General Mills Fun Group, Inc

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

IN THE MATTER OF GENERAL MILLS FUN GROUP, INC.

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Doket C- 965. Complaint, May 15, 1979 - Decision. May 15, 1979 This consent order, among other things, requires a Minneapolis, Minn. subsidiary of General Mils, Inc. in the advertising and sale of its toy products, to cease misrepresenting or failing to make relevant disclosures regarding the performance, operation, use, size or appearance of such products through viual portrayals, descriptions, or commercial production techniques. General Mils, Inc. is also bound by the terms of the order. Appearances For the Commission: Louise R. Jung, John G. Siracusa and Robert S. Blacher.

For the respondent: Robert J Fulgency, Minneapolis, Minn. 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 General Mils Fun Group, Inc., a corporation, hereinafter referred to as respondent, has violated the provisions of said Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as follows:

PARAGRAPH 1. Respondent General Mils Fun Group, Inc. is a corporation organized, existing and doing business under and by virtue of the laws of the State of Nevada, and with an office and place of business located at 9200 Wayzata Boulevard, Minneapolis, Minnesota.

Respondent General Mills Fun Group, Inc. is a wholly-owned subsidiary of General Mils, Inc. and is comprised of several divisions, including, among others, Kenner Products. PAR. 2. Respondent is now, and for all times relevant to this complaint has been engaged in the production, distribution and sale of a variety of toy products, including, but not limited to, the following Kenner toy products: "Nugget Lightnin' TIP TIP Trouble Patrol."

PAR. 3. Respondent has caused to be prepared and placed for Complaint 93 F.

publication and has caused the dissemination of advertising materi- , including, but not limited to, the advertising referred to herein, to promote the sale of "Nugget Lightnin' TIP " and "TIP Trouble Patrol."

PAR. 4. In the course and conduct of its aforesaid business respondent has caused "Nugget, Lightnin' TIP" and " TIP Trouble Patrol" in their packages to be transported from its place of business to purchasers thereof located in various other States of the United States and in the District of Columbia. Respondent maintains, and at all times mentioned herein has maintained, a substantial course of trade in said products in or affecting commerce. PAR. 5. In the course and conduct of its aforesaid business respondent has disseminated, and caused the dissemination of certain television advertisements concerning said products in or affecting commerce which were broadcast by television stations located in various States of the United States, and in the District of Columbia, having suffcient power to carry such broadcasts across state lines, for the purpose of inducing the sale of said products in or affecting commerce.

PAR. 6. Typical and ilustrative of tbe statements and representations in respondent's advertisements disseminated by means of television, but not all inclusive thereof, are the following advertisements, attached hereto and made a part hereof as Exhibits A, Band , respectively: "Dusty-Nugget Lightnin' TIP" and " TIP Trouble Patrol."

PAR. 7. Through the use of the aforesaid advertisements, respondent has represented, directly or by implication: 1. That "Nugget" wil stand without any human assistance or mechanical aid (see Exhibit A);

2. That a child can exercise a high degree of control over the speed and direction of the "Lightnin' TIP" car when it is launched from the "Lightnin' TIP" launcher and thereby can perform certain acts or series of acts with the "Lightnin' TIP" car as depicted in one of the aforesaid advertisements (see Exhibit B); and 3. That a child can exercise a high degree of control over the speed and direction of the "TIP Trouble Patrol" motorcycle and car when they are launched from the "TIP Trouble Patrol" launcher and thereby can perform certain acts or series of acts as depicted in one of the aforesaid advertisements (see Exhibit C). PAR. 8. In truth and in fact:

1. "Nugget" cannot stand without human assistance or mechanicalaid;

2. A child cannot exercise a high degree of control over the speed GENERAL MILLS FUN GROUP, U'v.

749 Complaint and direction of the "Lightnin' TIP" car when it is launched from the "Lightnin' TIP" launcher and cannot perform certain acts or series of acts with the "Lightnin' TIP" car as depicted in one of the aforesaid advertisements (see Exhibit B); and 3. A child cannot exercise a high degree of control over the speed and direction of the "TTP Trouble Patrol" motorcycle and car when they are launched from the "TIP Trouble Patrol" launcher and cannot perform certain acts or series of acts as depicted in one of the aforesaid advertisements (see Exhibit C). Therefore, the statements, representations and depictions referred to in Paragraphs Six and Seven are deceptive and/or unfair. PAR. 9. The use by respondent of the aforesaid deceptive or unfair advertising has had, and now has, the capacity and tendency to mislead members of the purchasing public into the erroneous and mistaken beliefthat the said representations were and are true, and into the purchase of substantial quantities of the products of respondent by reason of said erroneous and mistaken belief. PAR. 10. In the course and conduct of its aforesaid business, and at all times mentioned herein, respondent has been and is now, in substantial competition, in or affecting commerce, with other corporations engaged in the manufacture and sale of toy products. PAR. 11. The aforesaid acts or practices of respondent, as herein alleged as aforesaid, were and are all to the prejudice and injury of the public and of respondent' s competitors, and constituted and now constitute unfair methods of competition in or affecting commerce and unfair or deceptive acts or practices in or affecting commerce, in violation of Section 5 of the Federal Trade Commission Act, as amended.

;:.: ::/.. .. : :;: :: H''''' COMMISSION DECISIONS Complaint 93 F. -Y'k tp i;1't, F;- - i i;j i='1S 7:D! 0:, ::::::1., :,::u..

. . . . ; ): :: . .. , :: ; , , .: .,. / Complaint Y;;j, f 1'l! 'Jie I ;

,.c "'i )J .. Sf:

:c\,, r,. 6!& 'C: .

4C,,'J S:' :;:J 'l , J . -:0 :3::

;;, I j( :: , ; .; .:;., :;. : :.:.,, \.;,,,:. : ..: !. ., , . j).,.,; ,y,:,, ,,... .. (,, ,;: . ,;, Complaint 93 F.

"lO:

, J, ::" ; "7. :: c': ,.'c,, -; L f-i. v. 'C:: CL' " I:: . ' s ;: ;-c' Iij:' :i::, .0" '0. o.

:c C:,, ;J- 1'-LTGe: ;,"0 P. ' r..= cy, JU';' :Wo,, ,1::. ' "J R!. RE:'\S ;'-l'GGE;T ' 5 i. 1 S:. y.n, ;," TO .:Jt..

U:,,1 Ct' ; ijc':i: .0 SLE \iE c,, , ::n: ":.I;-J''':1: ,,,,0 f' 1,. ES HOilE'5 ICLAi 8:' p:; : ;:. TI '0'" '" ,; ce h. ",- Bl; "-I.

(Xl T\J CU 0, lI(;G::' S !'... I'u Null:;eo 1'. JSPLY SHOT. ALL n2:S os Giv..S flKC. ; ac . i.rc. :J_ ' ou . f, Du,ty olc '.l'a' ;Y.

, :: ::: :: : . , . :,), \\ ; , .((,: \:_/ . ,, :: \ GENERAL MILLS FUN GROUP, INC, 755 749 Complaint r\ ( ' J if_ ::"- 'i, 2, f?;;J VC:

:=v ' - 1 - c J%'/ C;: 'i'. ,. C;c:

c) - \ 1 1 ' 1;I_ ,r" :V"/'S ; I ' :C" ;CC J .

c. "

. ;, ..: ! . . ,,.: . \ ..\ .\ ,, ;,;; . : _: , . , ! . , .. \ \ !:: .,,.. Complaint 93 F.

I !1 (S I.: 'i 1\ f if; ! , K ,d, tl '"

";1 8 .

"3" . OO'c " r-- ' \ I fC-' iJ~~ f- fi; ; 3 ; ::1 i ' j" c C ;l(\ . Jci?.L ' :ii :3;:' / . : ,))).;/j, , . !::; ; ::.. . . / / \ 749 Complaint r;' :A"

n ' A.,!" C f! i\t ,t) -.c. Ii, V::

J ' :2(J S:-: '0 ;, \/ .. :; :/::; \\ . ! j ,,,,... . . , ! :.. :: ,.! , :_,,..;.\.)/ \)j ;..(;.../:,, , ( y:;;; . Complaint 93 F, ' 17 !;j, 0.", --i: e ""0.. ' ct- 0,, J;' r-- \II\ zJ;, fv, j:Ea 61 j,J . 2 1/- . J j;rl ' 2 '(/1' IJ\S\' u' \ ;-t Lj. \y. 40--\':.r _ Siu C",\:,.(-:'' - I - W- '5( f'?,:- )t) (;Y,5; -: r\ 1.' / I F\'-\,i - -l, --s t/ J' . 1 f -:'-i-" :'C::- S''J' .CC 1.: :: ,;e .l, " 2, ;':J:l 1:: ,:: \ . ,..: . . ;:; ::;::, ::.. \\ \; , ; \. \ \:::.j:\ \ , : , , :, \)\;:::,,, ( ); ,. 749 Complaint ,0i '\t '" r:

"i ;c g;c 61\L I, !lcc9 ,Q r-- 0 rc.;' Ifl' II '- 0 . "i,r'i" " I O, '0 z-r :L- fgJ ",\,, , u,. C j I 01', ':F- 11 10 : it G;" :l 12 ''':1 ' .(C' f;? /-I_ '.c . :'"-:"', '-;:J Decision and Order 93 F. DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondent named in the caption thereof, and the named respondent having been furnished thereafter with a copy of a draft of complaint which the Bureau of Consumer Protection proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge the named respondent with violation of the Federal Trade Commission Act; and The named respondent, General Mils, Inc., and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the named respondent of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by the named 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 matter and having determined that it had reason to believe that the named respondent has violated the said Act, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed agreement and placed such agreement on the public record for a period of sixty (60) days, and having duly considered the matter and having determined that it had reason to believe that the named respondent has violated the said Act, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed agreement and placed such agreement on the public record for a period of sixty (60) days, and having duly considered the comments fied thereafter by interested persons pursuant to Section 2.34 of its Rules, now in further conformity with the procedure prescribed in Section 2.34 of its Rules, the Commission hereby issues its complaint, making the following jurisdictional findings, and enters the following order: 1. The named respondent, General Mils Fun Group, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Nevada, with an offce and place of business located at 9200 Wayzata Boulevard, Minneapolis, Minnesota.

2. The named respondent is a wholly-owned subsidiary of General Mils, Inc., a corporation, organized, existing and doing business under and by virtue of the laws of the State of Delaware, 749 Decision and Order with its offce and principal place of business located at 9200 Wayzata Boulevard, Minneapolis, Minnesota. 3. The Federal Trade Commission has jurisdiction of the subject matter in this proceeding and of General Mils Fun Group, Inc. and General Mils, Inc., and the proceeding is in the public interest. ORDER For the purposes of this order:

1. The compression of a television commercial into a short time span shall not be considered a violation of this order so long as it does not result in the misrepresentation to children of the toy s performance or operation.

2. The term "children" shall mean the age group or age groups of children as shown on the packaging for whom the manufacturer recommends use of the toy.

3. The effectiveness of any oral or written disclosure, disclaimer or qualification of any visual portrayal or oral or written description shall be considered in determining whether the advertisement, as a whole, misrepresents to children the toy s performance, operation size or appearance.

4. The term "commercial production technique" shall include, but not be limited to, the use in commercial production of prototypes or other non-production or modified versions of a toy, controlled action sequences, mechanical or human assistance to child actors in actuating or manipulating the toy during or prior to commercial production, the use of special camera lenses or film or audio tecbniques, including video or audio overlays or the like, and the use of splicing or editing techniques.

5. The use of "commercial production techniques" shall not be considered a violation of this order so long as they do not result in the misrepresentation to children of the toy s performance, operation, size or appearance.

It is ordered, That General Mils Fun Group, Inc., a corporation, its representativessuccessors and assigns, and its officers, agents, employees, directly or through any corporation, subsidiary, division or other device, in connection with the advertising, sale, offering for sale or distribution of toys or related products (hereinafter referred to as "toys ), in or affecting commerce, cease and desist from, directly or indirectly, portraying or describing in an advertisement Decision and Order 93 F. the performance, operation, use. size, appearance, components or similar characteristic of such toy by or through the use of: A. Any visual portrayal or oral or written description of the performance or operation of a toy in any manner which cannot be duplicated by children in the ordinary use of such toy. B. Any use of any commercial production technique that results in any visual portrayal or oral or written description which, in the context of the advertisement as a whole, misrepresents to children a toy s performance, operation, size or appearance. C. Any visual portrayal or oral or written description of the performance or operation of a toy which fails to disclose to children the need for human or mechanical assistance, when such failure, in the context of the advertisement as a whole, misrepresents to children such toy s performance or operation. 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 thirty (30) days prior to any proposed change 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 this order.

It is further ordered, That the respondent herein shall, within sixty (60) days after service upon it of this order, fie with the Commission a report, in writing, setting forth in detail the manner and form in which it has complied with this order. It is further ordered. That General Mills, Inc., a corporation, its successors and assigns, and its officers, agents, representatives employees, directly or through any corporation, subsidiary (other than General Mils Fun Group, Inc.), division or other device, shall be bound by the terms of this order in the event it engages in the advertising of toys, in or affecting commerce, excluding those advertisements for toys not manufactured by or for General Mils, Inc. and those advertisements relating to the use of toys as premiums in connection with the sale of non-toy products. It is further ordered. That General Mils, Inc., a corporation, shall be liable for any penalties or other legal or equitable relief which arise or could have arisen from any suit based on any alleged GENERAL MILLS FUN GROUP, mv.

749 Decision and Order violation of this order committed by any subsidiary, division or other device of General Mils, Inc. subject to this order (hereafter company ), or by their officers, representatives or employees, while such company was owned by General Mils, Inc., if, for any reason such as sale, dissolution, merger, reorganization, insolvency or termination, the company is not amenable to suit or the execution of full judgment.

?'14- g72 0 - 8a - I+g M\AL TRADE COMMISSION DECISIONS Complaint 93 F.