The Coca-Cola Company

Text (OCR of the scan at left; may contain errors)

IN THE MATTER OF THE COCA-COLA COMPANY, ET AL.

CONSENT ORDERS, ETC., IN REGARD TO ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket 8824. Complaint, Nov. 20, 1970 — Decisions, Oct. 26, 1976 Consent order requiring an Atlanta, Ga., manufacturer of soft drinks and other food products, among other things to cease failing, in contests and promotional games, to disclose all terms, conditions and rules; to award all prizes to entries who conform to the conditions of entitlement to a prize; and to keep adequate records for a minimum of two years.

Consent order requiring a Westport, Conn., promotional firm, among other things to cease failing, in contests and promotional games, to meet all of the abovementioned requirements, and additionally, in relation to the future conduct of skill contests, to base them solely on matters of established, provable fact; to use such facts as are readily available from reference materials; to disclose that skill is involved and the reference works on which answers are based; to file questions and answers with an independent organization prior to promotion implementation; and to make available to participants the correct answers and a list of winners within sixty (60) days of judging the contest. Appea FANCES For the Commission: John J. McNally and David C. Fix. For the respondents: White & Case, New York City; Wake, See & Dimes, Westport, Conn.; and Weil, Gotshal & Manges, New York City. COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act, and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that The Coca-Cola Company, a corporation, and Glendinning Companies, Inc., a corporation, hereinafter sometimes referred to as respondents Coca-Cola and Glendinning, 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: PARAGRAPH 1. Respondent The Coca-Cola Company is a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware, with its office and principal place of business located at 515 Madison Ave., in the city of New York, State of New York.

Respondent Glendinning Companies, Inc. is a corporation organized, existing and doing business under and by virtue of the laws of the State COCA-COLA CO., ET AL. 657 656 ; Complaint of Connecticut, with its office and principal place of business located at One Glendinning’ Place, in the city of Westport, State of Connecticut. Par. 2. Respondent The Coca-Cola Company directly, and through various corporate subsidiaries, affiliates and franchisees is now, and for some time last past has been, engaged in manufacturing, distributing, advertising, offering for sale and selling concentrates, syrups, soft drinks, beverages and other food products. It has production and bottling plants and facilities in numerous American and foreign cities. Its beverages, including those popular soft drinks sold under the trade names “Coca-Cola” and “Tab,” are distributed and sold to a vast segment of the general public in substantially all parts of the United States through some 900 local bottlers. Its net sales in 1968 approximated $1,185,808,864.

Par. 3. Respondent Glendinning Companies, Inc. is now, and for some time last past has been, engaged in developing, manufacturing, promoting, offering for sale, selling and distributing trade stimulation programs and services, and sales promotional materials including promotional games and related devices used in and to induce the sale and distribution of food, gasoline and various other products. Par. 4. In the course and conduct of their respective businesses, respondent Coca-Cola and respondent Glendinning have acted separately or in concert for the purpose and with the result of bringing about the use of a promotional game known as “Big Name Bingo” in connection with and in order to induce the sale and distribution of “Coca-Cola” and “Tab” to a vast segment of the general public. The aforesaid “Big Name Bingo” promotional game utilizes “bingo” type entry cards to which game participants are required to attach game pieces in the appropriate spaces. The entry cards consist, in the main, of cardboard pieces inserted into cartons of Coca-Cola and Tab. The game pieces consist, in the main, of plastic liners inserted within the lids or caps of bottles of said product. The said entry cards and game pieces, together with tear sheets of advertising copy, in-store display pieces and other promotional game materials and devices, were made available through respondents Coca-Cola and Glendinning to bottlers and distributors of Coca-Cola and Tab, for use in connection with and in order to induce the sale and distribution of said products through usual retail channels in numerous marketing areas to a vast segment of the general public throughout the States of the United States and in the District of Columbia.

Par. 5. In the course and conduct of its business, respondent Coca- Cola now causes, and for some time last past has caused, said beverages and other food products, including Coca-Cola and Tab, to be distributed through said production and bottling plants and facilities located in Complaint _ 88 F.T.C.

various States of the United States, and to be sold and distributed through retail establishments for sale and distribution to a vast segment of the general public throughout the United States. Respondent Coca- Cola causes its said food products, including Coca-Cola and Tab, to be _advertised in newspapers of general circulation published and disseminated throughout the various States of the United States, and the District of Columbia. Respondent Coca-Cola maintains, and at all times ~ mentioned herein has maintained, a substantial course of trade in said beverages and other food products, including Coca-Cola and Tab, and has advertised and distributed said food products and the aforementioned promotional games including “Big Name Bingo” and related materials and devices, in commerce, as “commerce” is defined in the Federal Trade Commission Act.

Par. 6. In the course and conduct of its business, respondent Glendinning has caused to be manufactured, sold and distributed throughout the United States entry cards, game pieces and other materials and devices necessary for the promotion and use of various promotional games, including “Big Name Bingo” used in connection with and in order to induce the sale and distribution of Coca-Cola and Tab to a vast segment of the general public. Respondent Glendinning maintains, and at all times mentioned herein has maintained, a substantial course of trade in said promotional games, materials and devices in commerce, as “commerce” is defined in the Federal Trade Commission Act.

Par. 7. In the course and conduct of their business, respondents have caused advertisements to be published and disseminated in newspapers, through in-store promotional displays, on game entry cards, and by various other means, for the purpose of inducing and which have induced a vast segment of the general public to purchase Coca-Cola and Tab in order to participate in “Big Name Bingo.” Many of said advertisements contain depictions of all or a substantial portion of the bingo-type grid format of the game entry cards and set forth an example of a correct or winning game piece liner to be matched up with one of the ten “questions” or spaces on the card. Many of said advertisements recite or paraphrase all or portions of the instructions and rules set out on the game entry cards, and contain statements and representations concerning the likelihood that members of the general public would receive a stated sum by submitting a correct entry in the “Big Name Bingo” promotional game.

Incorporated herein by reference are copies of the following: front and reverse sides of a sample game entry card which are designated Appendix A-1 and A-2, sample of an in-store display card designated Appendix B, and an example of a newspaper advertisement designated COCA-COLA CO., ET AL. 659 656 Complaint Appendix C. The front side of the said game entry cards consist principally of a grid of 30 circles in six columns of five each. The two center columns comprise statements or “questions,” and the outer columns comprise pictures of named famous persons, or “possible answers.” Over the grid sections are set forth directions for participating in “Big Name Bingo” and on the reverse side thereof is set forth the “Official Rules” therefor.

Par. 8. Among and including the statements, depictions and representations set forth on said game cards heretofore designated Appendix A- 1 and A-2, and in other advertisements by respondents, as aforesaid, are the following:

PLAY BIG NAME BINGO WIN $100. Here’s How You Can Win $100.* * * (Depiction of three bottle caps, from the inside surface of one cap, a liner portraying Abraham Lincoln is being pried loose by what appears to be a knife blade). * * * Answer the questions by glueing correct picture liners face up and clearly visible over the appropriate question. For example, get the inside “ABRAHAM LINCOLN” picture liner and glue it on the space marked “Freed Slaves” and you are already playing BIG NAME BINGO. Be sure to read the official rules carefully* * *. When you have glued on as many “answers” as you can correctly, submit your card* * *. Webster’s unabridged dictionary and the Encyclopedia Britannica will serve as reference authorities* * *. Playing Grid, Glue correct picture liners over circles* * *,” * ® *Match the correct famous faces. Look for Coca-Cola and Tab Caps with the words “BIG NAME BINGO” on top* * *.

Official Rules * * *. On the playing grid you will find 10 “questions.” Adjacent are pictured examples of 20 possible “answers”* * *, There are no other picture liners in the contest. Answer each question by glueing the correct picture liners face up and clearly visible over the appropriate questions (be careful, in some instances the same picture liner may be used to answer more than one question and certain questions may not be answered by any of the picture liners). When you have glued on as many “answers” as you can correctly, sign your card and send it along with your name and address to BIG NAME BINGO * * *. Westport, Connecticut* * *. The decision of the judges will be final* * *.

Certain advertisements, including that heretofore designated Appendix C, set forth directions for participating in “Big Name Bingo,” including the following:

* * Match the faces with brief descriptions and paste the faces on the game card at left. For each description, look through all 20 famous faces to see if any match correctly. For example, get the “Abraham Lincoln” picture liner and glue it in the space marked “Freed Slaves.” It’s that simple. Correctly completed card wins you $100. But remember, there are 2() liners showing famous faces, and only 10 descriptions on the playing card. So play carefully. Fill in as many spaces as you can carrectly® * Complaint — 88 F.T.C.

Par. 9. The aforesaid directions, explanations, rules, depictions and other statements were published and disseminated by respondents so as to interest and attract a vast segment of the general public, including a substantial portion thereof of average sophistication and skill in semantics, and to induce their purchase of Coca-Cola and Tab in order to participate in said promotional game. By and through the use of the aforesaid directions, explanations, rules, depictions, and other statements, and by others of the same import and meaning not set out specifically herein, respondents represented to the aforesaid substantial portion of the general public, directly or by implication, that they would give $100 to each contestant who submitted a Big Name Bingo entry card upon which the appropriate liner was affixed in a clearly visible manner over each space in the playing grid containing a “question” to which the depiction on such liner constituted a correct answer according to the cited reference authorities.

Par. 10. In truth and in fact, many if not all contestants from among the aforesaid substantial portion of the general public, who submitted Big Name Bingo entry cards upon which the correct “answers” were affixed over the appropriate “questions,” as referred to in Paragraph Nine hereof, did not receive $100 from respondents. Contrary to the clear import of their directions, explanations, rules, depictions, and other statements and representations to the substantial portion of the general public interested and attracted thereby, as aforesaid, respondents imposed a material condition or rule, substantially at variance therewith and not disclosed to said substantial portion of the general . public, by virtue of which more than one liner had to be affixed over certain of the spaces in order to entitle contestants to win $100. As a consequence thereof, a substantial number of contestants from among the aforesaid substantial segment of the general public who had been beguiled and induced to purchase Coca-Cola or Tab in order to participate in said promotional game did not receive sums to which they would have been entitled had Big Name Bingo been conducted in accordance with the clear import, to said contestants, of respondents’ aforesaid statements and representations.

Therefore, respondents’ said statements and representations, acts and practices, and their failure to reveal material facts to a substantial segment of the general public and to award prizes to contestants entitled thereto from among said segment of the general public, as set forth in Paragraphs Eight, Nine and Ten hereof, were, and are, unfair, false, misleading and deceptive acts and practices. — Par. 11. In the course and conduct of their aforesaid business, and at all times mentioned herein, respondents have been, and now are, in substantial competition, in commerce, with corporations, firms and COCA-COLA CO., ET AL. 661 656 Complaint individuals in the sale of syrups, concentrates, beverages and other food products, and of trade stimulation programs and promotional games, of the same general kind and nature as that sold by respondents. Par. 12. The use by respondents of the false, misleading and deceptive statements, representations, acts and practices and their failure to reveal material facts and to award prizes to contestants entitled thereto, as aforesaid, has had, and now has, the capacity and tendency to mislead a substantial portion of the general public into the erroneous and mistaken belief that said statements and representations were and are true and complete, and into the purchase of substantial quantities of Coca-Cola and Tab by reason of said erroneous and mistaken belief.

Par. 13. The aforesaid acts and practices of respondents, including their continuing refusal to award prizes to contestants entitled thereto, as herein alleged, were and continue to be all to the prejudice and injury of the public and the respondents’ competitors and constituted, 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.

Complaint 88 F.T.C.

HERE'S HOW YOU CAN WIN Kelocent sre pitted tinea ef the 3 peta hoe of words en APPENDIX A-L se ce emer ~~ Porsitte Answers . Playing Grid Possible Answers : Do Not Cul Ovt—Examplos Only Glue correct picture liners over circies Oo Not Cut Out—Examples Only LED U.S.

NAVAL FORCES AT BATTLE OF Lane ERIE, ITALIAN ASTRONOMER WENT ON ARCTIC EXPEDITION FIRST DEFINED THE EFFECT OF GRAVITY ON A FALLING BODY DISCOVERER OF RADIO- ACTIVITY ATTENDED PARIS PEACE CONFERENCE TRIED FOR TREASON 19799 012077 COCA-COLA CO., ET AL.

Official Ruies 1. Pecture liners are available under caps of Coca-Cola and Tab that have the words BIG NAME BINGO printed on top cpiclures are also printed on the botiom of can cartons). You may trade any picture liner for any other that you want by sending the undesired picture liner plus the name of the piciure liner you want logether with & sampes, sail agdvessed envehope to “Pecture Liners,” P.O. Bos 582, Westport, Connecticut OG88D, Additional playong cards are also available from this sameaddiess. ye playing grid you will find 10 “quesons.’ possible “answers.”

rovided in Rule #1. There afe no other picture in the contest. Answer each question by he corsecl picture liners face up and clearly visible over the appropriate questions {be caretul, in some instances the same picture finer may be used io answer more than one Question and certain questions may not be answered by any of the picture liners).

3. When you have glued on as many “answers” as you can correctly, sign your card and send it along with your name and address to BIG MAME BINGO, P. 0. Box 582, Westporl. Connecticut O6880. for vetstication and awarding of rize at you are a winner, OO NOT SEND METAL OTTLE CAPS IN THE MA(L—only the liners themselves. Enities must be postmarked no later than May 31, 1969. Winners will de nottfied by mail about June 20, 1969. Limit one prize (0 3 family, Mf your entry is judged incorrect, you will not ‘de Notified uniess you enclose a stamped. selfaddtessed envelope with your entry. You will be Aotitied following the official closing date of the contest. No other correspondence will be ‘entered into regarding this contest.

4, Players submitting exactly corsect will be ie atded $100.00.

Gecizion of the judges will be final and entry tn the contest signiies 1 ihe agreement of the ‘entrant to abide by the judges’ decision. al ‘entries become the property of The Coca-t Company and none will be return . 5. Earept for incigentat help from Maly ng friends, entries must be wholly the work of the Person in whose name the entry is sudmitted, and wilt be disqualifies for professional or compensated help. The Coca-Cola Company teserves the cight to terminate this contest at any time. Contest materials are vod and may be rejected st not obtained through legitimate channels, or if any part 1s legible, mutilated, smeared oF tampered with. No facsimiles are igible. Void where restricted by law. Appitcable lanes are the responsibility of winners, Promotion ends May 31, 1969.

6. Olfer open to all U.S. residents except employees (and their families) of The Coca-Cola Company. its bottlers, marketing agencies and hes engaged sn the development. production 886 distrnbution of contest materials.

© Centamay Cognos Inc. Nestoort, Connctcst 1968 ears moe card which is judged .

he Complaint APPENBIX A*2 E ail to: BIG NAME BINGO, P.O. Box 582, estport, Connecticut 06880 26 2 3 2 8 a2 28 8 8 ao ¢ 8 2 zs PLAY BIG NAME BINGO Match the correct famous faces. Look for Coca-Cola and ‘Tab caps with the words “BIG NAME BINGO” on top.

ga FTC COCA-COLA CO., ET AL.

Complaint APPENDIX C afd BIG Nine.

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DECISION AND ORDER AS TO THE CocaA-Cola COMPANY The Commission having issued its complaint charging the respondent named in the caption hereto with violation of the Federal Trade Commission Act, and the respondent having been served with a copy of the complaint the Commission issued, together with a proposed form of order; and The respondent and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondent of all the jurisdictional facts set forth in the complaint issued, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondent that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission’s Rules; and The Commission having considered the agreement and having accepted same, and the agreement containing consent order having thereupon been placed on the public record for a period of sixty (60) days, and having duly considered the comments filed thereafter pursuant to Section 3.25(d) of its Rules now in further conformity with the procedure prescribed in Section 3.25(d) of its Rules, the Commission hereby issues its complaint in the form contemplated by said agreement, makes the following jurisdictional findings, and enters the following order:

1. The ‘Coca-Cola Company is a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware, with its office and principal place of business located at 310 North Ave., Atlanta, Georgia.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent, and the proceeding is in the public interest.

ORDER It is ordered, That respondent The Coca-Cola Company, a corporation, its successors and assigns, officers, agents, representatives and employees, directly or through any corporation or other device, in connection with the advertising, offering for sale, sale or distribution of Coca-Cola, Tab, or any food or other product, or in connection with the sale or distribution of “Big Name Bingo,” or any other promotional game, contest, sweepstake or similar device which involves or offers the awarding of a prize or anything of value to participants therein, by any means, in commerce, as “commerce” is defined in the Federal Trade Commission Act, forthwith cease and desist from: Engaging in, promoting the use of, or participating in any such COCA-COLA CO., ET AL. 667 656 Decision and Order promotional game, contest, sweepstake or similar device, by means of any announcement, notice or advertisement, unless: (a) All of the requirements, terms and conditions for participating therein and for entitlement of such prizes are clearly and conspicuously set forth in each advertisement or notice which purports to explain or illustrate the operation of, manner of participation in, or the basis for or prospects of becoming entitled to or receiving a prize in connection with, any such contest or promotional game.

(b) All such prizes are in fact awarded to all participants therein whose entries conform to the stated requirements, terms and conditions for entitlement to and receipt of such prizes. (c) There are maintained by respondent or its designee for a period of at least two years after the closing of each such promotional game or contest and the awarding of all prizes in connection therewith, full and adequate records including all entry forms submitted by participants therein, which clearly disclose the operation of such promotional game or contest, the basis or method used to determine entitlement to prizes, and the facts as to the receipt of such prizes by participants entitled thereto; which said records and documents shall be open for inspection during normal business hours by each contest participant or his duly authorized representative.

It is further ordered, That respondent shall forthwith distribute a copy of this order to each of its operating divisions. It is further ordered; That respondent notify the Commission at least 30 days prior to any proposed change in the corporate respondent such as dissolution, assignment or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries or any other change in the corporation which may affect compliance obligations arising out of the order. — It is further ordered, That the respondent herein shall, within sixty (60) days after service upon it of this order, file with the Commission a report, in writing, setting forth in detail the manner and form in which it has complied with this order.

Commissioner Dole did not participate by reason of absence. DECISION AND ORDER AS TO GLENDINNING COMPANIES, INC. The Commission having issued its complaint charging the respondent named in the caption hereto with violation of the Federal Trade Commission Act, and the respondent having been served with a copy of the complaint the Commission issued, together with a proposed form of order; and The respondent and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the Decision and Order 88 F.T.C.

respondent of all the jurisdictional facts set forth in the complaint issued, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondent that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission’s Rules; and The Commission having considered the agreement and having accepted same, and the agreement containing consent order having thereupon been placed on the public record for a period of sixty (60) days, and having duly considered the comments filed thereafter pursuant to Section 3.25(d) of its Rules now in further conformity with the procedures prescribed in Section 3.25(d) of its Rules, the Commission hereby issues its complaint in the form contemplated by said agreement, makes the following jurisdictional findings, and enters the following order:

1. Glendinning Companies, Inc. is a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware, with its office and principal place of business located at One Glendinning Place, in the city of Westport, State of Connecticut. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent, and the proceeding is in the public interest.

ORDER It is ordered, That respondent Glendinning Companies, Inc. a corporation, its successors and assigns, officers, agents, representatives and employees, directly or through any corporate or other device, in connection with the advertising, offering for sale, sale or distribution of Coca-Cola, Tab, or any food or other product, or in connection with the sale or distribution of “Big Name Bingo,” or any other promotional game, contest, sweepstake or similar device which involves or offers the awarding of a prize or anything of value to participants therein, by any means, in commerce, as “commerce” is defined in the Federal Trade Commission Act, forthwith cease and desist from: 1. Engaging in, promoting the use of, or participating in any such promotional game, contest, sweepstake or similar device, by means of any announcement, notice or advertisement, unless: (a) All of the requirements, terms and conditions for participating therein and for entitlement of such prizes are clearly and conspicuously set forth in each advertisement or notice which purports to explain or illustrate the operation of, manner of participation in, or the basis for or prospects of becoming entitled to or receiving a prize in connection with, any such contest or promotional game.

(b) All such prizes are in fact awarded to all participants therein COCA-COLA CO., ET AL. 669 656 Decision and Order whose entries conform to the stated requirements, terms and conditions for entitlement to and receipt of such prizes. (c) There are maintained by respondent or its designee for a period of at least two years after the closing of each such promotional game or contest and the awarding of all prizes in such connection therewith, full and adequate records including all entry forms submitted by participants therein, which clearly disclose the operation of such promotional game or contest, the basis or method used to determine entitlement to prizes, and the facts as to the receipt of such prizes by participants entitled thereto; which said records and documents shall be open for inspection during normal business hours by each contest participant or his duly authorized representative.

2. Engaging in, promoting the use of, or participating in the development or operation of any skill contest, unless: a. The skill contest is based solely on matters of established, provable fact.

b. The factual subject matter is obtainable from readily available reference materials, e.g., those available in the typical public library. c. Contest materials and advertising disclose clearly and conspicuously that a substantial degree of skill is involved and also the specific reference works on which the answers are based, (eg., a specific dictionary, encyclopedia, atlas, or historical work), and contest rules and directions clearly provide all necessary information for the contestant to participate successfully.

d. Questions and answers with complete supporting data as outlined in paragraphs (a) and (b) and complete judging procedures are filed with an independent organization prior to promotion implementation. e. The correct answers and a list of winners is made available to participants upon request and filed with an independent organization _ within 60 days of the close of judging of the competition. For purposes of this order a skill contest is defined as any promotional contest or device in which the award of a prize or anything of value to the participants is determined on the basis of the winning answers or solutions submitted by participants through the exercise of a substantial degree of skill in determining the winning answers or solutions to the questions or problems which are the subject of the contest or device. / In the event that the Commission promulgates a final trade regulation rule concerned with skill contests, then such trade regulation rule shall completely supersede and replace paragraph 2 and such trade regulation rule shall become part of this order. It is further ordered, That the terms of this order shall not apply toa promotional game, contest or device conducted by or under the direction Decision and Order 88 F.T.C.

of a governmental instrumentality, or where the respondent neither knew nor had reason to know of failure to comply with the terms of this order.

It is further ordered, That respondent shall forthwith distribute a copy of this order to each of its operating divisions. It is further ordered, That respondent notify the Commission at least 30 days prior to any proposed change in the corporate respondent such as dissolution, assignment or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries or any other change in the corporation which may affect compliance obligations arising out of the order.

It is further ordered, That the respondent herein shall, within sixty (60) days after service upon it of this order, file with the Commission a report, in writing, setting forth in detail the manner and form in which it has complied with this order.

Commissioner Dole did not participate by reason of absence. ELECTRONIC COMPUTER PROGRAMMING INSTITUTE, INC., ET AL. 671 671 Complaint