Physicians Formula Cosmetics, Inc.; Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 992 3158]

Physicians Formula Cosmetics, Inc.; 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 November 29, 1999.

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

Room 159, 600 Pennsylvania., NW, Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Elaine Kolish or Kent Howerton, FTC/S-

4302, 600 Pennsylvania. Ave., NW, Washington, DC 20580. (202) 326-3042.

or 326-3013.

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

Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Sec. 2.34 of the

Commission's rules of practice (16 CFR 2.34), notice is

[[Page 52790]]

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 complaint. An electronic copy of the full text

of the consent agreement package can be obtained from the FTC Home Page

(for September 13, 1999), on the World Wide Web, at ``http://

www.ftc.gov/os/actions97.htm.'' A paper copy can be obtained from the

FTC Public Reference Room, Room H-130, 600 Pennsylvania Avenue, NW,

Washington, DC 20580, either in person or by calling (202) 326-3627.

Public comment is invited. Comments should be directed to: FTC/

Office of the Secretary, Room 159, 600 Pennsylvania. Ave., NW,

Washington, DC 20580. Two paper copies of each comment should be filed,

and should be accompanied, if possible, by a 3\1/2\ inch diskette

containing an electronic copy of the comment. 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

Sec. 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, subject to

final approval, to a proposed consent order from respondent Physicians

Formula Cosmetics, Inc.

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.

This matter concerns ``Made in USA'' labeling of cosmetics,

cosmetic brushes,and skin care products. The Commission's complaint

charges that respondent, by labeling its products as ``Made in USA,''

misrepresented that they were all or virtually all made in the United

States when, in truth and in fact, a significant proportion of their

components was of foreign origin.

The proposed consent order contains a provision designed to remedy

the charges 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 misrepresenting the extent to which its products are

made in the United States. The proposed order would allow respondent to

represent that its products are made in the United States as long as

all, or virtually all, of the components of the products are of U.S.

origin and all, or virtually all, of the labor in manufacturing them is

performed in the United States.

The proposed consent order additionally provides that the order

shall not prohibit the respondent from depleting its inventory of

products bearing a marking or labeling otherwise prohibited by the

order and existing on the date the order is signed, in the normal

course of business, provided that no such existing inventory may be

shipped later than 120 days after the date the order becomes final.

Part II of the proposed order requires the respondent to maintain

materials relied upon in disseminating any representation covered by

the order. Part III of the proposed order requires the respondent to

distribute copies of the order to certain company officials and

employees. Part IV of the proposed order requires the respondent to

notify the Commission of any change in the corporation that may affect

compliance obligations under the order. Part V of the proposed order

requires the respondent to file one or more compliance reports. Part VI

of the proposed order is a provision whereby the order, absent certain

circumstances, terminates twenty years from the date of issuance.

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

proposed consent order. It is not intended to constitute an official

interpretation of the agreement and proposed order or to modify in any

way their terms.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 99-25418 Filed 9-29-99; 8:45 am]

BILLING CODE 6750-01-M