Announced Actions for March 12, 2004

BCP Director Beales addresses proposed restrictions on food ads to children: Remarks of Howard Beales, Director of the FTC's Bureau of Consumer Protection, at the 2004 Antitrust and Consumer Protection Symposium sponsored by the George Mason University Law Review, examined the FTC's experience in the 1970's with a proposed ban on advertising to children and the lessons to be learned from it.

In 1978, the Commission initiated a rulemaking known as "kidvid" to consider a ban on advertising to children too young to understand the selling purpose of advertising, as well as a ban on TV ads to kids 12 and under for the foods most likely to cause tooth decay. The FTC ultimately terminated the rulemaking due to the legal and practical limitations of the proposed restrictions.

Beales' remarks emphasized that the Commission's experience in the kidvid rulemaking was that bans on advertising foods to children raise significant constitutional issues, as well as practical implementation problems, while doing little to advance the goal of reducing childhood tooth decay. Government should focus on other more-effective efforts to reduce obesity, such as promoting competition for more healthy food products among food manufacturers, according to the remarks. (The staff contact is Mary Engle, Bureau of Consumer Protection, 202-326-3161.

Announcement of default judgment: On February 9, 2004, the United States District Court for the District of Nevada granted the Commission's motion for default judgment against two defendants in the Commission's action against the marketers of the AbTronic, the electrical muscle stimulation device that the defendants claimed would cause users to lose inches and obtain "washboard" abdominal muscles. (FTC v. Hudson Berkley Corp., et al. (CV-S-02-0649-PMP-RJJ) (D. Nev.)). The order permanently enjoins Oliver Braun and CCI Cad Cam Industries Ltd., Inc. (also known as Cad Cam Industries Ltd. and Cad Cam Industries (HK) Limited) from claiming: 1) that the AbTronic causes the loss of inches, fat, or cellulite; 2) that the AbTronic causes muscle growth or promotes well-defined abdominal muscles; 3) that use of the AbTronic is equivalent to or superior to abdominal or thigh exercises; 4) that a University of Maryland study cited in the AbTronic infomercial proves that the AbTronic increases abdominal strength better than exercise alone; and 5) that the AbTronic is safe for use over the chest area. The order also holds the defendants jointly and severally liable for $83 million, which represents the value of net sales of the AbTronic product to United States consumers. The order requires the defendants to repatriate and provide to the FTC those assets and all assets held abroad, and requires all third parties holding funds for defendants to turn those assets over to the Commission. On July 1, 2003, the court granted the Commission's motion for partial summary against the five other defendants in this case.

With the entry of the court's February order, all seven of the defendants in the AbTronic case are subject to permanent injunctive provisions and are jointly and severally liable for $83 million. The AbTronic matter was one of three cases the Commission filed in 2002 against marketers who claimed their electrical muscle stimulation devices would give users well-defined, "washboard" or "six-pack" abdominal muscles. (See press release dated May 9, 2002. The staff contact is Edward Glennon, 202-326-3126.

Copies of the documents mentioned in this release are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.