Re: Home Shopping Network, Inc. et al., Docket No. 9272


I reluctantly join my colleagues in voting to accept the consent decree in this matter. I write separately to emphasize my concerns.

My overriding concern is the size of the civil penalty given the conduct alleged here. I find the $1.1 million civil penalty amount to be barely adequate. Home Shopping Network and its subsidiaries ("HSN") are recidivists. The Commission instituted a suit against HSN in 1995, alleging that HSN had made various unsubstantiated product efficacy claims. Prior to trial, that matter was settled by a consent order which became final in 1996. Among other things, the order requires HSN to have substantiation for all efficacy claims regarding food and drug products. Only two years later, HSN is again before us, and is again facing allegations that it has made multiple unsubstantiated product efficacy claims. Indeed, these allegations give me reason to question whether HSN took its obligations under the 1996 order seriously. Parties cannot escape the requirements of Commission orders by claiming "good faith" incompetence in attempting to comply. Substantial penalties are warranted for parties that fail to reform their conduct and to live up to their obligations under the Commission's consent orders.

Further, a larger civil penalty may have been warranted here to deter future unsubstantiated claims by HSN and other advertisers. Civil penalties and other remedial impositions cannot be a mere cost of doing business. If false claims are profitable even in the wake of penalties, advertisers will continue to make such claims.

I applaud the FTC staff's diligence in monitoring HSN's compliance with the 1996 order and urge continued diligence with respect to HSN and all other parties under order.

Despite my concerns, weighing all of the evidence and factors before me, I am willing to accept the settlement in this case.