Announced Actions for February 14, 1997

For Your Information

 

 

The Federal Trade Commission today announced the following actions:

Commission action regarding applications for approval: Following public comment periods the Commission has ruled on applications for approval of transactions from the following:

  • The Commission has approved the application of Columbia/HCA Healthcare Corporation, of Nashville, Tennessee, for approval to divest Poplar Springs Hospital in Petersburg, Virginia, to PSH Acquisition Corporation, which is owned by Poplar Springs Hospital’s CEO and CFO, four physicians who practice at the hospital, and four individuals from Willamette Capital, Inc. Divestiture of this psychiatric hospital was required under a November 1995 consent order settling charges that Columbia/HCA’s acquisition of John Randolph Medical Center in Hopewell, Virginia, would violate federal antitrust laws by substantially reducing competition for psychiatric hospital services in the tri-cities area of south central Virginia. The divestiture is designed to restore competition. (See Nov. 30, 1995 news release for more details regarding the consent order; Docket No. C-3627; Commission vote to approve the divestiture was 5-0.) Staff contact is Daniel Ducore, 202-327-2526.
  • The Commission has approved the application of Community General Hospital, located in Reading, Pennsylvania, to be acquired by the St. Joseph Medical Center, another Reading hospital. Prior FTC approval of this transaction was required under a 1990 consent order, which settled charges that the consolidation of Community General and The Reading Hospital and Medical Center would substantially reduce competition in violation of antitrust laws. The order contains a provision requiring Community General to obtain FTC approval before permitting any hospital it operates in Berks County to be acquired by any entity that operates another hospital in the county. (See Jan. 31, 1990 news release for more details regarding the 1990 consent order; Docket No. C-3284; Commission vote to approve the acquisition was 5-0.) Staff contact is Daniel Ducore, 202-327-2526.
  • The Commission has approved the application of Red Apple Companies, Inc. Sloan’s Supermarkets, Inc., and John Catsimatidis, all of New York City, to divest a supermarket at 2407 Broadway to W.R. Purchasing Corp., of New York City, who then will sell it to Edilio Flores, doing business as EDF, Inc. Divestiture of this supermarket was required under a 1995 consent order settling charges that Red Apple’s acquisition of Sloan’s Supermarkets could substantially lessen supermarket competition in four Manhattan markets, including the Upper West Side where this supermarket is located, in violation of federal antitrust laws. (See Dec. 13, 1994 news release for more details regarding the consent order; Docket No. 9266; Commission vote to approve the divestiture was 5-0.) Staff contact is Daniel Ducore, 202-326-2526.

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

  • The consent order with California SunCare, Inc., of Los Angeles, California, and company president, Donald J. Christal, settles charges that the firm made false and unsubstantiated claims that moderate exposure to the ultraviolet radiation of the sun and in indoor tanning salons is not harmful -- and, indeed, that it provides many health benefits -- and that users of its "California Tan Heliotherapy" tanning products can reap these benefits while avoiding the dangers of burning and overexposure. The products at issue do not provide sunscreen protection, the FTC alleged. The order bars California SunCare and Christal from claiming that only overexposure and burning, and not moderate exposure, cause the harms of UV radiation; that tanning is not harmful to the skin; and that UV radiation reduces the risk of skin cancer, and also from misrepresenting that use of any tanning product prevents or minimizes the negative effects of UV expo sure. With regard to any tanning product or service, the order requires the respondents to have scientific substantiation for any claims about the health benefits of UV exposure; the ability of the product or service to prevent or minimize the harms of UV exposure or to improve tanning results; and about performance, safety, benefits or efficacy. The order also bars misrepresentations about any tests, studies or endorsements of their products, and requires them to send letters to distributors and retailers summarizing the Commis sion’s action and advising them to discontinue use of California SunCare’s challenged promotional materials. Certain future advertising and labeling of the respondents’ tanning products must include prominent cautionary statements about the health risks of tanning, and for labeling, the lack of sunscreen in the products. (See Nov. 19, 1996 news release for more details about this case; Docket No. C-3715; Commission vote on Feb. 11, 1997 to issue the order as final was 5-0, with Commissioner Roscoe B. Starek, III, dissenting as to the order’s "untriggered" advertising disclosure which, he said, consti tutes corrective advertising. Starek said he was not convinced that the evidence presented in this case meets the demanding standard the Commission applies for requiring correc tive advertising, adding: " . . . [T]he Commission is coming perilously close to lowering its standard for imposing corrective advertising by erasing the already blurred dividing line between that form of fencing-in relief and affirmative disclosures. Such a change is one that I cannot endorse.") Staff contact is Joel Winston, 202-326-3153
  • The consent order with PhaseOut of America, Inc. and Products & Patents, Ltd., both of Lynbrook, New York, settles charges that various advertising claims for PhaseOut, a purported stop-smoking device that also was said to make cigarettes less harmful by puncturing holes in the filter ends of cigarettes, were unsubstantiated or false. The order requires the firms to send a postcard to identifiable past purchasers of PhaseOut notifying them of the Commission’s action and advising them that PhaseOut has not been proven to reduce the risk of smoking-related diseases or to make cigarettes "safer." The order also prohibits the firms from falsely stating that a Johns Hopkins study proved that (1) PhaseOut was effective in enabling smokers to quit; (2) reduces the amount of tar, nicotine, or carbon monoxide smokers get; and (3) smoking PhaseOut-treated cigarettes significantly reduces the risk of smoking-related health problems. The order also requires the respondents to have scientific substantiation for claims that PhaseOut or any other smoking-cessation product reduces by certain percentages the amount of nicotine, tar, and carbon monoxide smokers get, and does so without changing the cigarette’s taste or draw; is effective in enabling smokers to quit, and to do so without withdrawal symptoms; reduces the risk of smoking-related health problems; provides immediate health benefits, including reduced congestion or coughing; that smokers using the product will not compensate for its effects by smoking more cigarettes; and for any other performance, benefit or efficacy claims. In addition, the orders bars misrepresentations about any test or study, and requires the respondents to have scientific substantiation for any claim that an endorsement reflects the typical experience of users. (See Nov. 14, 1996 news release for more details regarding this case; Docket No. C-3716; Commission vote on Feb. 12, 1997 to issue the order as final was 5-0.) Staff contact is Shira Modell, 202-326-3116.

Copies of the documents referenced above are available from the FTC’s web site at www.ftc.gov and also 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 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.

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