UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION

In the Matter of

ASHLAND, INC., a corporation.

FILE NO. 962-3072

AGREEMENT CONTAINING
CONSENT ORDER TO CEASE AND DESIST

The Federal Trade Commission having initiated an investigation of certain acts and practices of Ashland, Inc., a corporation ("respondent"), and it now appearing that respondent is willing to enter into an agreement containing an order to cease and desist from the acts and practices being investigated,

IT IS HEREBY AGREED by and between Ashland, Inc., a corporation, by its duly authorized officer, and counsel for the Federal Trade Commission, that:

1. Respondent Ashland, Inc., is a Kentucky corporation, with its office and principal place of business located at 1000 Ashland Drive, Russell, KY 41169.

2. Respondent admits all the jurisdictional facts set forth in the draft complaint here attached.

3. Respondent waives:

a. any further procedural steps;
 
b. the requirement that the Commission's decision contain a statement of findings of fact and conclusions of law; and
 
c. all rights to seek judicial review or otherwise to challenge or contest the validity of the order entered pursuant to this agreement.

4. 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, together with the draft of complaint contemplated thereby, will be placed on the public record for a period of sixty (60) days and information in respect thereto publicly released. The Commission thereafter may either withdraw its acceptance of this agreement and so notify the proposed respondent, in which event it will take such action consistent with law as it may consider appropriate, or issue and serve its complaint (in such form as the circumstances may require) and decision, in disposition of the proceeding.

5. This agreement is for settlement purposes only and does not constitute an admission by respondent that the law has been violated as alleged in the draft complaint, or that the facts as alleged in the draft complaint, other than the jurisdictional facts asserted in Paragraphs One through Three, are true.

6. This agreement contemplates that, if it is accepted by the Commission, and if such acceptance is not subsequently withdrawn by the Commission pursuant to the provisions of  2.34 of the Commission's Rules, the Commission may, without further notice to proposed respondent, (1) issue its complaint corresponding in form and substance with the draft of complaint here attached and its decision containing the following order to cease and desist in disposition of the proceeding and (2) make information public in respect thereto. When so issued, the order to cease and desist 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 mailing of the complaint and decision containing the agreed-to order to proposed respondents' address as stated in this agreement 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, and no agreement, understanding, representation, or interpretation not contained in the order or the agreement may be used to vary or contradict the terms of the order.

7. Respondent has read the proposed complaint and order contemplated hereby. It understands that once the order has been issued, it will be required to file one or more compliance reports showing that it has fully complied with the order. Respondent further understands that it may be liable for civil penalties in the amount provided by law for each violation of the order after it becomes final.

ORDER

Definitions

For purposes of this order, the following definitions shall apply:

"Engine treatment" shall mean packaged chemical ingredients sold to consumers as a supplement to fully-formulated motor oil in a vehicle's engine and as having the capacity to affect the engine or the engine's performance even after a subsequent oil change.

"Competent and reliable scientific evidence" shall mean tests, analyses, research, studies, or other evidence based on the expertise of professionals in the relevant area that has 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.

I.

IT IS ORDERED that respondent Ashland, Inc., a corporation, its successors and assigns, and its officers, agents, representatives, and employees, directly or through any corporation, subsidiary, division or other device, in connection with the manufacturing, advertising, labeling, packaging, offering for sale, sale, or distribution of Valvoline TM8 Engine Treatment or any other engine treatment, in or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

A. Making any representation, in any manner, directly or by implication:

1. That such product bonds polytetrafluoroethylene, Teflon, or any other substance to engine parts;
 
2. That, compared to motor oil alone, such product:
 
a) Reduces engine wear.
 
b) Reduces camshaft bearing wear by up to 75%, or by any other amount.
 
c) Reduces main bearing wear by up to 75%, or by any other amount.
 
d) Under high temperature conditions experienced by engines, provides twice as much, or any other incremental degree, of wear protection.
 
e) Extends the duration of engine life.
 
f) Improves fuel economy;
3. That one or any other number of treatments of such product lasts for 50,000 or any other number of miles; or
 
4. Regarding the performance or attributes of such product, 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.

B. Misrepresenting, in any manner, directly or by implication, the existence, contents, validity, results, conclusions, or interpretations of any test or study.

II.

IT IS FURTHER ORDERED that, for five (5) years after the last date of dissemination of any representation covered by this order, respondent, its successors and assigns, shall maintain and upon request make available to the Federal Trade Commission for inspection and copying:

A. All labeling, packaging, advertisements and promotional materials setting forth any representation covered by this order;

B. All materials that were relied upon to substantiate any representation covered by this order; and

C. All tests, reports, studies, surveys, demonstrations or other evidence in their possession or control that contradicts, qualifies, or calls into question such representation or the basis upon which respondent relied for such representation, including complaints from consumers or governmental entities.

III.

IT IS FURTHER ORDERED that respondent, its successors and assigns, shall notify the Federal Trade Commission at least thirty (30) days prior to any proposed change in the respondent such as dissolution, assignment, or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries, or any other change in the corporation which may affect compliance obligations arising under this order.

IV.

IT IS FURTHER ORDERED that respondent, its successors and assigns, shall forthwith distribute a copy of this order to each of its operating divisions and to each of its officers, agents, representatives, or employees engaged in the preparation and placement of advertisements, promotional materials, product labels or other such sales materials covered by this order, and shall obtain from each such person or entity a signed statement acknowledging receipt of the order.

V.

IT IS FURTHER ORDERED that this order will terminate twenty years from the date of its issuance, or twenty 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 years;

B. This order's application to any respondent that is not named as a defendant in such complaint; and

C. 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 had never been 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.

VI.

IT IS FURTHER ORDERED that respondent, its successors and assigns, shall, within sixty (60) days after 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 or intends to comply with this order.

Signed this ________ day of ______________, 199__.

Ashland, Inc., a corporation,

By: ________________________________________
Alan J. Hruska
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Ave.
New York, NY 10019-7475
Attorneys for Respondent

________________________________________
Robert M. Frisby
Counsel for the Federal Trade Commission

________________________________________
Jonathan Cowen
Counsel for the Federal Trade Commission

APPROVED:

______________________________
Mary Koelbel Engle
Assistant Director
Division of Enforcement
Bureau of Consumer Protection

______________________________
Elaine D. Kolish
Associate Director
Division of Enforcement
Bureau of Consumer Protection

______________________________
Joan Z. Bernstein
Director
Bureau of Consumer Protection


UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION

In the Matter of

ASHLAND, INC., a corporation.

DOCKET NO.

COMPLAINT

The Federal Trade Commission, having reason to believe that Ashland, Inc., a corporation, has violated the provisions of the Federal Trade Commission Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, alleges:

PARAGRAPH ONE: Respondent Ashland, Inc., is a Kentucky corporation, with its office and principal place of business located at 1000 Ashland Drive, Russell, KY 41169.

PARAGRAPH TWO: Respondent has manufactured, advertised, promoted, offered for sale, sold and distributed Valvoline TM8 Engine Treatment ("TM8"), an aftermarket motor oil additive or engine treatment containing various chemicals, including Teflon brand polytetrafluoroethylene ("Teflon"), blended in a fully formulated motor oil.

PARAGRAPH THREE: The acts and practices of respondent alleged in this complaint have been in or affecting commerce, as "commerce" is defined in Section 4 of the Federal Trade Commission Act.

PARAGRAPH FOUR: Respondent has disseminated or has caused to be disseminated advertisements for TM8, including, but not necessarily limited to, the attached Exhibits A-F. These advertisements contain the following statements and visual depictions:

A. A television advertisement for TM8:

Video: Visual depiction of TM8 coating internal engine parts.

Announcer: TM8 coats moving parts with eight friction-fighting ingredients including teflon.

(Exhibit A)

B. A radio advertisement for TM8:

Over time, stop and go driving creates deposits that rob your engine of performance, and shorten its life. That's why there is TM8 with teflon, a new engine treatment from Valvoline. TM8 reduces engine wear by coating moving parts with eight friction fighting ingredients.

(Exhibit B)

C. A magazine advertisement for TM8:

Engines don't die from old age. They wear out. And in terms of wear, the most grueling kind of driving is stop-and-go driving. . . . That's why there's TM8, a new engine treatment with Teflon from Valvoline. TM8's 8 friction-fighting ingredients chemically bond to moving parts, protecting your engine even at start-up. In fact, under high operating temperatures, motor oil treated with TM8 offers twice the protection.

(Exhibit C)

D. A TM8 coupon leaflet:

[T]here is something you can do to reduce wear and tear on your engine: Add a quart of TM8 Engine Treatment during your next oil change.

. . .

CAMSHAFT BEARING WEAR

[Chart]

REDUCE WEAR BY UP TO 75%. TM8 helps protect your car's vital engine parts from the demands of "Stop and Go" driving, reducing camshaft bearing wear by as much as 75 percent compared to conventional oil.

MAIN BEARING WEAR WEIGHT LOSS (AVERAGE)

[Chart]

REDUCE WEAR BY UP TO 75%. TM8 protects engines during "Stop and Go" driving, reducing main bearing wear by as much as 75 percent compared to conventional oil.

(Exhibit D)

E. Valvoline Web page on the Internet:

TM8 is a blend of eight scientifically formulated components - including DuPont's TEFLON fluoroadditive - that chemically bond to engine surfaces, reducing engine friction and wear.

. . .

"We've found scientific evidence in laboratory experiments and in a variety of engines that TM8 provides significant additional protection."

. . .

Main Bearing Wear Weight Loss (Average)

[Chart]

REDUCE WEAR BY UP TO 75%.

Camshaft Bearing Wear

[Chart]

REDUCE WEAR BY UP TO 75%.

. . .

We spent a great deal of time testing the existing products and experimenting with our own formulations to determine what worked and what didn't. Through extensive testing, we developed TM8. Our research shows that TM8:

• protects the engine during "Stop and Go" driving
• gives engine oil up to twice the protection in high temperature conditions
• improves fuel economy
• protects engine at start-up, especially at low temperatures

. . .

TM8 is designed to be used at least once every 50,000 miles. For optimum results, an engine may be re-treated with TM-8 once a year.

(Exhibit E)

F. TM8 product packaging:

TM8 ENGINE TREATMENT WITH TEFLON Fluoroadditive

TREATS THE ENGINE, NOT THE OIL

• Protects engine during "Stop and Go" driving

• Gives engine oil up to twice the protection in high temperature conditions

• Improves fuel economy

• Protects engine at start-up, especially at low temperatures

• Compatible with all motor oils

A blend of eight scientifically formulated components that chemically bond to critical engine surfaces, reducing friction and engine wear.

. . .

4. Treat your engine with TM-8 Engine Treatment at least every 50,000 miles. For optimal results, re-treat your engine with TM-8 Engine Treatment once a year.

(Exhibit F)

PARAGRAPH FIVE: Through the use of the statements and visual depictions contained in the advertisements and promotional materials referred to in PARAGRAPH FOUR, including, but not necessarily limited to, the advertisements and promotional materials attached as Exhibits A-F, respondent has represented, directly or by implication, that:

A. TM8 bonds Teflon to engine parts.

B. Compared to motor oil alone, TM8:

1. Reduces engine wear.
 
2. Reduces camshaft bearing wear by up to 75%.
 
3. Reduces main bearing wear by up to 75%.
 
4. Under high temperature conditions experienced by engines, provides twice as much wear protection.
 
5. Extends the duration of engine life.
 
6. Improves fuel economy.

C. One treatment of TM8 lasts for 50,000 miles.

PARAGRAPH SIX: Through the use of the statements and depictions contained in the advertisements and promotional materials referred to in PARAGRAPH FOUR, including, but not necessarily limited to, the advertisements and promotional materials attached as Exhibits A-F, respondent has represented, directly or by implication, that at the time it made the representations set forth in PARAGRAPH FIVE, respondent possessed and relied upon a reasonable basis that substantiated such representations.

PARAGRAPH SEVEN: In truth and in fact, at the time it made the representations set forth in PARAGRAPHS FIVE, respondent did not possess and rely upon a reasonable basis that substantiated such representations. Therefore, the representation set forth in PARAGRAPH SIX was, and is, false and misleading.

PARAGRAPH EIGHT: Through the use of the statements and visual depictions contained in the advertisements and promotional materials referred to in PARAGRAPH FOUR, including, but not necessarily limited to, the advertisement attached as Exhibit E, respondent has represented, directly or by implication, that tests prove that, compared to motor oil alone, TM8:

A. Reduces camshaft bearing wear by up to 75%.

B. Reduces main bearing wear by up to 75%.

C. Under high temperature conditions experienced by engines, provides twice as much wear protection.

D. Improves fuel economy.

PARAGRAPH NINE: In truth and in fact, tests do not prove that, compared to motor oil alone, TM8:

A. Reduces camshaft bearing wear by up to 75%.

B. Reduces main bearing wear by up to 75%.

C. Under high temperature conditions experienced by engines, provides twice as much wear protection.

D. Improves fuel economy.

Therefore, the representations set forth in PARAGRAPH EIGHT were, and are, false and misleading.

PARAGRAPH TEN: The acts and practices of respondent as alleged in this Complaint constitute unfair or deceptive acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act.

THEREFORE, the Federal Trade Commission this day of , 199 , has issued this complaint against respondent.

By the Commission.

Donald S. Clark
Secretary

[Exhibits A-F attached to paper copies of complaint, but not available in electronic form.]


ANALYSIS OF PROPOSED CONSENT ORDER
TO AID PUBLIC COMMENT

The Federal Trade Commission has accepted, subject to final approval, an agreement to a proposed consent order from Ashland, Inc. ("Ashland"). The agreement would settle a proposed complaint by the Federal Trade Commission that Ashland engaged in unfair or deceptive acts or practices in violation of Section 5(a) of the Federal Trade Commission Act.

The proposed consent order has been placed on the public record for sixty (60) days for 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 the comments received and will decide whether it should withdraw from the agreement or make final the agreement's proposed order.

This matter concerns advertising practices related to the sale of Valvoline TM8 Engine Treatment ("TM8"). The proposed complaint charges that, through the use of statements contained in its advertisements and promotional materials, Ashland made the following unsubstantiated representations: (1) TM8 bonds Teflon to engine parts; (2) Compared to motor oil alone, TM8: reduces engine wear; reduces camshaft bearing wear by up to 75%; reduces main bearing wear by up to 75%; under high temperature conditions experienced by engines, provides twice as much wear protection; extends the duration of engine life; and improves fuel economy; and (3) One treatment of TM8 lasts for 50,000 miles. Lastly, the proposed complaint alleges that Ashland falsely represented that tests prove that, compared to motor oil alone, TM8: reduces camshaft bearing wear by up to 75%; reduces main bearing wear by up to 75%; under high temperature conditions experienced by engines, provides twice as much wear protection; and improves fuel economy.

The proposed consent order contains provisions designed to prevent Ashland from engaging in similar acts and practices in the future. Part I of the proposed order prohibits Ashland from making any representation about the performance or attributes of any engine treatment unless, at the time it makes the representation, Ashland possesses and relies upon competent and reliable evidence, which when appropriate must be scientific evidence, that substantiates the representation. Part I also prohibits Ashland from misrepresenting the results of tests or studies.

The proposed order also contains standard provisions regarding record-keeping, notification of changes in corporate status, distribution of the order, termination of the order, and the filing of a compliance report.

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 the proposed order or to modify their terms in any way.