Schering-Plough Healthcare Products, Inc.; Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 942-3341]

Schering-Plough Healthcare Products, Inc.; 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 marketer

of Coppertone Kids sunscreens for children from making deceptive claims

about the effectiveness of sunscreens marketed for use on children. The

agreement will also require that the company produce and distribute

150,000 consumer education brochures to alert parents to the importance

of sunscreen protection for children and the need to reapply sunscreens

after toweling or sustained vigorous activity. The complaint

accompanying the consent agreement alleges that Schering's ads for

Coppertone Kids 6-Hour Waterproof Sunblock make unsubstantiated claims

that one application of Coppertone Kids provides six hours of

protection from the sun for children engaged in sustained vigorous

activity in and out of the water.

DATES: Comments must be received on or before May 5, 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; Toby Milgrom Levin,

Federal Trade Commission, S-4002, 6th St. and Pa. Ave., N.W.,

Washington, D.C. 20580. (202) 326-3156.

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 February 18,

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, 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 Schering-Plough Healthcare Products, Inc.

(``Schering-Plough Healthcare''). Schering-Plough Healthcare, a wholly-

owned subsidiary of the Schering-Plough Corporation, is a manufacturer

and distributor of health care products, including sunscreens.

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

sixty (60) days for receipt of comments by interested persons. Comments

received

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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 alleged deceptive representations made in

advertising for Coppertone Kids, a sunscreen product promoted for use

on children. According to the FTC complaint, Schering-Plough Healthcare

represented, without adequate substantiation, that a single application

of Coppertone Kids provides six hours of protection from the sun, at

the advertised SPF level, for children engaged in sustained vigorous

activity in and out of the water. The complaint also alleges that

Schering-Plough Healthcare falsely represented that it had conducted

tests demonstrating that the product provides such protection.

According to the complaint, among other things, the company's tests did

not evaluate a single application of the product under the advertised

conditions of use (sustained vigorous activity).

The consent order contains provisions designed to remedy the

violations charged and to prevent Schering-Plough Healthcare from

engaging in similar acts and practices in the future.

Part I of the proposed order prohibits Schering-Plough Healthcare

from representing: (a) the length of time that Coppertone Kids or any

other children's sun protection product will provide protection from

the sun for persons engaged in sustained vigorous activity in and out

of the water; or (b) the efficacy of any children's sun protection

product in providing protection against any harmful effect of sun

exposure or ultraviolet radiation, unless the company has scientific

substantiation for the representation.

The order defines a ``children's sun protection product'' as any

sun protection product that uses the word ``babies,'' ``children,''

``kids,'' or other similar words in the name or promotion of the

product, or that is advertised or promoted for use primarily on

children under the age of twelve.

Part II of the proposed order prohibits Schering-Plough Healthcare

from misrepresenting the existence, contents, validity, or conclusions

of any test or study concerning any sun protection product.

Part III of the order allows Schering-Plough Healthcare to make any

representation for a sun protection product that is specifically

permitted in labeling for that product under any tentative final or

final Food and Drug Administration standard or under any new drug

application approved by the Food and Drug Administration.

Part IV of the proposed order requires Schering-Plough Healthcare

to produce and disseminate a consumer brochure addressing the

importance of sunscreen usage to children and the health benefits

associated with it, and promoting the proper use and application of

sunscreens on children. The brochure, which is subject to FTC approval,

will be disseminated by Schering-Plough Healthcare to organizations

with direct access to parents or organizations with access to parents

or others who work with or care for children under the age of 12.

Parts V, VII, IX, and X of the proposed order require Schering-

Plough Healthcare to keep copies of all materials relied upon in making

any representations covered by Parts I and II of the order; to provide

copies of the order to certain of the company's personnel; to notify

the Commission of any change in corporate structure; and to file

compliance reports with the Commission. Part VI permits respondent to

use existing labeling for 100 days after the date of service of the

order. Part VIII provides that the order will terminate after twenty

(20) years under certain circumstances.

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.

Separate Statement of Commissioner Mary L. Azcuenaga Concurring in Part

and Dissenting in Part in Schering-Plough Healthcare, File No. 942 3341

Today, the Commission accepts for public comment a proposed consent

agreement resolving allegations about certain claims in the advertising

of Coppertone Kids 6-Hour Waterproof Sunblock. I concur except with

respect to Part IV of the proposed order, which requires the respondent

to develop and disseminate a consumer education brochure addressing the

dangers of unprotected exposure to the sun. Consumer education

brochures are an integral part of the Commission's consumer protection

program, but they are not necessarily defensible adjuncts to Commission

orders.

A fencing-in provision will be sustained by the courts as long as

it is ``reasonably related'' to the violation found.\1\ Fencing-in

relief properly may include requirements beyond simply prohibiting the

challenged conduct that are designed to ``close all roads to the

prohibited goal, so that [the Commission's] order may not be by-passed

with impunity.'' \2\ The allegedly deceptive claim is that the

respondent's sunblock for children would remain effective for six hours

even if the children engaged in ``sustained vigorous activities in and

out of the water,'' such as playing in sand, taking off and putting on

clothes and toweling off after swimming. Complaint para.5. The proposed

order expressly enjoins the respondents from making the challenged

claim, either directly or indirectly, for the product at issue as well

as for ``any other children's sun protection product.'' Order para.I.

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\1\ FTC v. Colgate-Palmolive Co., 380 U.S. 374, 394-95 (1965);

FTC v. National Lead Co., 352 U.S. 419, 428 (1957).

\2\ FTC v. Ruberoid Co., 343 U.S. 470, 473 (1952).

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In addition, the proposed order requires the respondent to develop

and distribute 150,000 copies of a color brochure concerning the

importance of sunscreen usage by children. The order requires that the

brochure contain six messages or themes only one of which addresses the

issue in this case, the need to reapply so-called water-proof or water-

resistant sunblock after vigorous activity or after toweling off. Order

para. IV-E.

The brochure requirement, even the message that relates most

closely to the challenged claim, is not focused on preventing the

respondent from making the challenged claim or otherwise from avoiding

compliance with the order. The brochure would help educate consumers

regarding an important health issue, and, presumably, make them less

likely to be misled by the kind of implied claims challenged in this

action.\3\ There is no reason to think that it would enhance the

deterrent effect of the order on Schering.

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\3\ The product label already contains the statement, ``Reapply

after toweling.''

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Presumably, the brochure requirement will not be unduly burdensome

or costly for Schering because it will promote the use of its product,

and the brochure is undoubtedly commendable as a public health

initiative. Nevertheless, under the circumstances, it is an overly

broad order requirement as measured against the current standard for

ordering relief.\4\ There is a

[[Page 10061]]

value to the Commission in maintaining the integrity of the standard

for imposing a fencing-in remedy.

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\4\ It would be even more difficult to justify Part IV of the

order as corrective advertising, because it is unlikely that the

implied claim challenged in the complaint would linger in the minds

of consumers long after it ceased being made. See Warner-Lambert Co.

v. FTC, 562 F.2d 749, 762 (D.C. Cir. 1977), cert. denied, 435 U.S.

950 (1978).

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I respectfully dissent from Part IV of the order.

Separate Statement of Commissioner Roscoe B. Starek, III Concurring in

Part and Dissenting in Part in Schering-Plough Healthcare, File No.

9423341

I have voted to accept for public comment the consent agreement

with Schering-Plough Healthcare Products, Inc. (``Schering''), because

I have reason to believe that the challenged advertisements are

deceptive and I find that the proposed order, for the most part,

provides appropriate relief. I do not, however, support the requirement

that Schering produce and distribute a consumer education brochure that

includes numerous specified ``messages or themes.'' As set forth in the

proposed order, this consumer education remedy is overbroad and in any

event is unlikely to assist in the prevention of the violations alleged

in the complaint. Although I am an advocate of a strong Commission

consumer education program, and we can be proud of the valuable work

done by the Bureau of Consumer Protection's Office of Consumer and

Business Education, this remedy is a well-meaning but not legally

justifiable effort to fund a general consumer education campaign.

The Commission enjoys extensive authority to fashion fencing-in

relief for deceptive practices so long as the remedy has a reasonable

relation to the violations alleged in the complaint. See, e.g., FTC

versus Colgate-Palmolive Co., 380 U.S. 374, 394-95 (1965); FTC versus

National Lead Co., 352 U.S. 419, 428-29 (1957). With such authority,

however, comes the responsibility to exercise it judiciously. In my

view, the consumer education remedy mandated by this proposed order

bears no reasonable relationship to the violations alleged in the

complaint.

The proposed complaint alleges that Schering lacked a reasonable

basis for the claim that a single application of Coppertone Kids

provides six hours of protection from the sun for children engaged in

sustained vigorous activity in and out of the water.\1\ The order

addresses this allegation by requiring scientific substantiation for

claims about the efficacy of any children's sun protection product in

providing protection against any harmful effect of sun exposure or

ultraviolet radiation, or about the length of time that any such

product will provide sun protection for individuals engaged in

sustained vigorous activity in and out of the water.

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\1\ The proposed complaint challenges as false the claim that

Schering has conducted tests demonstrating that a single application

of Coppertone Kids provides six hours of protection from the sun for

children engaged in sustained vigorous activity in and out of the

water. The proposed order broadly prohibits false establishment

claims for any sun protection product.

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In addition, however, the order would require Schering to design,

produce and print a brochure--subject to the approval of the Associate

Director of the Division of Advertising Practices (``DAP'') in the

Commission's Bureau of Consumer Protection--about the importance of

sunscreen usage by children. The order mandates that the brochure

include all of the following ``messages or themes'':

(A) The importance of sunscreens in preventing skin damage,

including skin cancer, sunburn, and premature skin aging;

(B) Regular use of a high SPF sunscreen during childhood can

significantly reduce the risk of certain types of skin cancers later in

life;

(C) A single bad sunburn during childhood can significantly

increase a child's risk of developing skin cancer later in life;

(D) The importance of proper application of sunscreens;

(E) The need to reapply sunscreens after toweling or sustained

vigorous activity; and

(F) The need to use sunscreens during outdoor activities--not only

in connection with water activities.

Order para. IV. The respondent must disseminate 150,000 copies of this

brochure to parents or to organizations with access to parents or

others who work with or care for children under age twelve.\2\

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\2\ Like the brochure, the dissemination plan is subject to the

approval of the Associate Director in charge of DAP.

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Of the six required messages, only statement (E) seems likely to

assist in the prevention of future deception like or related to that

alleged in the complaint. Yet by including this key reapplication

information in an extensive list of other facts about sunscreen, the

order makes it less likely that consumers will see the reapplication

information. In my view, it is highly unlikely that a parent who

receives and reviews whatever brochure is approved will recall the one

piece of information related to the complaint allegation when the

parent makes a sunscreen purchase. Because the scope of the information

to be included in the brochure is so broad, the consumer education

remedy is not reasonably related to the violations alleged in the

proposed complaint.\3\

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\3\ The consumer education remedy here stands in contrast to a

fencing-in provision contained in a consent order issued by the

Commission last year. See Blenheim Expositions, Inc., Docket No. C-

3633 (Jan. 18, 1996) (requiring a franchise show promoter to

undertake a limited distribution of an FTC consumer education

brochure to customers attending its franchise shows). The respondent

in Blenheim allegedly made unsubstantiated claims regarding the

earnings and success of franchise owners and false claims regarding

a poll of franchise owners. The brochure specifically identified FTC

requirements with which franchisors must comply, including

consumers' right to receive an earnings claims document, and it

provided instructions on how to evaluate earnings claims. It thus

contained information likely to assist the respondent's customers to

detect and protect themselves from possible future

misrepresentations of earnings like those alleged in the complaint.

Although the brochure also addressed other issues related to the

purchase of a franchise, all of the advice in the brochure at least

arguably would help prospective franchisees avoid becoming victims

of future violations by the respondent.

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It is also troubling that if the Commission issues this order, it

essentially will be ordering the respondent to advertise that persons

should buy and use more of the respondent's products. Schering already

has every incentive to communicate the required messages to consumers.

In fact, the consumer education remedy is advertising (``use more

sunscreen'') that the company might wish to do in any event since the

conduct provisions of the order may prevent it from continuing to

distinguish its children's sun protection product from others by

claiming that it requires fewer applications. The deterrence value of

this remedy is minimal at best.

Finally, if this relief were sought in litigation, rather than

obtained through a consent agreement, it would not withstand scrutiny

under the First Amendment. For purposes of First Amendment analysis,

there is no difference between compelled speech and restrictions on

speech. Riley v. National Fed'n of the Blind, 487 U.S. 781, 796-97

(1988). A valid restriction on commercial speech must be no more

extensive than necessary to serve the substantial governmental interest

directly advanced by the restriction. Rubin v. Coors Brewing Co., 115

S. Ct. 1585, 1591 (1995) (discussing Central Hudson Gas & Elec. Corp.

v. Public Serv. Comm'n of N.Y., 447 U.S. 557, 566 (1980)). Thus,

disclosures compelled by the FTC can be no broader than necessary to

prevent future deception or to correct the effects of past deception.

See, e.g., National Comm'n on Egg Nutrition v. FTC, 570 F.2d 157, 164

(7th Cir. 1977), cert. denied, 439 U.S. 821 (1978). Additionally, the

government bears the burden of showing that a speech restriction will

advance its

[[Page 10062]]

interest ``to a material degree.'' 44 Liquormart, Inc. v. Rhode Island,

116 S. Ct. 1495, 1509 (1996) (plurality opinion of Justice Stevens)

(citing Edenfield v. Fane, 507 U.S. 761, 771 (1993)). A commercial

speech restriction that ``provides only ineffective or remote support

for the government's purpose'' does not pass this test. 44 Liquormart,

116 S. Ct. at 1509 (citing Central Hudson, 447 U.S. at 564).

The dubious efficacy of the proposed consumer education remedy

makes it unlikely that it will directly advance the asserted

governmental interest in preventing future deception by the respondent.

In addition, I doubt that a credible argument can be made that the

information that the order specifically requires be included in the

brochure is no more extensive than necessary to prevent future

violations by Schering. Certainly Schering has waived any First

Amendment objections to this relief by entering into the consent

agreement. Nonetheless, when a remedy implicates First Amendment

rights, the Commission should be particularly reluctant to obtain

through negotiations relief that it lacks at least a colorable chance

to obtain in litigation.

In my view, it would be better to have no consumer information

remedy in the consent order if the only alternative is an overbroad

remedy of doubtful efficacy that raises First Amendment concerns.

[FR Doc. 97-5344 Filed 3-4-97; 8:45 am]

BILLING CODE 6750-01-M