United States of America
Federal Trade Commission
Washington D.C. 20580

Division of Enforcement
Bureau of Consumer Protection

Elaine D. Kolish
Associate Director

April 1, 2002

Teigue Thomas, Esq.
Staff Counsel for Marketing and Compliance
Gateway Law Department
14303 Gateway Place
Poway, CA 92064

Re: Gateway, Inc., FTC Docket No. C-4015

Dear Ms. Thomas:

The Division of Enforcement staff has completed its review of Gateway's submissions dated September 21, 2001, December 21, 2001, February 8, 2002, March 28, 2002, and March 29, 2002 which Gateway has filed to show the manner and form of its compliance with the order referenced above issued on June 22, 2001.

The staff has determined that some of Gateway's advertisements for one year of free Internet access through America Online in connection with the sale of certain Gateway computers violate Part III of the order because they do not contain all of the disclosures required by Part III or because the disclosures are not clear and conspicuous. Accordingly, staff is rejecting he following attachments to Gateway's submissions:

Exh. 1 point of purchase displays: the two in-store banners;  

Exh. 2 newspapers: ads entitled "Price Wars? You won" and "A little bit of country, A little bit of rock and roll;"  

Exh. 2 free standing newspaper inserts: ads entitled "Experience true freedom," "Hot back-to-school deals inside," and "Experience life at your own pace;"  

Exh. 2 magazines: all ads in July 2001 and August 2001 issues;  

Exh. 2 product guides and periodicals: the June 2001 Gateway Guide;  

Exh. 4 Gateway Country Store In-Store Manager Specials and In-Store Configurations, direct mail ads, and welcome kits that fail to warn consumers to check with their local phone companies;  

Exh. 5 faxable ads: all ads prior to July 9, 2001.

Gateway, however, has advised staff that it has ceased disseminating or has revised all of the above advertising.

Staff has concluded, on the assumption that the information submitted is accurate and complete, that no compliance action is indicated at this time. We will not be precluded, however, from recommending to the Commission an appropriate action if the submitted information is inaccurate or incomplete or if Gateway violates the terms of the order. Please be advised that the opinions expressed in this letter are those of the staff and not necessarily those of the Commission or of any Commissioner. You will be advised of the General Counsel's determinations concerning Gateway's request for confidential treatment of certain documents by separate letter.

Sincerely,

Elaine D. Kolish
Associate Director for Enforcement

cc:
Christine Varney, Esq.
Hogan & Hartson, L.L.P.
555 13th Street, N.W.
Washington, D.C. 20004