Global World Media Corporation; Sean Shayan; Analysis to Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 962-3210]

Global World Media Corporation; Sean Shayan; 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

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 October 3, 1997.

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 St. and Pa. Ave.,

N.W., Washington, D.C. 20580. (202) 326-3153.

Michelle Rusk, Federal Trade Commission, S-466, 6th St. and Pa. Ave.,

N.W., Washington, D.C. 20580. (202) 326-3148.

Nancy Warder, Federal Trade Commission, S-4002, 6th St. and Pa. Ave.,

N.W., Washington, D.C. 20580. (202) 326-3048.

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 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 the 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 29, 1997), on

the World Wide Web, at

``http:www.ftc.govosactionshtm.'

' A paper copy can be obtained from the FTC Public Reference Room, Room

H-130, Sixth Street and Pennsylvania Avenue, N.W., Washington, D.C.

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 Global World Media Corporation (``GWMC''),

the marketer of Herbal Ecstacy or Ecstacy (``Ecstacy''), and its owner,

Sean Shayan [hereinafter sometimes referred to as respondents].

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

sixty (60) days for reception of public 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.

The Commission's complaint in this matter concerns safety claims

respondents made in advertising for Ecstacy, a dietary supplement that

respondents promoted as a natural ``high'' and expressly likened to the

illegal street drug MDMA. More specifically, the complaint alleges that

respondents represented that Ecstacy, when taken in the recommended

doses or other reasonably foreseeable amounts, is absolutely safe and

has no side effects. The complaint explains that Ecstacy contains a

botanical source of ephedrine alkaloids, which can have dangerous

effects on the nervous system and heart. Thus, according to the

complaint, the claim that Ecstacy is safe and side effect free is both

false and unsubstantiated.

In addition, the complaint charges that respondents represented in

their advertising for Ecstacy, including in ads that ran on cable

programming stations with substantial youth audiences, such as

Nickelodeon and MTV, that Ecstacy is a safe alternative to illegal

drugs to produce euphoric, psychotropic (mind-altering), or sexual

enhancement effects, but failed to disclose the health and safety risks

of using the product. According to the complaint the undisclosed facts

would be material to consumers and, therefore, respondents' omission of

the facts about the health and safety risks of Ecstacy in their

advertising is alleged to be a deceptive practice.

Finally, the complaint challenges an endorsement of Ecstacy's

safety and lack of side effects contained in respondents' advertising

and attributed to a Dr. Steven Jonson of Tel Aviv, Israel. According to

the complaint, the endorsement is false because Dr. Jonson is a

fictitious person.

The proposed consent order contains provisions designed to remedy

the violations charged and to prevent respondents from engaging in

similar acts and practices in the future.

Part I of the order prohibits (1) claims that Ecstacy or any other

food, drug, or dietary supplement is safe or will cause no side

effects; or (2) any other safety or

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side effects claims, unless the claim is true and substantiated by

scientific evidence.

Part II prohibits respondents from making any representation for

any food, drug, or dietary supplement that contains ephedrine alkaloids

that consumers can appropriately take such product in an amount that

exceeds the level established by any regulation of the Food and Drug

Administration (``FDA'') for ephedrine alkaloids or any other

ingredient in the product.

Part III requires the following clear and prominent disclosure in

all future advertising and labeling of, and all consumer communications

concerning, any ephedrine-alkaloid-containing product sold by

respondents:

Warning: This product contains ephedrine which can have dangerous

effects on the central nervous system and heart and could result in

serious injury. Risk of injury increases with dose.

Under Part III, if the product is subject to an FDA rule or regulation

that requires a labeling warning, that warning is required in labeling

in lieu of the warning set forth above.

Part IV prohibits respondents from assisting others, including by

selling product to them, when respondents have reason to believe that

they are deceptively promoting respondents' ephedrine-containing

products.

Part V prohibits misrepresentations about endorsements and

testimonials.

Part VI prohibits respondents from directing to individuals under

the age of twenty-one advertising and promotional activities for

Ecstasy or any other ephedrine product marketed as an alternative to an

illegal drug or for its euphoric, psychotropic, or sexual effects. Part

VI includes examples of prohibited activity, including advertisements

and promotions to audiences half or more under twenty-one.

Part VII requires the respondents to conduct and submit annual

analyses of the levels of ephedrine alkaloids in any ephedrine-

containing product that they sell for the next five (5) years.

Part VIII provides that nothing in the order permits the

respondents to market any product (1) in a state where its sale has

been banned; (2) in a manner that is inconsistent with state

restrictions on its sale; or (3) in a way that is inconsistent with any

applicable FDA rule or regulation.

Parts IX and X provide safe harbors for claims approved pursuant to

FDA's regulation of the labeling for drugs and foods, respectively.

Part XI requires respondents to send a letter (Attachment A to the

order) to anyone who provides the public with information about any of

respondents' ephedrine-containing products. The letter advises the

recipient that the disclosure required by Part III of the order must be

made in all communications with consumers concerning any of

respondents' ephedrine-containing products and that the only

permissible statement about the dose of any such product is the

information on the label. Part XII sets forth the record keeping and

surveillance requirements with respect to Part XI.

Part XIII requires respondents to send a letter (Attachment B to

the order) to distributors and resellers, including any person who

purchases more than 100 units of any of respondents' ephedrine-

containing products in any there (3) month period. The letter describes

the Commission's action in this case and advises recipients to

discontinue use of any promotional materials that do not comply with

the order. Part XIV set forth the record keeping and surveillance

requirements with respect to Part XIII.

The remaining parts of the order contain standard provisions

pertaining to record keeping, compliance, sunsetting of the order, and

similar matters.

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 the agreement and proposed order or to modify in any

way their terms.

Donald S. Clark,

Secretary.

[FR Doc. 97-20450 Filed 8-1-97; 8:45 am]

BILLING CODE 6750-01-M