Part III Administrative Complaints
Competition Mission
Competition Mission (Summary)

Competition Mission (Detail)

Toys R Us, Inc.

The Commission issued an administrative complaint charging that Toys R Us, the nation's largest toy retailer, used its market power to keep toy prices higher and reduce toy outlet choices for consumers. The complaint alleged that Toys R Us extracted agreements from toy manufacturers to (1) stop selling certain toys to warehouse clubs, (2) put toys into more expensive combination packages, and (3) tell Toys R Us in advance what items they planned to sell to the clubs. The complaint further alleged that as a result of these practices, consumers could not obtain lower priced toys from clubs and could not compare prices easily.

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Part III Administrative Complaints
Consumer Protection Mission

Consumer Protection Mission (Summary)

Consumer Protection Mission (Detail)

Ciba-Geigy Corporation; Ciba Self-Medication, Inc.

The Commission issued an administrative complaint alleging that Ciba-Geigy and Ciba Self-Medication, marketers of Doan's Pills, did not have evidence to back up advertising claims that this pain reliever was more effective in relieving back pain than other over-the-counter analgesics. The Commission is seeking an order that will prohibit the respondents from making such claims without reliable scientific evidence and that may require corrective advertising. The advertising agency for Doan's Pills reached a separate settlement with the Commission in connection with its role in some of the challenged advertising (see ­ Jordan, McGrath, Case & Taylor, Inc.).

Exxon Corporation

The Commission issued an administrative complaint alleging that Exxon misled consumers by making unsubstantiated advertising claims for its gasoline. The advertisements allegedly claimed that switching to Exxon gasolines generally ­ or to Exxon 93 Supreme specifically ­ would make engines cleaner and would significantly reduce automobile maintenance costs. According to the Commission, Exxon failed to substantiate these claims. The Commission is seeking an order to require the company to have scientific support for future claims about the benefits of its gasolines.

Quaker State-Slick 50, Inc.; Slick 50 Corp.;
Slick 50 Management, Inc.; Slick 50 Products Corp.

The Commission issued an administrative complaint alleging that Quaker State and three subsidiaries made false and unsubstantiated claims in advertising for Slick 50, the best selling automobile engine treatment in the United States. The advertisements claimed that Slick 50 improved engine performance, reduced engine wear, lengthened engine life, and provided a host of other benefits compared with motor oil alone. The Commission is seeking an order to prohibit future misrepresentations and to require that claims be backed by competent and reliable evidence.

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Part III Consent Orders Issued
Consumer Protection Mission

Consumer Protection Mission (Summary)

Consumer Protection Mission (Detail)

Home Shopping Network, Inc.; Home Shopping Club, Inc.;
HSN Lifeway Health Products, Inc.

Home Shopping Network and two of its subsidiaries settled allegations of deceptive advertising for four mouth sprays ­ three vitamin sprays and a stop-smoking spray. The sprays were promoted and sold via interactive television shopping programs. According to the Commission, the respondents made a number of health-related claims for the sprays without evidence to support them. Under the consent order, the respondents must secure scientific evidence to back up claims that any food, supplement, or drug can treat a disease or affect a function of the body. A separate settlement was made with the actress who made the claims on television and her production company (see ­ Live-Lee Productions, Inc.).

National Dietary Research, Inc.; William H. Morris Company, The; William H. Morris

The Commission approved a consent order with two companies and their owner, settling allegations that they made false and unsubstantiated claims for two products purported to promote weight loss and reduce cholesterol. Under the order, the respondents are required to pay $100,000, to be used for consumer refunds if practical or to be deposited in the U.S. Treasury. The order also prohibits the respondents from making false or unsubstantiated claims about their products and programs in the future, including claims about weight loss or health benefits, dietary constituents, test results, and testimonials.

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Initial Decisions
Consumer Protection Mission

Consumer Protection Mission (Summary)

Consumer Protection Mission (Detail)

RustEvader Corporation (a/k/a Rust Evader Corporation, d/b/a REC Technologies);
David F. McCready

An Administrative Law Judge issued an initial decision prohibiting RustEvader and its president from using the names "Rust Evader" or "Rust Buster" for a purported electronic corrosion-control device for automobiles that the judge said is not effective in substantially reducing corrosion, despite the company's advertising campaign to the contrary. The Commission alleged that RustEvader made false claims about this product and about a demonstration and studies regarding its efficacy. The judge's decision prohibits RustEvader from using the two brand names, from misrepresenting the performance, efficacy, or attributes of any automotive product, and from conditioning warranty coverage on the purchase of certain brand-named or trade-named products or services.

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Final Orders
Competition Mission

Competition Mission (Summary)

Competition Mission (Detail)

California Dental Association

A Commission decision upheld an administrative complaint that alleged that the California Dental Association interfered with its members' use of truthful and nondeceptive advertising to promote the price, quality, and availability of dental services. The order, which upholds the 1995 initial decision of an Administrative Law Judge, prohibits such practices in the future and requires the Association to update its Code of Ethics to remove any language that does not agree with the provisions of the order. The order, however, does not prohibit the Association from enacting ethical guidelines to regulate false and misleading advertising of dental services or members' solicitation of patients vulnerable to undue influence.

Harper & Row Publishers, Inc.; Hearst Corporation, The; Macmillan, Inc.;
Putnam Berkley Group, Inc., The; Random House, Inc.; Simon & Schuster, Inc.

The Commission dismissed separate administrative complaints against six book publishers, ruling that changes in the book distribution industry have corrected the alleged price discrimination practices specified in the 1988 complaints. The complaints had charged that the publishers used unfair methods of competition by engaging in discriminatory pricing practices and services in the sale of trade books and mass-market paperbacks.

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Final Orders
Consumer Protection Mission

Consumer Protection Mission (Summary)

Consumer Protection Mission (Detail)

Dillard Department Stores, Inc.

The Commission dismissed its complaint against Dillard, ending a case in which it had alleged that Dillard made it unreasonably difficult for consumers to remove unauthorized charges from their charge card bills. The Commission dismissed the complaint in light of a standard recently issued by the Federal Reserve Board, which deals with investigating claims of unauthorized credit card use. The Commission stated that because the new standard appears to differ from the standard reflected in the complaint, it would not be in the public interest to continue the case.

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