Ford Motor Company; Proposed Consent Agreement With Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 952-3210]

Ford Motor Company; 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 or deceptive acts or practices and unfair methods of

competition, this consent agreement, accepted subject to final

Commission approval, would prohibit, among other things, the Dearborn,

Michigan-based automobile manufacturer from making broad pollution-

removal claims for its MicronAir Filtration System or any substantially

similar system. The Consent Agreement settles allegations that Ford and

its advertising agency, Young & Rubicam, Inc., made false claims about

the extent to which the MicronAir Filtration System can remove air

pollutants in automobile passenger cabins.

DATES: Comments must be received on or before June 17, 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:

Linda K. Badger, Federal Trade Commission, San Francisco Regional

Office, 901 Market Street, Suite 570, San Francisco, CA 94103, (415)

356-5270.

Jeffrey Klurfeld, Federal Trade Commission, San Francisco Regional

Office, 901 Market Street, Suite 570, San Francisco, CA 94103, (415)

356-5270.

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: Ford Motor Company, a corporation; File No.

952-3210.

Agreement Containing Consent Order To Cease and Desist

The Federal Trade Commission having initiated an investigation of

certain acts and practices of Ford Motor Company, a corporation, and it

now appearing that the 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 Ford Motor Company, a

corporation, by its duly authorized officer, and its attorney, and

counsel for the Federal Trade Commission that:

1. Proposed respondent Ford Motor Company, is a corporation

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

of the State of Delaware with its offices and principal place of

business located at The American Road, Dearborn, Michigan 48121.

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; 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 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

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 the 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 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 Section 2.34 of the

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

proposed respondent, (a) 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 (b) 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 the proposed

respondent's address as stated in this agreement shall constitute

service. The 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. The proposed respondent has read the proposed complaint and

order contemplated hereby. The proposed respondent 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.

The 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, Ford Motor Company, a corporation,

its successors and assigns, and its officers, and respondent's agents,

representatives and employees, directly or through any corporation,

subsidiary, division or other device, in connection with the labelling,

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

[[Page 16921]]

the ``MicronAir Filtration System'' as configured in the 1995 Lincoln

Continental or 1995 Mercury Mystique or any substantially similar

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

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

any representation, directly or by implication, that such product

removes virtually all pollutants. For the purposes of this Order,

``substantially similar product'' shall mean any automotive cabin air

filter which is an electrostatic filter, consisting of layers of non-

woven fabric, with at least one layer that has been electrically

charged.

II

It is further ordered that respondent, Ford Motor Company, a

corporation, its successors and assigns, and its officers, and

respondent's agents, representatives and employees, directly or through

any corporation, subsidiary, division or other device, in connection

with the manufacturing, labelling, advertising, promotion, offering for

sale, sale or distribution of any automotive cabin air filter, in or

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

Commission Act, do forthwith cease and desist from making any

representation, in any manner, directly or by implication, about the

efficacy of any such product in reducing or removing pollutants, unless

such representation is true, and at the time of making such

representation, respondent possesses and relies upon competent and

reliable scientific evidence, that substantiates such representation.

For purposes of this Order, ``competent and reliable scientific

evidence'' shall mean 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.

III

It is further ordered that for three (3) 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 written complaints from consumers.

IV

It is further ordered that respondent 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 of the Order.

V

It is further ordered that respondent shall, within ten (10) days

from the date of service of this Order upon it, distribute a copy of

this Order to each of its officers, agents, representatives or

employees engaged in the preparation, review or placement of

advertising or other materials covered by this Order.

VI

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.

VII

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

from the date of 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 an agreement, subject to

final approval, to a proposed consent order from respondent Ford Motor

Company (``Ford''), 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.

Ford manufactures and distributes automobiles, automotive parts,

and other products to consumers. Certain models of Ford automobiles,

such as the Mercury Mystique and Lincoln Continental, include an

automotive cabin air filter called the ``MicronAir Filtration System.''

The Commission's complaint charges that Ford's advertising of this

filter contained the false representation that it removes virtually all

pollutants likely to be encountered by a driver. The complaint alleges

that the MicronAir Filtration System does not, in fact, remove

virtually all such pollutants. For example, the filter has no effect on

gaseous pollutants, such as hydrocarbons, carbon monoxide, and nitrogen

oxides.

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. Part I of the proposed order

prohibits the respondent from claiming that the ``MicronAir Filtration

System'' as configured in the 1995 Lincoln Continental or 1995 Mercury

Mystique, or any substantially similar product, removes virtually all

pollutants.

Part II of the proposed order prohibits the company from making any

representation, in any manner, directly or by implication, about the

efficacy of any cabin air filter in reducing or removing pollutants,

unless such representation is true, and at the time of making such

representation, respondent possesses and relies upon competent and

reliable scientific evidence, that substantiates such representation.

The proposed order also requires the respondent to maintain

materials relied upon to substantiate claims covered by

[[Page 16922]]

the order; to provide a copy of the consent agreement to all employees

or representatives involved in the preparation and placement of the

company's advertisements; 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.

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. 96-9552 Filed 4-17-96; 8:45 am]

BILLING CODE 6750-01-M