J. Walter Thompson Company

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IN THE MATTER- OF J- WALTER THOMPSON COMPANY CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket 9131. Complaint Nov. 27, 197. Decision, April, 1981 This consent order requires, among other things, a New York City advertising agency to cease making survey claims unless the surveys are designed executed and analyzed in a competent and reliable manner. Further" the firm is prohibited from making claims regarding the opinions or recomm ndations of any professional group unless that professional group is actually asked about their opinions or recommendations.

Appearances For the Commission: Randell Ogg, John Clewett, Roberta L- Gross and David Axelrad and Mary For the respondent: Donald H Green, Mark Schattner Graham, Word, Harkrader Ross, Washington, D_ DECISION AND ORDER The Commission having heretofore issued its complaint charging the respondent named in the caption hereof with violation of Section 5 of the Federal Trade Commission Act, as amended, and the respondent having been served with a copy of that complaint, together with a notice of contemplated relief; and The respondent, its attorney, 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, 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and other provisions as required by the Commission s Rules; and The Secretary of the Commission having thereafter withdrawn this matter from adjudication in accordance with Section 3_ 25(c) of its Rules; and The Commission having considered the matter and having- thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, and Compaint published atpage:\20 herein.

Decision and Order 97 F_ having duly considered the comments fied thereafter by interested persons pursuant to Section 3-25 of its Rules, now in further conformity with the procedure prescribed in Section 3-25 of its Rules, the Commission hereby makes the following jurisdictional findings and enters the following order:

Respondent, J- Walter Thompson Company, is a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware, with its principal offces arid place of business located at 420 Lexington Ave- , in the City of New York State of New York- 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 Part I It is ordered, That respondent J- Walter Thompson Company JWT"), its successors and assigns, and its officers, representatives agents and employees, directly or through any corporation, subsidiary, division or other entity, in connection with the advertising, offering for sale, sale or distribution of any "drug or device" (as those terms are defined by Section 15 of the Federal Trade Commission Act); aids to decrease use of cigarettes, cigars or pipes; smoke alarms; water purifiers; baby food preparation kits; shower head attachments; and water foot massagers (hereinafter referred to in Part I as "Product" or "Products ), in or affecting commerce, as commerce" is defined in the Federal Trade Commission Act, forthwith cease and desist from:

Employing, in any advertisement for any product, the word survey" (or any comparable term), or basing any claim upon one or more surveys in whole or in part which states, either expressly or by implication, the beliefs, opinions, practices, recommendations, or endorsements of any professional group (or portion thereof) with expertise relative to the product, unless: (1) a projectabJe sample was used and the sample size of and response rate to the survey were sufficiently large so as to allow meaningful projections to the population referred to in the advertisement with a reasonable degree of confidence unless there is a clear and conspicuous disclosure in the advertisement that the survey may J- WALTER THOMPSON cn 335 333 Decision and Order not be representative of the population referred to in the advertisement;

(2) the survey was completed within three years prior to the date of the representation, unless there is other appropriate data which establishes a reasonable basis for concluding that the beliefs opinions, practices, recommendations or endorsements of the members of the relevant professional population surveyed have not materially changed since the completion of the survey; and (3) the survey was designed, executed and analyzed in a competent and reliable manner- Representing, directly or by implication, that the beliefs, opinions, practices, recommendations or endorsements of members of any professional group with expertise relative to the advertised product have been surveyed or sampled unless the surveyor sample directly solicits the beliefs, opinions, practices, recommendations, or endorsements of members of that group- Provided, however in circumstances where the surveyor sample was conducted by an independent third party and was not, directly or indirectly, conducted or controlled by JWT or its client, it shall be an affrmative defense to an alleged violation of this Part for JWT to prove that it had a reasonable basis for believing that the surveyor sample was conducted in accordance with the provisions of Part I of this Order- For purposes of this affrmative defense, JWT may demonstrate that it had a reasonable basis by showing (i) that the document reflecting the surveyor sample had sufficient information for JWT to conclude that the survey(s) or sample(s) was conducted in accordance with this Part, or (ii) where there is insuffcient information in such document that JWT made an appropriate inquiry and either (1) received a letter or memorandum from the third party containing adequate information regarding those aspect(s) of the sample(s) or survey(s) as to which there was insufficient information so that JWT had a reasonable basis for concluding that the sample(s) or survey(s) was conducted in accordance with this Part, or (2) sent a letter or memorandum to the third party confirming the third party s oral communication of adequate information regarding those aspect(s) of the sample(s) or survey(s) as to which there was insuffcient information so that JWT had a reasonable basis for concluding that the sample(s) or survey(s) was conducted in accordance with this Part. In lieu of the letter or memorandum required by (1) or (2) above, JWT may rely on other written confirmation regarding the aspect(s) of the sample(s) or Decision and Order 97 r' survey(s) as to which there was insufficient information only if JWT has a reasonable explanation for so doing. Part II It is further ordered, That respondent J- Walter Thompson Company ("JWT"), its successors and assigns, and its officers representatives, agents and employees, directly or through any corporation, subsidiary, division or other entity, in connection with the advertising, offering for sale, sale or distribution of any product, in or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from: Making any statements or representations, directly or by implication, concerning the ability of thc advertised product to prevent mitigate, or treat periodontal disease unless, at the time the statements or representations are made, JWT possesses and relies on a reasonable basis for such statements or representations, which shall include a competent and reliable clinical test and may also include other competent and reliable evidence including competent and reliable opinions of experts who are qualified by professional training, education, and experience to render competent and reliable judgments in such matters- For purposes of this Order, a "clinical test" is one in which a person with skil and expertise in the field conducts a well-controlled test on human subjects, using those testing procedures generally accepted in the profession which ensure accurate and reliable results, and evaluates its results in a disinterested manner. The clinical test must be of sufficient duration to ensure that the results (a) were not materially distorted by any unusual short-term practices or temporary physical conditions of the test subjects (as such practices or conditions related to the test conditions), and (b) were clinically significant.

Provided, however, in circumstances where the clinical test or other evidence was not directly or indirectly conducted or controlled by JWT, it shall be an affirmative defense to an alleged violation of this Part for JWT to prove that it reasonably relied on the expert judgment of its client or of an independent third party in concluding that it had a reasonable basis in accordance with Part II of this Order- Such expert judgment shall be in writing signed by a person qualified by education or experience to render the opinion- Such opinion shall describe the contents of such test or other evidence upon which the opinion is based- Provided further, however in the event the Commission enters a .. .

u. HftlJ.llj.l\' 11.l\..JIUr..Vl 333 Decision and Order final order to cease and desist against T€ledyne, Inc_, or Teledyne Industries, Inc-, or any division thereof, in this proceeding which prohibits the dissemination, without a reasonable basis, of claims for the prevention, mitigation or treatment of periodontal disease and if said order did not require that the reasonable basis for such claims include, as an essential and necessary element, a clinical test, the phrase in the second paragraph of Part II "and may also include shall thereupon be deleted and the word " " inserted in its place- Part II It is further ordered, That:

For the period of three years after JWT last placed the advertisements for dissemination, JWT shall retain all test results, data, and other documents on which it relied for advertisements of Products covered by this Order which were in its possession during either creation or placement by JWT of the advertisements. JWT shall notify the Commission at least thirty (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 ofthe Order JWT shall forthwith distribute a copy of this Order to each of its operating divisions, and to each of its officers, agents, representatives, or employees engaged in the preparation and placement of advertisements of the Products covered by this Order- JWT shall, within sixty (60) days alter service upon it of this Order, and at such other times as the Commission may require, fie with the Commission a written report setting forth in detail the manner and form of its compliance with this Order Commissioner Pitofsky did not participate- , , Modifying- Oi"aer 97 +'_TC-