Amoco Oil Company; Consent Agreement With Analysis to Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 932-3011]

Amoco Oil Company; Consent Agreement With Analysis to Aid Public

Comment

AGENCY: Federal Trade Commission.

ACTION: 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

bar the Chicago-based corporation from making any performance or

environmental benefit claim for any of its gasoline without first

having scientific evidence to back it up. The consent agreement settles

allegations stemming from Amoco's ``Crystal Clear Amoco Ultimate''

advertising campaign.

DATES: Comments must be received on or before April 29, 1996.

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:

Joel Winston, Federal Trade Commission, S-4002, 6th and Pennsylvania

Avenue, NW, Washington, DC 20580. (202) 326-3153. Michael Dershowitz,

Federal Trade Commission, S-4002, 6th and Pennsylvania Avenue, NW,

Washington, DC 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 Section 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 Section 4.9(b)(6)(ii) of the Commission's Rules of

Practice (16 CFR 4.9(b)(6)(ii)).

In the Matter of Amoco Oil Company, a corporation; File No. 932-

3011.

Agreement Containing Consent Order to Cease and Desist

The Federal Trade Commission having initiated an investigation of

certain acts and practices of Amoco Oil Company, a corporation,

hereinafter sometimes referred to as 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 use of the

acts and practices being investigated,

It is hereby agreed by and between Amoco Oil Company, by its duly

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

Commission that:

1. Proposed respondent Amoco Oil Company is a Maryland corporation,

with its offices and principal place of business located at 200 East

Randolph Drive, Chicago, Illinois 60601.

2. Proposed respondent admits all the jurisdictional facts set

forth in the draft complaint here attached.

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; and

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

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

4. This agreement shall not become part of the public record in 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 thereby, 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 the 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 of complaint here attached, or that

the facts as alleged in the draft complaint, other than 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

[[Page 7794]]

Commission's Rules, the Commission may, without further notice to the

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

substance with the draft of complaint here attached 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 complaint and 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 may 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 the agreement may be used

to vary or contradict the terms of the order.

7. Proposed respondent has read the proposed complaint and order

contemplated hereby. It understands that once the order has been

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

showing that 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.

Order

I.

It is ordered that respondent Amoco Oil Company, a corporation, its

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

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

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

for sale, sale or distribution of Amoco Silver 89 octane gasoline,

Amoco Ultimate 92 or 93 octane gasoline, or any other gasoline in or

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

Commission Act, do forthwith cease and desisit from making any

representation in any manner, directly or by implication, that:

(A) Amoco Ultimate gasoline is superior to all other brands of

premium gasoline with respect to engine performance or environmental

benefits because it is refined more than all other such brands;

(B) The clear color of Amoco Ultimate gasoline demonstrates the

superior engine performance or environmental benefits Amoco Ultimate

provides compared to other brands of gasolines that are not clear in

color;

(C) A single tankful of Amoco Silver or Ultimate gasoline will make

dirty or clogged fuel injectors clean;

(D) Amoco Silver or Ultimate gasoline provides superior fuel

injector cleaning compared to other brands of gasoline;

(E) Automobiles driven more than 15,000 miles with regular gasoline

generally suffer from lost engine power or acceleration which will be

restored by the higher octane of Amoco Silver gasoline; or

(F) Concerns the relative or absolute attributes of any gasoline

with respect to environmental benefits or with respect to engine

performance, power, acceleration, or engine cleaning ability,

unless, at the time of making such representation, respondent possesses

and relies upon competent and reliable scientific evidence that

substantiates the representation. For purposes of this Order,

``competent and reliable scientific evidence'' shall mean tests,

analyses, research, studies, or other evidence based upon 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.

For purposes of this Part, any representation, directly or by

implication, that any gasoline will clean or clean up fuel injectors to

a level that engine performance is not adversely affected will be

deemed to be substantiated if respondent possesses and relies upon

competent and reliable testing demonstrating that the flow rate of each

fuel injector was returned to at least 95 percent of its original

value.

Provided that, nothing in this Order shall prohibit respondent from

truthfully representing the numerical octane rating of any gasoline.

II.

It is further ordered that respondent Amoco Oil Company, shall

within thirty (30) days after service distribute a copy of this Order

to all operating divisions, subsidiaries, officers, managerial

employees, and all of its employees or agents engaged in the

preparation and placement of advertisements or promotional sales

materials covered by this Order and shall obtain from each such

employee a signed statement acknowledging receipt of the order.

III.

It is further ordered that for three (3) years after the last date

of dissemination of any representation covered by this Order,

respondent Amoco Oil Company or its successors or assigns, shall

maintain and upon request make available to the Federal Trade

Commission or its staff for inspection and copying:

A. All materials that were relied upon to substantiate any

representation covered by this Order; and

B. All tests, reports, studies or surveys, in respondent's

possession or control that contradict any representation covered by

this Order.

IV.

It is further ordered that respondent Amoco Oil Company shall

notify the Commission at least thirty (30) days prior to the effective

date of any proposed change in the corporation that may affect

compliance obligations under this Order such as a dissolution,

assignment or sale resulting in the emergence of a successor

corporation(s), the creation or dissolution of subsidiaries or any

other change in the corporation.

V.

It is further ordered that this Order will terminate twenty years

from the date of its issuance, or twenty years from the most recent

date that the United States or the Federal Trade Commission files a

complaint (with or without an accompanying consent decree) in federal

court alleging any violation of the order, whichever comes later;

provided, however, that the filing of such a complaint will not affect

the duration of:

A. Any paragraph in this Order that terminates in less than twenty

years;

B. This Order's application to any respondent that is not named as

a defendant in such complaint; and

C. This Order if such complaint is filed after the Order has

terminated pursuant to this paragraph.

Provided further, that if such complaint is dismissed or a federal

court rules that the respondent did not violate any provision of the

Order, and the dismissal or ruling is either not appealed or upheld on

appeal, then the Order will terminate according to this paragraph as

though the complaint was never filed, except that the Order will not

terminate between the date such complaint is filed and the later of the

deadline for appealing such dismissal or ruling and the date such

dismissal or ruling is upheld on appeal.

[[Page 7795]]

VI.

It is further ordered that respondent Amoco Oil Company 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 Proposed Consent Order to Aid Public Comment

The Federal Trade Commission has accepted, subject to final

approval, an agreement containing a consent order from Amoco Oil

Company (``Amoco'').

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 or make final the agreement's proposed

order.

This matter concerns advertising claims regarding the performance

attributes of Amoco Silver midgrade and Amoco Ultimate premium

gasolines. The Commission's proposed complaint alleges that Amoco's

advertising has made unsubstantiated claims that Amoco Ultimate

provides superior performance and environmental benefits compared to

all other premium brands, because it is refined more than such brands,

and that Ultimate's clear color demonstrates its superiority. The

complaint also challenges as unsubstantiated the claim that automobiles

driven more than 15,000 miles generally suffer from lost engine power

and acceleration, which Amoco Silver's higher octane will restore.

Finally, the complaint challenges as unsubstantiated the claims that

Silver and Ultimate will clean dirty fuel injectors in one tankful, and

are superior to other brands in cleaning fuel injectors.

The proposed consent order contains provisions designed to prevent

respondent from engaging in similar acts and practices in the future.

Part I of the proposed order prohibits respondent from making any

of the unsubstantiated representations alleged in the complaint, or any

other representation concerning the attributes of any Amoco gasoline

with respect to environmental benefits or engine performance, power,

acceleration or engine cleaning ability, unless it has competent and

reliable scientific evidence that substantiates the representation, at

the time it is made.

Part I of the proposed order also states that any claim by

respondent that a gasoline will clean or clean up fuel injectors to a

level that engine performance is not adversely affected will be deemed

to be substantiated by competent and reliable testing showing that the

flow rate of each injector was restored to at least 95% of its original

value. Part I of the proposed order also allows truthful

representations regarding the numerical octane rating of any gasoline.

Part II of the order requires Amoco to distribute copies of the

order to its operating divisions and to various officers, agents and

employees of Amoco.

Part III of the order requires Amoco to maintain copies of all

materials relied upon in making any representation covered by the

order.

Part IV of the order requires Amoco to notify the Commission of any

changes in corporate structure that might affect compliance with the

order.

Part V of the order is a ``sunset'' provision, dictating that the

order will terminate twenty years from the date it is issued or twenty

years after a complaint is filed in federal court, by either the United

States or the FTC, alleging any violation of the order.

Part VI of the order requires Amoco to file with the Commission one

or more reports detailing compliance with the order.

The purpose of this analysis is to facilitate public comment on the

proposed order. It is not intended to constitute an official

interpretation of the agreement and proposed order or to modify in any

way their terms.

Donald S. Clark,

Secretary.

[FR Doc. 96-4692 Filed 2-28-96; 8:45 am]

BILLING CODE 6750-01-M