Coca-Cola Company

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IN THE ATTF.R OF THE COCA-COLA COMPANY MODIFYING ORDER IN REGARD TO ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Dockel D. 8824. Decision, Oct. 1976--Modi(ying Order, June, 1981 This order reopens the proceeding and modifies the order issued by the Commission on October 26, 1976 88 F. C. 666, 41 FR 53653, by deleting certain language from Paragraph lee) which required respondent to maintain all entry forms submitted in games or contests and by adding language limiting the applicability of the recorded retention requirement to games of skill. ORDER REOPENING THE PROCEEDING AND MODIFYING CEASE AND DESIST ORDER Petitioner, The Coca-Cola Company, seeks the modification of a record-keeping provision of the Order to Cease and Desist issued by the Commission on October 26, 1976.

The Order Paragraph in question currently prohibits petitioner from:

Engaging in, promoting the use of, or participating in any. . . promotional game contest, sweepstake or similar device, by means of any announcement, notice or advertisement, unless:

(c) There arc 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 record" 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 pri7-cs, 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. (Emphasis supplied.

Petitioner is required by this provision to retain all entry forms submitted in all contests-including games of chance and games of skill-in which it engages. Petitioner requests that the Commission modify the Order by limiting the applicability of this requirement to games of skill Specifically, petitioner proposes that the Commission delete the underscored language, requiring the maintenance of entry forms, from Paragraph (c), and add a new paragraph requiring the retention of entry forms in connection with games of skill. The purpose of the requirement that petitioner keep entry forms Modifying drder submitted in contests in which it engages is to enable the Commission to determine whether contest winners were properly selected and, if not, to identify persons to whom prizes should have been awarded. Thus, the Commission could, at the conclusion of a skill contest, examine the contest entries and evaluate whether petitioner had fairly conducted the promotion and, if not, determine the proper winners of the contest. In the case of a game of chance, however examination of the entry forms would not provide the Commission with any useful information in determining whether the contest was properly administered or the identity of any injured parties. This is because all entry forms are identical, and winners are chosen at random rather than based on whether the information contained on their entry forms is correct. The maintenance of entry forms submitted in connection with games of chance does not, therefore serve any useful function. It does, however, impose costs upon petitioner.

The Commission, having considered the Petition, determines that petitioner has made a satisfactory showing that the public interest requires that the Order be reopened and modified as requested. This determination is consistent with the Commission s Order of February 24, 1981, modifying the Order against Glendinning Companies Inc., in Docket No. 8824 in the same manner as the Commission hereby directs in the instant case.

It is therefore ordered That the proceeding is hereby reopened and the Decision and Order issued on October 26, 1976, against The Coca- Cola Company shall be modified by making the following additions (indicated by underscoring the added language) and deletions (indicated by placing dashes over the deleted language) to the Order: 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 927 Modifying Order promotional game, contest, sweepstake or similar device, by means of any announcement, notice or advertiseitienl, unless: (a) Alj 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. therein (b) Alj such prizes are in fact awarded to all participants whose entries conform to the stated requirements, ter:rs 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. 2. Ental2"ing in. motinll the 1Jse of or uarticiuatinll in the development or operation of any skill contest unless respondent pr its desi!lne maintains for at le st two years after the closch skill contest and the trdin!l of all prizes in ng of e ords reauired bv Para-nection therewith. in additi n to the graoh J(c). alt entry fo ms submitted bv participants in such ill contests.

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, 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 this modification shall become effective upon service of this Order.

34. 554 0-82- 930 KELLOGG CO., ET AL.

Int,:.rlocutor Qrdcr 97 F.