Blue Coral, Inc.; Blue Coral-Slick 50, Inc.; Blue Coral-Slick 50, Ltd.; Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

[Docket No. 9280]

Blue Coral, Inc.; Blue Coral-Slick 50, Inc.; Blue Coral-Slick 50,

Ltd.; Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: The consent agreement in this matter settles alleged

violations of federal law prohibiting unfair or deceptive acts or

practices or unfair methods of competition. The attached Analysis to

Aid Public Comment describes both the allegations in the draft amended

complaint that accompanies the consent agreement and the terms of the

consent order--embodied in the consent agreement--that would settle

these allegations.

DATES: Comments must be received on or before September 29, 1997.

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

Room 159, 6th St. and Pa. Ave., NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:

Elaine D. Kolish, Federal Trade Commission, S-4302, 6th & Pennsylvania

Ave., NW., Washington, DC 20580. (202) 326-3042. Mary K. Engle, Federal

Trade Commission, S-

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4302, 6th & Pennsylvania Ave., NW., Washington, DC 20580; (202) 326-

3161.

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

Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46, and Section 3.25 of

the Commission's Rules of Practice (16 CFR 3.25), notice is hereby

given that the above-captioned 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 public record

for a period of sixty (60) days. The following Analysis to Aid Public

Comment describes the terms of the consent agreement, and the

allegations in the accompanying complaint. An electronic copy of the

full text of the consent agreement package can be obtained from the

Commission Actions section of the FTC Home Page (for July 24, 1997), on

the World Wide Web, at ``http://www.ftc.gov/os/actions/htm.'' A paper

copy can be obtained from the FTC Public Reference Room, Room H-130,

Sixth Street and Pennsylvania Avenue, NW., Washington, DC 20580, either

in person or by calling (202) 326-3627. 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)).

Analysis of Proposed Consent Order To Aid Public Comment

The Federal Trade Commission has accepted an agreement to a

proposed consent order from Blue Coral, Inc.; Blue Coral-Slick 50,

Inc.; and Blue Coral-Slick 50, Ltd. These three entities are successors

in interest to Quaker State--Slick 50, Inc.; Slick 50 Management, Inc.;

Slick 50 Products Corp.; and Slick 50 Corp. (all entities collectively,

``respondents'').

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

sixty (60) days for receipt 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 involves allegedly deceptive representations for Slick

50 engine treatment, and aftermarket motor oil additive containing

particles of the polymer polytetrafluoroethylene (``PTFE''). The

Commission issued a complaint on July 12, 1996, charging that

advertisements for Slick 50 disseminated by the respondents made

various false and unsubstantiated claims. The Commission's complaint

was withdrawn from adjudication on May 12, 1997, prior to commencement

of the administrative hearing, so that the Commission could consider

the proposed order.

According to the FTC complaint, the respondents falsely claimed:

(1) Automobile engines generally have little or no protection from wear

at or just after start-up unless they have been treated with Slick 50;

(2) Automobile engines commonly experience premature failure caused by

wear unless they are treated with Slick 50; (3) Slick 50 coats engine

parts with a layer of PTFE; and (4) Slick 50 meets military

specifications for aftermarket motor oil additives. The complaint

alleged the following claims as unsubstantiated: (1) Compared to motor

oil alone, Slick 50: reduces engine wear, reduces engine wear by more

than 50%, reduces engine wear by up to 50%, reduces engine wear at

start-up, extends the duration of engine life, lowers engine

temperatures, reduces toxic emissions, increases gas mileage, and

increases horsepower; (2) One treatment of Slick 50 continues to reduce

engine wear for 50,000 miles; and (3) Slick 50 has been used in a

significant number of U.S. Government vehicles. Lastly, the complaint

alleged that respondents falsely represented: (1) Tests prove that,

compared to motor oil alone, Slick 50: reduces engine wear by more than

50%, reduces engine wear by up to 50%, and reduces engine wear at

start-up; and (2) Tests prove that one treatment of Slick 50 continues

to reduce engine wear for 50,000 miles.

The proposed consent order contains provisions designed to prevent

the respondents from engaging in similar acts and practices in the

future. Part I of the proposed order prohibits the respondents from

representing that: (1) Automobile engines generally have little or no

protection from wear at or just after start-up unless they have been

treated with Slick 50 or a similar PTFE product; (2) Automobile engines

commonly experience premature failure caused by wear unless they are

treated with Slick 50 or a similar PTFE product; or (3) Slick 50 or a

similar PTFE product coats engine parts with a layer of PTFE.

Part II of the proposed order prohibits the respondents from

misrepresenting that any oil additive or Slick 50 engine lubricating

product meets the standards of any organization and from

misrepresenting tests or studies when selling such products. Part II

also prohibits the respondents from making any representation about the

performance, benefits, efficacy, attributes or use of such products

unless, at the time they make the representation, they possess and rely

upon appropriate, competent and reliable evidence that substantiates

the representation.

Part III of the proposed order prohibits respondents from

representing that any Slick 50 lubricating product for use in a motor

vehicle, other than an engine lubricating product, reduces wear,

extends the life of a part, lowers engine temperature, reduces

emissions, or increases mileage or horsepower, unless, at the time they

make the representation, they possess and rely upon appropriate,

competent and reliable evidence that substantiates the representation.

Parts IV through IX and XI require the respondents to keep copies

of advertisements making representations covered by the order; to keep

records concerning those representations; including materials that they

relied upon when making the representations, to notify the Commission

of changes in corporate structure; to provide copies of the order to

certain of respondents' personnel; to send notice of the order to

purchasers for resale of Slick 50; to keep records showing that the

order or notice of the order was received by or sent to appropriate

persons and showing any redress made available to consumers pursuant to

class action lawsuits challenging conduct similar to that challenged in

the Commission's complaint; to provide notice to Commission staff prior

to submitting any proposed settlement of such class action lawsuits to

a court; and to file with the Commission compliance reports and reports

showing any redress made available to consumers pursuant to class

action lawsuits. Part X provides that the order will terminate after

twenty (20) years under certain circumstances.

Additionally, Paragraph 5 of the consent agreement seeks to

preserve the Commission's option to seek consumer redress under Section

19 of the Federal Trade Commission Act if the respondents do not make

available redress having an aggregate retail value of at least $10

million to consumers pursuant to class action lawsuits that challenge

conduct similar to that challenged in the Commission's complaint.

Paragraph 5 also reserves the Commission's right to seek to intervene

in any such class action lawsuit to oppose a settlement that it

believes is not in the public interest.

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

proposed order, and it is not intended to constitute an official

interpretation of

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the agreement and proposed order or to modify in any way their terms.

Benjamin I. Berman,

Acting Secretary.

[FR Doc. 97-19897 Filed 7-28-97; 8:45 am]

BILLING CODE 6750-01-M