Announced Actions for March 25, 1999

For Your Information

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 orders binding on the respondents.

  • Allied Domecq Spirits and Wine Americas and Beck's North America, Inc. The Commission vote to approve the decisions and orders was 4-0 in the Allied matter and 3-1 in the Beck's matter, with Commissioner Orson Swindle issuing a dissenting statement. In his statement, Commissioner Swindle said, "Although I voted to accept the consent agreement for comment, I now dissent from the issuance of the complaint and final consent order because, upon further reflection, I conclude that the requirements for unfairness are not met. I continue to believe that the ads, which are inconsistent with the Beer Institute's Advertising and Marketing Code and may violate federal and state boating safety laws, are ill-conceived and unwise. ... In order for the Beck's advertisements to be unfair, [however,] they must be likely to cause consumers substantial injury, such as increasing the likelihood they will fall off a boat and drown, and this injury must be one that consumers cannot reasonably avoid by themselves. Unlike in other unfairness cases, where ads influenced children to engage in unsafe activities, in this case the consumers of Beck's products -- through the exercise of their own adult judgment -- surely can reasonably avoid any injury that they might suffer from the advertisements' depiction of dangerous activity. In other words, a reasonable adult could easily see that the conduct depicted in the ads is rather stupid and dangerous and would conclude that it would be unwise to engage in it. ... This case calls attention to the ongoing debate over how far the government should go in trying to protect people from themselves. The Commission is seeking to protect people who may decide to act unreasonably by choosing to put themselves at risk of injury. Government cannot and should not shield people who knowingly choose to expose themselves to such risks."

    In a separate statement about the Beck's matter, Commissioner Mozelle Thompson said, "... I joined in that vote. I also believe, however, that the advertisements at issue were deceptive. The Commission has defined deceptive advertising as "that which contains a representation, omission or practice that is likely to mislead the consumer acting reasonably in the circumstances, to the consumer's detriment. In my view, the Beck's television advertisements fit this definition. First, I believe the advertisements imply to reasonable targeted consumers that consuming alcohol while boating is appropriate and/or safe. In fact, the actors begin one advertisement by stating 'Wanna have some fun? Mix hot music, cool people, [a] big boat and a great German beer.' Unfortunately, the advertisement does not disclose that consuming alcohol while boating poses a heightened danger not only to the boat operator, but also to passengers. It also fails to disclose that such behavior may violate applicable Federal boating laws. Second, as evidenced by the actors and the language portrayed in the advertisement, I believe that the message is targeted at a youthful audience. Accordingly, it can be justifiably inferred that a reasonable youthful consumer could easily be deceived by not appreciating the danger of imitating the behavior featured in the television advertisements. For these reasons, I would find that the Beck's advertisements were deceptive as well as unfair under Section 5 of the FTC Act."

    (See news release dated August 6, 1998; FTC File Nos. Allied: 9823050; Beck's: 9823092; Staff contact is Lee Peeler, 202-326-3090.)

  • General Signal Power Systems, Inc. The Commission vote to approve the final order was 4-0. (See news release dated December 21, 1998; FTC File No. 972-3063; Staff contacts are Matthew D. Gold or Linda K. Badger, 415-356-5270.)

Bureau of Economics Staff Files Comments and Releases Staff Report

  • Comments Submitted to California PUC about Electric Utility Issues The staff of the Federal Trade Commission's Bureau of Economics submitted comments to the California Public Utilities Commission regarding the structure and regulatory framework governing electricity distribution service and distributed generation. The staff's comments, which were filed on March 17, 1999, responded to a number of questions raised by the CPUC in a request for public comment. For example, the FTC staff noted that:
    • the CPUC may wish to establish rules that will allow a fair market test of distributed generation;
    • the CPUC may wish to complete its work on fair market rules for distributed generation before turning to a broader assessment of distribution competition;
    • the CPUC may wish to regularly revisit the issue of whether competition engendered by distributed generation is sufficient to consider deregulating electric distribution services.
  • The Commission vote to file the staff comment was 4-0.
  • The comments represent the views of the staff of the FTC's Bureau of Economics and are not necessarily the views of the Commission or any individual Commissioner. FTC File No. V990004; Staff contact is John Hilke, 303-844-3565.)

Copies of the documents mentioned in this FYI are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202-382-4357); TDD 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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