Mattel, Inc.; Proposed Consent Agreement With Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 932 3332]

Mattel, Inc.; Proposed Consent Agreement With Analysis To Aid

Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: In settlement of alleged violations of federal law prohibiting

unfair acts and practices and unfair methods of competition, this

consent agreement, accepted subject to final Commission approval, would

prohibit, among other things, a California-based corporation from

representing that any aerosol product it sells offers any environmental

benefit, unless it can substantiate the claim.

DATES: Comments must be received on or before June 13, 1995.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,

Room 159, 6th St. and Pa. Ave., N.W., Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT:

Michael Dershowitz, FTC/S-4002, Washington, D.C. 20580. (202) 326-3158.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal

Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Sec. 2.34 of the

Commission's Rules of Practice (16 CFR 2.34), notice is hereby given

that the following consent agreement containing a consent order to

cease and desist, having been filed with and accepted, subject to final

approval, by the Commission, has been placed on the public record for a

period of sixty (60) days. Public comment is invited. Such comments or

views will be considered by the Commission and will be available for

inspection and copying at its principal office in accordance with

Sec. 4.9(b)(6)(ii) of the Commission's Rules of Practice (16 CFR

4.9(b)(6)(ii)).

In the matter of Mattel, Inc., a corporation. File No. 932-3332.

Agreement Containing Consent Order to Cease and Desist

The Federal Trade Commission having initiated an investigation of

certain acts and practices of Mattel, Inc., a corporation (``proposed

respondent''), and it now appearing that proposed respondent is willing

to enter into an agreement containing an order to cease and desist from

the acts and practices being investigated,

It is hereby agreed by and between Mattel, Inc., by its duly

authorized officer, and its attorney, and counsel for the Federal Trade

Commission that:

1. Proposed respondent Mattel, Inc. is a corporation organized,

existing and doing business under and by virtue of the laws of the

State of Delaware, with its principal office or place of business at

333 Continental Blvd., El Segundo, California, 90245-5012.

2. Proposed respondent admits all the jurisdictional facts set

forth in the draft of complaint.

3. Proposed respondent waives:

(a) Any further procedural steps;

(b) The requirement that the Commission's decision contain a

statement of findings of fact and conclusions of law;

(c) All rights to seek judicial review or otherwise to challenge or

contest the validity of the order entered pursuant to this agreement;

and

(d) All claims under the Equal Access to Justice Act.

4. This agreement shall not become a part of the public record of

the proceeding unless and until it is accepted by the Commission. If

this agreement is accepted by the Commission, it, together with the

draft of the complaint contemplated hereby, will be placed on the

public record for a period of sixty (60) days and information in

respect thereto publicly released. The Commission thereafter may either

withdraw its acceptance of this agreement and so notify proposed

respondent, in which event it will take such action as it may consider

appropriate, or issue and serve its complaint (in such form as the

circumstances may require) and decision, in disposition of the

proceeding.

5. This agreement is for settlement purposes only and does not

constitute an admission by proposed respondent that the law has been

violated as alleged in the draft complaint or that the facts as alleged

in the draft complaint, other than the jurisdictional facts, are true.

6. This agreement contemplates that, if it is accepted by the

Commission, and if such acceptance is not subsequently withdrawn by the

Commission pursuant to the provisions of Sec. 2.34 of the Commission's

Rules, the Commission may without further notice to proposed

respondent, (1) issue its complaint corresponding in form and substance

with the draft of complaint and its decision containing the following

order to cease and desist in disposition of the proceeding, and (2)

make information public in respect thereto. When so entered, the order

to cease and desist shall have the same force and effect and may be

altered, modified or set aside in the same manner and within the same

time provided by statute for other orders. The order shall become final

upon service. Delivery by the U.S. Postal Service of the decision

containing the agreed-to order to proposed respondent's address as

stated in this agreement shall constitute service. Proposed respondent

waives any right it might have to any other manner of service. The

complaint may be used in construing the terms of the order, and no

agreement, understanding, representation, or interpretation not

contained in the order or in the agreement may be used to vary or

contradict the terms of the order.

7. Proposed respondent has read the complaint and the order

contemplated hereby. It understands that once the order has been

issued, it will be required to file one or more compliance reports

showing it has fully complied with the order. Proposed respondent

further understands that it may be liable for civil penalties in the

amount provided by law for each violation of the order after it becomes

final.

[[Page 19069]]

Order

Definitions

For purposes of this Order, the following definitions shall apply:

``Class I ozone-depleting substance'' means a substance that harms

the environment by destroying ozone in the upper atmosphere and is

listed as such in Title 6 of the Clean Air Act Amendments of 1960, Pub.

L. No. 101-549, and any other substance which may in the future be

added to the list pursuant to Title 6 of the Act. Class I substances

currently include chlorofluorocarbons, halons, carbon tetrachloride,

1,1,1-trichloroethane, methyl bromide and hydrobromofluorocarbons.

``Class II ozone-depleting substance'' means a substance that harms

the environment by destroying ozone in the upper atmosphere and is

listed as such in Title 6 of the Clean Air Act Amendments of 1960, Pub.

L. No. 101-549, and any other substance which may in the future be

added to the list pursuant to Title 6 of the Act. Class II substances

currently include hydrochlorofluorocarbons.

``Product'' means any product that is offered for sale, sold or

distributed to the public by respondent, its successors and assigns,

under the Barbie brand name or any other brand name of respondent, its

successors and assigns; and also means any product sold or distributed

to the public by third parties under private labeling agreements with

respondent, its successors and assigns.

``Competent and reliable scientific evidence'' means tests,

analyses, research, studies or other evidence based on the expertise of

professionals in the relevant area, that has been conducted and

evaluated in an objective manner by persons qualified to do so, using

procedures generally accepted in the profession to yield accurate and

reliable results.

I

It is ordered that respondent, Mattel, Inc., a corporation, its

successors and assigns, and its officers, agents, representatives, and

employees, directly or through any corporation, subsidiary, division,

or other device, in connection with the labeling, advertising,

promotion, offering for sale, sale, or distribution of any product

containing any Class I or Class II ozone-depleting substance, in or

affecting commerce, as ``commerce'' is defined in the Federal Trade

Commission Act, do forthwith cease and desist from representing that

any such product ``contains no chlorofluorocarbons'' or ``contains no

CFC's'' or representing, in any manner, directly or by implication,

that any such product will not deplete, destroy, or otherwise adversely

affect ozone in the upper atmosphere or otherwise harm the atmosphere.

II

It is further ordered that respondent, Mattel, Inc., a corporation,

its successors and assigns, and its officers, agents, representatives,

and employees, directly or through any corporation, subsidiary,

division, or other device, in connection with the labeling,

advertising, promotion, offering for sale, sale, or distribution of any

aerosol product in or affecting commerce, as ``commerce'' is defined in

the Federal Trade Commission Act, do forthwith cease and desist from

representing, in any manner, directly or by implication, that any such

product offers any environmental benefit, unless at the time of making

such representation, respondent possesses and relies upon competent and

reliable evidence, which when appropriate must be competent and

reliable scientific evidence, that substantiates such representation.

III

It is further ordered that for five (5) years after the last date

of dissemination of any representation covered by this Order,

respondent, or its successors and assigns, shall maintain and upon

request make available to the Federal Trade Commission for inspection

and copying:

A. All materials that were relied upon in disseminating such

representation; and

B. All tests, reports, studies, surveys, demonstrations, or other

evidence in its possession or control that contradict, qualify, or call

into question such representation, or the basis relied upon for such

representation, including complaints from consumers.

IV

It is further ordered that respondent shall 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, promotional materials,

product labels or other such sales materials covered by this Order.

V

It is further ordered that respondent shall notify the Commission

at least thirty (30) days prior to any proposed change in the

corporation such as a 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 under this Order.

VI

It is further ordered that respondent shall, within sixty (60) days

after service of this Order upon it, and at such other times as the

Commission may require, file with the Commission a report, in writing,

setting forth in detail the manner and form in which it has complied

with this Order.

Analysis of Consent Order to Aid Public Comment

The Federal Trade Commission has accepted an agreement, subject to

final approval, to a proposed consent order from respondent Mattel,

Inc., a Delaware corporation.

The proposed consent order has been placed on the public record for

sixty (60) days for reception of comments by interested persons.

Comments received during this period will become part of the public

record. After sixty (60) days, the Commission will again review the

agreement and the comments received and will decide whether it should

withdraw from the agreement and take other appropriate action, or make

final the agreement's proposed order.

This matter concerns the labeling of the respondent's Barbie Bath

Blast Fashion Foam Soap. The Commission's complaint in this matter

alleges that Barbie Bath Blast Fashion Foam Soap contains

hydrochlorofluorocarbons (``HCFCs'')--chlorodifluoroethane (HCFC-142b)

and chlorodifluoromethane (HCFC-22).

The Commission's complaint charges that the respondent labeled the

product, ``Contains no Chlorofluorocarbons (CFC's Non-Irritant--Non-

Toxic.'' The complaint alleges that through this claim, the respondent

falsely represented that because Barbie Bath Blast Fashion Foam Soap

contains no chlorofluorocarbons, it will not deplete the earth's ozone

layer or otherwise harm or damage the atmosphere. In fact, Barbie Bath

Blast Fashion Foam Soap contains the harmful ozone-depleting

ingredients chlorodifluoroethane (HCFC-142b) and chlorodifluoromethane

(HCFC-22), which harm or causes damage to the atmosphere by

contributing to the depletion of the earth's ozone layer.

The proposed consent order contains provisions designed to remedy

the violations charged and to prevent the respondent from engaging in

similar acts and practices in the future.

The proposed order defines Class I and Class II ozone-depleting

substances, [[Page 19070]] incorporating the definitions established in

the Clean Air Act Amendments of 1990. Class I substances currently

listed under the Act include CFCs, halons, carbon tetrachloride, 1,1,1-

trichloroethane, methyl bromide, and hydrobromofluorocarbons. Class II

substances currently consist of HCFCs.

Part I of the proposed order requires the respondent to cease and

desist from representing that any product containing any Class I or

Class II ozone-depleting substance ``contains no chlorofluorocarbons''

or ``contains no CFC's'' or representing, in any manner, that any such

product will not deplete, destroy, or otherwise adversely affect ozone

in the upper atmosphere or otherwise harm the atmosphere.

Under the Clean Air Act Amendments, the EPA has authority to add

new chemicals to the Class I and Class II lists. Thus, the order's

definitions of Class I and Class II ozone-depleting substances include

these and any other substances that may be added to the lists. If

additional substances are added to the Class I or II lists, Part I of

the order becomes applicable to claims made for products containing

those substances after the substances are added to the lists.

Part II of the proposed order provides that if the respondent

represents in advertising or labeling that any aerosol product offers

any environmental benefit, it must have a reasonable basis consisting

of competent and reliable evidence, which when appropriate must be

competent and reliable scientific evidence, that substantiates the

claims.

The proposed order also requires the respondent to maintain

materials relied upon to substantiate the claims covered by the order,

to distribute copies of the order to certain company officials, to

notify the Commission of any changes in corporate structure that might

affect compliance with the order, and to file one or more reports

detailing compliance with the order.

Benjamin I. Berman,

Acting Secretary.

[FR Doc. 95-9265 Filed 4-13-95; 8:45 am]

BILLING CODE 6750-01-M