serious questions, not answered by complaint counsel, concerning the reliabilty of the survey exhibits (Bardsley 1920K; Miler 986- , 1004-05; Light 1868-69; see also Light 1801-04; Cormack 1920K- 15 through 1920Z- 17; Schneider 4912- 4866-69; Starr 4926- , 4929-35; Messer 1127-28). Further, there is an overriding problem present in all market research ilustrated in the testimony of the witness Schneider. Prior to testifying in this proceeding, he had analyzed over two hundred research evaluations in his company s fies and concluded (Tr. 4867, 4866- 69):

* * * that anywhere from 10 to 15 per cent of * * * (those consumers whomJ we fee) very confident have seen the commercial, play back element!' that are specifically unrelated to the advertising.

The foregoing is confirmed by Dr. Starr (Tr. 4929-35). Examples include a survey run by BBD&O on a completely fictitious product in 1401 Initial Decision which 22 percent of the consumers interviewed said they were aware of the product; 8 percent said they had tried it; and 2 percent said they had bought it a second time (Light 1802-03). Another example is in CX- 147 where 10 to 21 percent of the consumers indicated familiarity with advertisements of F -310 before any F -310 advertisements had been run (Light 1801-08; Starr 4928-29). Complaint counsel attempted to establish through Dr. Starr that this confusion factor could be quantified at something on the order of 10 to 15 percent, but the witness responded (Tr. 4935):

, sir. This was a number I gave upon being asked to give an estimate of an average figure. It can be much lower, and it can be much higher, as is the case in the 21 percent figure that I cited, being in the table in CX- 147. But it depends on the area, the amount of attention it has generated in respect to the consumer s mind, and you can find there are cases when individuals are not at high levels of confusion, but you have to get a benchmark of what that Jevel is to find it out. Complaint counsel did not offer any "benchmark" evidence which would permit the trier of fact to make an evaluation of the accuracy of the results reported in these surveys.

Consumers are often unable to differentiate between sources of information (Light 1795-96). Advertisements by competitors of their products and inaccurate publicity regarding a product influence consumer responses to a survey. consumer may think he is stating to an interviewer his understanding of certain advertising, but in fact the consumer may be repeating another advertising message concerning another product, or may have been influenced in his response by characterizations of the advertising in newspaper articles. This can render an otherwise reliable survey invalid (Schneider 4870- , 4903; Starr 4929-31; Light 1857- , 1844-45). Respondents' Exhibit 54 is a partial compilation ilustrative of the types of advertisements published by Standard' s competitors from Dec. 1969 through Aug. 1970 (Fenton 4805; see also, Messer 1114- , 1118-19).

13. Complaint counsel called John M. Miler, a project and research director with the advertising agency for Humble Oil and Refining Company, to testify in regard to CX-170 (Tr. 952- , 958- , 963-64). Mr- Miller did not know the actual purpose of the survey (Tr. 963-64), although he thought the purpose was to get a "general indication of consumer opinion" on "air pollution, the automobile, gasoline and lead in gasoline " (Tr. 956, 961- , 989-90). Mr. Miller did not participate in the interviewing process (Tr. 964); could not verify the accuracy of the data reported (Tr. 965); read only a small portion of the questionnaires and did not tabulate the results (Tr. 965-66); the execution of the survey departed from accepted procedures and techniques for random sam- Initial Decision 84 F. piing in a number of particulars (Tr. 997- , 967- , 969-72); and the possibilty of various kinds of bias in the test results existed (Tr. 984 986 , 995- 1005, 1057-58). Based upon the testimony of Mr. Miler it appears that the persons interviewed in each of the cities surveyed were able to distinguish between air pollution and other social problems between air pollution caused by automobiles and air pollution caused by industry; and that there was no evidence the public would expect changes in gasoline to cause a reduction in air pollution from sources other than the automobile (Tr. 1030-32). The survey had no connection with the F-310 advertisements, and it does not constitute probative evidence of any allegations of the complaint. Complaint counsel called Glenn C. Messer, director of marketing services of the advertising agency retained by the Standard Oil Company of Ohio (Tr. 1059, 1063) to identify these exhibits, which were prepared for that company. Commission Exhibit 132 is a report of telephone survey in Cleveland, Ohio, taken to " get some reading" on consumer awareness of pollution levels, the major causes of air pollution and the degree of interest in reduced lead in gasolines (Tr. 1062). Due to nonrandom sampling, the reported results contain nonquantifiable errors exceeding 10 percent (Tr. 1065) and are suitable for obtaining only a general indication of what the tenor of the public s feelings are like (Tr. 1066- , 1099-1100). The survey does not show anyone believes changes in gasoline would reduce pollution from sources other than the automobile, or that anyone confuses the distinction between automotive and nonautomotive sources of air pollution (Tr. 1089). Commission Exhibit 131. This was a survey conducted for Sohio in the Los Angeles area in Feb. 1970 to measure the effects of F -310 advertising on brand awareness and brand switching (Tr. 1110- , 1113). There is no evidence that the coded responses represent the opinion of any consumer (Tr. 1122- , 1132-35); the reported results are quantitatively inaccurate (Tr. 1127-28) and also reflect the impact of competitive advertising (Tr. 1129- , 1114- , 1118- 19). Commission Exhibit 172. This exhibit reports two surveys performed in Cleveland, which were of a preliminary and exploratory nature designed to get "a litte know ledge of consumer understanding" of the potential market for unleaded gasolines (Tr. 1148- , 1150). They had nothing to do with Chevron gasolines (Tr. 1153); were deliberately biased in favor of male respondents (Tr. 1148, 1150-51); and the results were distorted by contemporary advertising and news media emphasis on the removal of lead from gasolines (Tr. 1158). The exhibit has no probative value except to show that consumers are able to distinguish , 1401 Initial Decision between various pollutants, such as carbon monoxide and hydrocarbons in automobile exhaust (CX-l72 A, p. 14; Tr. 1158). Commission Exbibit 130. This memorandum is a summary of interviews of 20 Chevron dealers and 6 Shell dealers in Los Angeles on eb. , 1970 (Tr. 1160- , 1165). Mr. Messer did not conduct the interviews and could not remember the name of the employee who did (Tr. 1171); he testified this was not in any sense ofthe term a survey (Tr. 1164); nor was it even a research report (Tr. 1165). As a market researcher, he would not base any decisions on this document (Tr. 1174-75); and when questioned about specific aspects of this exhibit which he wrote he could offer no explanation except to respond I don t know what that means I would have to say I can t interpret that, sometbing is screwy" (Tr. 1174). Although originally admitted over respondents' objections, after reviewing Mr. Messer s testimony and the testimony of Dr. Light Professor Star and Mr. Schneider, it must be concluded that the exhibit has no probative value.

14. The following exhibits reflect research conducted by BBD&O. Dr. Light was called as an expert witness to explain them. Commission Exhibit 146. This was a preliminary survey conducted May 8, 1969, eight months before the publication of the first F-310 advertisements (Tr. 1779, 1738-39). Its purpose was to provide some form of guidance in formulating future advertising (Tr. 1779-80), or more simply stated, to make sure "we are not going to introduce a product nobody wants" (Tr. 1780). Dr. Light testified there was nothing in this survey which could be used in any way to determine how a consumer would later interpret the F-310 advertisements (Tr. 1781), and the witness Schneider testified he thought it was "obvious" that this exhibit "couldn t be used as an indication of what was gained from the advertising" (Schneider 4873- 74).

Commission Exhibits 147, 148 and 150. Commission Exhibit-147 was conducted as a benchmark before the F-310 advertising campaign began; Commission Exhibits 148 and 150 were alternating benchmark and tracking studies designed to measure changes in brand awareness (Tr. 1794- , 1799-1800, 1818-19; CX- 150, pp. 1-4). Collectively, the three exhibits reflect different portions of a multiphase study, originally intended to evaluate the effectiveness of the F-310 campaign (Tr. 1794). Due to adverse publicity in the news media regarding F-;no (RXS-55) and to competitive advertising (RXS-54), the study was abandoned (Tr. 1827, 1831). It became evident that these effects rendered the results of the study invalid. This study was not designed to measure consumers understanding of any of the F-310 advertisements or what the adver- 142 FEDEUAL TRADE COMMISSION DECISIONS Initial Decision 84 F. tisements communicate (Tr. 1794, 1799; Schneider 4874- , 4879-80; Star 4921- , 4932-33); rather it was designed to measure changes in brand awareness (Tr. 1794, 1799-1800 1809- 1818-19; Schneider 4874- , 4879-80; Star 4921, 4932-33). The two are not the same thing and a tracking study such as this cannot be relied upon as evidence of consumer understanding of F-31O advertising (Tr. 1825-26; Schneider 4882- 4874-75; Starr 4935- , 4921-22).

Commission Exhibit 149. This survey was designed to sample public awareness concerning five F -310 television commercials to aid in the development of furher advertising (Tr. 1835); it was not designed to determine how consumers understood the advertisements (Tr. 1835- 1846). It suffers, therefore, from the same basic defect as the preceding three exhibits, namely having been designed for one specifc purpose, it cannot be used for another. It has no probative value in determning consumer understanding of the F-31O advertisements (Schneider 4881- 82; Star 4921-23). Adverse publicity and competitive advertising campaigns also rendered the results of this survey invalid (Tr. 1845- , 1852- , 1857- , 1860- , 1868-69; Schneider 4877- , 4881-82; Star 4929-32). Rejected Surveys-CXID- 133, CXID- 134, CXID- 144, CXID- 174. These exhibits also concern consumer surveys and were offered by complaint counsel and objections of respondents were sustained. In reviewig the entire record, including the testimony of Dr. Star and Mr. Schneider, it must be concluded that these exhibits were properly excluded for reasons previously stated and for the additional reason that none of the excluded surveys was conducted for the purposes for which complaint counsel seek to offer them (Tr. 1211-12; 4907- 08; 1722- 24; 1920Z- l8 through 1920Z-22 and 1920Z-35; 1920X through 1920Y). 15. As a par of its corporate organization, Standard has a product engineering deparment, staffed with scientists and engineers (Kane 3487-89; Fenton 4741-43). Tbe product engineering deparment has the priary corporate responsibility to review and evaluate proposed advertising claims and representations for Standard's products to assure that such claims and representations are technically accurate and are supported by reliable scientific and engineering data (Kane :1487-89; Fenton 4741-4:,). The claims for F -:no which are the subject of this proceeding were reviewed and approved by the product engineering deparment (Fenton 4741-43, 4745, 4755; Kane :J489). Chevron Research Company is a subsidiary of Standard that conducts research and development work on refming processes, petrochemicals lubricants and all fuels including gasolines, jet fuels, diesel fuels, fuel oils and residual fuels (Stip. Fact 8, RX-1l3). Chevron Research operates a research center at Richmond, California, which includes more , :

1401 Initial Decision than 20 buildings on a 15.5-acre site, employs over 900 chemists, engineers, mathematicians, physicists and technicians and has a total staff of 050 (Stip. Fact 8, RX-113). Over 50 percent of the technical personnel hold masters or doctors degrees (Kane 349:1- , 3497). Chevron Researcb operates on a budget which in 1970 exceeded $25 000 000 (Stip. Fact 8, RX-1l3). It is one of the largest research companies of its kid west of the Mississippi (Kane 3493-94). Chevron Research performed the research and development work which resulted in the invention and commercialization of F- l0 (RX- , pp. 6-11; RXS- , i, j). It conducted tests of F -310 and participated in the design, supervision and analysis of the tests conducted by independent testing laboratories. Chevron Research has played an active role in research to control barul emissions from automobiles ever since the involvement of such emissions in the formation of photochemical smog was IIrst demonstrated in the early 1950s (RXS- , p. 82; Stone a8:10-:13).

In 1963 Chevron Research scientists began test work on polybutene ame additives. The early polyhutene amines added, for the first time the capability of controllng deposits on the underheads of intake valves (Stone 3771 774, 3776; RXS 6e, pp. 52-55). Further work revealed that certain polybutene amines could also control the buidup of sludge and varnish on pistons, positive crankcase ventilation (PCV) valves and throughout the crankcase area (RXS- , p. 4; RXS- , p. 56; Stone 3769- 3779-80). Ths resulted finally in 1968, in the F-31O additive package. It consisted of a specific polybutene amine called F -309, at a concentration of 400 ppm (active), 1600 ppm of a carer oil, designated Zerolene , and 2.5 to 5 ppm (active) of a demulsifying agent designated F -311 (RXS- , pp. 6-7; RXS- , p. 72; Kane 3514- , 3526-27; Stone :1784-86). 31O" is a trademark registered with the United States Patent Office to designate the additive package (RXS- , App. Q, p. 1). On Feb. 23, 1971, the United States Patent Office issued Patent 565 804 to Chevron Research Company covering the polybutene amine component in F-31O (Stip. Fact 1, RXS-113). The issuance of such a patent is presumptive evidence that F-310 is a new and useful product produced by the exercise of inventive ingenuity (35 U. C. 101, 102 103 131 282; Brenner v. Manson (1966), : 83 U.S. 519, 528 et seq.; King- Seeley Therrnos Co. v. Refrigerated Dispensers, Inc. 354 F.2d 533, 537 (10 Cir. 1965); Graham v. .Iohn Deere Co., 383 U.S. 1, 17 (1965)). 16. In addition to its own extensive testing of F-31O, both in the laboratory and in the field, Standard elected, before introducing F -310 to the market, to retain an independent testing laboratory to run stil furher tests of the product (Kane 3529-30; Stone :1846-47). Scott Research Laboratories was selected for this purose. The Scott tests are Initial Decision 84 F. described in detail in RXS- , pp. 92- , and Appendices H (RXS-60), I (RXS-6p and J (RXS-6q) of the Technical Summary RXS-6) and in the transcript (Stone: 846-78 and Harkins 4121-46). Scott Research Laboratorics, Inc. is an independent manufacturing, research and testing organization involved in nearly all pbases of the air pollution field since 1959 (Harkins 4117). Its laboratory in San Bernardino, Calif., where its research program on F-31O was performed, is fully equipped to do work in the field of vehicle emissions (Harkins 4118). Scott Research Laboratories conducts both "research programs" and test programs" in the field of automotive emissions. In an impartial research program" such as that conducted on F -310, Scott personnel design the test and have "total control over tbe program." In a "test program " Scott measures emissions only, with no control over vehicle operation prior to tbe measurement (Harkins 4120-21). Scott, because of its research and test work for many governmental and industry organizations, takes particular care to maintain its objectivity and impartiality (Harkins 4118-19). Scott, at the time of its research program pertaining to F -310, was "the leading laboratory of its type in the entire country; its credentials "were outstanding" (Fenton 4749; RX- , p. 10; Stone 3861-62).

The validity of the test procedures and the accuracy of the test results, demonstrated the ability of F -310 to reduce exbaust emissions from diry engines by an average of 50 percent in the case of unbured hydrocarbons, by an average of 33 percent in the case of carbon monoxide and to improve gas mileage by an average of 7.7 percent. Standard' s witness Dr. E.K Spitler testified that, after carefully reviewing tbe Scott tests to assure the accuracy and validity of all the test data (Spitler 4448-49), he concluded that F-310 would substantially reduce hydrocarbon and carbon monoxide emissjons from dirty engines (Spitler 4449- , 449H-99); and that with all the prior experience and experiments of Cbevron Research (Spitler 4449-50), it was logical to conclude from the Scott tests that "F -310 would have an average net effect of reducing hydrocarbon and carbon monoxide emissions from cars with less dirty engines" (Spitler 4150). Standard' s witness John Harkins testified that on the basis of all his experience he did not have any reservation at an as to the accuracy and the validity of the tests of F-31O and the results obtained (Harkins 4178) and his conclusion from the Scott tests was that "the use of a gasoline containing F-31O, in a vehicle which had deposits in the carburetor throttle body and in tbe PCV valve, would result in the removal of these deposits, and subsequently reduction in the exhaust emissions" of the _. , . . .

1101 Initial Decision order of 50 percent for unburned hydrocarbons and one third for carbon monoxide (Harkins 4145-46).

Standard' s expert witness Dr. Phillip S. Myers testified that he made Irs own analysis of the Scott test data, as a result of which he was satisfied that the data were accurate, in agreement with engineering theory, and that the test constituted "an unequivocal demonstration" of the effect of F-310; that "unquestionably, during the diry-up phase air/fuel ratio decreased, emissions increased; during the clean-up phase ai/fuel ratio increased, emissions decreased" (Myers 5122- , 5510-23; RX-107; RX- 108).

Standard' s expert witness Max Roensch testified that he reviewed the Scott tests and particularly the procedures that were employed to determine their suitability with respect to tbe object of the test, as well as "the overall control applied to the test to assu re the validity of the results" (Roensch 5168). He concluded that the test had been well done; he could find nothing to criticize in the conduct of test; he considered it was a proper means of evaluating the ability of F -310 to reduce emissions of hydrocarbons and carbon monoxide and that it demonstrated F- 31O' s deposit-removal capability (Roensch 516g-69). Particularly notable is the counsel's expert witness on the subject of tests, Kenneth D. Mills, formerly of the Environmental Protection Agency. He could find no reason to dispute the results of the Scott tests (Mills 8140-41) and testified that they would indicate a general reduction in emissions in the car population (Mills 3143). He testified (Mils 3140- 41):

Q. Now, taking ajj the circumstances of these Scott Research Laboratory tests, the design, the objective, the manner in which they were conducted, do you have any reason to disputf' the validity of the results of that test? A. I fully understand what the test program was, I believe. The intent in designing the program and conducting it, I have no reservation as the tests were conducted, no reason to dispute the results.

Standard' s witness Robert K. Stone fully concurred in these conclusions as stayed by complaint counsel's witness Kenneth D. Mills (Stone aS76- 77).

Each of the individuals and organizations who participated in the research, development, testing or consulatation with respect to F-31O possessed sufficient technical and scientific experience and expertise to responsibly evaluate tbe product. The record of these proceedings establishes that their judgments were rendered on an informed basis; and that respondents were justified in relyjng upon the technical quali- 575 956 O- I.T - 76 - 91 1432 FEDERAL TUADE COMMISSION DECISIONS Initial Decision 84 F. fications, expertise and judgments of these individuals and orgamzations.

17. The results of the Scott tests could be and were properly extrapolated by Standard in Jan. 1970 to establish that exhaust emissions in the general car population would be reduced from the use of F-;)10, and that since the average condition of cars in the general car population was not as diry as the engines in tbe Scott test vehicles, the reduction in emissions would be correspondingly smaller. This conclusion was supported by respondents' and complaint counsel's witnesses alike. It was tbe engineering judgment of Dr. Spitler and the other scientists at Chevron Research at the time F -310 was first placed on the market that the range of effect on the average car population would be somewhere between 10 and 20 percent reduction of hydrocarbons and carbon monoxide (Spitler 4522), based upon the Scott tests, Chevron Research' tests of F-310 and knowledge of the condition of carburetors and PCV in the field (Spitler 4522-23).

Dr. Eneas Kane testified that it "is quite common practice in the industry to run this type of severe test" to provide "a technically sound basis" for the characteristics of the product (Kane 3581). When asked whether the results of the severe test by Scott could be extrapolated to the average car population, his answer was "Not directly, without additional data" and he then explained that Chevron Research had the additional data which permitted it to make the extrapolation (Kane 35.' 32). Dr. Kane also testified that on the basis of the California Air Resources Board's surveillance data and other data, they calculated that 810 would produce a reduction of "around 15 per cent" or more in the average level of cars (Kane 3546-48).

Robert Stone testified that with "so much background and experience" they had no difficulty as an engineering matter in extrapolating the results of' the Scott tests to the average car population (Stone 3847 8852, :J855), and that "there would certainly be a general reduction in hydrocarbon and carbon monoxide emissions (Stone ;)876-77). John Harkins testified that from the results of the Scott tests, the conclusion could be drawn that F-310 "would certainly be of benefit to the average motor vehicle population " (Harkins 4146); that, while he had not calculated the percentage reduction in emissions that would be acbieved in tbe average car population, neverthless on the basis of' sound engineering experience, it was "logical to assume that if F 310 cleans very dirty engines that it would also clean less dirty engines (Harkins 4146); and that it also could be concluded that F-:Jlo, when used in new engines and clean engines, would help to prevent increases in their emissions in actual service (Harkins 4146). 1101 I nitial Decision Robert L. Chass, originally listed as a complain t counsel witness but actually called as a witness for respondent Standard, testified that from the Scott test data it was "reasonable and prudent" to conclude that reductions in emissions in the whole vehicle population would be smaller, and from all the data available when F'-310 was first marketed in Jan. 1970, he had been able to extrapolate that the average reductions would be 15 percent (Chass 4366-67), an extrapolation which subsequently proved correct (Chass 4367).

Witnesses caned by complaint counsel likewise confrmed that the results of the Scott Research Laboratories tests could be extrapolated to the general car population to establish that F -:iO would result in reductions of hydrocarbon and carbon monoxide emissions. Kenneth D. Mils, the expert witness on testing procedures caned by complaint counsel, testified on cross-examination as fonows: Q, Now, Mr. Mils, notwithstanding the fact that the Scott Research Laboratory tests were directed to detennining the effectiveness of Chevron gasolines with F310 on motor vehicles with very dirty engines, heavily deposited engines, would the results of these tests in any way permit you to reach any conclusions as to what the results of F:310 would be on, say, the general motor vehicle population'! A. I think it certainly suggests if the general motor vehicle population is composed of vehicles with varying dej,"Tees of induction system deposit formations to the point of fouling, that there would certainly be a general reduction in hyd rocarbon and CO resulting from the use of an extremely effective additive (Mills 314::1. R.W. Hurn, a witness from the Federal Bureau of Mines caned by complaint counsel, testified the results of the Scott tests "should be a useful indicator of the result to be expected" in the general car population (Hum 3245-46).

18. Respondent's expert witness, Dr. Philip Myers, testified that from his review of an the underlying records, he concluded "there was adequate technical data and support" for the initial advertisements of 310 (Myers 5018- , .5140-41). Respondent' s expert witness Max Roensch testified that in his judgment Chevron Research and Standard had a sound scientific and engineering basis upon which to make th representations they did make in their advertisements (Roensch .5173- 74). John Harkins certified to the national networks that the advertising claims in the initial BJ( "commercials, pertaining to the function of tbe 310 additive, are substantiated by the test data" which Scott Research Laboratories compiled and endorsed (CX-283a; CX 283c; CX 28e; Harkins 4174-7.5).

Commencing over a year prior to the introduction of the F-:ilo advertising campaign, BBD&O's representatives worked in close cooperation with representatives of Standard's management, Standard' 14: FEDEUAL TUADE COMMISSION DECISIONS Initial Decision 84 F. Advertising and Product Engineering Departments and Chevron Research in the development of the F -310 advertisements. The process involved a continuous interchange of ideas and information between the representatives of BBD&O and Standard; suggestions for advertising themes, as well as specific advertising representations, methods and formats, were proposed, considered and reviewed; each of the claims suggested for F-310 was investigated for technical accuracy and the adequacy of engineering support; in some instances special testing was undertaken; ultimately each proposal was either rejected, modifed or accepted in whole or in part (Fenton 4740- , 4756- , 4824; Clark 4939- 4945-54). Before the initial advertisements of 31O were published each was reviewed and examined for the adequacy of tbe technical support for the claims made therein by the following and each approved the same (Fenton 4740-51; 4755-60; Clark 49: 54): A. Cbevron Research (Fenton 4742-43; 4755, 4824; Clark 4947- 49);

B. Standard's Product Engineering Department (Fenton 4742- , 4755, 4824; Clark 4948-49);

C. Standard's Advertising Department (Fenton 4744-50); D. Standard's legal counsel (Fenton 4742- , 4756; Clark 4948- 49);

K Two levels of Standard' s management (Fenton 4742- , 4757 4824);

F. BBD&O's executives handling Standard's accounts (Fenton 4758 4821- , 4825-26a; Clark 4939-43);

G. BBD&O's corporate management (Fenton 4758; Clark 4952); H. BBD&O's legal counsel (Fenton 4758-5!J; Clark 4948-49); I. In the case of the network commercials, by Scott Research Laboratories (Clark 4948- , 4952);

J. By Scott Carpenter, the former NASA astronaut, who only agreed to serve as the announcer in the advertisements after he had f"rst reviewed the tecbnical data and satisfied himself that F- 310 had tbe ability to perform as the advertisements represented (Fenton 4761-62). Mr. Carpenter is a mechanical engineer and aeronautical engineer, with "great personal knowledge of carburetion of engines" (Fenton 4760-61).

Although BBD&O' s executives, corporate management and legal counsel reviewed and approved all F-:Jlo advertisements, BBD&O sought, received and relied upon the advice and assurances of Standard' s technical personnel, notably those of Chevron Research and the product engineering department, for the technical accuracy of the advertising claims made for F-:Jlo and for tbe adequacy ofthe scientific , p.

STANDAUD OIL COMPANY OF CALIF., ET AL. 1435 1401 Initia) Decision and engineering data in support thereof (Fenton 4758- , 4819- , 4823; Clark 4952-54). BBD&O did not have the personnel, facilties or the technical expertise to conduct its own scientific tests of F-31O (Fenton 4819-20; Clark 4952-53). The record is clear that in relying upon the representations and assurances of its client, Standard, BBD&O followed the custom and practice of the advertising industry (Fenton 4819-20; Clark 4953).

19. After the initial advertising and marketing of Chevron gasolines with F -310 in Jan. 1970, furher tests were conducted. In early 1970 tbe Los Angeles County Mechanical Department tested 31 0 on six County Sheriffs cars, three 1968 and three 1969 models which had accumulated 30 000 to 60 000 miles (RX-6q, App. J, p. 12), using a premium grade competitive gasoline containing a competitive additive Super Shell," containing dupont additive DMA-4) (RX- , p. 100; Kane 3558-59; Spitler 4467, 4513, 6174). After measurig the vehicles' exhaust emissions, the cars were switched to Chevron gasolie with F -310 and operated for distances ranging between 678 and 2 093 miles (RX- 100; Spitler 4457-58), at which time their emissions were again measured. Tbe results sbowed the use of F -310 reduced exhaust emissions of hydrocarbons an average of 24 percent and carbon monoxide emissions an average of 42 percent (RX- , p. 100; Kane 3558-59; Spitler 4466, 4499-4500). Exhaust emissions decreased for each car (RX-6q, Appendix J, p. 13, fig. 13).

Notably, the emissions requirements on these test vehicles were conducted at the City of Commerce laboratory of the United States Deparment of Health, Education, and Welfare and used the hot portion only of the Federal 7-mode procedure (RX- , p. 100; Kane 3558-59; Spitler 4457 4499). Respondents' expert witness Max Roensch reviewed the test data and some of the actual engine parts from the test vehicles (Roensch 5169-70; RX-71); he concluded that it was a valid test of F -31O's ability to reduce deposits in engines and thereby reduce exhaust emissions (Roensch 5170). The test also confirmed the findings of the Scott Research Laboratories tests that F-31O could reduce substantially hydrocarbon and carbon monoxide emissions from the segment of cars in the general car population with very diry engines (Spitler 4467- 68). It was stipulated that Standard did not conduct or participate in the test (Tr. 748). Standard rITt learned of the test after its completion (Spitler 6174, 4456).

20. Commencing in March 1970, a test was conducted on over 50 car selected by the Orange County, California, Department of Transportation to represent a cross-section of their fleet vehicles. Tbe test vehicles were from a well-maintained fleet of over a thousand vehicles that ,, pp.pp.

1436 FEDEUAL TUADE COMMISSION DECISIONS Initial Decision 84 F. followed a rigorous maintenance schedule, including draining of crankcase oil every 2 000 miles, changig of oil fiters every 4 000 miles and a complete engine tune-up every 10 000 miles (RX- , App. M, p. 5). Included in the test vehicles were 6-cylinder and 8-cylinder engines ranging from 1964 to 1969 Fords and Plymouths; approximately twothirds were post-1966 models with exhaust emission controls. All of the vehicles had previously operated on a competitive premium grade gasolie containing a well-known carburetor detergent (Super Shell with dupont DMA-4) (RX- , p. 101; RX- , App. L, p. 1; RX- , App. M 6; Harkis 4159-60; Spitler 4472-73; Kane 3559). The exhaust emissions of the vehicles were tested, using the hot portion of the Federal 7m6de procedure, as published in the Federal Register (RX- , App. M p. 6; RX- , App. L, p. 2; Harkins 4165-66). The cars were then switched to Chevron gasoline with F 31O and driven in their normal service for approximately 2 000 miles when their exhaust emissions were again measured in the same manner. The results showed that the use of F-310 reduced hydrocarbon emissions an average of 12.4 percent and carbon monoxide emissions an average of 27.6 percent (Harkins 4160; Spitler 4473- 4500; RX- , App. L, p. 3; RX- , App. M, p. 6). Respondents' witness Harkins testified that this test showed conclusively that switching a well maintained fleet of vehicles from a major competitive brand to Chevron with F-310 resulted in significantly reducing hydrocarbons and carbon monoxide emissions (Harkins 4209) and cOnImned the extrapolation of the results of the original Scott tests to "actual, real-life operation" (Harkins 4178). Robert L. Chass from the Los Angeles Ai Pollution Control District testified this was a valid test to show the effect of F-310 in the car population; the results showed significant reductions of hydrocarbons and carbon monoxide and were accurate reflections of the effect of F-81O (Chass 4374). Dr. Spitler testified the test conrmned Chevron Research' s prior judgment that use of F -310 in the general car population would produce significant reductions of bydrocarbon and carbon monoxide emissions although lesser than those in the Scott tests (Spitler 4474). Standard' s expert witnesses, Myers (Myers 5123-24) and Roensch (Roensch 5170-71), both testified the test was a valid determination of F-310' s ability to remove deposits and reduce exhaust emissions.

21. Between Mar. and June 1970, Standard tested F -310 on a large sample of cars designed to be representative of the distribution of makes and models in the California car population (RX- , App. M 13; RX-(if, pp. 102-08; see for detailed description RX- , 6u, (iv, 6w (App. M, N, 0, P)). Statistical analysis showed a sample of aoo cars was required; however, to allow for losses of test cars for various reasons , p.

1401 Initial Decision during the test, the sample was increased to 455 cars (RX- , App. M 12; Spitler 4532). Cars were selected randomly to match the distribution of makes and models in the California car population, with the limitation that none of the participants should have been users of Chevron gasolies in the preceding three months (RX- , App. M, p. 9; Spitler 4524- 26). The cars initially were given a mechanical inspection (but no changes were made) and their emissions were tested by Olson Laboratories, Inc., a well-recognized independent automotive emissions testing organization (Spitler 4526), using the hot start portion of the Federal 7mode procedure. Each participant then operated his car for approximately 2 000 mies on Chevron gasoline with F-:Jlo, when emissions again were measured (Spitler 452(;; RX- , App. M , pp. 10-11). Elimination of cars that failed to return, didn t drive at least 1 000 miles, had tuneups or mechanical changes or had errors in their tests reduced the final test car sample to 297 vehicles (RX- , App. M, pp. 12- 17; Spitler 4530-32). The test results showed that use of F-31O reduced hydrocarbon emissions an average of 13.9 percent, carbon monoxide emissions an average of 11.6 percent and oxides of nitrogen emissions an average of 8 percent (RX- , App. M, pp. 15- 16; Spitler 4532). Statistical considerations were taken into account in both the design of the Rose Bowl test (Spitler 4484- , 4522- , 6175-77) and in a detailed analysis of the results after it was concluded (reported in RX- , App. N; Spitler 4529-:JO). Dr. Spitler testified the confidence level in the test results was 99.99999 (Spitler 4670) and there was "less than one chance in a million that we would have observed the effect we did if indeed, F-310 had no effect" (Spitler 4532). The detailed statistical analysis of test results, in particular (RX- , A pp. N), shows that Standard exercised scientific caution and conservatism in determining and reporting the results of the Rose Bowl test. For example, only Federally"approved correction data was utilized. Respondents' Exhibit , App. N, p. 72, table XIII shows that larger reductions of hydrocarbons (HC) and carbon monoxide (CO) from use of F-310 could have been appropriately reported if other scientifically valid correction factors for temperature and fuel composition had been utilized. Dr. Philip Myers made his own analysis of the Rose Bowl test data (Myers 5110- , 5124-25; RX-11O) and concluded the test "clearly indicates that the deposits were removed and that air/fuel ratio increased (i.e. became leanerl as the result of the removal of the deposits" (Myers 5125, 5110-11). Max Roensch testified after a complete review of the Rose Bowl test that the "test was well designed " and "well conceived and well executed" and was a reliable and proper test to determine F- 31O' s ability to reduce emissions and to improve mileage (Roensch 5171). 1438 FEDERAL TUADE COMMISSION DECISIONS Initial Decision 84 F.l'. Robert L. Chass, Air Pollution Control Officer of the Los Angeles Air Pollution Control District, testified that "(tJhere is no question in my opinion that the Rose Bowl tests are the best tests that have been run on the whole subject;" the results were valid and accurate, and the hydrocarbon and carbon monoxide reductions from using F-310 were significant reductions (Chass 4375). Mr. Chass' testimony in regard to the Rose Bowl test was based on his own review of published data and on the review of such data by his staff in the Air Pollution Control District 'Chass 4421-23).

Ralph C. Stahman, Chief of the Test and Evaluation Branch of the Environmental Protection Agency, who was in charge of EPA's test of 310, testified the test design of the EPA test "was similar to that of the Rose Bowl test" (RX-83; Stahman 5339-41) and EPA "felt that the Pasadena (Rose Bow1J test would cover the kind of used-car population we were interested in" (Stahman 5339). Mr. Stahman testified that EP A's consultants, Research Triangle Institute, had investigated the design of the Rose Bowl test and had adopted many features of the Rose Bowl test for the EPA test of F-310 (Stahman 5340-41). Mr. Stahman further testified that, except for differences in the new CVS procedure for measuring emissions and the use of two test sites rather than one, the EP A test and the Rose Bowl test were essentially of similar design (Stahman 5340-42). S.B. White, Senior Statistician with the consulting firm retained by EP A, compared the similarities of the Hose Bowl test with the EPA test (White 5928-37), and accepting tbe engineering judgments reached in their design, he couldn t find "anything basically wrong" with either test (White 5936-37). Complaint counsel's witness Francis G. Bollo of Shell Oil Company had not personally checked the test sample to be sure it was representative of the car population (Bollo 5463-64), but other than that, both he and his department had reviewed the test data, and he considered the results of the Rose Bowl test a valid demonstration of the effectiveness of F-31O (Ballo 5464); it was a "meaningful test" for the purpose for which the data were used (Bollo 5464-65). Complaint counsel's witness Hugh Shannon, whose own test conducted for Humble Oil Company showed that the use of gasolines containing F-31O would reduce emissions 10-15 percent (Shannon 5402), testified that he was familiar with the Rose Bowl test and it substantiated the conclusions drawn from his own testing (Shannon .5402-03). In Mr. Shannon s words, his test "says the same thing" as the Rose Bowl test (Shannon 5403). Complaint counsel's witness W. Hurn of the United States Bureau of Mines testified that the Rose Bowl test should "be a useful indicator of the result to be expected" from the use of F -310 (H urn 3245-46). Complaint , , 1401 initial Decision counsel's witness WilJam L. Kent of Union Oil Company testified there was nothing in the tests he conducted of F -310 that in any way contradicts or refutes the results of the Rose Bowl test. (Kent 5247-4ij) 22. In their rebuttal case complaint counsel called three statisticians and one engineer to offer criticisms of the Rose Bowl test. The statisticians were Dr. Theodor D. Sterling, a former professor in bio-statistics (Sterling 5487; CX-417) whose principal work, according to his curculum vitae, was in the area of statistics used for medical purposes (CX- 417c-g); Dr. Robert Ferber, a professor of economics and business administration working principally in survey research (Ferber 5697; CX-419); and Dr. WilJam Krskal, whose qualifications (CX-420) and testimony on voir dire by agreement of counsel, would be the same as Dr. Ferber s (1r. 5855). At the time these witnesses testified, serious reservations existed about tbe qualifications of each to testify in tbe field of automotive engineering, but their testimony was admitted to be weighed in light of cross-examination and the entire record. Each of the stat"stica,l witnesses denied any training, experience or expertise in the engineering f1:elds in which his opinions were being sought. Dr. Sterling testified: "Mechanical engineering is not my field of specialty" (Sterling 5502); "I am not an automotive engineer" (Sterling 5505); he admitted he was not qualified to answer questions about procedures for measuring emissions (Sterling 5512-14); he didn t claim to be an expert on internal combustion engines (Sterling 5636); he conceded "my concern is not with the chemistry or mechanics of measuring emissions" (Sterling 5523); when asked questions directed to one of his stated criticisms of the test, he answered ( have no skills on that" (Sterling 5525-26); he disclaimed any knowledge of PCV valves or expertise "in the field of carburetors and deposits on carburetors and their effect on exhaust emissions" (Sterling 5648); he would "not presume to look into the various procedures " the engineering and chemical procedures used by Chevron Research to evaluate the additive (Sterling 5650); be didn t take the time to look into them because "Chevron does an awful lot of things in chemistry and other areas in which I wouldn even know what I am reading and yet it may be very relevant to what I am doing" (Sterling 5661-(2). Dr. erber by his testimony and Dr. Kruskal by agreement of counsel (supra), was not an automotive engineer (Ferber 5700, 5709); nothing in his qualifications, training or experience involved the testing of automobile emissions (Ferber 5707-08); he had no experience with experiments involving the testing of auto emissions (Ferber 5709- 10) or with the effect of deposits on emissions Werber 5710); he admitted I have no competence and I don t say that I know what the engineering aspects are" (Ferber 5795) and he con- , 1440 FEDEUAL TRADE COMMISSION DECISIONS Initial Decision 84 F.T. ceded that his own opinion herein is subject to criticism because he doesn t know the engineering factors involved (Ferber 5798). Although conceding their lack of engineering qualifications, the witnesses recognized that their criticisms of the Rose Bowl test depended upon engineerig judgments which they could not make. Dr. Sterling agreed, for example, that judgments concerning the design of the test involved questions peculiarly within the expertise of a chemical engineer and "Not being a chemical engineer I may not recognize which ones they are" (Sterling 5637). In this connection, Dr. Spitler, who helped design and was in charge of the conduct of the Rose Bowl test, and who participated in the statistical analysis of tbe test results is a mechanical engineer with training in statistics (Spitler 447) and he had the services at Chevron Research of L.J. Painter, wbo was both a senior research statistician and a chemical engineer (Sterling 5637; Myers 6227-28; RXS- , Appendix N, p. 2). Dr. Ferber agreed that there was an intermixture of engineering; and statistics needed to reach an overall judgment and he could not say that his criticism of the test did not depend upon engineering judgments (Ferber 5795- , 5799), for which he had no competence" (Ferber 57!J5-96).

While agreeing that "in evaluating any particular step in the scientific process, you must always look to the body of background knowledge that has previously been accumulated" (Sterling 5656) and that varables which may affect a test can be eliminated in advance or through side studies, anciliary or prior to the central one" (Sterling 5660-61), these witnesses nevertheless had reviewed only a very limited part of the F-3IO record. Dr. Sterling, for example, saw only 44 pages of the text out of 115 and only two ofthe 17 appendices of RXS- , the Tecbnical Summary of the F -g10 Gasoline Additive Development (Sterling 5641-4). In addition, be saw :30-40 pages out of the more than 300 pages of Dr. Spitler s testimony and nothing of the rest of the almost two thousand pages of the defense case (Sterling 5644-45). He had no knowledge whatsoever of the 40 000 hours of laboratory testing of F- :i10 (Sterling 5648), the 5 000 000 miles of field testing (Sterling 5650), or the half milion miles of testing in employee cars (Sterling 5652); and he had not reviewed the data underlying Standard's judgment to conduct the Rose Bowl test without a control group, because it wasn, as Dr. Sterling admitted within his line of expertjse to review this kind of data" (Sterling 5649). Dr. Ferber and Dr. Krskal, if anything, were less informed than Dr. Sterling (Ferber 5791, 5794-5806; Krskal 5861). Essentially, these three statistical witnesses were of the opinion that in the Rose Bowl test there should have been a control group of cars to 1401 Initial Decision eliminate any influences that might arise from possible "variables" in the test (Sterling 5518, 5609; Ferber 5753-54; Kruskal 5862-64). The inherent shortcoming in their testimony is that none of these witnesses was qualified to and none did testify that the results of the Rose Bowl test were actually in error; Dr. Sterling testified only that "a variable is poss.ible influence on an experiment" (5586-87); as to each "variable" it would require engineering knowledge to know what effect f any, would have on the test (Sterling 5678-79) and if a control j(roup had been used, the benefits of F -:110 might even be greater than those shown in the test results (Sterling 5677). Dr. Kruskal said his criticisms were hypothetical" and were only "possible biases" (Kruskal 5868); he emphasized he was "only saying they are possible" and "I don t know that they were present" (Kruskal 5885). Dr. Ferber couldn t say whether his criticisms would make any difference in the test (Ferber 5750); he didn know whether there already were adequate controls (Ferber 5789); he couldn t say that P-310 did not cause a real reduction in emissions (Ferber 5782-84); and he conceded that a control group might entirely confirm the test results (Ferber 5754, 5843). In the design of the Rose Bowl test the use of a control group was considered and rejected (Spitler 4711- , 6175). Careful consideration was given to all potential variables which might influence the results of the test and controls were either designed into the test or the variables were measured and accounted for in some other manner (Spitler 4482- , 4522- , 4684-86). The decision that a control group was not needed was based in large part on the California Air Resources Board' s surveillance data and findings that in the average car population exhaust emissions increase with time and with the accumulation of mileage (Spitler 480, 6172, 6176; Hurn 3321). A control group in the Rose Bowl test after 2 000 miles of operation would show, if anything, a slight increase in emissions (Spitler 6176-77; Myers 6230, 6238-39; see also White 5910- 12; Cattaneo 6155-57). This would have made the reductions from F-:JI0 correspondingly greater than those shown in the test (Spitler 6176-77; Myers 6230).

Ralph C. Stahman of the Environmental Protection Agency appeared as a witness for respondent Standard. He testified that the results of the Rose Bowl test of F -310 had been suffciently impressive to pcrfmade the Federal agency that it would be "worthwhile" to undertake a similar test of its own of F-310 (Stahman 5330, 5339- , 5381-82). The EP A test was similar to the Rose Bowl test (supra). Mr. Stahman testified that the Federal government, in conjunction with its consulting engineers and statisticians at Research Triangle Institute, considered carefully whether a control group was necessary in the EP A test and , Initial Decision 84 F. concluded it was not (Stahman 5342-44). A major reason for this conclusion was that more accurate results could be obtained by testing more cars, rather than by using part of them as a control group (Stahman 5343). (In this regard, even Dr. Kruskal conceded that whether or not there should be a control group is in part an economic decision (Kruskal 5868-69.)) Respondents also called S.B. White, a statistician from Research Triangle Institute, who emphasized the importance of engineers answering questions in the design of such a test which the statistician was not equipped to answer (White 5908-10). He also testified that one of the critical circumstances which made a control group unnecessary in the EP A test was the "general consensus" that the emissions of cars in a control group in 2 000 miles would, if anything, increase (White 5910- 12); where you already have adequate information, it is unnecessary to have a control group to "(tell you the same thing" (White 5968). The analysis of the EP A test results had not been completed when the record in this case closed, but Mr. Stahman testified the results of the EP A test should not be used to judge the validity of the Rose Bowl test (Stahman 5384-35); the two tests cannot be directly compared (Stahman 5335) because "of the differences in test procedures, because the test was initiated nearly two years after F-310 was introduced, and because several major oil companies have added similar purpose additives in their gasolines during that period which would influence the base lines (Stahman 5386).

Dr. Philip Myers testified in surrebuttal that Drs. Sterling, Ferber and Kruskal, having been statisticians who were principally concerned with medical tests on animate objects, tests on human beings who respond to the fact of testing and in cases where there is no background of prior experiments on which to draw, naturally tend to want a control group (Myers 6225-28)--a group, for example, to receive a placebo in a medical test to eliminate the human element. On the other hand Mr. White, and I might add Mr. Painter, who planned the Rose Bowl experiment, have had their experience in the field of engineering where you do have in many cases a background of theory to draw on" (Myers 6227-28). Dr, Myers further testified that even without regard to expense, he would not have used a control group in the Rose Bowl test because "the weight of all the evidence is clearly in favor of the fact that emissions from the control group would either remain constant or increase;" it seems therefore completely unnecessary and might induce error to use a control group when you can use the conservative estimate that was used, that the emissions would remain constant with time conservative because "it underestimates the effect of F-:nO" (Myers 6280). , STANDARD OIL COMPANY OF CALIF., ET AL. 1443 1401 Initial Decision .Finally, it is significant that the EPA engineers "reached the same automotive engineering judgments that the Chevron engineers" and Dr. Myers had reached and that they so advised their statisticians (Myers 6239; Stahman 5342-44).

23. Complaint counsel's final rebuttal witness called to criticize the Rose Bowl test was Dr. Alfred G. Cattaneo, an engineer formerly with Shell Oil Company, but who has been out of the field of automotive fuels since 1961. (Cattaneo 5998-6000) He was also a member of the former Technical Advisory Committee to the California Air Resources Board (Cattaneo 6000). Dr. Cattaneo s opinions and criticism of the Rose Bow test are clearly contrary to the weight of the testimonial and documentary evidence. As one example, he testified there is no relationship between a clean carburetor and exhaust emissions (Cattaneo 6058). Every other witness who testified in this regard, both for complaint counsel and respondents, took an opposite view. His testimony a) so defies the expert opinions expressed in innumerable exhibits in evidence, As Dr. Myers said, there is no explanation for Dr. Cattaneo views because "there is a clear relationship between carburetor air-fuel ratio, deposits and emissions" (Myers 6236). A second deficiency in his testimony was his conceded lack of knowledge of the underlying facts with respect to matters as to which he rendered an opinion. To ilustrate: on direct examination he testified the Orange County test in his opinion was of no moment because the maintenance schedule was Ulltypical of the general car population (Cattaneo 6079); on cross-examination he agreed that the test "showed significant reductions from the use of F-810" and was a valid test (Cattaneo 6113). When confronted with the fact that better maintenance of the test cars would result in their having cleaner engines, intake systems, PCV valves and carburetors (Cattaneo 6115), thereby making tbe test all the more demonstrative of 81O' s effectiveness, he dismissed his ability to judge the test with do not notice that test in sufficient detail to have an opinion sir" and " would not care to judge that test from the viewpoint of its significance to the general car population" (Cattaneo 6115). Dr. Cattaneo believed there should have been a control group used in the Rose Bowl test, but for no specific reason, except that he thought the test was looking for 10 to 20 percent reductions in emissions (Cattaneo 6019-20); yet, he conceded on cross-examination, HI have not thought this entirely through how one would have to design it" (Cattaneo 6153- 54). He was unaware that F. G. Bollo, whom he recognized as a competent automotive and petroleum engineer (Cattaneo 6106-07) and with whom he had co-authored a number of technical papers (Cattaneo 6105; Initial Decision 84 F. CX-421), had appeared as a witness for complaint counsel and testified that, assuming a representative sample, the Rose Bowl test was a valid test of F-310' s effectiveness without a control group (Cattaneo 6106-07). Dr. Cattaneo s testimony on a control group added nothing to the testimony of Doctors Sterling, Ferber and Kruskal. Dr. Cattaneo rejected F - HO because it reduces carbon monoxide and hydrocarbon emissions by 10 to 14 percent which he considered to be insignificant, a small reduction" (Cattaneo 6012- 1:i). When cross-examined, he claimed F-310' s 10 to 15 percent reductions of emissions would be worthless if it interfered with other emission control devices (Cattaneo 6089-90), but when forced to admit that he knew of no device which is adversely affected by F -310, he dismissed the matter entirely by saying he couldn t answer the question and "1 don t think it matters at all" (Cattaneo 6090, 6089-93). The evidence is uncontradicted that F -310 does not interfere with any existing or proposed emission control device (Spitler 6209-10). Similarly, at one moment Dr. Cattaneo agreed with Dr. Haagen-Smit of the California Air Resources Board that every method that wil produce even a 10 percent reduction in automobile emissions is a worthwhile step (Cattaneo 6103-04), but a few moments later he testified that time should not be spent "trying to accomplish a mere 10 percent improvement" (Cattaneo 6120). Dr. Cattaneo s testimony on this point is contradicted by many of complaint counsel's own witnesses (Chipman 6118-20; Megonnell 6124-26; Edinger 6127-29; Atschuller 6129: Behar 6130-31).

24. Finally, Dr. Cattaneo criticizes F -310 on the grounds that some of the cars in the Rose Bowl test showed increases in emissions after using F -310 and in his opinion no "cleaning method" is acceptable if some cars still increased their emissions (Cattaneo 6013). He dismisses the fact that the average emissions of almost 300 cars in that test were reduced saying we do "not concern ourselves with an abstract concept like the average " (Cattaneo 6015). Dr. Cattaneo s views in this respect are contradicted by other witnesses who testified on this subject. Complaint counsel' s witness, Francis Bolio, of Shell Oil Company, testified that it is pretty general experience" in tests of the effects of additives on vehicle emissions, that some of the test vehicles may go in a direction other than expected for one random reason or another, independent of the effect of the additive (Bolio 5462-63).

When the Environmental Protection Agency conducted its tests of F- 310, it was concerned with determining the average level of emissions not the emissions of individual cars. Mr. S.B. White of Research Triangle Institute, the consultants to EPA , testified that "it was decided by all that the average emission effect is the parameter of interest" (White 1401 Initial Decision 5975). He further testified that in "light of the inherent variability in anything we test " one would expect that some of the cars would show increases in emissions (White 5939-40); and that the basic purpose of the EP A test was to determine the average effect; "the interest was in the average, not in any particular individual" car (White 5942). Dr. Spitler fully expected that some cars in the Rose Rowl test would increase in emissions; Chevron Research was not interested in individual cars, but rather in the overall average effect of the additive (Spitler 6198-99). Generally, the cars which increased in emissions were cars that initially had low emissions and there was a tendency for such vehicles emissions to bounce around with some going up for a variety of reasons. On the other hand, cars that started with high emissions consistently trended downward (Spitler 6199-6200). Subsequent to the test, Dr. Spitler made a separate investigation of some of the cars that increased substantially in emissions; in all but two or three cases there were obvious explanations" independent of any effect from F -:110 (Spitler 6219-20). Moreover, even though the inclusion of the data from these cars worked adversely to F-31O, they remained in the final test results because in the initial examination of their histories, without regard to their emissions levels, the cars were thought to qualiy (Spitler 6220-21). Robert Stone testified that in any large sample of cars, you always expect to find some that increase rather than decrease (Stone :,965). Ralph C. Stahman of the Environmental Protection Agency testified there will always be some cars whose emissions go up notwithstanding the effect of the additive, and for that reason you look for the average figures (Stahman 5347). Dr. Myers testified that if there wasn t some variability in the emission data, he would suspect it; he would think " was doctored" (Myers 5147); he further testified that variability is the reason that you need a large number of cars in order to get a valid average result" (Myers 5147). Finally, with regard to the Rose Bowl test, Dr. Myers testified in surebuttal that based on his background training and experience, his detailed analysis of the Rose Rowl test and his review of the testimony of all of complaint counsel's rebuttal witnesses, that he had seen no data which would cause him to change his opinion that the Rose Rowl test was a valid test of the effectiveness of 31O (Myers 62:'7.

25. In their rebuttal case, complaint counsel produced witnesses from four oil companies that compete with Standard: Wiliam Kent of Union Oil Company, Robert Snyder of Standard Oil Company of Ohio, Hugh Shannon, who conducted research for Humble Oil Company, and Francis Bollo of Shell Oil Company. Complaint counsel introduced tests of F- 310 which these competitive oil companies had conducted on clean Initial Decision R4 F.T. engines; the tests started with clean engines which emitted very low exhaust emissions and after running during the test period on F-810 the engines were found to have remained clean with no essential change in emissions. As Mr. Kent testified all these tests proved was that the statement in Standard's advertisement that "If a car is Dew or its engine is clean, F-310 wil not improve its performance or reduce its emissions of pollutants" was a correct statement (Kent 5235). And as Mr. Bolio testified, the tests proved that by using F -310 in clean engines "they remained substantially in a clean condition " (Bolio 5466). On cross-examination it was established that each of the competitive oil companies referred to above had also conducted other tests of 1"-310 not offered by complaint counsel, which showed that it did reduce deposits and emissions. Mr. Kent found UF -310 gives very good results with respect to intake valve deposits" (Kent 5249). Mr. Bolio found that F -310 improved the performance of the PCV valve (Bolio 5468); gave improvements of 44-46 percent in removal of intake valve deposits (Bolio 5469-70); and his tests showed that "in addition to the current claims for F -310, assertions may be made that this material can reduce engine oil consumption" (Bolio 5468). Mr. Shannon concluded on the basis of his tests that F -310 when used in cars with dirty carburetors would reduce the emissions of those cars 10-15 percent (Shannon 5402), that the Rose Bowl Test of F-310 conducted by Standard says "the same thing" as Mr. Shannon s tests of F -310 (Shannon 5403). Mr. Snyder of Standard Oil Company of Ohio on direct examination covered two tests of F -310 which the witness established were inconclusive because "mechanical and/or ambient factors may have hidden the effects of the additive" (Snyder 5284, 5263, 5267, 5297-99). Cross-examination developed other tests which showed: F-810 "was much more effective" than their own additive; in one test of F-31O they started with a very dirty carburetor and ended with it essentially clean (Snyder 5281); " 310 produced significantly fcJleaner air-fuel ratios" (Snyder 5283); F -310 was found to be more effective than competitive additives (Snyder 528:1, 5290- , 5295); another test showed "rather conclusively that F-310 was better than their own additive package and "as effective a carburetor cleaner as we had seen" (Snyder 5288, 5290); an intake valve test showed less deposits from use of F-310 and better performance than other additives (Snyder 5294); and another test showed that 310 produced a "dramatic decrease in emissions " (Snyder 5295-96). The company has under consideration the possibilty of using the additive (Snyder 5303).

Complaint counsel have failed to satisfy their burden to establish by reliable, probative and substantial evidence" that the results of the 1401 Initial Dccision lests mentioned in the preceding findings do not support Standard' C. 556(d)-Administrative Procedure Act).advertising claims (5 V. Complaint counsel have the burden of proving that respondents have Commission Act (Koch v. Federal Tradeviolated the Federal Trade , Inc. v. FTC.Commission (6 Cir. 1953), 206 F.2d 311; CarteT Products 268 F.2d 161 ceriorari denied :,61 U.S. 88 (9 Cir. 1959)), and they must satisfy that burden of proof, as noted above, by substantial evidence. In Carlay Co. v. Federal Trade Commission 153 F.2d 493 (7 Cir. 194G), the court described the meaning of the "substantial evidence" standard: Substantial evidence is more than a mere scintilla. It means such relevant evidence as a reasonable mind would accept as adequate to support a conclusion. It must he of such character as to afford a substantia! basis of fad from which the fact in issue call be rcasonably inferred. It cxcludes vague, uncert.ain or irrcJevant matter. It implies a quality and charader of proof which induces conviction and makes a lasting impression on reason (153 r.2d 496), 26. The complaint charges respondents falsely represented the bag 2 toand balloon demonstrations pictured in attachments No. 1 and No. the complaint and in similar television advertisements. The black exhaust shown in the "before" pictures in the bag and balloon advertisements came from cars actually used in the tests conducted by Scott Research Laboratories (Stone 3905): and the same procedures were followed as in the actual tests (Harkins 4117; Spitlcr 4455). The "clear exhaust in the "after" pictures in the bag and balloon advertisements throughwas the result of tbe removal of the deposits from the engines, the use of F -310, thereby reducing their exhaust emissions and eliminat- , 4455; Kane 3534-39; Myersing the visible black smoke (Spitler 4981- 5087-89).

The relationship between the emission of visible black smoke from the tailpipe and excessive exhaust emissions of hydrocarbons and carbon monoxide is a well recognized engineering phenomenon (Harkins 4150-51; Spitler 4(jO- , 4452; Myers 5072- , 5088-89; Kane 3535-39; Stone 3899-3900, :,90G, 3955). Exhaust emissions of unburned hydrocarbons and carbon monoxide from a new car or a car with a clean engine are colorless, but as the car ages and accumulates mileage, deposits rom on critical parts of the engine, such as the carburetor and PCV valve resulting in a rich fuel-air mixture, which in turn increases both hydrocarbon and carbon monoxide emissions. As the deposits continue to build up in such critical areas, the fuel-ai mixture becomes stil richer earlier so that black soot (composed of carbon paricles) is formed; in the but stages the soot particles in the exhaust may not be visible to the eye, filtering the exhaust will show they are present. As tbe engine becomes 575-956 O- LT - 76 - 92 Initial Decision 84 F. very dirty with heavy deposits in the critical areas, the fuel-air mixture becomes so rich that visible black smoke appears in the exhaust and under this condition of visible black smoke, hydrocarbon and carbon monoxide emissions are quite high. Accordingly, visible black smoke in the exhaust of an automobile is an indicator and is "symptomatic" that the engine is receiving an excessively rich fuel-air mixture, causing very high emissions of unburned hydrocarbons and carbon monoxide; and conversely a relatively clear exhaust indicates a much lower level of such emissions (Kane 3535-39; Stone 3899-3900, 3955-56; Harkins 4150- 51; Spitler 4451-56; Myers 5072- , 5088- , Roensch 5174). Complaint counsel' s expert witness Mils testified it is certainly reasonable that an engine emitting black smoke has high emissions of hydrocarbons and carbon monoxide (Mils 3147-48).

John Harkins of Scott Research Laboratories, testified the demonstrations accurately depicted the conditions of the cars that were photographed in both the before and after conditions (Harkins 4146-47); that what one saw in the television film truly and correctly reflected exactly what occurred with the test vehicles (Harkins 4148). Standard's witnesses Kane, Stone and Spitler all testified to the technical justification for the bag and balloon demonstrations (Kane 3535-39; Stone 3899-8900; Spitler 4451-55); Dr. Myers testified the use of the bag and balloon demonstrations were properly " based upon the relationship" between the level of visible black smoke and the level of exhaust emissions of unburned hydrocarbons and carbon monoxide (Myers 5088-89); and Max Roensch testified the advertisements were properly supported by good sound engineering facts and foundation and were "straightforward and to the point because of the relationship pointed out earlier between the visible smoke and emissions" (Roensch 5174). The bag and balloon advertisements do not represent, either explicitly or impHcitly, that every motor vehicle wil emit black smoke unless operated on Chevron gasoline containing F 310. The printed advertisements, attachments No. 1 and No. 2 to the complaint, clearly describe the "before" pictures as showing "exhaust emissions from dirty engines not from all engines, and they contain explanations of what causes "an engine to produce dirty exhaust in the first place;" similarly the television advertisements correlate the dirty exhaust emissions in the black balloon and bag to "exhaust emissions from dirty engines not from all engines. The ability of the public to recognize this distinction is illustrated by the testimony of Robert L. Chass, of the Los Angeles Air Pollution Control District, who, in commenting on the possibilty that the general use of F-310 would eliminate visible emissions from motor vehicles, testified (Chass 4411): , .

1401 Initial Decision This would certainly help, because I don t think there is any question that again we are talking about the public. The man in the street considers this as one of the principal sources of nuisance--driving behind a vehicle t.hat i's pouring it out. The stipulated Evidence points out that smoke is the "most obvious pariculate pollutant; that it is composed primarily of carbon and other combustible substances given off during the incomplete burning of a material; that it is produced by automobiles (Stip- Evid. RX-1l4, item 2 of CX-217); and that the "most obvious effect of air pollution is the reduction of visibility. Indeed, often this is the first sign of an air pollution problem" (Stip. Evid. RX-1l4, item 7 of CX-2l7; RX-1l4, item 3 of CX-178).

Dr. Myers introduced the results of an extensive survey, reported to the California legislature and in a paper of the Society of Automotive Engineers (Myers 5060-65), which showed the levels of carbon monoxide emissions at idle of approximately 24 000 cars in California (Myers 5074; RX-59). In California 51.5 percent of the noncontrolled vehicles (Le. pre- 1966 models without emission control devices) had carbon monoxide emissions above the 5 percent level (RX-IOO; Myers 5062, 50(7), so that their exhaust would contain sooty materials comparable to what is shown in the upper row of gauges photographed in RX-34a (Myers 5(82); 50 percent of the controlled cars had emissions of carbon monoxide above the :1 percent level (HX-lol; Myers 5(69); and for the 24 000 cars the average carbon monoxide emission level was 4 percent (Myers 5(75). He then testified (Myers 5086):

Q, Now, from all this that you just explained t.o His Honor, Doctor, what conclusion do you draw as respeds the bag and balloon demonstrations that were used to illustrate the effect of F-mO? A. That there are a significant number of cars on the road that would have carbon monoxide readings high enough to produce the visible smoke and if you put this smoke in the bag you would get the same results to varying degrees, depending on what. the carhon monoxide reading was--the same result as you did in the commercial. Dr. Myers also testified that similar data for other parts of the United States established that the same conclusions in respect to emission levels arc valid elsewhere (Myers 5061, 5066). Commission Exhibit 91 establishes that other states have laws prohibiting the emission of excessive smoke from motor vehicles (CX- , p. 24); and complaint counsel's witness Rickles testified that regulations both in New York City and New York State prohibit emissions of visible smoke from the exhaust of motor vehicles (Rickles 2826-27). 27. Tbe complaint charges respondents falsely represented that the building identifed as Standard Oil Company of California Chevron Research Center in the advertisements attached as No. 1 and No. 2 to , p. ;)): , 1150 FEDEUAL TUADE COMMISSION DECISIONS rnitial Decision 84 F. the complaint and in corresponding television advertisements owned, occupied, or used for research" by Standard, whereas in fact it is the Riverside County Courthouse in Palm Springs, Calif. (Complaint Paragraphs Five- , Six-8). The one-story building in question is pictured in tbe background of attachment No. 2 to the complaint and in the corresponding balloon television advertisement (RX-4, p. 2); it does not appear in attachment No. 1 to the complaint, nor the corresponding bag television ad vertisement (RX -4, p. 2).

The following stipulations were entered into by complaint counsel and Standard (RX-1l3 A. Standard bad an agreement with Riverside County to use the courthouse in return for paving the courhouse parking lot. B. The Comnrssion s complaint does not charge that Standard' s use of the Riverside County Courhouse or the sign placed on the side oftbe courhouse affected the results of the demonstrations. C. The Commission s complaint does not charge that the use of the courhouse building or the sign misrepresented the qualities or characteristics of F -;)10.

The use of the sign and the building in respondents' advertising represented that r, 310 was developed by Chevron Research Company and marketed by Standard. Both representations are true (Fenton 47(9). The research center at Richmond, Calif., includes more than 20 buildings on a 15.5 acre site, employs over 900 chemists, engineers matbematicians, physicists and technicians, and has a total staff of 1 050. Over 50 percent of the technical personnel bold Masters or Doctors degrees. Chevron Research operates on a budget which in 1970 exceeded $25 000 000. It is one of the largest research companies of its kind west of the Mississippi.

Initially, respondents considered filming the advertisements of the Chevron Research facilities in Richmond, Calif., but for technical reasons, such as the weather, they were unable to do so (Fenton 4768; Clark 4954-55). Simple comparison of the courhouse building, as used in the background of some of the advertisements, and the Chevron Research facilities in Richmond (RX-fj2), supports the uncontradicted testimony that use of the Chevron Research facilities would have been "more impressive" than the building in Palm Springs (Clark 4955). Various pictures of Chevron Research facilities as shown in RX-62 ilustrate the point beyond doubt.

In view of the stipulations that the use of the courthouse and the sign neither affected the results of tbe demonstrations nor "misrepresented the qualities or eharacteristics of 1"-310 " notbing in the picture of the building or the sign thereon could constitute a material factor in any 1401 Initial Decision consumer s decision to buy Chevron gasolines with F-310; or, in other words, could not have the capacity to mislead or deceive the consuming public into purchasing Chevron gasolines containing F-310. 28. The complaint charges respondents falsely represented the meter pictured in the jjMeter" television commercial "is used by the federal government to measure the total amount of pollution emitted by a motor vehicle" (Complaint, Paragraphs Five- , Six-9). In the 60 second Meter" television commercial, the audio text accompanying the picture of the meter states "This type of meter is used by federal and state authorities" (RX- , p. 3). This statement is true, for the undisputed evidence is that the meter "is of the same type as is used by various Federal and State agencies such as the Department of Health, Education and Welfare at its Exhaust Laboratory at Ypsilanti, Mich., by the Federal Motor Vehicle Compliance Section Field Laboratory in the City of Commerce, Calif., by the Air Resources Board of the State of California, and by numerous other public agencies and private organizations (Stip. Fact RXS-113, Exh. 1, p. 3; Harkins 4154). The minor alterations to the face of the meter for the purpose of aiding viewer comprehension in the limited time available in a television commercial did not in any way modify, change or affect its accuracy (Stip. Fact RXS-113, Exh. 1 4).

The I'Meter" television commercial did not represent that the meter was being used during the television demonstration to measure the total amount of pollution emitted by a motor vehicle." The advertisement represented only that the meter was used to measure "exhaust emissions/' which it does do and was doing at the time of the television demonstration. Complaint counsel place special emphasis on the Meter TV commercial (RXS- , p. B). Despite the fact the advertisement nowhere refers to all exhaust emissions " complaint counsel Ucontend that the meter advertisement does make the specific claim to reduce all exhaust emissions" (Tr. 27(3). They rely on the words "exhaust emis sions" appearing on the face of the meter and in the audio text, and the stipulated facts that the meter is not cap"ble of and is not used to measure more than one pollutant at a time, and, as depicted in the TV commercial, was measuring only emissions of hydrocarbons (Stip. Facts 10-11; RXS-113, p. 4). Complaint counsel's contention must be rejected. It is undisputed that hydrocarbon emissions are exhaust emissions and it is common and ordinary usage to refer to the hydrocarbon component in motor vehicle exhaust in the plural, not in the singular. Complaint counsel's own expert witness on emissions testing, Kenneth D. Mils, testified that people in the automobile industry normally use the plural in referring to hydrocarbon emissions (Mills 3124, 3153). In 1452 FEDEUAL TUADE COMMISSION DECISIONS Initial Decision 84 FTC. the Federal Register' of June 4 1968, for example (RXS-24), the Department of Health, Education and Welfare established standards for Evaporative Emissions" (RXS-24a, 24b) yet the only "emissions" covered were hydrocarbons (RXS-24d, 985.22). Further, the Stipulated Evidence in this proceeding specifcally refers to "hydrocarbon emissions (e. RXS- 114, item 2 of CX 151, p. 9: " In the 1971 model year limitations wil be placed on hydrocarbon emissions resulting from evaporation of gasoline from carburetors and fuel tanks RXS-114 item 7 of CX-143, p. 34: "The advantage of this approach-or any other fuel change-is that it would reduce hydrocarbon emissions from all motor vehicles, regardless of whether they were subject to pollution control standards It is also undisputed that the phrase "exhaust emissions" can be ordinarly and commonly used in a generic sense to describe hydrocarbon and carbon monoxide emissions. Federal agencies, in establishing regulations to control air pollution from motor vehicles, regularly use the phrase "exhaust emissions" to refer only to hydrocarbon and carbon monoxide emissions. In the Federal Register of June 4, 1968, for example (RXS-24), the Department of Health, Education and Welfare published "Standards for Exhaust Emissions" (RXS-24a, 24b), yet the only exhaust emissions for which standards were set were hydrocarbons and carbon monoxide (RXS-24d 85.21). (See also, RXS- , RXS- , RXS- 25.

Tbe record also provides an additional reason why the Meter TV commercial is an accurate demonstration of F-310' s capabilty in reducing both hydrocarbon and carbon monoxide emissions, notwithstanding the fact that at the time of tbe filming of the commercial, the meter was only measuring hydrocarbon emissions. As a scientific matter, changes in the levels of the two emissions go "hand in hand." Standard' s witness Robert K. Stone testified that the Meter commercial depicting measurements of unburned hydrocarbons was also ilustrative of the order of magnitude of reductions of emissions of carbon monoxide: "Considering the fact that in these kinds of tests, the carbon monoxide and hydrocarbons go hand in band, to that extent, it certainly in my view would ilustrate that the carbon monoxide emissions were doing the same thing" (Stone :3998-99).

To the same effect is the testimony of John Harkins: Q. Now, Mr, Harkins, at. the time of the fjlming of that. demonstration, the met.er was actually measuring Ilnburned hydrocarbons only; based upon your experience, would this showing on the meter at. that time be in any way indicative of what you would expect to receive in the way of measurements of carbon monoxidf had the metcr been shiftcd over and calibrated for that purpose? 1401 Initial Decision A. Yes. Carbon monoxide and hydrocarbons are highly correlatable. (Q. J In your business, and based upon your long experience, do you frequently use a reading of one exhaust emission, say carbon monoxide, and accept that as a valid indicator of what you would expect to get for, say, unburned hydrocarbons? A. Yes, we do this on a daily basis at Scott. We use carbon monoxide instruments as an indication of the condition of the vehicle.

Q. And do you generally find that thf' measurement of one of those exhaust emissions is very closely paralleJed by the other? A. Yes.

Q. Hearing Examiner Schrup: You mean in rf'lation to--they go hand in hand'! A. The Witness: They go hand in hand, yes, sir (Harkins 4154-55). Similarly, Standard' s witness Dr. Philip Myers testified that the meter as shown in the television commercial "is giving an indication of the changes directly of hydrocarbons and indirectly of carbon monoxide and that the television commercials were a proper demonstration, an accurate demonstration of the effects of F-310 (Myers 5091-92). Further, in this regard, complaint counsel's own evidence shows that nationwide motor vehicles annually emit 86 milion tons of pollutants to the atmosphere, of which 66 million tons are carbon monoxide and 12 million tons are hydrocarbons (CX- ig. 2, p. 11); thus, these two pollutants together account for over 90 percent of the total exhaust emissions from automobiles. Complaint counsel' s own witnesses (e. Behar) established that in some local areas, such as Los Angeles, motor vehicle emissions were responsible for as much as 97 percent of the carbon monoxide and 80 percent of hydrocarbons in the atmosphere (Behar 1956, 1941). Since hydrocarbons and carbon monoxide account for over 90 percent of the total exhaust emissions from motor vehicles since those were the only two pollutants subject to Federal motor vehicle control programs at the time the challenged advertisements were published (Stone 4281; RXS-24), and Rince the Meter TV commercial correctly demonstrated F -31O' s ability to reduce those two pollutants, the representations in the commercial that F -310 reduces exhaust emissions are true.

29. The complaint further charges that respondents falsely represented that tests had been conducted to prove that "Every purchaser of Chevron gasolines containing F -310 "wil obtain significantly better mileage" than can be obtained from "any other commercially available gasoline" (Complaint, Paragraphs Five-lO(c), Six- lO(c)). The challenged advertisements do not represent that every purchaser wil receive significantly better mileage from the use of F -310; they do represent that use of Chevron gasolines containing F-310 "improve mileage" or wil provide "better mileage " but such representations are made in the I nical Decision 84 F. context either of improving mileage in cars with "dirty engines" or in minimizing mileage loss in cars with clean engines. The challenged advertisements do not refer to competitive gasolines or "other commercially available" gasolines. All the tests of F-:1l0 whicb established Its ability to remove and reduce the buildup of deposits on critical parts of engines and to reduce and control hydrocarbon and carbon monoxide emissions, by the same token established F -:no' s ability to improve mileage (Stone 3788-89; Spitler 4452-53; Myers 5028, 5031, 5131). As Dr. Myers testified (Tr. 6233-34):

* * * there is a well-establi:;hed relationship between air-fuel ratio and fuel economy. When you use F -310 and it removes deposits, it changes the air-fuel ratio; it therefore changes the fuel economy. The effect is not tremendous; it is no 20 or 30 percent. nut it is real; it is theoretically sound; it is present. And the Stipulated Evidence establishes that hydrocarbons and carhon monoxide represent "unburned and wasted fuel" (RX- 114, item 1 ofCX- 87).

The Scott Research Laboratories tests conducted prior to the publication of the challenged advertisements established that the use of F -:110 reduced fuel consumption in dirty engines by an average of 8 percent with larger improvements under idling conditions (18.2 percent) and at steady cruise of 25 miles per hour (12.6 percent) (Stone 3869; Spitler 4452-53: RX- , App. H). Tests on taxicabs in Spokane, Washington showed that three months "after switching to Chevron gasolines containing F-310, the two test groups showed an average increase in mileage per gallon of 15.66 percent. This is a significant improvement and represents a substantial saving in the costs of operating a taxicab fleet" (RX - , affdavit of the owner of the taxicab company, stipulated into evidence with all objections to admissibility waived, Tr. 5055). :,0. The complaint charges respondents falsely represented that Chevron gasolines containing F-3IO "wil clean or keep clean all engines and engine components" (Complaint, Paragraph Five-II). The complaint further alleges, however, that the representation is false because in truth and in fact" F -310 reduces the accumulation of deposits in the carburetor and in or on certain other engine c(J'mponents (Complaint Paragraph Six-II), The challenged advertisements do not represent that Chevron gasolines containing F- 310 will clean or keep clean all engines or all engine components; they do represent that F-3IO "reduces the accumulation of deposits in the carburetor and in or on certain other engine components.

In fact the use of Chevron gasolincs with 11-310 removes and reduces the buildup of deposits in carburetors, intake manifolds, intake ports 1401 Initial Decision and on intake valves and PCV valves, and minimizes the buildup of sludge and varnish on pistons, piston rings, valve lifters, oil screens, oil pump relief valves and throughout the crankcase area of dirty engines. The degree of improvement necessarily depends upon the condition of the engine. In the case of new cars or cars with clean engines, F -310 wil prevent or minimize the accumulation of such deposits. :11. Wiliam H. Megonnell, Director of the Division of Stationary Source Enforcement of the Environmental Protection Agency, testified that the automobile as a source of air pollution varies from area to area; for example, in Washington, D. , it emits more than 70 percent of the hydrocarbons and about 99 percent of the carbon monoxide (Megonnell 3446-47); while in West Virginia, the motor vehicle contributes only 1percent of the air pollution (Megonnell 3448). Mr. Megonnell also testified on cross-examination concerning EP A's regulation of motor vehicle emissions (Megonnell 3451-52); that even though the automobile s contribution is small in some areas of the country, the air quality standards and controls of automobile emissions are established by law on a nationwide basis (MegonnelJ 3452). He explained tbe reason for nationwide controls:

A. The reason is: Congress passed a law and it applies nationa)Jy, and in the field of public health there is a web-established principle that you regulate based on the worst situation. So, it is quite true that in Mt, Storm, West Virginia, the fellow buying a new car couldn t care less about the controls on it, but he must put it on because Los Angeles California, has the problem.

Q. Now, in the course of the functions and duties that you performed, and observed in your work for the Federal Government, has it always been the case that these standards and controls arc set up on a nationwide basis? A. Since 1968, that was the first year that there was national control put on" (Megonnen 3452-53).

also testified that even nationwide control programs, such as the evaporative controls to prevent escape of vapors from gasoline tanks which provided only a 1 percent reduction in hydrocarbon emissions in the first year (1971) and which wil take 10 years to accomplish a litte over a 10 percent reduction, were undertaken by the government because "every litte bit helps" (Megonnell 3453-55). John Chipman, an engineer with the California Air Resources Board, called by complaint counsel for a different purpose, testified on cross-examination that a 10 percent reduction of hydrocarbons and carbon monoxide would be a worthwhile" improvement and agreed with Dr. Haagen-Smit, Chairman of the California Air Resources Board, that "every little bit counts (Chipman 2780-81).

Testimony of most of complaint counsel' s witnesses established that reductions of even lesser magnitude than those achieved by F-310 were , , 1456 FEDERAL THAIJE COMMISSION DECISIONS Initial Decision 84 F. important" and "worthwhile" and were necessary in the "step-by-step process needed to achieve the required standards of air quality. To establish the significance of F-310' s reductions of hydrocarbons and carbon monoxide from exhaust emissions of motor vehicles, Standard introduced comparisons which showed that the reduction in automotive air pollution, which would result from the general use of F -;)10, would exceed in most instances and approximate in others the reductions achieved from varous emission control programs adopted, enforced or approved by government agencies. Most of the comparisons were introduced through respondents' witness Robert K. Stone; and many used data for Los Angeles County, because it had a "large car population for which there is good information;" the results, however would apply to other car populations anywhere in the United States" (Stone 4002-04). Robert K. Stone compared the significance of F-310' s capabilities with other additives. He testified on the basis of his background, training and experience, particularly in the field of working with government agencies and the like, seeking ways and means of controlling automotive exhaust emissions. There was, in his opinion, no other known additive which provided the benefits of deposit control to the same degree and to as many areas of the automobile as does 1"-310 (Stone 4279). Even when other additives were tested at higher concentrations, such as are used with F-310, they were unable to provide tbe same benefits as F - , and many at such concentrations developed adverse effects (Stone 4280). Dr. Eneas D. Kane testified that a reduction of only 50 parts per milion of hydrocarbon emissions from vehicles in the average car population ie. of around 15 percent, from use of F-310 would indeed be significant" (Kane 3552, 3546-52); and that based on all the in-house testing that was done at Chevron Research on F'-31O, all of the testing on employees cars, fleet vehicles, and the Scott Research Laboratories tests, there was a scientific and an engineering basis for the advertising claim that F -310 would result in a significant reduction of hydrocarbons and carbon monoxide (Kane 3553).

Robert L. Chass of the Los Angeles County Air Pollution Control District testified that F-:no is a significant contribution to the reduction of air pollution by reducing hydrocarbon and carbon monoxide emissions in the general car population (Chass 4:379, 4441-42); and that the results of the Rose Bowl test are valid and accurate results and represent a significant" reduction in exhaust emissions of hydrocarbons and carbon monoxide (Chass 4.175). Max Roensch, an expert witness for Standard testified that the reductions in exhaust emissions produced by F -;)10 are very significant;" that there is "no magic formula" to eliminate exhaust 1401 Initial Decision emissions; that it must be accomplished step by step and therefore even , 3 or 5 percent reductions would be significant (Roensch 5176). Dr. Phillip Myers, an expert witness for Standard, testified that on the basis of his entire investigation of F-:nO it was his opinion that the emissions "reductions achieved by F-310 are significant" (Myers 5128- 30); that F -310 "is available now" when emissions are at their highest level, and it uwil reduce emissions now;" it wil reduce emissions in all cars on the average, if used in all cars (Myers .5130); the consumer doesn t have to do anything, the result comes automatically (Myers 5130); it is an economical way to improve the atmosphere (Myers 51:iO- :Jl). Dr. Myers also reviewed all the comparisons of reductions by F-310 with reductions by government control measures and he agreed with the analyses of witness Stone (Myers 5130-31). Dr. Wiliam L. Faith originally subpoenaed as an expert witness on smog by complaint counsel but then excused, was caned by Standard. He was asked whether a 13.9 percent reduction in hydrocarbon emissions from automobiles would be significant and he answered: "Certainly it would be significant " adding that even a 5 percent reduction would be significant (Faith 4250). Dr. Faith was also of the opinion that the comparisons of F-31O' reductions with those of other control measures (RXS-:J6 through RXS- 5gb) was an appropriate way of determining the significance of the effect of a product such as F -810 (Faith 4252). He was familiar with all the control procedures compared by Mr. Stone and testified that Mr. Stone in no instance unfairly favored F -810 (Faith 4254). 32. The overwhelming weight of the reliable and probative evidence in this matter establishes that in fact the use of Chevron gasolines containing F -310 wil reduce hydrocarbon and carbon monoxide emissions from cars with dirty engines, and prevent or minimize the increase of hydrocarbon and carbon monoxide emissions from new cars or cars with clean engines, by amounts which constitute a significant reduction of those pollutants in the atmosphere, thereby making a significant contribution to cleaner air.

Following the close of the evidentiary trial record in this matter complaint counsel at page 89 in their Memorandum in Support of the Proposed Findings of Fact, Conclusions of Law and Order filed Feb. 26 1973 have attempted to interject a new issue in this matter not the subject of the specific allegations and charge of the complaint directed to the challenged advertising by the respondents. The memorandum states "we believe the staff is entitled to the following modification of Part I of the proposed order, should the Judge find that the use of Standard' s gasoline does significantly reduce air pollution. Initial Decision 84 F. The proposed modified order, if' issued, would require that the respondents "do forthwith cease and desist, in connection with advertising, offering for sale, sale or distribution of gasoline unless it is clearly and conspicuously disclosed on the pumps dispensing gasoline and in advertising that: 'USE OF THIS PRODUCT IS HARMFUL TO HUMAN HEALTH AND WELFARE. IT'S USE WILL HAVE DAMAGING EFFECTS TO HEALTH, VEGETATION, AND CROPS, AND WILL RESULT IN A REDUCTION OF VISIBILITY. IN CERTAIN AREAS IT WILL CAUSE PHOTOCHEMICAL SMOG.''' This modification or alternative order directed to gasoline as such with or without the additive F-31O being now proposed by complaint counsel is rejected. See particularly, pages 24-28 of Reply of respondent Batten, Barton, Durstine & Osborn, Inc. to Proposed Findings of Fact Conclusions and Order Submitted by Complaint Counsel. Finally it is found that the Motion filed Febr. 2, 1973 of respondent, Batten, Barton Durstine & Osborn, Inc. to dismiss the complaint against it for failure of proof should be, and is hereinafter, granted. THE ORAL ARGUMENT Counsel for respondent Standard on Mar. 19, 1973 filed a 49-page reply to the proposed findings of fact of complaint counsel. Counsel for respondent BBD&O on Mar. 19, 1973 fied a 33-page reply to the proposed findings of fact of complaint counsel. Complaint counsel on Mar. 16, 1973 filed a 263-page reply to the proposed findings of fact of each of the respondents. Complaint counsel at such time also submitted two very voluminous loose-leaf files entitled, Volume I and Volume II containing lengthy extracts of the transcript testimony of' record of some 28 witnesses.

A two day oral argument was held in this matter on Mar. 28 and Mar. , 1973 covering the entire record in this proceeding, Incorporated in the oral argument are two single page documents submitted by respondent Standard, respectively entitled, Factual Guidelines for Interpreting the F -310 Advertisements and Legal Guidelines for Interpreting the 310 Advertisements, The oral argument was informative and helped pinpoint the pertinent issues necessary for resolution of this matter and was fully considered in the making of the preceding findings of fact. CONCL US IONS 1. Complaint counsel have failed to carry the required burden of factual proof that respondent Standard Oil Company of California has violated Section 5 of the Federal Trade Commission Act as alleged and charged in the complaint.

1101 Opinion of the Commission 2. Complaint counsel have failed to carry the required burden of factual proof that respondent Batten, Barton, Durstine & Osborn, Inc. has violated Section 5 of the Federal Trade Commission Act as alleged and charged in the complaint.

3. The complaint in this proceeding therefore should be dismissed as to each said respondent.

OHDEH It is ordered That the complaint in this proceeding be, and the same hereby is, dismissed as to respondent Standard Oil Company of California and as to respondent Batten, Barton, Durstine & Osborn, Inc. for failure of proof.

OPINION OF THE COMMISSION BY ENGMAN CO'ftrniss'ioner:

Complaint counsel appeal from the administrative law judge s initial decision dismissing the complaint as to both respondents. The complaint alleges that respondents used false, misleading and deceptive advertisements to promote the sale of Chevron gasolines containing F -310, an engine cleaning gasoline additive developed by respondent Standard Oil Company of California. Respondent Batten, Barton, Durstine & Osborn Inc. is the advertising agency which prepared and distributed the advertisements, The advertisements purport to demonstrate F-31O' s capacity to control automotive exhaust emissions and increase gasoline mileage. The demonstrations are based on tests conducted by an independent testing rit, and the record indicates that F -310 does have some degree of effectiveness in preventing and removing internal engine deposits and reducing exhaust emissions. However, the development of a product with laudable characteristics does not grant a license to exaggerate its effectiveness. We find that respondents through demonstrations made claims which far exceed the actual effects of F-:Jlo. Such advertisements had the capacity to deceive the consuming public and violated Section 5 of the Federal Trade Commission Act. L THE F-31O ADVEHTISEMENTS The F-310 advertisements at issue were first disseminated in Jan. 1970, and included five basic television commercials, numerous related radio and print advertisements, and a variety of point of purchase advertising materials. Respondents entitled the television commercials The Balloon, The Bag, The Meter, The Torch and The Garage Door. Full Opinion of the Commission 84 F. audio texts and brief descriptions of the video portions of each of the basic, 60-second television commercials are set forth below and in the appendix to this opinion. Also reproduced in the appendix are samples of print ads based on tbe Balloon and Bag themes. In each television dramatization, astronaut Scott Carpenter appears and provides the audio portion of the advertisement while a test demonstration is carried out by workers clad in white laboratory coats bearing identifiable Chevron emblems. Each advertisement uses a before-andafter test comparison format, with an assertion that just six tanksful of Chevron gasoline with F -310 caused the difference in test results. Our analysis wil focus on the Balloon, Bag- and Meter advertisements, which contain the most glaring misrepresentations. A. The Balloon and The Rog The Balloon and Rag television advertisements have similar formats in which the exhaust from a test car is collected inside a large transparent plastic bag. In the Balloon ad, the plastic bag is attached directly to the exhaust pipe of the car, and as the bag fils with exhaust, it rises until it is suspended in the air to the rear of the car. In the Bag ad, the car is enclosed inside a plastic bag, so the exhaust inflates the bag around the car.

In the "before" sequences of the ads, the bags fil with thick black smoke making it impossible to see into or through them. The "after sequences, show the bags again filing with exhaust. This time, however the inflated bags are clear so that the viewer can see inside and completely through them. In the "after" sequence ofthe Bag ad, the test car which was previously engulfed in black smoke is completely visible. In the same segment of the Balloon ad, one sees objects directly behind the balloon" which were totally blocked out before. Copies of the storyboard summaries of the 60-second versions of these commercials are set forth on the following pages:

-The sturyb()ard placeu in the record, and repruduced here, "how certain superimposed qoa!ifying language beinl! flashed on the acreen. All indicated below, p. 7 lp. 1: 6;J-64 hereinj. th"s" measlIg"" did not appear in the television commercials during!' the period Jan. 9 1910. June 9, 1910. ilm of the IIdUIl160- ccond commercial they appeared during!/ thi period "f time lire in the record. , . , p.,..,,,, ..., p,,(,,,,,..,,, ,, . , ,. ... :,...!. . ::.\...,?,.:,,.., ... . :,,;,:,. . .. ,, ,, , : ,. , . . : , :. ,. , ..., ,/ 1401 Opinion of the Commission Standard Oil Company of California BBO & 0 "'BALLOON.. 60 SEC, COLOR .II '1' "

:2.

"C ",,"""C I'm s ,iC ,p.n"", " Wfi'olnfoe." "!1.ching' . d .,"a"Gon' ,n""""'G .1,,, go; 'Q "'0"" ." U'''9 w"n";"y ' .",i..ion. lh" m',"M" w," 1I7IT!-""'' D'_ No""co"".dlh.lii....llirtl'OU -0 C4momt._of -""""'""fo""u'.F-'''3\C.d','y,""".",oo...n.y",.ng; s.",,, .0" ._a.lIaolt '3'0 '0. - 4... And"oc""""'""""",~w'''ec .nN'" ""dirt"""'.. .""'I.",oj...n.".', "G '. """Q' h'fjheio '0". 0""""" C""on ..II )'O, Am.job,.."'hmu "Dm Q"' om "!'''8, ,'''c.'probl.m. F-310 "_O' c:--, C'U''''.;' bon.rni'-90- Ch."o 110 !"'M ,'" ""'''"0 T"",."". or",, ' '0'" .."... !TJSert""hibits from ins. page 2233 ...... ... y .,.,, _..,,.,,,,,,,,,,,,,,. .:: Opinion of the Commission 84 F. Standard Oil Company of California BBD & D "BAG" 60 SEC. CDLOR .....'8d. _)n.pj.. t.oo T"-'w_.....u.og... ,..""'Io_p,,,'or \o.;-cl, "...,__oint1.. v..If\olhaw- '"..bolnga",_ "'C It flc TI" "",nw bo--, ""11....,"001\.",""".'"m Sctl C_n"'. oIRi..,.,..",...."""Iir.01Uh..""_"""''' "i"l-"''' f'=l """""08..c--.. SI""c..'''Joi. (t"". c"'_ral. Fof.3111I1oo..ddll,,- oICb.,onwl..F-31Q . bo"" mjl4.,, c..."., ''' "'rt..""wo'fa,,"'w C"".",n.."nF.J'Owmo"'''...",. l"'",. An""..!Em....,...",....dOO'Yh."""Sf . ""I'" ",""... A.-lIooll""oLnco on", cJ"nmH.... "!""In_o310b..po"ao F-310 T""..,. "n_"'''DIh. ohm"...,....I"(H In.-ert pxhihil from mH. page 22:14 1401 Opinion of the Commission R. The Meter In the Meter ad, after an aerial view of the test car, the dial of a meter is shown with a left-to right calibration from zero to 100. On the left side of the dial is the word CLEAN with an arow pointing; in the direction of zero. On the right side of the dial is the word DIRTY with an arrow pointing toward 100. The words EXHAUST EMISSIONS appear immediately below the dial. Scott Carpenter describes the meter as the type used by federal and state authorities to test emissions. The test demonstration consists of a technician inserting a test electrode into the exhaust pipe of the car followed by a full screen showing of the meter as it registers the contaminant level. At first the meter registers 100 - DIRTY. In the "after" sequence, the meter registers 20 - CLEAN. C. Audio Portions of the Tele?!ision Commercials The audio portions of the television advertisements contain claims that F-310 is one of "the most signifcant developments in gasoline history, reduces exhaust emissions from dirty engines " and, after just six tanksful of Cbevron with F -310, exhaust emissions are reduced leaving "no dirty smoke " and "cleaner air." The Bag, Ba1loan and Meter commercials all conclude with the following statements: Chevron with F -310 turns dirty smoke into good, dean mileage. There isn t a car on the road that shouldn the using it.

Near the end of each television commercial, a side-by-side, split screen comparison is used to contrast a diry balloon to a dean one, a meter reading 100 to a meter reading 20, etc. This type of side-by-side comparison is also used in most of the initial newspaper and magazine ads.

By June 9, 1970, the television commercials and some of the print ads had run in all western states. From June 10, 1970 through Aug. 1970, the ads continued, but during that period, some qualifying language was superimposed on the video portion of the television commercials. I Although the language of the complaint would permit scrutiny of all 31O advertisements making emission control and mileage claims after Jan. 9, 1970, we concern ourselves here only with the initial test comparison advertisements disseminated from Jan. 9 to June 9, 1970, focus- I Some Or all of the fulJuwi"g wen' flushed on the screen at different time during tel"visinn commercial run after Jon 10: "Very Diry Engi"eo Purposely Us..d to Provide Sev"re Test Not All Cars Emit Exce ive Exhau Only Dirty Enj-rines Emit Black Smoke Degr",' of Improv"ment in Your Car Depend on Condition of Engine. The superimposed lang1Jage w"s adrkd voIunUirily and an Assorance uf Voluntary Compli"nce W,," filed with the Cornrnis ion promising continued tJs,' of th" oup"rimpused language wh"never the enrnrn"rdal were used in the future The Commission has not accepted respnnd"nt s assurane,' of compliance as dispositio1\ of thi matter. 575- 956 O- LT - 76 - 93 1464 joEDEHAL TRADE COMMISSION DECISIONS Opinion of the Commission 84 F'. ing specifically on the Bag, Balloon and Meter television and print advertisements.

II. THE COMPLAINT AND INITIAL DECISION The Commission s complaint alleges that the challenged advertisements made the following false, misleading and deceptive representations: (1) F-31O in Chevron gasolines is a revolutionary development in the reduction of air pollution; (2) Chevron with F-31O wil produce motor vehicle exhaust which is generally pollution free; (:J) Chevron with F- 310 will significantly reduce the total amount of air pollution; (4) Chevron with F-310 will significantly reduce air pollution caused by motor vebicles; (5) Cbevron with F-31O will significantly reduce emissions of carbon monoxide (CO) and unburned hydrocarbons (HC) from every motor vehicle in which it is used; (6) the Balloon and Bag demonstrations constitute proof, or accurately or visually demonstrate that Chevron with F-310 reduces motor vehicle emissions of HC and CO and signifcantly reduces air pollution caused by motor vehicles; (7) every motor vehicle will emit black exhaust as pictured in the Balloon, Bag and other demonstrations if operated on motor fuels other than Chevron with F-31O; (8) the building identified as Standard Oil Company of California Research Center in some of the advertisements is owned occupied, or used for research by Standard; (!J) the machine (Meter) pictured in some of the advertisements is used by the Federal Government to measure the total amount of pollution emitted by a motor vehicle; (10) tests or demonstrations had been performed before publication or dissemination of the advertisements which proved representations (2), (3), (4) and (5) above, and also that every purchaser of Chevron with F-310 will obtain signifcantly better mileage than with any other commercially available gasoline; (11) F' 310 or Chevron with 1 310 will clean or keep clean all engines and engine components. The ALJ concluded that complaint counsel had failed to carry the required burden of proof in support of the complaint's allegations, and he dismissed the complaint as to both respondents. As a preface to our discussion of the questions raised on appeal, we wil summarize the nature of the motor vehicle air pollution problem in the United States prior to 1970, provide a brief history of Standard' development of F-31O, and review the testing of F -310. III. THE MOTOR VEHICLE AIR POLLUTION PROBLEM The most prominent claim of the challenged advertisements is that F- 310 affects emissions of air pollutants from motor vehicles. The record contains considerable evidence concerning the nature of the automotive STANDARD OIL COMPANY OF CALIF., ET AI. 1465 1401 Opinion of the Commission air pollution problem in the United States and the capacity of pre-1970 technology to control it.

The principal groups of air contaminants resulting from the fuels and combustion processes of motor vehicles are unburned hydrocarbons (HC), carhon monoxide (CO), oxides of nitrogen (NO,), sulfur oxides and various particulates, including lead compounds. In addition, a number of secondary pollutants are created when the primary pollutants react chemically with each other and with other substances in the atmosphere after leaving the motor vehicle. 2 On the basis of weight , HC and NO, are the most abundant of automotive air pollutants. Although there is some dispute among authorities as to which of the automotive pollutants are most damaging, and which should command top priority in pollution control programs, federal and state auto pollution programs in effect prior to 1970 were concerned almost entirely with the control of CO and HC.

It should be noted that all the national emission standards and the accompanying mechanical add-on requirements applied to new cars. It is widely acknowledged, however, that emissions generally increase as cars get older, even in cars with built-in pollution control devices. The question of what to do about pollution levels in used cars is a troublesome onc, and we have kept in mind the used car emission problem throughout our analysis of this appeal.

Respondent' s defense of the disputed advertising claims is based principally on F-310' s ability to reduce HC and CO exhaust emissions. Standard admitted in its answer that F-310 had no impact whatsoever on lead compound emissions. In the course of the hearings, the company Z Lc,"y, Tr. 127Z- . Moat ondersirable HCs from automotive soorceR, for example. require further chemical alteration before they become hazaniou", and Rome of the moat damaging forms of aotomotive NO" result from secondary atmospheric reactions. In SOme geographic areas, II Rigoificant product of the interreaction of primary pollutant" io the atmosphere is photocbemkal smog. Photochemical smog result" from the chemical combination of certain unburned HC and NO, in the pre ence of sonliKht. It redoeea viaibility, cauaea eyc irritation and, in certain forma, clln adveraely affcct the health of planta and people. Smol/. of coor, ia a particularly aerioUH air pollotion problem in the Loa Anllelea Bas;n where F.:J10 was heavily marketed and advertised throulIhout the eha!lenged ad campaign. Levy, Tr. 1260-72; Behar, Tr. 19:,8-40: Faith, Tr. 4236-47. There are around 200 varieties of HCa if! automotive exhaoat. Levy, Tr. !280. There are e timates in the record that only from 60 to 7f, percent of them arc reactive and therefore eontrihutora to pollutiona. Levy, Tr. 1:,02 (!;O percent reactive): Stone, Tr. 4347 and ex 219, p. 4 (75 percef!t reactive).

;j The United Statea Ef!vironmental Prot.ection Agency has eatimated that Kasoline operated motor vehiclea were reaponaible in 1968 for 59,0 percent of all CO pollution; 47.5 percent of all HC; :J2 percent of all NOx; 1.8 percent of all particulatea and.6 pereentof all sulfur oxides. CX 120. Tablea 2, 4 , 7, 9 and 11 Following early efforta hy the Californ;a State Government to cOTJtrol auto emiaaiona. includinl\ enactment of emiaaion level ceilinga aa early aa 195!!, and the requirement that poaitive CTankcaae ventibtion (rCV) valvea lw ;natal1ed in all new ears Hold in the state bel\inning with 19fi1 modela, the Ferleral Government reqoired pev valves on all TJeW cars in )9fi:J aod eatabUahed national auto emiaaion atamlarda fur 19fi8 models. The ataodards for 1968 Car" required a 5:- percent reduction of c.0 and a 62 perceot reduction of !lC. All 1969 models had to alan mainta;n those level.. Stand:,rda for the !970 model year increaaed the requirementa to a tnt,,! fi8 percent reduct;oo of CO and 67 percent redoctin" nf HC. In the 1971 model year, the standards reqoired 85 percent t"tal HC reduction. Opinion of the Commission 84 F. acknowledged it wasn t until after the F -:nO advertising campaign began that they learned F-31O may have some impact on NO, emissionsJi One of the main contributors to increased automotive air pollution in cars can be an imperfect air/fuel mixture in an engine s combustion system. The imbalance usually results from faulty carburetor function. If the air/fuel ratio is too rich in fuel, there is a higher level of unburned fuel compounds, and HC and CO emissions increase. If the fuel mixture is too lean, the tendency is toward a slight decrease in HC and CO emissions. (; When a rich mixture is present, fuel economy also tends to drop because of an increase in wasted, unburned fuel. Although carburetor malfunctions may be caused by improper mechanical adjustments, the formation of carbonaceous deposits on vital carburetor components can contribute to an increase in HC and CO emissions. One of the main claims for F-31O is that it removes such carburetor deposits.

IV. THE DEVELOPMENT AND CHAHACTEHISTICS OF' 310 Respondent Standard became actively involved in the development of deposit-controllng gasoline additives in the early 1950s. Chevron Research Company, a Standard subsidiary, conducted extensive laboratory and field tests in efforts to improve and develop such additives. Numerous mixtures of the components which would eventually become the F- 310 additive package were tested and evaluated. In 1968, the present F- 310 package was developed, and Chevron Research had accumulated evidence that the new additive package was not only effective in controlling carburetor and intake system deposits, but also in reducing the build-up of sludge and varnish on pistons, piston rings, valve lifters, oil screens, oil pump relief valves and PCV valves. Evidence would also later be uncovered that even certain theretofore untouched crankcase deposits were affected by F-310.

Respondents determined that, although numerous F'-310 tests had been conducted during the development of the additive, the strength of their marketing efforts would be increased if another series of tests were run by an independent testing company, Scott Research Laboratories, Inc., in San Bernardino, California.

Accurdin to 1!lIili Com mer"" nep"rtmCTlt " ti",at,,s, 100 p('r e"t of the CO, :-O , :Inri lead pollutants from aut()mobile came from the exhaust. fifty-fjve percent of the automotive He p"llulants came from cxha,, t with 25 !Itr ent coming frnm fuel tank and carburet"r cvap"n,tion and 20 percent from ('ankease blowby- CX 91 , Part 1, p. J Fig.

!;With" 1",11mix tun" I\' emis i()m; may t.end 1.0 go up because of a rPHolling increa c in cf1girw ternlwratLln' !!!! 1401 Opinion of the Commission V. TESTS BY SCOTT HESEAHCH LABORATORIES, INC- Thirteen F-310 tests were conducted by Scott, beginning in 1968. 7 A specially formulated fuel developed by Chevron Research was used in the first phase of the tests. The fuel was chemically structured to assure the rapid build-up of heavy internal engine deposits. The test cars were driven 5 000 to 20 000 miles, over a prescribed course until they idled roughly, stalled, and emitted visible black smoke. At the conclusion of this "dirty-up" phase, tests of the cars' exhaust emissions showed substantially increased levels of H C and CO. A "clean-up" phase was then commenced during which the cars were driven over the same test course for 2 000 miles using Chevron premium gasoline with F-:nO additive.

During the "clean- " phase of the thirteen tests, HC emissions were reduced over 50 percent on the average, and CO emission reduction averaged more than 38 percent. Gasoline mileage improved an average of 7.7 percent."

Complaint counsel's major challenge to the Scott tests is aimed not at whether the tests were properly conducted in a technical sense, but whether the tests really show what respondents' advertisements say they do- There was considerable discussion on the record as to whether the use of an accelerated test procedure with a specially formulated dirty- " fuel realistically approximated actual driving experiences of average gasoline consumers. Respondents have conceded that the tests 7 For the first scri s of Lests, six 1!W,!; Ch,'vro!,.ts with !""title to :JOOtWJodur,..ter mil,'s w('r" S('l"dtd fro!lusl'd Car Jots and insp d to s e if they nwt !Pst s\J"eifkaLions- r-"w or r"bu;IL ,,,,rbureLors il,,1 n!'w I'CY v"lv(.s were inm"ned on ach ''''r. 1\' " oth r cle""jng or m dwnie"J udjuslJn""t w"r de, After th" n!'W earborotors "ntl I'CV Vl\!;" 'R wpre in pla, ttl" ehr ' pmi sion W"re te h'd ,md fjv ofthe,'m met Califoroiaxhaust emissi"ns standards- AIJi)( ofthe" " Were eqoipped with kg-any ma",latpd em;s5i,m control equipment. New PCV val,' wen' al1"irl if) tau"d i" fjv" of th"ix "an at th,' beginnj,,!; of Pha t II to focu "Ue"tjon on the carbu.retor cleaning action of the uddit;v('- Afkr th" " el"an-ol' '' pha, all six "ar h"wed HC and CO reductin"', ",,,1 beu r fu,.1 rnill'ag - Two can; from olh,'r ((anufactun'r wer th,'J added to the te l fieet, ami seven simibr te$b wen' eonducterl U ;J1g th additim",1 Car 'md "rnp "f th original 5ix cars. Thi., time, the PCV vah' wer" not rppla,,"ed at th" bel!inning nf the clean-up pha5 and Ch vron r gujar """s used inst""d of pr miun, in Som" uf the ars PC\' v"lv,' plugging Wa rpdu,' d to zer" in 5ix of U,,, eight car "n whi"h I'CY ,alv" plugging me,, un' m"nb w,'rC taken_ lnune "fthe"ther lwoth"rf' Was n"!'v;dene,'ofplugging,,tthpstarl of the cl""n-upph"se and "e",,"ide,.ahk rpduet;nn wa a"hievpd in th" r"",ajninl- te t even lhDugh thp "logging did not f(.uch Z"ro. !I At ahool the timt the ahnvn t,, w"re hein!, conduct,'d by Scutt, St,,,dard ran a t.. t on eleven used passenger ear . In th,'"e te, ther w,, at! "v"ran !I.ller""nt reduption of HC and \!. I peree"L r"dUltion uf CO. RX" lif, pp- !t7- Additi""ally, aft.er U". comrn,'np,'ment of the F- :JJO "d"."rti ing campaign ;/1 .1,'1, 1!J70 "v!'r,,1 t,, l" "."n. conduct",d on U,,, "dditiv,' uy vari()u. ""rnpeti"v: oil "o"'panics, loc,,j "nd "ational govl'rn!lH'nt agencl, and r""P""rI,.nt Stanrlard These po "dverti"ing tpsts, alt.h"ugh nut admits.,;hl" On the i ue of whether n' I'''nd'-lit d a ,.e,, "nabln uusis j,,, ",aking lhcir adv"rti ing- claim" at Uw time they w"r" cmnm"nc€,I r'f; . l",, RI F T-C. Z;, (1972), wer" properly "admitted into thp ",'"m-d since th" c"Ulplaint als"h"IJ"ng'" th,. veracity of cbims in th" F- n(l advt'rtisE'"wnb. Th"s" t,, ts and OLJr fj(Jding co,,,' ,'rn;ng them are set fnrth ill tht, Appendix t" thi opiniun in th" "a (' of the S"ott t,. , t.h"s uddiUon,Ji t, fail to sopport th,' greatly (,xaggerat"d dcpid;om; ",,,tained in the Bag. flail""" and Mdtrudvertis"mc"ts y 1468 FEDEi(AL THAIJE COMMISSION DECISIONS Opinion of the Commission B4 F. are unquestionably 8cvere tefits which resulted in larger emissions improvements than would be enjoyed in the general car population. They argue, however, that if F-:Jlo succeeds in removing deposits from extremely dirty engines, it will also affect deposits in engincs of cars with less severe problems and retard build-up of deposits in "clean engines.

Numerous expcrts testified concerning the applicability of the Scott test data to the general car population. Dr. Spitler and other experts at Chevron Research estimated the likely impact on the general car population would be somewhere between 10 and 20 percent reduction of HC and CO. Dr. Kane, president of Chevron Research during F -31 O's development, estimated the likely impact on the average car population to be around 15 percent" or more. Robert 1. Chass, Air Pollution Control officer for the Los Angeles Ai Pollution Control District, also estimated the probable average impact to be 15 percent based on the Scott tests. 10 VI. COMPLAINT COUNSEL S APPEAL Complaint counsel maintain in their appeal that, contrary to the conclusion of the ALJ, there is ample evidence in the record to support the allegations of the complaint. We will first consider the arguments that the Balloon and Bag television and print advertisements represented that use of Chevron with F-31O wil result in motor vehicle exhaust which is generally pollution free.

A. Ralloon and Rag Advertisements Paragraphs Five- , Five- , Six-2 and Six-6 of the complaint charge that the Balloon and Bag advertisements deceptively overstate F-31O' effectiveness and falsely represent that Chevron with F -310 will produce motor vehicle exhaust which is generally pollution free. The cars used in the Balloon and Bag demonstrations were among the oribrinal Scott test vehicles. For the filmed demonstrations, they were run through virtually the same accelerated process as in the Scott tests with 10 For install"", in a Mar. 11-, !!17() Jetter tn a "'cmber or th" L"s Ang('l,, Cou"ly Board "j" SUpcrvi or. , Mr., Ch,,"," id:

The test dala available"" far' . ""nn""ing the effects "10 !'xhausl "mi" j()t\s llsing 1"-:-\0 ga "line art, ,wi ;"I(''oat(' t" permit any reli"bl,' e tim"t" or the 'Iuantitative "hail!:""lJchin"mi "i()n" whkh might o('cur for" whole vl'hid,' population. It is ,."ason"bl" "nd prudent, however, to " tim,,te that they wijJu,,! h" as great 010 those indic""tl'd hy th,. t (jaw publicizedo far for extreme c,, "';- In fad ince JTJo l vehirl!'s have been ope, "ting ()' ddeJ' I:eill- "''''l,!i"ing g;.()Jj",, for th" past jf, .J'e"rs, it Stems '10 it.. sac" t.() p.-, did th"t d"jji:'- fe". a larg" TL'prespnL"tive populatiun will probably''' r"thertnaJl, """h,,ps of ihp ()rd,'r of 15 I",rccnt or lpss. In "ny (,v, it i "nlikdy th;!i a"y cha"g" whi"h do ",:cur, wh,-th,-,. thy arc inl'"a "s or d",.rea ,-s, will affcd "'og "ffj""'J1t1y tv he apl1:!"cnt to th,' public. Th" "pin i"" han,d hy r" p"n jbl mcrnbe of the Air ()lJrC H R(J,nl staff IH. XS 6" ("mph "b in urig;",,!JI , .

1401 Opinion of the Commission before-and-after sequences filmed at the beginning and end of tbe clean-up phase.

Before the Balloon and Bag demonstrations were devised, BBD&O' Research Department conducted a statistically projectable survey of 000 motorists to help establish the direction of the campaign_" Among other things, the survey report of May 8, 1969 showed that most motorists considered air pollution a serious problem and automobiles to be a major cause of air pollution.

Most significantly, BBD&O's survey showed that only 14 percent of motorists were aware that the most polluting elements in exhaust are invisible.

It is beyond dispute that the black smoke in the "before" segments of the Balloon and Bag demonstration was intended to indicate the presence of air pollutants in the exhaust of tbe test vehicles. For instance, the Balloon television advertisement reproduced supra at 4 fp. 1461 hereina, states: "The Balloon is filling with dirty exhaust emissions " and the print advertisement states: "You can even see the emissions as dirty smoke." The disappearance of the smoke was just as clearly intended to indicate disappearance of the smoke was just as clearly intended to indicate F -31O' s ability to reduce those air pollutants. Complaint counsel maintain that the demonstrations were misleading because HC and CO emissions are actually invisible and that , CO, NO, and lead were all present inside the clear bags in the after" sequences of the demonstrations.

Respondents argue that in order to find the advertisements claim F- 310 results in generally pollution-free exhaust, we would have to add words which aren t actually contained in the advertisements. We must however, consider the advertisements in their entirety, including logical implications of both their verbal and visual components. Although the words "generally pollution-free" do not appear in tbe advertisements the strong, predominant visual message is that the reduction of pollutants is a complete reduction.

We find that the advertisements make the claim that just six tanksful of Chevron cause the disappearance of virtually 100 percent of exhaust emission pollutants. However, it is undisputed that the complete disap- \1 During the filming, the fuel in the test car not the dirty-up fuel It was Chevron without :HO. ex 2!1()II. 1'hih Willi II point of controveray in the calle hecaulle NRC televillion netwr1rk raiaed the quelltion of which fuel wall ulled in the "before" lIequencea. Complaif\t counael cO!laid".,ed it II millreprellentation when BBD&O ,,,"pond,,d that the fuel wall Chevrnn without F'-SJ(, but failed to mention that the dirty COf\dition had beef\created by a Hpeci;dly formulaled fuel Although we alilo queHtinn the propriety of DBO&O' H rellponae, we do not conllider it an illaue railled in the complaint. 12CX 141i. Light, Tr. 1778- Opinion of the Commission 84 F.T.C. pearance of black smoke was not accompanied by anywhere near a complete elimination of HC and CO pollutants. In fact, the automobile pollution problem where it exists is, at best, only partly relieved by F- :i10, and implications that a 100 percent or near 100 percent remedy can be achieved are greatly exaggerated and materially misleading. Respondents defend tbe Balloon and Bag demonstrations on the ground that the timing of the demonstrations was not rigged in any way and that the films showing thick black smoke in the "before sequences and virtually no smoke in the "after" sequences are accurate memorializations of visual changes which did occur. We do not question trus but conclude that the Balloon and Bag advertisements were materially misleading and deceptive because of the substantial disparity between the visual impact of the demonstrations and the evidence which showed the actual average reductions to be about 50 percent for HC and :i:i percent for CO with respect to tbe Scott test cars. Moreover, we believe it likely that a substantial portion of the audi ence viewing the Bag and Balloon advertisements during the period in question thought they were being told that the dirty exhaust emissions shown in the ads were representative of most used automobiles on the road-that their exhaust, if collected in an enclosed space such as the plastic bag or balloon shown, would tend to have the same black appearance and that use of "just six tanksful of Chevron with F-31O" would clear up pollution from such cars in the same dramatic way that appeared to be the case in the ads. But undisclosed to viewers was the fact that the demonstration cars had unusually heavy engine deposits that were created by a special Hdirty-up " fuel before the sequence was televised. The evidence indicates only a small percentage of the cars on tbe road would have similar engine conditions and Standard concedes that it was known by Jan. 1970, when the commercials were commenced that the average reduction of HC and CO for the general car population resulting from use of F-310 would be on the order of only 15 percent. These considerations make the exaggerated visual depictions all the more misleading.

Futhermore, there is no specific description in the television versions of the Bag and Balloon commercials of whicb pollutants are actually affected by F-31O, so viewers have no reason to assume less than all pollutants are affected. As indicated earlier, a number of important pollutants, such as lead compound emissions, are not affected by F-31O. Some of the print advertisements specifically mention HC and CO as affected pollutants, but they give no hint to potentially uninformed viewers that other pollutants also come from motor vehicles. In drawing conclusions about the Balloon and Bag advertisements, we .

1401 Opinion of the Commission have not ignored their verbal texts. In evaluating advertising representations, we are required to look at the complete advertisements and formulate our opinions of them on tbe basis of the net general impression conveyed by them and not on isolated excerpts. See e. , Rhode, Pharmcal Co. v. FTC 208 F.2d :182, 387 (7th Cir. 1953): Charle, of the Ritz IJistribuling, Corp. v. FTC 14:1 F.2d 676 (2d Cir. 1944); Aronberg FTC 132 j.' 2d 165, 167 (7th Cir. 1942). Respondents would have us hold in tils instance, that the verbal portions of the television and print advertisements suffciently qualify the implications of the visual demonstrations to eliminate any deception which might result from isolated consideration of the demonstrations.

The television texts do speak in tents of "cleaner air " and "reduction" of emissions rather than "completely clean air" or "total elimination" of emissions. Most of the print texts contain the same or similar wording. At the same time, however, they also contain these phrases: Chevron with F -310 turns dirty smoke into good clean mileage There isn t a car on the road that shouldn t be using it no diry smoke" and uF -310 keeps good mileage from going up in smoke." (Empbasis added.) The latter phrases give the impression of a more complete, unqualified claim of effectiveness, and, at least, create considerable uncertainty as to the degree of qualification gained by the less absolute language stressed in respondents' argumentsY! It is well settled that where one of two meanings conveyed by an advertisement is false, the advertisement is deceptive within the meaning of the Act. Giant Food Inc. V. FTC 322 F.2d !J77, 981 (D. C. Cir. 196:1); Rhodes Pharmacal CO. V. FTC, supra; Colgate-Palmolive Co. 5H F.T.G 122 (1961).

In any event, the net impression conveyed by the Ba1loan and Bag advertisements is overwhelmingly influenced by the striking visual portions of the advertisements, and we do not find that the verbal texts provide sufficient qualification or limitation to the visual representations to remove the overall, misleading impressions conveyed by the advertisements taken as a whole)1 Respondents have also raised the argument that because the major automotive air pollutants are invisible, they were compelled to show the I:J In the matter of1"he Co," c"/,,C"'"I"J1'ij (IIi- C), Docket H!J!I, Slip Opinion, p- 19 (O('t fi, I!J7:Jj the Commissiun stated.

The Commission is willing to reco,:nize that even express cbirns phrascd IneT!'ly in the positive degree soch as high" ,md "sensible " can convey comparative, and even superlative, mpaniIlgs- Th,'y ('an' do so . for example, if th" advertisement' snd irnpressionseTves to soppoTtsochacompaTison 14 Some of the pTiJJtadvertisements utilized by re"p,md"nb ose "U pictuN's at all, and "fthese, s"me morpfulJy explain tJw nature of F-:!lO' backgruo,,,1 and effel'ti"I'ness . We need n"t teacb U", qoesti"" of wh"th..r any of these aovertisement., viulaterJ the standards of Section 5 ,ince it i, e""ugh t" ,ustai" oor ntd,'r fbat we fiml the adverti "ment, that rl'li,'d upon verba! depieti"n during ,J"n, luIJe 1970 W"TP dpe"ptivp 1472 EDEHAL TRADE COMMISSION DECISIONS Opinion of the Commission 84 F. reduction of ::ome related, visible substance in order to make television and other pictorial advertising meaningful to viewers. We would not be so troubled by that argument if the visual demonstrations they chose accurately portrayed the degree of F-31O' s efficacy. If, however, respondents can devise no way to visually represent the claimed effects of 31O, then they should not employ that demonstration. As the Supreme Court observed in Federal Trade Corn mission v. Colgate Palmolive Co. et al. 380 U.S. 874, :191 (l91i5):

If * * * it he('omes impossible or impractical to "how simulated demonstrations on television in a truthful manner, this indicates that tdevision is not a medium that lcmls itself to this type of commercial, not that the commercial must survive at all costs. Similarly Ilnpersll:lsive is respondents' objection that the Commission s decision discrimi nates against scHers whose product daims cannot he "verified" on television without the use of simulations. All methods of advertising do not cqually favor eVf ry ::eller, If the inherent limitations of a method do not permit its Us( in the way a seller desires, the seller cannot hy material misrepresentation compensate for those limitations. The complaint also alleges (Paragraphs Five- lO and Six- lO) that the foregoing ad vertisements claim tests had been conducted prior to the commencement of the advertising campaign and proved or ::mbstantiated the claims that Chevron with F -310 wil produce generally pollution-free exhaust- The adverti::ements contain statements such as "Here s proof' and You re about to see proof' which clearly invite the assumption that what follows is based on tests or other reliable substantiation. The appearance in the demonstrations of comp1icateu measuring instruments and white-coated "technicians" contributes to the impression that scientific testing is behind the advertisements. We find that the advertisements do represent that tests had been conducted which proved the claims made in the advertisements. As we found, however, representations in the advertisements about F-310' s effectiveness far exceed any reasonable interpretation of pre-advertisement or post-advertisement tests. Tbe advertisements were, therefore, misleading and deceptive in their representations that pre-advertisement tests proved or substantiated the advertised representations.

The challenged F-310 advertisements are examples of the type of advertising which focuses on serious anxieties of consumers resulting from heated public discussion of issues such as environmental protection; individual and public health; job, home and auto safety; economic woes such as shortages and inflation; etc. In addition to respondents undoubted general awareness of consumer concern about the environ ment in 1970, they knew from BBIJ&O's May 8, 1%9 survey report that most motorists considered air pollution to be very serious problem 1401 Opinion of the Commission (ranked closely in seriousness in the motorists' minds with the problems of narcotic drugs and local crime) and associated black smoke from automobile exhaust with air pollution. In our opinion, it js jncumbent upon advertisers who seek to advance their own interests in even partial reliance on such serious consumer concerns to exercise an extra measure of caution in order to be certain that their representations to consumers wil not deceive or mislead.

B. The M etwr Advertisements In the preceding sections we have focused on the Balloon and Bag advertisements, but we should also discuss the misrepresentations contained in the Meter advertisements. The Meter advertisements were only used on television, and they depicted a change in "EXHAUST EMISSIONS" from 100 to 20 on a scale of 100." The meter itself was not rigged in any way, and the needle on the meter actually reflected the differences in electronic impulses associated with a reduction in HC. One misleading aspect of the demonstration was that the meter showed a reduction of 80 out of 100 units on the dial. However, for technical reasons, a change of 80 units on the meter dial did not in fact mean an 80 percent reduction of emissions was effectuated. The reduction was no more than 50 percent of HC in actual fact. " Such a wide disparity between an advertising representation and the factual basis for the challenged product claim compels the conclusion that the advertisements are materially misleading and deceptive. It is less likely that consumers wil interpret the Meter commercial as making a "pollutionfree" claim similar to the Bag and Balloon ads because the Meter demonstration stil shows 20 units of exhaust emissions on the dial in the after" sequence. Nevertheless, the substantial difference between the reduction claimed and the most favorable reduction to be expected based on the test results creates a clear likelihood for deception. Also, we agree with complaint counsel that tbe Meter advertisements at least have the capacity to mislead viewers into the belief that all pollutants are being measured simultaneously. There is no explanation of any kind that "EXHAUST EMISSIONS" refer to a single pollutant rather than all pollutants, and nothing in the advertisements gives viewers any reason to believe that only one pollutant (HC) is being measured rather than all pollutants.

In conjunction with the representations discussed here and in Subpart A above, we have determined that because F -BID' s effectiveness in lfiSee Appendix I!llp. 1477 h..re;nj.

The Scott te"tR, unadju"ted to the "general car popol t;on "howeu aver",""" IIC redoction. of 50 percent. No other :Jlo te.t "hnw"d b..tter HC control.

1474 FE DE HAL THAUE COMMISSION DECISIONS Opinion of the Commission 84 F. controllng air pollutants is limited to only two or possible three specific pollutants, all future F-31O advertisements claiming any reduction of air pollution or motor vehicle air pollution should contain a conspicuous disclosure that not all harmful pollutants in automotive exhaust are affected by F -310. This wil provide consumers with information vital to a proper understanding of 310' s effectiveness. D-urstine Osborn, Inc.C. Liability of Batten, Barton, The ALJ dismissed tbe complaint as to BBD&O after finding the advertising agency had properly relied on Standard' s assurances concerning the technical accuracy of the :HO advertising claims. BBD&O has maintained all along that its lack of research facilities compelled it to rely on Standard and Scott for conclusions about the technical correctness of the claims. BBD&O further contends that if it held liable for deception in the F-310 advertisements, advertising agencies will be unable to develop advertisements for technically complex products without first building their own elaborate research and testing facilities. The rationale urged for the latter argument is that if BBD&O is held liable in this case, advertising agencies wil no longer be able to place reasonable reliance on the scientific and technical expertise of their clients or of independent testing companies. We do not accept BBD&O's arguments because the assumptions inherent in them are inconsistent with the facts of this case. This is not a case of an advertising agency that helped develop deceptive advertisements through unknowing, good faith reliance on faulty back-up data. Tbe evidence shows the F-310 advertising representations went far beyond even the most favorable interpretation of test results or other research data available when the advertisements were created and distributed. Such a wide disparity between ad vertising claims and substantiation information is inconsistent with the contention that the advertisements were conceived through reasonable reliance on the data or on the assurances of experts that the advertising claims were technically correct.

In analyzing a similar issue in the matter of M mdc Cn., Inc. (j9 C. 526, 558 (1966), the Commission stated:

Although the agency contends, in this connection, that it relied on information furnished hy Merck (the advertiser), the deception found to exist stcms not from the falsity of this information but from the use made of it by the agency. In like fashion, the deceptiveness of the advertisements challenged in this proceeding resulted from the way BBD&O and Standard jointly 171.0., flndingH IH ami Ipf). 143:J, 14m h"r('inl 1101 Opinion of the Commission used the substantiation information rather than from falsity of the information itself.

The legal standard which must be applied in determining the liability of an advertising agency in a case like the present one requires that the agency actively participated in the deception and knew or had reason to know the challenged advertisements were false or deceptive. Doughn1y, Clifford Steers Shenfield v. Federal Trade Commi:ssion, 392 2d 921 , 928 (6th Cir. 1968); ITT Continental Baking Company, Inc. FTC Docket No. 8860, Slip Opinion, pp. 26-28 f83 b' C. 865, 968-fij (Oct. 19, 197:).

In the same opinion, the court noted the Commission had found, as we do in this case, that "the advertising at issue * * * is the product of both respondents Representativesjointly.Id.of BBD&O were involved in the development of the F- 310 advertising from the very earliest stages. They carefully reviewed all the test results and were active participants in numerous meetings in which alternative advertising approaches were evaluated and ultimately accepted or rejected. The final determination to use the demonstration format of the Jan. 1970 advertisements was a joint decision of representatives of BBD&O and Standard, and after the final joint decision was made, BBD&O actively participated in the filming of the pictorial portions of the advertisements !! the drafting of the verbal texts, tbe preparation of layouts and the promotion and distribution of the advertisements.

BBD&O' s representatives clearly knew what the research and test results were, and they also knew the demonstrations showed changes from heavy smoke to no smoke, a 100 - DIRTY reading to a 20 - CLEAN reading, etc. It does not take engineering or scientific expertise to realize that demonstrations depicting emission changes ranging from 80 percent to 100 percent cannot be justified by data showing much lower improvements. Also, as previously noted, BBD&O Research Department had conducted a consumer survey to establish the direction of the campaign and learned that most motorists correlate black smoke from In f),with,,-d!f the mort said The pmjWr rjt"riQn if) deciding in" ca5" ofthi kind a to whether a r'e;!s(' ,,,d dt!sist order shoo!d is u" "Iain t th" "dvcrtis;nt: "geo(':, is "the ext,'nt to which the ",jverti irr agen('y actually parti"ipated in the de"eptiOI'- This iH "nti"Hy a problem of fact for th" C"mmiHsi'!n " In unler to be hdd to h,' a parti"jpanturh indee"ptinn, the al!"""Y t know Or h"v,' n'ason to know of the fal ity of the I!dverti jl1g, Code 1'1"dl1rr" 1m,. v. F1(' , ",Uj'nI ;J2: V2d 52;J 5:-1 (5th Cir) lhe timing of the television advl' rtispments Was dua!ly carried (Jot by Film"ir, I,,,. orukr ('"ntract. BIJU&O had r"presen1tativt' s pr"sent"taxi timing ses$iuns, how"vlr tos""that all wellt,-spJanned 211 J.D., finding JH Ii'. J.: -! ht'rpiol; F't'ot!m, Tr. 4745--11 47hli.5!1; Kao(' , Tr. :J;,lU- 12; CI"rk, Tr. 4!1:J!J, 4!W t RBD&O aJ"o condorted" fin..1 revi,'w "f all ,,,,If'ri,,!s jntt:nded fnr network rlistribution and h,mdled aU eommunieations with network "ff"i in the diolTibutio!1 pro('' . Clark, Tr. 4\167- 7 J. _ , Opinion of the Commission 84 FTC. exhaust with air pollution emissions and only 14 percent are aware that the most polluting elements in exhaust are invisible. BBD&O also arg-es the agency was justified in proceeding with the advertising campaign because the F-310 advertisements were subjected to extraordinarily thorough reviews and clearances by technical experts, engineers, advertisers, lawyers, and management from Standard and account executives, lawyers and management from BBD&O.'l But obviously, reviews and clearances by numerous individuals at various levels of respondents' organizations do not satisfy the law s requirements of truth in advertising. In the Merck case, where one matter in issue was the alleged liability of an advertising agency for deception in test-related throat lozenge advertisements, the Commission said Nor is it a defense to the agency that the advertising was approved by Merck' s (the advertiser s) legal and medical departments. " The same rule applies here, even though there were mote steps of review in this instance than in Merck.

For the reason stated in this section we find that BBD&O knew or had reason to know the F- lO advertisements in dispute in this case were false, misleading- and deceptive, and that the ag-ency actively participated in that deception. We conclude that BBD&O' s actions constitute a violation of Section 5 and that entry of an order against said agency is appropriate.

D. COITecti.ve Ad.ve.rtising The notice order in this case provides for corrective advertising for a period of one year after the entry of an order against respondents. However, the evidence is inconclusive on the residual effects of the advertising- in the minds of consumers, and the state of the record fails to justify entry of a corrective advertising urder. E. Addilional Points Raised by Complaint Counsel on Appeal In their appeal brief, complaint counsel rely on a number of other alleg-ations made in the complaint which are not specifically discussed in this opinion. We have examined each of these charges and other issues raised on appeal and have determined in each case that complaint counsel's position is without merit or that resolution of the issue is not required in arriving at the conclusions contained herein. J 1./)" timlinI' Hi, 112, prov;,j"s "eompleh' list of tI,,, J"veJs of r!'vie'" to which the f'- ;J10 adverLLSCml'nb wn,' suhj"et,' (L In the ca " of Stanrlani, the review a('ti",, read",'! the hi t l"vcJ ur eurporate manag.em(.nt. Such high level r('vipw dof's nut occur in m,, l Standard ",Iv"rti inv activities, Sn' "'-"' . Clark, Tr. 4!Hfj,4!J lij FTC. 5:!fi 5:J!JWMi) STANDARD OIL COMPANY OF CALIF., ET AL. 1477 1401 Opinion of the Commission VIL CONCLUSION In accordance with tbe legal and factual conclusions discussed in this opinion, we find that the F-310 advertisements discussed herein were false, misleading and deceptive in violation of Section 5 of the Federal Trade Commission Act and that the entry of' the order accompany;ng this opinion is appropriate.

APPENDIX I. METER (Basic 60-second TV Commercial shown .Jan. 22 - June 9, 1970) Scene: Test car parked by the side of a large trailer truck in a partially filled parking lot. Video Befm.e: After an aerial view of the test car and trailer truck in the parking lot, the dial of a meter is pictured with a left to right calibration running from zero to 100. The word CLEAN and an arrow pointing toward zero appear on the jeft of the dial, and the word DIRTY and an arrow pointing toward 100 appear on the' right of the dial. The words EXHAUST EMISSIONS appear he neath the dial. A measurement instrument is inserted into t.he exhaust pipe of a test car, and t.he pointer on the meter goes to 100 (DIRTY).

Aftrn' The measurement instrument is again placed in the idling test car s exhaust pipe. This time the pointer on the mctcr only goes to 20 (CLEAN). Audio You are about to see proof of one of the most important achievements in gasoline history. I'm Scott Carpenter. This type meter is used by federal and state authorities to measure exhaust emissions that go into the air. On this test car the meter shows excessive dirty exhaust. N ow Standard Oil of California has created an l' xtra-ordinary gasoline additive, Formula 1"-310. F-:HO educes exhaust emissions from dirty engines, Same car, just six tanksfuI of Chevron with F-81O- exhaust emissions reduced. A significant step towards solving one of today s major problems. And since dirty exhaust is really wasted gasoline, 1"-310 keeps good mileage from going up in smoke- cleaner air better mileage, Chevron with F-:HO turns dirty smoke into good, dean mileage. There isn a ear on the road that shouldn t be using it. 11 TOUCH (Basic 60.-second TV Commercial shown Jan. 26 - June 9, 1970) Scene: Test car parked in what appears to be a laboratory testing room, Video Hejru" A hose is attached to the f'xhaust pipe of a test car. On the other hand of the hose supported by a vertical floor stanrJ, is a metal cylinder a Jittle larger than a onegallon can. The cylinder is open at thc top. As the car idles, the room lights are dimmed and a flaming wand is waved over the cylinder by Scott Carpenter, The exhaust coming out of the cylinder instantly ignites and continues to burn as the car idles.

After: This time when the flaming wand is waved over the "torch" no flame appears. A small flag hearing t!w Chevron emhlem and the trademark F-310 is attached to the cylinder, and it flutters upward to indicat.c that exhaust is actually corning oul. Audio I'm Scott Carpenter. We re about to demonstratf' how an amazing gasoline develop- 1478 FED",HAL TRADE COMMISSION DECISIONS Opinion Qf the Commission 84 F. ment reuuces wasted gasoline and restores mileage. We ve connected this device to a car to show that dirty exhaust contains enough wasted gasoline to ignite a torch. That is wasted gasoline burning. Now Standard Oil of California has developed an extraordinary additive, Formula F-:nO, that rcduces cxhaust emissions from dirty engines. Same car, after just six tanksful of Chevron with F -310. Exhaust emissions reduced, no wasted gasoline burning, Chevron gasoline" with F-310 reduce wasteful exhaust emissions, keep good milcage from going up in smoke. Cleaner air, better mileage. Only Chevron Gasolines have F -310. There isn t a car on the road that shouldn t be using it. III. GARAGE DOOR (Basic GO-second TV Commercial Shown Feb. 8 - June 9, 1970) Scene: Test car parked before what appears to be a large automotive garage. Immediatc- Icy behind the car is a portable frame containing a white, sliding garage door. Video Jon,. A test vehicle is backed up until it almost touches a white garage door supported by a frame behind the car. As the car idles, a dark, black circle forms on the sllrface of the door immediately behind the tailpipe. After: The ear is again allowed to idle immediately in front of the white garage door, This time, nu deposit builds up on the door s surface. It remains completely clean. Small white strcamers flutter in the tailpipe to show that exhaust is actually coming out. Audio I'm Scott Carpenter. Here s proof of one of the most long-awaited gasoline developments in history. We ve backed this car against a garage door to show dirty exhaust emissions going into the air. That adds up to wasted mileage. Now, Standard Oil of Caljfornia has accomplished the reduction of exhaust cmissions from dirty engines with the development of Formula F - , a unique gasoline additive. Same car, after just six tanksful of Chevron with F-31O. Dirty cxhaust reduced. No dirty smoke. Cleaner air. An important development to help solve one of today s major problems. And since dirty exhaust is wasted gasoline, F -310 keeps good mileage from going up in smoke. Cleaner air, better mileage. Chevron with 1"-810 turns dirty smoke into good clean mileage. There isn t a ear on the road that shouldn t be using it. \ , . . , , , ?::: (,, , \ .. ,,( ) .. _ ,. ,,\ , .?:,) , , \SS\01\ , oi i\\e \,\\C,,,,o" \ V\C\'- 'f; "" e 6.

')Jr- "

oes . so t.O heat"OO h' ;\St.

-'..0 to t"'. ,. J"e t.\) 0 C\e .,-\\If1 "0,,\0"\ \)e ,- -\ \.\"C N' \\\e, o,\\\e'e' f'3\O. C\\e"o" S'\) " 'I" - ",'I"C ,.... . ,....,_.,.,,,....... .....,, .,;. _.,,,...., ; : ( ,,,. Opinion of the Commission 84 F. 1',(. , Pi' A:- BEFORE AFTER F-310 ,x,.., ..e New F-310 in Chevron gasolines dirt exhaust into turns good clean mieage.

Chevron I;' i;.

Chevron with F-310. There isn t a caron the road that shouldn the using it. STANDARD OIL COMPANY OF CALIFORNIA - ;)A , p. :. , . 1101 Opinion of the Commission VI. F-310 TESTS CONDUCTED AFTER THE COMMENCEMENT OF THE ADVEHTISING A. The Los Angdes COilldy She.riff, Cat Teslt; The first F -alo tests after the advertising began were conducted in January and Fehruary 1970 by the Los Angeles County Mechanical Department on six County Sheriffs cars. Three 1968 and three 1969 Ply mouths with :30 000 to 60 000 accumulated miJcs were selected for the tests. "Super Shell" gasoline, a premium grade competitive gasoline containing- Dupont engine-cleaning additive DMA- , had previously been used in the test ears. \ After pre-test emi,mion measurements, the cars were switched to Chevron gasoline with F-310 and driven by Sheriffs deputies in regular service for 678 to 098 miles. Concluding emission measuremcnts showed avcrage HC reductions of 240,) and CO reductions of 42%. Each vehicle had achieV( d some degree of emission improvement. Standard had nothing to do with the tests and first learned of them at or near their completion in February HJ70, Criticisms raised on the record as to the reliability of the test results included suggestions that the sample was too smal! and not properly selected for an accurate representation of the general United States car population.:- It was also argued that the driving done during the tests was not typical of the average gasoline consumer.4 Factors raised in defense of the tests were that the cars had very dirty engines to begin with, they had been operated for a long time on a premium grade gasoline with an l engine-cleaning additive, and the tests, unlike the Scott tests, were nol atccJerated. 8, The Om-n.rc County Fleet Test Beginning in Mar. 1970, G vehicles5 from the fleet of the Department of Transportation of Orange County, California were tested at Standard' s request by Scott Hesearch Laboratories, Inc. to determine the effects of Chevron gasoline with F-:310 on their exhaust emissions. A varied group of 1961 through HJ(ig Fords and Plymouth:: were used. Their beginning mileage readings range(J from 9 j to 76 034 and test miles driven ranged from 1 619 to 3 136 with a mean of 2 056. Prior to the tests, the cars had been operated on "Super SheH" gasoline with Dupont additive DMA-4. During the tests, the cars W(,rl' driven by Orange County personnel in normal usc. Before and after emission tests showed an average 12.4% reduction of HC, )b reduction of CO and (),5% increase of oxides of nitrogen, In this test, not aU cars showed HC and CO decreascs. By one means of measurement, 17 cars showed increased CO, 15 showed imreased HC and 27 showed increased NOX.

Standard eonsioered this series of tl'sts an opportunity to document the effects of F- 310 on a well maintained fleet of cars in normal use. In fact, the maintenance on t.he fleet. I LD., fi",ljnl . RXS t,f, p. 100; Kane, Tr :!.',hi'- 9; Spitler, Tr. 44(;7, 451:' , 6174. HS AIl " p. :Ji'; J.D. , findi,,!, J \; Item I;f; RXS 71 , Kant' , 'fr. :1;,,,i'- , 4457 ,,!1, 44(;(;-(;7 H!J ,)()n, 4,,1 !. I:3, As in lh,' S""tt tests, only 0", h"t porti"n of th Fl'de,-a! ,-rn",1f (est l'yd,' w"s u d. Kant' , Tr, :,5:'11:;9; Spithn, Tr. 44!i7, 41\1\1 :1 tahrn"n, Tr. ,):!M; C"Uaneo, Tr. !-()77 Stahrn"", Tr. ;);!I;.! ;, 0"" "r Wa" I,,t t" th" l,'st from tlip ur;ginaJ total of, 4 hee""s of "nversi()n tu been natural Ii" te"d "I' "!i,,c. RXS lis, T"hll' I 10Th.. ea1"S had both V-K and I-I! engines 7 Again, a in the Scott t"st ntl SherijTo e"r t!, , only th" h"t I",ration f the F('d"r: 7-!nod,- pr"""dun' W; , u ed. H RS ,It". \!; 1.n., finding 2() !: RXS I;"~ ftXS \;. pp. 4-K and an:"!nla"yin!- "hart" ami pieturc.'; Ha.1"k;n, T1". 41S 1;1, 4Hi.:rti6, 4:00!J; Spitler, Tr. 447:0- , 4,)(10 . /.. p !:\ ;,_ Opinion of the Commission 81 F. was extraordinarily thorough.9 Respondents' witnesses argued that the high maintenance JeveJ a(fds strength to the test findings because evet) with such conscientious care the cars still averaged an improvement with F-;nO. They also said it is significant that average improvements were seen even though the cars previously used a high grade gaso!inc. Some witnesses, on the other hand, expressed doubts about the tests, because of alleged limited applicability to the general car population and obvious pollution increases in many of the cars. 11 C, The Rose Bowl Test After trying without success to interest the California Air Resources Board in carrying out a broad-based test of 1"-310 in the gcn€ral car population, Stand8rd retained Olson Laboratories, Inc. to conduct comparative emission tests on a large number of automobiles in the Pasadena, California area. OJson is a recognized independent aut.omotive testing company. Haug Associates, Inc., a marketing research fim, was hired to obtain the desired samples of cars for the tests, Standard' t; instructions to Haug were that they should select the sample randomly from a five mile radius of the Rose Bow! in Pasadena and they should not select cars which had used Chevron gasolines after December 1 , 1969. The random sample was stratified according to representative, statewide model, make and engine-type data obtained from the California State Department of Motor Vehicles. l:: Haug made 4 000 initial telephone contacts to det.ermine gasoline use patterns among cli!-rible car owners Seven hundred were contacted a second time and asked if they would participate in t.he tests. Four hundred fifty-five cars actually started the tesls which before and after emissions tests were conducted in the Rose Bowl parking lot. Drivers wcrc instructed to return after driving 2 000 miles in normal car usc. Test results are given only in terms of the measurements taken on 2!J7 of the cars. The reasons so many of the original cars were excluded from the final tabulations are varied: 12 cars didn t return for the second test 14 received improper emissions tests at the test. site, 19 cars had been driven less than 1 000 miles during the test period, 46 cars underwent "gross" mechanical changes Hi and 67 had received tUrle-ups. 17 Final adjusted 1iJ computations of the test data show average reductions of 1:3.9% HC, 11.6% CO, and NOx.

There was more dispute during the evidentiary hearings about the reliability, genera! applicability and significance of the Rose Rowl test results than there was about any of the other F'- 310 tests. Complaint counsel claimed the following elements were weaknesses in the tests: (1) no control group was used tu assure t.hat F -:310 and not some other factor or factors were responsible for the improvement; (2) t.he adjw5tments for humidity which increased the recorded percentage improvements were improperly made; (3) the strati- RXS 6s, Tabl.. :

los,' , S!,ili"r. Tr. 447!J 11 Si.hm;lI, Tr. 5:ntj Cattal"''' Tr- fiu7!1. 6115. /1111 . , Chas l'r . '!:'\4 JtXS fit, PI!- H-!l.

\;\It was "stimalcd that las 000 cars were oWlOed by I"'''p!' hvin in th ' five mil., t,'st radius. H The 7 mode hut, t.t test was used "-,,in thc Scott, Oran c Cuunty and 8herifr car te !"Onc was lost ill;m accident, onc participant died during- thl' tL , and the (Jth"r ~im!,ly did" t return U", He,"u"\! time- RXS(it !ll/d I?hi_ at PI'. 1:1- The final figlire w"re adjlit,-d fur humidity vari:!tions aC,""rrlillg tfJ conver i on tabl,, d.,vcl"ped by Bthy! CU'lI. t:nadjlJsted n'dudi(ll\ were 11-0'k HC, !U% CO, and NOx , pp. (;

1401 Opinion of the Commission fied sample was not a statistically proper "random" sample; (4) the size of the sample and the types of cars used do not permit projection of the results lo the general United States ear population; (5) it was improper to rely on participant questionnaire answers to ascert.ain prior gasoline use and driving conduct during the test; and, ((i) exclusion of cars which had undergone mf'chanical changes during the test made the results unrealistic becallse such changes do occur in normal use and would influence the general use of F- JO. Respondents countered with arguments that: (1) no control group was nef'ded because there were other controls built into the tests, and no value would have accrued from the \Jsc of such a group; (2) no recognized humidit.y adjustment factors existed at the time of the test other than Ethyl Corporation figures, which were properly applied; (3) without stratification the sample wouldn t have had a realistic chance of including a representative variety of makes, models and engine types; (4) they had aimed at a sample of 300 in the IITst place because they were convinced that was a minimum necessary size, and Sllffieif'nt controls were present to make the sample valid and generally projectionable to the United States car population; (5) there was no sensible way to obtain gasoline use and test conduct information other than through participant questionnaires; and (6) because the test was aimed only at a measurement of F-:HO effects, it woolrl have been improper to include cars which may have changed because of mechanical problem or tune-ups-other deleted cars were excluded so they wouldn t improperly bias the results through uncontrolled variances.

There was also a great deal of analytical and conclusory testimony by experts for both sides about whether the test as a whole was statistically valid and whether the average percentage improvcments were really significant in light of the .6'Teatness of the air pollution problem.

D. Test. Hy CO'/pd.ing on CO'upunies 1. Union Oil Company Test.

Between ,January and March 1970, Union Oil Company of California conducted comparative emissions test.s on ten late mOllej cars which had previously been operated on Union gasolines containing an engine-cleaning additive, The cars ranged in age from 1965 to 1969 ami had odometer mileage of 2:3 000 tn 66 000. They were switched to Chevron gasoline with F -310 for six tanksful and an average of 1,400 miles was accumulated during the tests. I!1 According to Union s stat.istical analysil', before and after emission measurements were not significantly different from zero, but average figures showed a (i.l1% HC increase, a 1.44% CO imrease and a 0.21 % improvement in gasoline mileage, O Union s technical experts did not expect much of an improvement when they started. the tests because thp)' inspected the carburetors of the test cars and found them to be essent.ially clean before the tests began .

Standard argues that the tests prove their contention that if a car is clean to begin with Chcvron with F-;nO wi! keep it that way, Without analyzing that argument at this point we do find that tJw Union test results serve to help place the Scott test results, upon which miles wen' "n urnuJat!',j on a Lhas js dy,,,mom"t,,r n,ther than thnJup;h adual ruad drivinl; IITbe measurcments W"re mad" by Scutt Reh,'arch Laburatm-ieh, Inc. ex 11U ZI It should be noted that ,'vcn in light of these test res ucts, L'n iondjdiIJcreasethep,'r"e"tap,econe"ntrationnfitH uwn iilldit;vl' in its ""mmenial ga o!ines after F-:110 was i"tmdu"ed K""t, Tr. 5 ES Brief ,) Opinion of the Commission 84 F.T.C. the basic ads are based, into their proper overall perspective. The following was Union summary of the significance of their test findings: * * * Standard reported that their test of F-mO on cars with artificially fouled carburetors showed a reduction of 55% in hydrocarbon emissions, 34% in carbon monoxide emissions and an improvement in gasoline mileage of 5%. The results of our tests provide dear evidence that cars regularly using Union s gasoline" would show no significant improvement when switched to Chevron fuel. It is estimated that Standard would have had about onc chance in 35,000 of getting their publisher! results if they had picked can:; previously run on Union gasolines for their test instead of cars that had run on a selected and nontypical gasoline.2:'1 Union gasoline is a commercially available gasoline which is more representative of fuels used by most drivers than the "dirty- " fuel used to prepare cars for Standard' s Scott tests, One notable aspect of Union s tests was that exhaust filed, polyethylene bag comparisons were used in an attempt to compare the tests with Standard' s advertbing dramatizations.24 When the bags were fiJJed before the switch to Chevron with 1"-310, they were just about as clear as they were after the six tanksful of Chevron. The bags never filed with black smoke. We find it is worth noting that cars run for 2: 0()O to 63 000 miles on a commercially available detergent gasoline did not fil a bag- with black srnoke. 2f, 2. Standard (hl Crnnpnn,y of Ohio Test. (SOH /0) Two 1970 F -310 tests by SOHIO were introduced by complaint counsel during direct Complaint counselexamination of the SOBIO employee who wrote the test reports.2(; attach significance to the fact that the tests showed no significant effects of 1"-810 use, but we note that in both test reports, the reader is cautioned that rnechanical maJadjustments may have obscun:d any additive effects.

Other tests conducted by SOHIO led them to the conclusion that F-310 was somewhat better than their own additive and better than certain other competitive additives. Although at the time of t.he hearing, the company was still considering using F. 310 in its own gasolines, there is no evirlence that it ever began such m;e.21' 3. Esso Research o:nd Euyineen:ng Cowpany Tests Early in 1970, Icsso compared Chevron Custom Supreme Extra by using eight employee-owned cars which had previously operated on Esso Extra 90% of the time. The cars were driven at an average speed of 30 m. h, for 400 miles per day for a total of 2 400 miles, lmission measurements !) were made every 600 miles, with two measurements at 2 400 miles.;'o Over the course of the tests, average emissions inereasp.d rather than declined. The Esso test report cone/uaed that, although some other factors may have in flue need the test results, it could at least be determined that "Chevron Supreme containing 1"-310 is unable to further clean carburetors operated with Esso Extra. :!ICX 4!(f ! ex 410 "-c con b ur pieturt's of (h e hali ,-,(,mpari offs. Ther!' i IJO n()tic" hle diff"rence between th imp ill Lhe b"f()re ami aftpr picture 'St:mrJ"rd r"n some early te"ts on A ! CO Ii"H()line lo Hee jf "void oM' it as a hase for th" bag ,!to ball",,, tests. F:xhau5t from ears runn;,,/( on AI/CO dirJ !Jot fil the bags with hla"k smoke Th reaft(:r, Standard d"veloped itsJ"'cial dirty- " fuel fur the S""U tl.,;ts !;CX 411, ex 41 -n 1.0., findioli 2;; :-\: Snyd' , Tr. 52I'O. IO (i" """". Snyder, Tr. ";W,, (ill cmlw' They u erl the whol m"rt ('.'de rat!wr th,!n just the hot portion "" in mo L of Uw other Fi :HO tests. I Seven of thn eight( car, hart emis i()" """truly device" (", them a rt,,!uired hy law, ex 41:t d1CX 11:b.

& :,! ::!! , g: ! 1401 Opinion of the Commission A se('ond test was conducted on eight 198: and 1984 cars which had no cmission controls. A July 1970 report says that the tests show F-310 does not significantly reduce emissions rdative to the additive Esso was then using. A witness from Esso testified that on the basis of the tests run by the company, F-BIO could result in 10-15% emission reducing effect.:-! During the testimony of this witness, respondent emphasized and obtained agreement from the witness that, at a minimum, the tests show that F -:HO keeps clean engines clean.

4. Shell Oil Compa.ny Test.::

Shell ran a number of tests during 1970 comparing F -310 to Shell additives. One test. of five late model employee-owned cars with 20 000 to 45 000 miles of operation excIusivcJy on Shell products, resulted in average emission changes of O.B% decrease in HC, 0. change in CO, and 12% decrease in NOx,:.w The conclusion of the test report was that "the use of Chevron Supreme Gasoline with F-:HO affords no significant hencfit. regarding exhaust emissions for cars that have been using Super Shell Gasoline and Super Shell Motor Oil.":!:' Another test was conducted using four cars from Shell's salesmerl s fleet. The 1968 and 19m cars had been driven 25 000 to 44 000 miles on Super Sh('ll, and after 7)350- 716 miles on Chevron Premium with F- , there were "no significant changes in the emissions from the initial to the final measurement.":\!; Two series of laboratory engine tests were also conducted, one to evaluate .F-310' keep-clean capaeity and the other to measure accelerated clean -up.:17 'The keep- clean tests showed F-310 would keep ",orne engine parts clean, hut the' dean- up tests we're not so clear.

At the request of their Marketing Sales Department, Shell ran comparative plastic hag tests to simulate Standard's Balloon advertisements. Two new cars were used- one operating on Super Shell and the ot.her on Chevron Supreme. In two direct comparisons the bags appeared thf' same on both cars. At no time did the bags fil with black smoke', Standard maintains that because both cars were new, making any comparison to cars with dirty carburetors would not he v3lirl. Standard' s position appears to be that this test isjust another indication that F-:310 keeps clean engines clean. 8. Standard' s FOUT Car Stay-Cleu1I Test Standard purchased four new 1970 cars, two Chevrolet V-Rs and two Ford V- , for a noo test of F-:HO' s ability to control increases in emissions in new cars without engine deposits. The PCV valves were not changed, anrl after a 2 500 mile break-in period, no further carburetor adjustments were made. One car of each make was driven over the 11OShannun, 'fr. :141\1tJSh,mnon, 'fr. ;,401.

101Sc"U Laburatori did the ernj sion rn"a ur"m nts ex 41 h, The NOx reduction w,, not attrih"u.d to F -:\10 in the lest r p"rt ex 41 bex 41Hh. Bolio, 'fr. ::4!;

:#; B"I!n, 'fr- ,,,Hk, ex: ;Ikc Another Shell test showed that tune-up" had a greata effect "n emi sions than earbur"tur ckan. up- Specifically, :Irburctor dean-ujJ oh"wed tittl" eff( ct afl..r Uw car hHd been tl1ners-'lp and intakp v,Llll had bepn r"pla"Nt ex 'll l1 RoJlo, Tr- 54. :\" A dirty- op fl1,,1 W,,' used to ac""jH'-tc the te t. 1),,110, 1'r. M52 !lR"lI" 1'r :1'1f'idun,s of the "OInparison an' in the rpcord. CX 41Hf ,111 HS brit'f, p. 2(;. During thp p.:iorl of .)anuury to March 1972, Sh"ll ,."nriuded t,'sts on F- ::110 in a" u"lt,ad.,d ba fuel which ,huwed int:.h v,dve depu it ,,"'an- up uf 44-4!j'JL R XS II!! ;!j 14H6 FEOEHAL TRADE COMMISSION DECISIONS Opinion of the Commission 84 FTC. Scott Laboratories course using Chevron gasoline with F'-;no. The other two used ARCO Reguar Grade Gasoline which had been purchased in March and May 1970. The cars using Chevron with F-310 showed a 1% HC increase and a (j% CO increase. The cars operated on ARCO Regular had a 62% HC increase and a W8% CO increase. F. The California Air Re, O"true8 Board Tests Three tests from the CARB were offered by complaint counsel to challenge the claims made for 1,' :nO by respondents. The written reports of lwo of the tests were rejeded by the AL.l on the grounds that they were not suffdenLly reliable or conclusive to have probative value.42 A May 1970 letter discussing the tests written by the Air Pollution Control Offcer of Los Angeles County Air Pollution Control District was received. :J The letter states that the tests showed changes which have "no significance " for the general automobile poJ1ution problem. In testimony at the hearings in this cas( , the author of the letter al.so stated that the test results were so inconclusive that they could not be used as indicatorg of F-31O' s effectiveness or lack thereof.44 The first of the tests was the so-caJied " 19-Car Test." As an attempt at a rapid evaluation of F.. l0 effectiveness, cars of 19 CARli employees were tested before and after six tanksful of Chevron with F-31O, accumulating between 1 500 and 2 000 miles each. A chassis dynamometer was used to run the tests in place of regular driving. The results were inconclusive according to the testim011Y of several witnesses. The second test was a series of survey tests on R42 cars in the Los Angeles area in which motorists voluntarily submitted their cars to one-lime tests of emissions and answercd questions about the gasoline their car was using.4fi The purpose of the test was apparently to comparc cmission )levels of Chev ron users and users of other brands to see if the levels for Chevron with F-810 were signifieantly lower taken as a group,47 Although we do not have the document. now in the record, testimony indicates that although no substant.ial emission differences existed between F-81O users and other groups, the reliability of the available figures is very questionable. The rejection of the exhibit appears to have been proper because of its equivocal nature. The third test offered in the group was the so-called ARCO Project. This t(,st of 120 state-owned vehicles was conducted by the CAHli, but AHCO installed the (,xhaust gas recirculation devices which were the focus of the test. Respondents have argued that the purpose of the tests was only to measur( the effectiveness of the pollution control dE vice so it is not a proper vehicle for an evaluation of 1"-31O' s effectiveness. We would not be persuaded by this argument if it could be shown that the figures about F-;3IO were reliable 11 RXS fi, pp. 104-5. An additional stay-d"a" t.'st wa ('onduded "'"' te t "umb r 14 "fU", original S ott test In the earlier te . the "dirty- " fuel u&f'd in the "riginal S,ott te ts wa run in a test car with F-::!w l1ddNI to pmvid(' a r01"J",.r on to thl' increase in "mi si"n "rved in thc dirty- up ph:J(- when 1" :-\1 n wa. !lul "sed- RXS fit" p, ;'- , fig. , Api'. T(, o- (j & No. 14 42Tr. 2! .;; ex ;;1()- The au th"r of the Jett"r Wa Hobert L. Ch,, s who apppared a a wit nfo" in U"'5e pace"d ing: on behalf of re pol1dents. The Jdter was addr(-5 e(1 to Ow Lo AI1Iees Coonty n""nl of S"l"'rvi ors 4.Cha.. , 'fr. 4;-!()- 1;Chiprnal1, 'fr- 2(;11;- 17; SpiUer. Tr. 4,,01-U,,; Cha, Tr- 4;\(;9-7:. 41; Chipman, Tr- Zf""l. The Cars list"d w,,", ",,roe.! by pe"ple who earn" to "tat.e agenci(' for IiLen, i"specti",,", d(". 47 Chipman Tr- Z:JJ-:S:J; ex :Hf;a 1h One uf the major objection" re"p"nd('!lt had tu Uw admis i()" of lhe te b Wa the fact that the only evid,'nce uf which ga.,,,!ine was being " ed w"s quc ti""nain' an wers from p,-rtieipaots whi(,h only gave c(jrn'nl " ,, i"f"rmati")l and nut priur use pattern . Chipman, Tr. Z77:J Chipman, Tr- ii/j; ex J4().

STANDARD OIL COMPANY OF CALIF., ET AI. 1487 1401 Opinion of the Commission and probative. Thert' were, however, some questions raised about the tests which we find damaging to the value of them as indicators of F-310 performance, Although the drivers of the cars had credit to purchase Chevron gasoline during at least a substantial portion of the tests, there is no assurance that some did not deviate from exclusive Chevron gasoliI\ Ilse.5O There is also evidence that some changes and adjustments were made in the cars while the test was going on which may have affected emissions. Given these facts, we attach litte significance to the report of the ARCO Project results as far as they have been urged as a negation of F -310 effectiveness, G. Standard' s Uniun Gasoline Comparison Test One of the original Scott test vehicles was run through another dirty-up phase in order to test the dean-up capacity of Union Oil Company gasoline and compare (Inion with Chevron and F- 31O. After the dirty-up phase, the car was operated on Union Regular for 000 miles. Only a slight drop in HC emissions occurred, and there was no CO decreasf'. 'The car was then operated on Chevron gasoline with F-3JO, and after another 1 400 miles emissions had returned to the starting level."j 1/. Taxicab Fleet Test in Spokane, Wasldngto1/ The affidavit of the president of a Spokane taxi company was introduced by respondents upon a stipulation of complaint counsel to provide evidence of a favorable gasoline mileag-e test of Chevron with F -310. Thirty cabs were operated for three months using Chevron without F' 31O. Then, in Mar., Apr. and May 1970, twenty of them were switched to Chevron with 1"-310 and they experienced an overall 15.66% improvement in gasoline mileage: l This was considered a significant improvement by the company president because he felt it meant substantial savings in the cost. of operating his fleet. The affidavit states that a check was made SIX months after the second phase and thc results verified that the mileage Improvement was stil present. I. ML c(!ll(lwOH.s Add' iti(mal Tests The Bureau of Mines conuucted an F-310 test using two cars with low engine deposits for 12 000 miles. The tests were designed to evaluate deposit control rather than emission reductions, and t.he results were at best inconclusive. (Hurn, Tr. 3321-2:3). There was some evidence of superior deposit. removal by F-31O in the tests. (Hurn, Tr. 3267, 3278). General Motors' Chevrolet Uivision used Chevron with F-310 in its 1973 federal engine certification tests. (Roensch, Tr, 5180). And because there was no increase in emissions over the test period and no noticeable engine "deterioration " the company planned to use the gasoline in its 1974 tests. In prior tests using other fuels, emissions had increased as much as 23% during the course of the tests. (Spitler, 'fr. 1558- 59; Roensch, Tr. 5186). The United Stat.es Environmental Protection Agency has conducted emissions test.s on OO cars using F -310 but t.he results were not published by the time of the trial of this case. (Kane, Tr. 3645-6). The tests were similar in format to the Hose Bowl test, hut it is doubtful a meaningful comparison could be made between the two tests because they are based upon different emission measurement methods. (RXS 33; Spitlf'r, Tr. 45(4). Additional, less significant tests are mentioned in the recorrl, hut. are not discussed here. (See RXS 6f, pp. 106- 108; RXS 75, Spitler, Tr. 4(88). f.ISTP Facts, 5, 6: TT- ), There j omf' questiun a to when",r the "hang" ()fthe State s gasoli",' purchase agre,:(Ients may hav" aJt!'T",1 gaooline buyi"g patterns befoH' the fnd of the test. RXS !I , lO, 11 "l RXS fif, p- )(J.; Spitler, Tr- 4517- RXS HI , Tr. 50 1488 FE DE HAL TRADE COMMISSION DECISIONS Fina! Order H4 F.TC. FINAL ORDER This matter is before the Commission on the appeal of complaint counsel from the administrative law judge s initial decision fied Apr. 25 1973. The Commission has received written briefs, heard oral arguments and considered the record in this matter, and has determined that complaint counsel's appeal should be granted in part. The Commission also has determined that, except as otherwise ordered herein, the initial decision should be set aside, and the findings and conclusions contained in the accompanying opinion should be adopted as the findings of fact and conclusions of law of the Commission, and that the cease-and-desist order contained herein should issue.

After the Oct. 15, l!J73 oral argument on this appeal, three motions were fied with the Commission by parties hereto. Said motions shall be acted upon in the manner and for the reasons set forth herein. Accordingly, It is ordered That respondent Standard Oil Company of California Motion to Strike Portions of Complaint Counsel's Briefs in this Docket and in Docket No. 8851 (Cmwn Central) filed on Oct. 23, 1973 is denied for the reason that it is not improper for parties to adjudicative proceedings before the Commission to cite to initial decisions of administrative law judges in other such proceedings in briefs on appeal to the Commission. Such citations have no evidentiary value and are considered by the Commission only as references to pre-existing adjudicative conclusions which may serve as precedents or guides to future decisions when similar or related issues are before the Commission for resolution. In addition, no prejudice has been shown as a result of the challenged references to the initial decision in question. It -isfurther ordered That the .Joint Motion to Correct the Record of Oral Argument fied by counsel for all the parties hereto on Mar. 1 , 1974 is granted and that a copy of said motion shall be attached to the offcial copy of the transcript of the oral argument to provide a record of the agreed changes.

It is further ordered That respondent Batten, Barton, Durstine & Osborn, Inc.'s Motion to Correct the Record filed Feb. 25 1974 is denied for the failure of the motion to state persuasive reasons for a change on the grounds alleged. However, said motion shall be considered a statement by said respondent in explanation of its counsel's remarks about its abilities to sell gasoline chemistry recorded at page 67 of the transcript of the oral argument.

It is fu-rther ordered That only the following portions of the adminis- STANDARD OIL COMPANY OF CALIF., ET AL. 1489 1401 Final Order trative law judge s initial decision in this case are adopted as findings and conclusions of the Commission:

The lists of witnesses; the first two paragraphs following the witness lists; findings 1-6; all but the first full sentence of finding 7; finding 11; finding 15; \1 Jl, 2, 5, 6 and 8 of finding 16; \1\11 4 and 5 of finding 17; \12 of finding 18; all of finding 19 except the second and third sentences of 12; \11 of finding 20; \13 of finding 25; \11, all but the fifth sentence in \12, the first full sentence of \13 and \1\15 and 6 of finding 26; finding 27; \1a, the last two sentences of \15, all but the last sentence of \16 and the first two sentences of \17 of finding 28; 12 of finding 29; 12 of finding :10; \1\11 and 2 and the first four sentences of \18 of finding 31; \1\12 and 3 and the first two sentences of \14 of finding 32; and both paragraphs under the heading The Oral Argument.

All other findings and conclusions of the initial decision are hereby set aside, and the conclusions contained in the accompanying opinion are established together with the above listed sections of the initial decision and the appendix to tbe opinion, as the fmdings of fact and conclusions of law of the Commission in this case.

It is further ordered That the following cease and desist order shall be and it hereby is entered:

It is ordered That respondent Standard Oil Company of California, a corportion, its successors and assigns, its officers, representatives agents, employees, directly or through any corporate or other device, in connection with the advertising, offering for sale, sale or distribution of Chevron gasolines, or the additive "' :110, or any other product in commerce as "commerce" is defined in the Federal Trade Commission Act, do forth with cease and desist from:

1. Representing directly or by implication that any such product: (a) Will produce or result in motor vehicle exhaust which is pollution free or generally pollution free; or (b) Wil eliminate or reduce air pollution caused by motor vehicles; or (c) Will eliminate or reduce emissions from all or any number or group of motor vehicles in which it is used; or that:

Final Order 84 P Cd) Any gasoline or gasoline additive product has any other quality, performance ability or other characteristic; or (e) Tests, demonstrations, research or experiments have been conducted which prove or substantiate any of said representations;

Unless and only to extent that each and every such representation is true and has been fully and completely substantiated by competent scientific tests. The results of said tests, the original data collected in the course thereof and a detailed description of how said tests were performed shall be kept available in written form for at least three years following tbe final use of the representation. 2. Representing directly or by implication that: Ca) Automotive exhaust has certain observable or measurable characteristics in all or any number or group of motor vehicles when such is not the fact; or (b) Any machines, measuring devices or technical instruments have particular characteristics or capacities when such is not the fact; or Cc) Any product has any effectiveness in reducing air pollution or any air pollutant or air pollutants without at the same time, in the same advertisement or other form of communication, conspicuously disclosing that not all of the harmful pollutants in automotive exhaust are affected by said product; or Cd) Any product wil reduce any emissions of pollutants from automobile exhaust by any percentage or numerical quantity unless in connection therewith there is a clear, accurate and conspicuous disclosure of the type of vehicle which can expect to achieve reductions of such magnitude and the approximate percentage of such vehicles in the general car population.

It is ordered That respondent Standard Oil Company of California, a corporation, its successors and assigns, its officers, representatives agents, employees, directly or through any corporate or other device, in connection with the advertising, offering for sale, sale, or distribution of Chevron gasoline", or the additive F -310 or any other product in commerce, as "commerce" is defined in the Federal Trade Commission Act do forthwith cease and desist directly or indirectly from: 1401 Final Order 1. Advertising by or through the use of or in conjunction with any test, experiment, or demonstration, or the result thereof, or any other information or evidence that appears or purports to confirm or prove, or is offered as confirmation, evidence, or proof of any fact, product characteristic or the truth of any representation which does not accurately demonstrate, prove, or confirm such fact product characteristic, or representation.

2. Using any pictorial or other visual means of communication with or without an accompanying verbal text which directly or by implication creates a misleading impression in the minds of viewers as to the true state of material facts which are tbe subject of said pictures or other visual means of communication. R Misrepresenting in any manner or by any means any characteristic, property, quality, or the result of use of any gasoline or gasoline additive product.

III.

It is or.dered That respondent Batten, Barton, Durstine & Osborn Inc., a corporation, its successors and assigns, its officers, representatives, agents, employees, directly or through any corporate or other device, in connection with the advertising, offering for sale, sale or distribution of Chevron gasolines, or tbe additive F-31O, or any other product in commerce as "commerce" is defined in the Federal Trade Commission Act, do forth with cease and desist from: 1. Representing directly or by implication that any such product: (a) Wil produce or result in motor vehicle exhaust which is pollution free or generally pollution free; or (b) Wil eliminate or reduce air pollution caused by motor vehicles; or (c) Will eliminate or reduce emissions from all or any number or group of motor vehicles in which it is used; or that:

(d) Any gasoline or gasoline additive product has any other quality, performance ability or other characteristic; or (e) Tests, demonstrations, research or experiments have been conducted which prove or substantiate any of said representations;

Unless and only to the extent that respondent has a reasonable basis for such representation based upon competent scientific tests by it or its client. The results of said tests and the data Final Order 84 F.

collected in the course thereof relied upon by respondent shall be kept available in written form for at least three years following the final use of the representation. 2. Representing directly or by implication that: (a) Automotive exhaust has certain observable or measurable characteristics in all or any number or group of motor vehicles when such is not the fact; or (b) Any machines, measuring devices or technical instruments have particular characteristics or capacities when such is not the fact; or (c) Any product has any effectiveness in reducing air pollution or any air pollutant or air pollutants without at the same time, in the same advertisement or other form of communication, conspicuousuly disclosing that not all of the harmful pollutants in automotive exhaust are affected by said product; (d) Any product will reduce any emissions of pollutants from automobile exhaust by any percentage of numerical quantity unless in connection therewith there is a clear, accurate and conspicuous disclosure of the type of vehicle which can expect to achieve reductions of such magnitude and the approximate percentage of such vehicles in the general car population.

IV.

It is orde-red That respondent Batten, Barton, Durstine & Osborn Inc., a corporation, its successors and assigns, its officers, representatives, agents, employees, directly or through any corporate or other device in connection with the advertising, offering for sale, sale, or distribution of Chevron gasolines, the additive F-:olo, or any other product in commerce as 'jcommerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist directly or indirectly from:

1. Advertising by or through the use of or in conjunction with any test, experiment, or demonstration, or the result thereof, or any other information or evidence that appears or purports to confirm or prove or is offered as confirmation, evidence or proof of any fact product characteristic, or of the truth of any representation which does not accurately demonstrate, prove, or confirm such fact, product characteristic, or representation unless the respondent can establish it neither knew, nor had reason to know, nor upon reasonable inq uiry could have known that such was the case. 149: Complaint 2. Using any pictorial or other visual means of communication with or without an accompanying verbal text which directly or by implication creates a misleading impression in the minds of viewers as to the true state of material facts which are the subject of said pictures or other visual means of communication unless the respondent can establish it neither knew nor had reason to know nor upon reasonable inquiry could have known the true facts. t Misrepresenting in any manner or by any means any characteristic, property, quality, or the result of the use of any gasoline or gasoline additive product unless the respondent can establish it neither knew nor had reason to know nor upon reasonable inquiry could have known that such representations are false. It is further oordered That Subparagraphs 1 , 3, 4, 5, 7, 8, 9, lO(b), lO(c) and 11 of Paragraphs Five and Six of the complaint be, and they hereby are, dismissed.

It isfurtherorder-d That the respondent corporations shall forthwith distribute a copy of this order to each of their operating divisions. It is further or-dered That respondents herein shall notify the Commission at least thiry (:iO) days prior to any proposed change in any of the corporate respondents 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 respondents shall, within sixty (60) days after service of the order upon them, file with the Commission a written report, signed by the respondents, setting forth in detail the marmer and form of their compliance with the order to cease and desist. Commissioners Hanford and Nye did not participate since oral arg-ument was heard prior te their assumption of Office.