Young & Rubicam, Inc.; Proposed Consent Agreement With Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 952-3336]

Young & Rubicam, 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 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 New York

City-based advertising agency from making broad pollution-removal

claims for Ford Motor Company's MicronAir Filtration System, and

substantially similar cabin air filtration system, or any household air

filtration system. The Consent Agreement settles allegations that Young

& Rubicam, in their advertising campaigns for several 1995 models of

Ford automobiles, 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. NW., 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: Young & Rubicam Inc., a corporation; File No.

952-3336.

Agreement Containing Consent Order To Cease and Desist

The Federal Trade Commission having initiated an investigation of

certain acts and practices of Young & Rubicam Inc. (``Young &

Rubicam''), 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 Young & Rubicam, a corporation,

by its duly authorized officer, and its attorney, and counsel for the

Federal Trade Commission that:

1. Proposed respondent Young & Rubicam is a corporation organized,

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

State of New York, with its office and principal place of business

located at 285 Madison Avenue, New York, New York 10017.

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

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 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.

[[Page 16923]]

Order

I

It is ordered that respondent, Young & Rubicam, 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

advertising or promotion of the MicronAir Filtration System as

configured in the 1995 Lincoln Continental and the 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 products remove 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, Young & Rubicam, 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 advertising or promotion of any household or 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.

Provided, however, that it shall be a defense hereunder that the

respondent neither knew nor had reason to know of an inadequacy of

substantiation for the representation.

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 or review 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 Young &

Rubicam Inc. (``Young & Rubicam''), a New York 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.

Young & Rubicam is an advertising agency which has prepared

advertisements for Ford Motor Company (``Ford'') and the Lincoln-

Mercury Dealers Associations (``LMDAs''). Young & Rubicam has prepared

and disseminated advertising materials to promote the sale of Ford's

Mercury Mystique and Lincoln Continental automobiles. These

advertisements have included claims regarding the efficacy of the

``MicronAir Filtration System,'' a cabin air filter installed in

Mercury Mystique and Lincoln Continental automobiles.

The Commission's complaint charges that Young & Rubicam has

prepared advertisements for the MicronAir Filtration System which

contain the false representation that this filter 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. Furthermore, the

[[Page 16924]]

complaint alleges that Young & Rubicam knew or should have known that

this claim was false.

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 household or 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. Part II provides Young & Rubicam a defense to liability

if it neither knew or had reason to know of an inadequacy in the

substantiation for the representation.

The proposed order also requires the respondent to maintain

materials relied upon to substantiate claims covered by 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. 96-9553 Filed 4-17-96; 8:45 am]

BILLING CODE 6750-01-M