Shell Oil Company, et al.; Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 982-3107]

Shell Oil Company, et al.; 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 December 13, 1999.

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

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

FOR FURTHER INFORMATION CONTACT: C. Lee Peeler or Michael Dershowitz,

FTC/S-4002, 600 Pennsylvania, Ave., NW, Washington, DC 20580. (202)

326-3090 or 326-3158.

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 complaint. An electronic copy of the full text of

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

(for September 15, 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

[[Page 55728]]

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 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 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, subject to final

approval, an agreement containing a consent order from respondents

Shell Oil Company and Shell Chemical Company (collectively, ``Shell'').

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 or make final the agreement's proposed

order.

Shell has manufactured, tested, advertised, and sold gasoline

additives to its trade customers for inclusion in aftermarket fuel

system treatment products that they, in turn, sold to the public. The

Commission's proposed complaint alleges that by providing its trade

customers with allegedly deceptive advertising and promotional

materials, as well as with making allegedly false or misleading

representations to them about test data, Shell provided the means and

instrumentalities to its trade customers to deceive the public. The

Commission's proposed complaint alleges the Shell made unsubstantiated

representations that Shell gasoline additives significantly improve

engine power and acceleration in motor vehicles generally. The

complaint also challenges as unsubstantiated the representations that

Shell gasoline additives are superior to other fuel system additives in

improving engine power and acceleration. The complaint also challenges

as false or misleading Shell's representations that scientific tests

prove that Shell gasoline additives (a) significantly improve engine

power and acceleration, and (b) are superior to other fuel system

treatments in improving engine power and acceleration.

Furthermore, the proposed complaint alleges that in reporting test

results to its trade customers in regard to tests Shell conducted on

its additives and in regard to tests Shell conducted on its customer's

aftermarket fuel additive products which contained Shell's additives,

Shell made false or misleading representations that such test results

(a) constitute scientific proof that Shell gasoline additives and its

customer's products that contain Shell additives, significantly improve

engine power and acceleration, and (b) constitute scientific proof that

Shell gasoline additives, and its customers products that contain Shell

additives, are superior to other fuel system additives in improving

engine power and acceleration.

The proposed consent order contains provisions designed to prevent

respondents from engaging in similar acts and practices in the future.

Part I of the proposed order prohibits respondents claiming that

any of their fuel additive products or ingredients improves power or

acceleration, or is superior to other products in this regard, unless

the claim is substantiated by competent and reliable scientific

evidence. It also requires respondents to have substantiation for any

representation concerning the performance, benefits, efficacy,

attributes or use of any fuel additive product or ingredient.

Part II of the proposed order prohibits respondents from

misrepresenting the existence, contents, validity, results, conclusion,

or interpretations of any test, study or research done on any fuel

additive product or ingredient.

Part III of the proposed order requires respondents to mail copies

of the Commission's complaint and order to each trade customer that

purchased the fuel additive product or ingredient involved in this

matter.

Part IV of the proposed order requires respondents to maintain

copies of all materials relied upon in making any representation

covered by this order.

Part V of the proposed order requires respondents to distribute

copies of the order to its operating divisions and to various officers,

agents and employees of respondents.

Part VI of the proposed order requires respondents to notify the

Commission of any changes in corporate structure that might affect

compliance with the order.

Part VII of the proposed order requires respondents to file with

the Commission one or more reports detailing compliance with the order.

Part VIII of the proposed order is a ``sunset'' provision,

dictating that the order will terminate twenty years from the date it

is issued or twenty years after a complaint is filed in federal court,

by either the United States or the FTC, alleging any violation of 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.

By direction of the Commission.

Benjamin I. Berman,

Acting Secretary.

[FR Doc. 99-26843 Filed 10-13-99; 8:45 am]

BILLING CODE 6750-01-M