Announced Actions for November 1, 1996

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Commission action regarding applications for approval: Following a public comment period for each, the Commission has ruled on applications for approval of transactions from the following entities:

  • The FTC has approved an application from James F. Duffy, a trustee appointed by the Commission, to divest the drug stores owned by Revco, D.S., Inc. in Marion and Covington, Virginia, to Horizon Pharmacies, Inc., of McKinney, Texas. Revco is based in Twinsburg, Ohio. Divestiture of these assets was required under a November 1994 consent order settling charges that Revco's acquisition of Hook-SupeRx, Inc. would violate antitrust laws by substantially reducing competition for prescription drugs sold in retail stores in these two areas, and also in Radford, Virginia. In February 1996, the FTC appointed Duffy as trustee to divest the Marion and Covington stores' pharmacy businesses, because the deadline under the 1994 order for completion of the divestitures had passed. The 1994 order is designed to restore competition for prescription drugs sold in retail stores in the areas at issue. (See Nov. 4, 1994 and Feb. 8, 1996 news releases for more details regarding this matter; Docket No. C-3540; Commission vote to approve the divestiture was 5-0.) Staff contact is Elizabeth Piotrowski, 202-326-2623.
  • The FTC has approved the application from Columbia/HCA Healthcare Corporation, of Nashville, Tennessee, to divest Denton Community Hospital in Denton, Texas, to NetCare Health Systems, Inc., which also is based in Nashville, or to any of NetCare's subsidiaries. This divestiture is one of seven required under a 1995 consent order settling FTC charges over Columbia/HCA's acquisition of Healthtrust, Inc., and is intended to restore competition allegedly injured by that acquisition. (See April 21, 1995 news release for more details regarding the consent order; Docket No. C-3619; Commission vote to approve the divestiture was 5-0.) Staff contact is Elizabeth Piotrowski, 202-326-2623.

Commission action regarding petitions to reopen and modify FTC orders: Following a comment period, the FTC has ruled on a petition from the following:

  • The FTC has granted in part and denied in part a petition from Onkyo U.S.A. Corporation, of Ramsey, New Jersey, to modify a 1982 consent order. The Commission granted Onkyo's request to modify the order to permit the company to implement price restrictive cooperative advertising programs, and to unilaterally terminate a dealer for failing to adhere to previously announced resale prices. The Commission denied several specific language changes requested by Onkyo, however, as well as Onkyo's requests that the Commission (1) end the firm's obligation to furnish copies of the order to certain employees and (2) terminate the order 20 years after its original 1982 date rather than 20 years after the FTC's 1995 civil penalty action against the firm for allegedly violating the order. (See Sept. 24, 1981 news release regarding the original order and July 25, 1995 news release regarding the civil penalty action; Docket No. C-3092; Commission vote to reopen and modify the order was 5-0, with Commissioner Roscoe B. Starek, III, concurring in the result only.) Staff contact is Elizabeth Piotrowski, 202-326-2623.

Consent agreements given final approval: Following a public comment period, the Commission has made final consent agreements with the following entities. The Commission action makes the consent order binding on the respondents.

  • The Commission finalized two consent orders with Grey Advertising, Inc., of New York City, settling charges over the role the agency played in advertising a paint-sprayer toy marketed by Hasbro, Inc., and The Dannon Company's "Pure Indulgence" line of frozen yogurt. The order in connection with the Hasbro toy resolves allegations that the commercial at issue employed a hidden motorized air compressor to misrepresent how easily children could operate the sprayer. This order prohibits Grey from using deceptive demonstrations or otherwise misrepresenting the performance of any toy The second order resolves allegations that the commercial at issue falsely implied that some of the flavors in the Pure Indulgence line were low in fat and calories, and lower in fat than ice cream. This order prohibits Grey from misrepresenting the fat, saturated fat, cholesterol, or calories in any frozen yogurt, frozen sorbet, and most ice cream products. (See Aug. 7, 1996 news release for more detail regarding these consent orders; Docket Nos. C-3690 (the toy ad order) and C-3691 (the frozen yogurt order); the Commission votes on Oct. 30 to finalize the orders were both 5-0.) Staff contact is Rosemary Rosso, 202-326-2174.
  • The Commission finalized a consent order with David F. McCready, former president of RustEvader Corporation (of Altoona, Pennsylvania) and inventor of the "Rust Evader," a purported anti-corrosion device for vehicles, settling charges that he made false claims about the product's ability to substantially reduce motor vehicle body corrosion, employed a deceptive demonstration, and illegally conditioned warranty coverage on consumers paying the labor costs of having their vehicles inspected every 24 months by an authorized Rust Evader dealer. The order requires McCready to pay $200,000 over six months for consumer redress; bars him from using the names Rust Evader or Rust Buster for this or similar devices; prohibits him from claiming that this or similar devices prevent or substantially reduce corrosion, and from misrepresenting the existence or results of test or studies or that any demonstration proves any material feature of any product for use in motor vehicles; requires him to have substantiation to back up performance or efficacy claims about any product for use in motor vehicles; and bars him from conditioning warranty coverage for any consumer product on the purchase by consumers of a certain brand-named or trade-named product or service. (See July 3, 1996 news release for more details regarding this consent order; Docket No. D-9274; Commission vote on Oct. 30 to issue the order in final form was 5-0.) Staff contact is Michael Milgrom, FTC Cleveland Regional Office, 216-522-4210.

Copies of the news releases and most of the related documents referenced above are available from the FTC's World Wide Web site at http://www.ftc.gov (no period). All public documents are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 202-326-2502. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.

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