For Your Information: September 12, 1997
The Federal Trade Commission today announced the following actions.
Commission action regarding applications for approval: Following a public comment period, the Commission has ruled on an application for approval of a transaction from the following:
- The FTC has approved the application of Novartis AG, a Swiss firm, and Chiron Corporation, of Emeryville, California, to license specified gene therapy technology and patent rights to Rhone-Poulenc Rorer Pharmaceuticals, Inc., of Collegeville, Pennsylvania. Licensing of the technology is required under an April 1997 consent order settling charges that the merger of CibaGeigy Ltd. and Sandoz Ltd. to form Novartis would reduce competition in the development and commercialization of certain gene therapy products, which are expected to begin offering significant improvements in the treatment of cancer and other diseases and medical conditions by the year 2000. Chiron is 46.5 percent owned by Novartis. The licensing requirement is designed to restore competition for the development and commercialization of gene therapy treatments for cancer and graft versus host disease research and treatment. (See Dec. 17, 1996 news release for more details regarding this case; Docket No. C-3725; Commission vote to approve the licensing agreement was 4-0.) Staff contact is Daniel Ducore, 202-326-2526.
Commission action regarding petitions to reopen and modify FTC orders: Following a public comment period, the FTC has ruled on a petition from the following:
- The FTC has approved the petition of Oerlikon-Buhrle Holding AG, of Zurich, Switzerland, to reopen and modify a February 1995 consent order to replace a requirement that the firm, until February 2005, obtain the prior approval of the Commission for acquisitions of any assets used to manufacture, distribute or sell turbomolecular pumps or compact disc metallizers or any interest in an entity that manufactures, distributes or sells them. A prior notice provision has been substituted for the prior approval provision. The 1995 order settled charges that Oerlikon-Buhrle's acquisition of Leybold AG would raise prices and reduce innovation in the markets for these two products, used in the manufacturing of semiconductors and in making compact discs, respectively. (See Oct. 27, 1994 news release for more details about the 1995 consent order; Docket No. C-3555; Commission vote to grant the petition was 4-0.) Staff contact is Daniel Ducore, 202-326-2526.
Consent agreements given final approval: Following a public comment period on each, the Commission has made final consent agreements with the following entities. The Commission action makes the consent orders binding on the respondents.
- The settlement with Aldi Inc., headquartered in Batavia, Illinois, settles charges that this regional grocery chain failed to tell job applicants denied employment (1) when information in the applicants' credit records played a role in the denials, and (2) the name and address of the firm that provided the credit-history information, in violation of the Fair Credit Reporting Act (FCRA). The order requires Aldi to comply with the provisions of the FCRA requiring that, when consumers are denied a job based in whole or in part on information in their credit reports, that the denying company notify the consumers that such reports played a role in the denials and the name and address of the consumer reporting agency that supplied the reports. Within 30 days thereafter, the consumers may contact the credit reporting agency to obtain a free copy of their credit reports, check for errors and, if any are found, request that the credit reporting agency reinvestigate and correct them. (Effective Sept. 30, the FCRA has been revised to require firms to notify applicants before obtaining his or her credit report, and to obtain from the applicant a written acknowledgment of this fact. The revisions also require the firm in this situation to give the adversely-affected consumer the telephone number of the relevant credit reporting agency and a statement of his or her rights under the FCRA to dispute the accuracy or completeness of the report.) Under the final settlement, Aldi also is required to give the information required by the FCRA to consumers denied employment after Jan. 1, 1994, where appropriate. (See May 13, 1997 news release for more details regarding this case; Docket No. C-3764; Commission vote on Sept. 5 to issue the order as final was 4-0.) Staff contact is C. Steven Baker, Chicago Regional Office, 312-353-8156.
- The consent order with Icon Health and Fitness, Inc., IHF Capital, Inc., and IHF Holdings, Inc., of Logan, Utah, settles charges that they made unsubstantiated claims about the weight-loss benefits of the "Proform Cross Walk Treadmill." The order requires the respondents to have substantiation for future claims about the weight-loss, calorie-burning or fat-burning benefits of any exercise equipment. In addition, the order requires that testimonials in the respondents' advertising either represent the typical experience of users, or include disclosures of the generally expected results or some statement making clear that consumers should not expect to experience similar results. (See June 17, 1997 news release for more details regarding this case and "Project Workout," a law-enforcement and consumer education campaign targeting exaggerated weight-loss claims for exercise equipment; Docket No. C-3765; Commission vote on Sept. 9 to issue the order as final and binding was 4-0.) Staff contact is Laura Fremont, San Francisco Regional Office, 415-356-5270.
- The consent order with Life Fitness, of Franklin Park, Illinois, settles charges that it made unsubstantiated claims about the weight-loss benefits of its Lifecycle stationary exercise cycle. The order requires Life Fitness, and its general partner, The Life Fitness Companies L.P., also of Franklin Park, to have substantiation for future claims about the weight-loss, calorie-burning or fat-burning benefits of any exercise equipment. It also prohibits them from misrepresenting the result of any test, study or research relating to these types of benefits. (See June 17, 1997 news release for more details regarding this case and "Project Workout," a law-enforcement and consumer education campaign targeting exaggerated weight-loss claims for exercise equipment; Docket No. C-3766; Commission vote on Sept. 9 to issue the order as final and binding was 4-0, with Commissioner Mary L. Azcuenaga issuing a statement in which she said she concurred with the decision to issue the final order "except to the extent that The Life Fitness Companies, L.P. (the parent of Life Fitness), although not named in the complaint or in the caption of the order, is included in the order's substantive provisions." Azcuenaga said that because by law, "complaints are the predicate on which orders must be based, . . . [e]ither Life Fitness Companies, L.P., as a party responsible in whole or in part for the unlawful conduct alleged, should be included in both the complant and the order, or the company should be removed from the order." She concluded that she saw "no basis under Section 5 of the FTC Act for imposing an order to cease and desist on a nonparty.") Staff contact is Laura Fremont, San Francisco Regional Office, 415-356-5270.
Copies of the documents referenced above are available from the FTC's web site at http://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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