9823107

The Federal Trade Commission, having reason to believe that Shell Oil Company, a corporation, and Shell Chemical Company, a corporation ("respondents"), have violated the provisions of the Federal Trade Commission Act, and it appearing to the Commission that this proceeding is in the public interest, alleges:

1. Respondent Shell Oil Company ("Shell Oil") is a Delaware corporation. Respondent Shell Chemical Company ("Shell Chemical") is a Delaware corporation and a wholly owned subsidiary of Shell Oil. Shell Oil and Shell Chemical have their principal offices or places of business at One Shell Plaza, 910 Louisiana Street, Houston, TX 77002-4916. Shell Oil controls the acts and practices of its subsidiary Shell Chemical.

2. Respondents have manufactured, tested, advertised, offered for sale, sold, and distributed motor vehicle gasoline additives, including the VEKTRON™ 3000 series of gasoline additives. This series of additives contains the active ingredient polyether pyrolidone ("PEP"), a molecule patented for use in gasoline additives. Respondents have advertised and sold these additives to trade customers for use in their fuel system treatment products. The trade customers who have purchased these additives include Castrol North America Automotive, Inc. ("Castrol") and Blue Coral/Slick 50, Inc. ("Blue Coral/Slick 50"). Castrol and Blue Coral/Slick 50 have marketed fuel system treatment products containing respondents' additives as their active ingredient to the public under the brand names Castrol Syntec Power System and Slick 50 Synchron Premium Octane Treatment, respectively.

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

4. Respondents have promoted their PEP-containing additives to trade customers through their Internet website, advertisements in trade publications, and a promotional videotape, among other means, including the attached Exhibits A through D. These materials have been provided to trade customers, including Castrol and Blue Coral/Slick 50, and contain the following statements and depictions:

A. VEKTRON™ 3000

Gasoline Additives

Tests Confirm revolutionary additive's unique performance advantages.

To demonstrate that VEKTRON™ 3000 additized gasoline returns power to engines equipped with knock sensors, we conducted field acceleration tests using a runway at the Westheimer Airport in Houston, Texas. . . . The results: all of the test cars with gasoline containing VEKTRON™ 3000 Additive performed better in every acceleration range versus those run on base fuel with EPA-grade additive. . . . After running the cars with VEKTRON™ 3000 Additive, acceleration was improved by .6 seconds and 32 feet, roughly two car lengths faster. . . . VEKTRON™ 3000 Gasoline Additive is based on a revolutionary new technology that has proven to provide superior performance: returning power to engines. . . .

[Exhibit A: Internet Advertisement]

B. VEKTRON™ 3000

Gasoline Additives

A Revolutionary New Advancement In Gasoline Additive Technology

* * * *

ACCELERATION

In vehicles fitted with electronic knock sensors, the use of VEKTRON™ 3000 Additive technology can provide power and acceleration benefits unattainable from other technologies.

A bar graph depicts acceleration results based upon results achieved (1) with a clean engine, (2) with an EPA grade additive, and (3) with respondents' PEP-containing additive.

[Exhibit B: Internet Advertisement]

C. OUR NEW VIDEO SHOWS PERFORMANCE SO HOT WE'VE
RATED IT "R"

* * * *

Every additive supplier makes superiority claims. Shell Additives would like to prove theirs. Our new VEKTRON™ 3000 Gasoline Additives go beyond merely removing some of the engine deposits; they actually can help restore and maintain power and performance by chemically enhancing the combustion process.

* * * *

[Exhibit C: Trade Publication advertisement]

D. Promotional video depicts actual field acceleration tests conducted by Shell, and graphically depicts a car with respondents' PEP-containing additives going 2 car lengths faster than a car that does not contain respondents' additives.

The video depicts what this test data "means to consumers": (a) that in trying to pass a truck on a two-lane roadway, a car with respondents' PEP-containing additives is able to accelerate just fast enough to pass the truck and avoid a head-on collision with an oncoming tractor trailer truck in the other lane; and (b) in merging into the flow of highway traffic at high speed, a car with respondents' PEP-containing additive is able to accelerate and merge fast enough to barely avoid an accident with an 18-wheel tractor trailer.

[Exhibit D: Promotional video advertisement]

5. Through the means described in Paragraph 4, respondents have represented, expressly or by implication, that:

A. Respondents' PEP-containing additives significantly improve engine power and acceleration in motor vehicles generally.

B. Respondents' PEP-containing additives are superior to other fuel system additives in improving engine power and acceleration in motor vehicles generally.

6. Through the means described in Paragraph 4, respondents have represented, expressly or by implication, that they possessed and relied upon a reasonable basis that substantiated the representations set forth in Paragraph 5, at the time the representations were made.

7. In truth and in fact, respondents did not possess and rely upon a reasonable basis that substantiated the representations set forth in Paragraph 5, at the time the representations were made. Therefore, the representation set forth in Paragraph 6 was, and is, false or misleading.

8. Through the means described in Paragraph 4, respondents have represented, expressly or by implication, that:

A. Scientific tests prove that respondents' PEP-containing additives significantly improve engine power and acceleration in motor vehicles generally.

B. Scientific tests prove that respondents' PEP-containing additives are superior to other fuel system additives in improving engine power and acceleration in motor vehicles generally.

9. In truth and in fact:

A. Scientific tests do not prove that respondents' PEP-containing additives significantly improve engine power and acceleration in motor vehicles generally.

B. Scientific tests do not prove that respondents' PEP-containing additives are superior to other fuel system additives in improving engine power and acceleration in motor vehicles generally.

Therefore, the representations set forth in Paragraph 8 were, and are, false or misleading.

10. Respondents have performed tests of their PEP-containing additives relating to their purported acceleration benefits, as well as tests for their trade customers, including Castrol and Blue Coral/Slick 50, of the PEP-containing formulations of those customers' fuel system treatment products sold to the public. In connection with the promotion and sale of their PEP-containing additives, respondents have reported the results of those tests to their trade customers. In so doing, respondents have represented to their trade customers, expressly or by implication, that:

A. The reported test results constitute scientific proof that respondents' PEP-containing additives, and fuel system treatment products containing respondents' PEP-containing additives, significantly improve engine power and acceleration in motor vehicles generally.

B. The reported test results constitute scientific proof that respondents' PEP-containing additives, and fuel system treatment products containing respondents' PEP-containing additives, are superior to other fuel system additives in improving engine power and acceleration in motor vehicles generally.

11. In truth and in fact:

A. The reported test results referred to in Paragraph 10 do not constitute scientific proof that respondents' PEP-containing additives, and fuel system treatment products containing respondents' PEP-containing additives, significantly improve engine power and acceleration in motor vehicles generally.

B. The reported test results referred to in Paragraph 10 do not constitute scientific proof that respondents' PEP-containing additives, and fuel system treatment products containing respondents' PEP-containing additives, are superior to other fuel system additives in improving engine power and acceleration in motor vehicles generally.

Therefore, the representations set forth in Paragraph 10 were, and are, false or misleading.

12. By providing their trade customers, including Castrol and Blue Coral/Slick 50, with the advertising and promotional materials referred to in Paragraph 4, and with the test data and reports referred to in Paragraph 10, respondents have furnished the means and instrumentalities to those customers to engage in deceptive acts and practices in violation of Section 5(a) of the Federal Trade Commission Act.

13. The acts and practices of respondents 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 twenty-second day of December, 1999, has issued this complaint against respondents.

By the Commission, Commissioner Swindle dissenting and Commissioner Leary not participating.

Donald S. Clark
Secretary

SEAL: