UNITED STATES OF
AMERICA In the Matter of WEIGHT WATCHERS INTERNATIONAL, INC., AGREEMENT CONTAINING a corporation. DOCKET NO. 9261 CONSENT ORDER This agreement, by and between Weight Watchers International, Inc., a corporation, by its duly authorized officer (“Weight Watchers” or "respondent"), having been represented by counsel, and counsel for the Federal Trade Commission, is entered into in accordance with the Commission's Rule governing consent order procedures. The parties hereby agree that: 1. Respondent Weight Watchers International, Inc. is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Virginia, with its principal place of business located at 175 Crossways Park West, Woodbury, N.Y. 11797. 2. Respondent has been served with a copy of the complaint issued by the Federal Trade Commission charging it with violations of Section 5(a) of the Federal Trade Commission Act, and has filed an answer to the complaint denying said charges. 3. Respondent admits all the jurisdictional facts set forth in the complaint. 4. This agreement is for settlement purposes only and does not constitute an admission by the respondent that the law has been violated as alleged in the complaint, or that the facts alleged in the complaint, other than the jurisdictional facts, are true. 5. Respondent waives:
6. This agreement shall not become part of the public record of the proceeding unless and until it is accepted by the Commission. If this agreement is accepted by the Commission, it will be placed on the public record for a period of sixty (60) days and information about it publicly released. The Commission thereafter may either withdraw its acceptance of this agreement and so notify respondent, in which event it will take such action as it may consider appropriate, or issue and serve its decision in disposition of the proceeding. 7. This agreement contemplates that, if it is accepted by the Commission, and if such acceptance is not subsequently withdrawn by the Commission pursuant to the provisions of Section 3.25(f) of the Commission's Rules, the Commission may, without further notice to respondent, (1) issue its decision containing the following order in disposition of the proceeding, and (2) make information about it public. When so entered, the order shall have the same force and effect and may be altered, modified, or set aside in the same manner and within the same time provided by statute for other orders. The order shall become final upon service. Delivery of the decision and order to respondent by any means specified in Section 4.4 of the Commission's Rules shall constitute service. Respondent waives any right it may have to any other manner of service. The complaint may be used in construing the terms of the order. No agreement, understanding, representation, or interpretation not contained in the order or in the agreement may be used to vary or contradict the terms of the order. 8. Respondent has read the complaint and consent order. It understands that it may be liable for civil penalties in the amount provided by law and other appropriate relief for each violation of the order after it becomes final. ORDER DEFINITIONS For the purposes of this order, the following definitions shall apply: A. "Competent and reliable scientific evidence" shall mean those tests, analyses, research, studies, surveys, or other evidence based on the expertise of professionals in the relevant area, that have been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results. B. "Weight loss program" shall mean any program designed to aid consumers in weight loss or weight maintenance, when offered to consumers in classes or meetings of one or more individuals where person-to-person instruction in weight loss or weight maintenance is provided. Food products shall not be considered, for purposes of this order, part of a weight loss program unless they are advertised, promoted, offered for sale or sold as a necessary part, e.g., “Personal Cuisine,” of a “weight loss program.” Cardio-Fitness Corporation programs shall not be deemed, for purposes of this order, “weight loss programs”, unless they are advertised, promoted, offered for sale, or sold using the Weight Watchers trademark or name and otherwise satisfy the definition of "weight loss program." C. "Broadcast medium" shall mean any radio or television broadcast, cablecast, home video, or theatrical release. D. For any order-required disclosure in a print medium to be made "clearly and prominently" or in a "clear and prominent manner," it must be given both in the same type style and in: (1) twelve point type where the representation that triggers the disclosure is given in twelve point or larger type; or (2) the same type size as the representation that triggers the disclosure where that representation is given in a type size that is smaller than twelve point type. E. For any order-required disclosure given orally in a broadcast medium to be made "clearly and prominently" or in a "clear and prominent manner," the disclosure must be given at the same volume and in the same cadence as the representation that triggers the disclosure. F. For any order-required disclosure given in the video portion of a television or video advertisement to be made "clearly and prominently" or in a "clear and prominent manner," the disclosure must be of a size and shade, and must appear on the screen for a duration, sufficient for an ordinary consumer to read and comprehend it. I. IT IS ORDERED that Weight Watchers International, Inc., a corporation ("respondent"), its successors and assigns, and respondent’s officers, representatives, agents, and employees, directly or through any corporation, subsidiary, division, or other device, including franchisees or licensees, in connection with the advertising, promotion, offering for sale, or sale of any weight loss program, in or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from: A. Making any representation, directly or by implication, about the success of participants on any weight loss program in achieving or maintaining weight loss or weight control unless, at the time of making any such representation, respondent possesses and relies upon competent and reliable evidence, which when appropriate must be competent and reliable scientific evidence, that substantiates the representation; provided, further, that for any representation that: (1) any weight loss achieved or maintained through the weight loss program is typical or representative of all or any subset of participants of respondent’s program, said evidence shall, at a minimum, be based on a representative sample of:
(2) any weight loss is maintained long-term, said evidence shall, at a minimum, be based upon the experience of participants who were followed for a period of at least two years from their completion of the active maintenance phase of respondent’s program, or earlier termination, as applicable; and (3) any weight loss is maintained permanently, said evidence shall, at a minimum, be based upon the experience of participants who were followed for a period of time after completing the program that is either:
B. Representing, directly or by implication, except through endorsements or testimonials referred to in paragraph I.D. herein, that participants of any weight loss program have successfully maintained weight loss, unless respondent discloses, clearly and prominently, and in close proximity to such representation, the statement: "For many dieters, weight loss is temporary."; provided, further, that respondent shall not represent, directly or by implication, that the above-quoted statement does not apply to dieters in respondent’s weight loss program; provided, however, that a truthful statement that merely describes the existence, design, or content of a weight maintenance or weight management program or notes that the program teaches participants about how to manage their weight will not, without more, be considered for purposes of this order a representation regarding weight loss maintenance success. C. Representing, directly or by implication, except through endorsements or testimonials referred to in paragraph I.D. herein, that participants of any weight loss program have successfully maintained weight loss, unless respondent discloses, clearly and prominently, and in close proximity to such representation, the following information: (1) the average percentage of weight loss maintained by those participants; (2) the duration over which the weight loss was maintained, measured from the date that participants ended the active weight loss phase of the program, provided, further, that if any portion of the time period covered includes participation in a maintenance program(s) that follows active weight loss, such fact must also be disclosed; and (3) if the participant population referred to is not representative of the general participant population for respondent’s programs:
D. Using any advertisement containing an endorsement or testimonial about weight loss success or weight loss maintenance success by a participant or participants of respondent’s weight loss program if the weight loss success or weight loss maintenance success depicted in the advertisement is not representative of what participants of respondent’s weight loss programs generally achieve, unless respondent discloses, clearly and prominently, and in close proximity to the endorser's statement of his or her weight loss success or weight loss maintenance success: (1) What the generally expected success would be for Weight Watchers customers in losing weight or maintaining achieved weight loss; provided, however, that in determining the generally expected success for Weight Watchers customers, respondent may exclude those customers who dropped out of the program within two weeks of their entrance or who were unable to complete the program due to change of residence or medical reasons, such as pregnancy; and that for endorsements or testimonials about weight loss success, respondent can satisfy the requirements of this subparagraph by accurately disclosing:
or, (2) the limited applicability of the endorser's experience to what consumers may generally expect to achieve; i.e., that consumers should not expect to experience similar results; provided, however, that a truthful statement that merely describes the existence, design, or content of a weight maintenance or weight management program or notes that the program teaches participants how to manage their weight, or which states either through the endorser or in nearby copy that under the program "weight loss maintenance is possible," or words to that effect, will not, without more, be considered for purposes of this paragraph a representation regarding weight loss maintenance success or trigger the need for separate or additional maintenance disclosures required by other paragraphs of the order; provided, further, that:
E. Making comparisons between the efficacy or success of one or more of respondent’s weight loss programs and the efficacy or success of any other weight loss program(s), including but not limited to any other of respondent’s weight loss programs, unless, at the time of making such representation, respondent possesses and relies upon competent and reliable evidence, which when appropriate must be competent and reliable scientific evidence, that substantiates the representation. F. Making any representation, directly or by implication, about the rate or speed at which any participant in any weight loss program has experienced or will experience weight loss, unless true. G. Making any representation, directly or by implication, about the existence, contents, validity, results, conclusions, or interpretations of any test, study, or survey, unless true. H. Making any representation, directly or by implication, about the performance or efficacy of any weight loss program, unless true. II. IT IS FURTHER ORDERED that respondent shall notify the Commission at least thirty (30) days prior to the effective date of any proposed change in the corporate respondent such as dissolution, assignment, or sale resulting in the emergence of a successor corporation(s), the creation or dissolution of subsidiaries, or any other change in the corporation(s) that may affect compliance obligations arising out of this order. III. IT IS FURTHER ORDERED that for three (3) years after the last date of dissemination of any representation covered by this order, respondent, or its successors and assigns, shall maintain and upon request make available to the Federal Trade Commission for inspection and copying: A. All materials that were relied upon in disseminating such representation; and B. All tests, reports, studies, surveys, demonstrations, or other evidence in its possession or control that contradict, qualify, or call into question such representation, or the basis relied upon for such representation, including complaints from consumers. IV. IT IS FURTHER ORDERED that respondent shall, within ten (10) days after the service of this order, distribute a copy of this order to each of its officers, agents, representatives, independent contractors, and employees involved in the preparation and placement of advertisements or promotional materials, and to its regional managers; and distribute to those having point of sale responsibilities under the order, written instructions implementing the point of sale obligations of the orders; and, for a period of five (5) years from the date of service of this order, distribute same to all future such officers, agents, representatives, independent contractors, employees, and regional managers. V. IT IS FURTHER ORDERED that: A. Respondent shall use its best efforts to obtain its weight loss program franchisees’ and licensees’ compliance with this order by doing the following: (1) Respondent shall, within forty-five (45) days after service of this order, distribute a copy of this order to each of its weight loss program franchisees or licensees, return receipt requested; (2) Respondent shall review advertising and promotional materials submitted to it from its franchisees or licensees prior to dissemination and publication to determine compliance with the requirements of this order; (3) Respondent shall notify any franchisee or licensee in writing if any advertising or promotional material does not comply with the requirements of this order and that it should not be disseminated or published; (4) Respondent shall monitor franchisee and licensee advertising and where it finds advertising that has not been submitted to it and which it believes is not in compliance with the requirements of this order, it will notify such franchisee or licensee in writing of its findings and that such advertising should be withdrawn; (5) Respondent shall maintain separate files for each franchisee or licensee containing a copy of the signed receipt and copies of any correspondence relating to any advertising and promotional materials with respect to the issues raised by this order for a period of three (3) years; (6) Upon request, Respondent shall make these files available to the Commission staff for inspection and copying; and (7) Where this order provides for the distribution of documents containing certain information to participants, Respondent shall include such information in “Program” materials which its franchisees or licensees are required to supply to each participant. B. Respondent shall include in all future weight loss program franchise or license agreements with new franchisees or licensees a requirement that the franchisee or licensee operate its business in full compliance with the prohibitions and affirmative requirements imposed on respondent pursuant to Part I of the Commission’s order; provided further, for purposes of this part of the order, the term “new franchisees or licensees” means those who are not franchised or licensed to conduct any weight loss program, or those who do not own or control such franchisees or licensees, at the time the order becomes final. VI. IT IS FURTHER ORDERED that respondent shall, within sixty (60) days after the date of service of this order, file with the Commission a report, in writing, setting forth in detail the manner and form in which it has complied with this order. VII. IT IS FURTHER ORDERED that this order will terminate twenty (20) years from the date of its issuance, or twenty (20) years from the most recent date that the United States or the Federal Trade Commission files a complaint (with or without an accompanying consent decree) in federal court alleging any violation of the order, whichever comes later; provided, however, that the filing of such a complaint will not affect the duration of: A. Any paragraph in this order that terminates in less than twenty (20) years; and B. This order if such complaint is filed after the order has terminated pursuant to this paragraph. Provided further, that if such complaint is dismissed or a federal court rules that the respondent did not violate any provision of the order, and the dismissal or ruling is either not appealed or upheld on appeal, then the order will terminate according to this paragraph as though the complaint was never filed, except that the order will not terminate between the date such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal. Signed this day of , 19 . WEIGHT WATCHERS INTERNATIONAL, INC., a corporation. By Kent Q. Kreh Keith E. Pugh, Jr., Esq. FEDERAL TRADE COMMISSION By Ronald L. Waldman APPROVED: Michael Joel Bloom CONCUR: Joan Z. Bernstein ANALYSIS OF PROPOSED
CONSENT The Federal Trade Commission has accepted an agreement, subject to final approval, to a proposed consent order from Weight Watchers International, Inc.(hereinafter “Weight Watchers” or “respondent”), marketers of the Weight Watchers Weight Loss Program. The Weight Watchers Weight Loss Program is offered to the public nationwide through company-owned and franchised weight loss centers. The proposed consent order has been placed on the public record for sixty (60) days for the 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 any comments received and will decide whether it should withdraw from the agreement and take other appropriate action or make final the agreement's proposed order. The Commission's complaint alleged that the respondent made numerous unsubstantiated representations through consumer testimonials and other advertisements that: (1) its customers are typically successful in reaching their weight loss goals and maintaining their weight loss under respondent's diet program; (2) overweight or obese customers typically are successful in reaching their weight loss goals and maintaining their weight loss either long-term or permanently; and (3) its weight loss programs are superior to other weight loss programs in enabling participants to achieve and maintain weight loss. The complaint further charges that Weight Watchers made false and unsub- stantiated claims that consumers using its “Quick Success” program would lose weight at a faster rate when compared to its earlier programs. The proposed consent order seeks to address the alleged success misrepresentations cited in the accompanying complaint in several ways. First, the proposed order, in Part I.A., requires the company to possess a reasonable basis consisting of competent and reliable scientific evidence when appropriate substantiating any claim about the success of participants on any diet program in achieving or maintaining weight loss. To ensure compliance, the proposed order further specifies what this level of evidence shall consist of when certain types of success claims are made: (1) In the case of claims that weight loss is typical or representative of all participants using the program or any subset of those participants, that evidence shall be based on a representative sample of: (a) all participants who have entered the programs where the representation relates to such persons; or (b) all participants who have completed a particular phase of the program or the entire program, where the representation only relates to such persons. (2) In the case of claims that any weight loss is maintained long-term, that evidence shall be based upon the experience of participants who were followed for a period of at least two years after their completion of the respondents’ program, including any periods of participation in respondent’s maintenance program. (3) In the case of claims that weight loss is maintained permanently, that evidence shall be based upon the experience of participants who were followed for a period of time after completing the program that is either: (a) generally recognized by experts in the field of treating obesity as being of sufficient length to constitute a reasonable basis for predicting that weight loss will be permanent; or (b) demonstrated by competent and reliable survey evidence as being of sufficient duration to permit such a prediction. Second, Part I.B. of the proposed order requires the respondent, when making any claim that participants of any diet program have successfully maintained weight loss, to disclose the fact that “For many dieters, weight loss is temporary.” In addition, Part I.C. requires respondent to disclose the following information relating to that claim: (1) the average percentage of weight loss maintained by those participants (e.g., “60% of achieved weight loss was maintained”), (2) the duration over which the weight loss was maintained, measured from the date that participants ended the active weight loss phase of the program, and the fact that all or a portion of the time period covered includes participation in respondent’s maintenance program(s) that follows active weight loss, if that is the case (e.g., “Participants maintain an average of 60% of weight loss 22 months after active weight loss (includes 18 months on a maintenance program)),” and (3) the proportion of the total participant population that those participants represent, if the participant population referred to is not representative of the general participant population for that program (e.g., “Participants on maintenance -- 30% of our clients -- kept off an average of 66% of the weight for one year (includes time on maintenance program)).” (In lieu of that factual disclosure, respondent may state: “Weight Watchers makes no claim that this result is representative of all participants in the Weight Watchers program).” However, if Weight Watchers makes a representation about weight loss maintenance that does not use a number or percentage, or descriptive terms that convey a quantitative measure such as “We have a successful weight management program,” then in lieu of the above disclosures it may make in connection with such representation the statement “Check at our centers for details about our maintenance record.” Weight Watchers would then be required to make the required maintenance information disclosures, in a printed document that is distributed to consumers at weight loss centers in accordance with the procedures set forth in Appendix A of the proposed order. The proposed order specifies that consumers must acknowledge receipt of this document and that it must be signed by the client and retained in the customers record of service for three years. Third, Part I.D. of the proposed order addresses advertisements containing an endorsement or testimonial about weight loss success or weight loss maintenance when those claims are not representative or “typical” of what Weight Watchers participants generally achieve. Part I.D. requires Weight Watchers, when employing such “atypical” weight loss success or weight loss maintenance testimonials, to disclose either (1) what the generally expected success would be for Weight Watchers customers; or (2) the limited applicability of the endorser’s experience to what consumers may generally expect to achieve. Part I.D. of the proposed order addresses advertisements containing an endorsement or testimonial about weight loss success or weight loss maintenance when those claims are not representative or “typical” of what Weight Watchers participants generally achieve. In accordance with the principles set out in the Endorsement Guides, Part I.D. would require Weight Watchers, when employing such “atypical” weight loss success or weight loss maintenance testimonials, to disclose either (1) what the generally expected success would be for Weight Watchers customers (Part I.D.(1)); or (2) the limited applicability of the endorser’s experience to what consumers may generally expect to achieve (Part I.D.(2)). For weight loss testimonials Part I.D. of the proposed order permits Weight Watchers to accurately make the “generally expected success” disclosure in one of two ways. First, the company may state, in the relevant advertisement, “Weight loss averages (number) lbs. over weeks.” Alternatively, Part I.D. of the proposed order permits Weight Watchers to disclose in the relevant advertisement “Average weight loss (number) lbs. More details at centers.” Required disclosures that are made at centers--which are described in Appendix B of the proposed order--may be made either in the introductory brochure or in a separate document entitled “Weight Loss Information.” The proposed order makes clear that the alternative disclosures requirement contained in Parts I.C. and D. do not relieve Weight Watchers of the obligation to substantiate any maintenance success claim in accordance with Part I.A. of the proposed order. Other Proposed Order Relief Part I.E. of the proposed order prohibits unsubstantiated comparative efficacy claims. It would require that Weight Watchers not make comparisons between the efficacy or success of one or more of its weight loss programs and the efficacy or success of any other weight loss program(s) unless it possesses and relies upon competent and reliable evidence, which when appropriate must be competent and reliable scientific evidence, that substantiates the representation. Part I.F. of the proposed order covers rate of weight loss claims. It requires Weight Watchers to cease and desist from making any representation, directly or by implication, about the rate or speed at which any participant in any weight loss program has experienced or will experience weight loss, unless true. Part I.G. of the proposed order would require Weight Watchers to cease and desist from making any representation, directly or by implication, about the existence, contents, validity, results, conclusions, or interpretations of any test, study, or survey, unless true. Part I.H. of the proposed order is fencing-in relief which would require Weight Watchers to cease and desist from making any representation, directly or by implication, about the performance or efficacy of any weight loss program, unless true. Part II. of the proposed order would require Weight Watchers to notify the Commission of certain changes in the corporate respondent. Part III. of the proposed order would require Weight Watchers, for a period of three years after date of last dissemination of any representation covered by the order, to maintain and make available to the FTC materials relied upon in disseminating such representation and any evidence that contradicts or qualifies such representation. Part IV. of the proposed order covers the distribution of the order to designated current and future persons. The order must be distributed to regional managers and those having point-of-sale responsibilities under the order as well as key individuals involved in the placement of advertisements. Part V. of the proposed order covers the efforts Weight Watchers shall use to obtain its weight loss program franchisees’ and licensees’ (“franchisees”) compliance with the order. Weight Watchers is required under Part V., among other things, to: (1) distribute a copy of this order to each of its weight loss program franchisees or licensees within forty-five days after service of the order; (2) review advertising and promotional materials submitted to it from its franchisees or licensees prior to dissemination and publication to determine compliance with the requirements of the order; (3) notify any franchisee or licensee in writing if any advertising or promotional material does not comply with the requirements of the order and that it should not be disseminated or published; (4) monitor franchisee and licensee advertising and where it finds advertising that has not been submitted to it and which it believes is not in compliance with the requirements of the order, to notify such franchisee or licensee in writing of its findings and that such advertising should be withdrawn; (5) maintain separate files for each franchisee or licensee containing a copy of the signed receipt and copies of any correspondence relating to any advertising and promotional materials with respect to the issues raised by the order for a period of three (3) years; (6) make these files available to the Commission staff for inspection and copying; and (7) where the order provides for the distribution of documents containing certain information to participants, to include such information in “Program” materials which its franchisees or licensees are required to supply to each participant. In addition, subparagraph B. of Part V. requires Weight Watchers to include in all future weight loss program agreements with new franchisees or licensees a requirement that the franchisee or licensee operate its business in full compliance with the prohibitions and affirmative requirements imposed on respondent pursuant to Part I. of the Commission’s order. This part of the order defines “new franchisees or licensees” to mean those who are not franchised or licensed to conduct any weight loss program, or those who do not own or control such franchisees or licensees, at the time the order becomes final. Part VI. of the proposed order would require Weight Watchers to file a compliance report with the Commission within sixty days after the date of service of this order. Part VII. of the proposed order is a sunset provision that indicates, in part, that this order will terminate twenty years from the date of its issuance. The purpose of this analysis is to facilitate public comment on the proposed order, and it is not intended to constitute an official interpretation of the agreement and proposed order, or to modify in any way their terms. |