In the Matter of

QVC, INC., corporation.



The Federal Trade Commission, having reason to believe that QVC, Inc., a corporation ("respondent"), has 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 QVC, Inc. ("QVC") is a Delaware corporation with its principal office or place of business at 1200 Wilson Drive, West Chester, PA 19380. QVC operates two cable shopping services and is principally engaged in the marketing of a variety of consumer products by means of live, customer-interactive, televised sales programs and through its Internet Web site (www.qvc.com). QVC produces and disseminates advertising in the form of television programming that is disseminated through cable channels, broadcast stations and satellite dish receivers. This programming markets consumer products directly to viewers.

2. Respondent has advertised, offered for sale, sold and distributed dietary supplement products to the public, including Cold-Eezer Plus Zinc Gluconate Lozenges and Cold-Eeze Zinc Lozenges (hereinafter, collectively, "Cold-Eeze"). These products are "foods" and/or "drugs" within the meaning of Sections 12 and 15 of the Federal Trade Commission Act.

3. 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.

4. Respondent has disseminated or has caused to be disseminated advertisements for Cold-Eeze, including but not limited to the attached Exhibits A through E, transcripts of television advertisements that appeared on QVC or Q2, home shopping cable channels run by QVC. These advertisements contain the following statements:

(a) Show Host: Chuck is back to tell us why Cold-Eezers are so fabulous. Perfect time of year to bring them back because we've got hay fever and allergies combined with an upcoming cold season. Already I'm starting to see lots of sniffles around QVC.

(Exhibit A, p. 1).

(b) C. Phillips: To have a strategy to help fight the common cold. The kids are in school. They are there right now.

. . .

C. Phillips: It's a breeding ground. Everything they touch -- if the child before had a cold and they touch that spot and they touch their noses, its off to the races.

. . .

C. Phillips: So, there's a couple of strategies. One is we can take one a day and try to see if you can beat the cold to what they call prophylactic or a preventive medicine.

Show Host: Excellent

C. Phillips: Try taking one a day. Or if the child comes home and you see that it's here . . . that they have symptoms, start treating the child. Take one every three hours. But everyone in the family should take a couple to prevent picking up that cold.

(Exhibit A, p. 2).

(c) Caller: I just wanted you to know I have a granddaughter that's 12 years old, and ever since birth when she gets a cold, it turns into bronchitis.

. . .

Caller: And so I tried these . . . and it eliminated the cold almost immediately.

C. Phillips: Well, that's really important because we have several customers we know through QVC and other places where they really can't afford to have their children even get a cold because what happens is this exacerbated condition appears.

Show Host: Sure.

C. Phillips: You get bronchitis, pneumonias. And here's an opportunity right in front of us to stop it right now.

Show Host: Right. Exactly.

(Exhibit A, p. 3).

(d) C. Phillips: The other thing is allergies.

Show Host: Yes.

C. Phillips: We have many, many people who have reported to us that their usual choice is to have antihistamines, which make them dopey --

Show Host: Sure.

C. Phillips: -- which make them incapable of functioning, some of them.

Show Host: Right.

C. Phillips: And we suggested they try it. So, we -- they tried it and they take one and they see how long it lasts. It does diminish the symptoms of allergies.

(Exhibit A, p. 4).

(e) Show Host: Children can absolutely take this. In fact, I've heard . . . people will wrap one of these in cheesecloth and let their toddler suck on it so they can get the benefits from it without actually risking choking or anything.

C. Phillips: Um-hum. Yes.

(Exhibit A, p. 6).

(f) Caller: And I was glad to hear you say something about taking one a day as a preventative. We've never tried that before.

C. Phillips: Yes. Well, now's the time to try it.

Show Host: Yep.

C. Phillips: This is -- this is a strategy that may pay off big-time because it does help block as you saw in the animation. If we can stop the viruses we pick up over the day, they will not have a chance to even start.

Show Host: Perfect.

C. Phillips: Therefore, it will preclude you getting the cold.

Caller: Yes.

C. Phillips: And it's a good strategy. We highly recommend people try that.

(Exhibit A, pp. 6-7)

(g) Show Host: $18.25. Now, you get 60 lozenges. If you want to do it as a preventative measure, that's going to be a two month supply for you. If you want to stash some in your desk at work, stash some in the glove compartment in your car. Give a couple to your kids at school, because halfway through the day if they start to get that tickle in their throat, by taking one of these, they're already taking steps ahead to prevent getting sicker and to prevent spreading it to the rest of the family. So, these do last you a good long time.

But this is the time of year to stock up. Even if you're not suffering from hay fever and allergies, you know that cold season has pretty much started -

(Exhibit A, p. 8).

(h) C. Phillips: Well not only that, but zinc is a critical, very important mineral that we all need. A lot of us are deficient in it. . . . So, not only are you preventing a cold, but you're getting that zinc which has been proven many times to have a positive effect on many conditions of the body.

Show Host: So you're getting even healthier.

C. Phillips: Absolutely.

(Exhibit A, p. 9).

(i) Show Host: And actually, if you take these on a preventative basis, you might not ever get a cold at all.

R. Pollack: Right.

(Exhibit B, p. 3)

(j) Show Host: You know, my own grandma just got over pneumonia.

R. Pollack: Hmm.

Show Host: And I'm sending her these so that she can continue to take them, and as some of the people do, take them on a preventative basis.

R. Pollack: Right. Yes.

Show Host: I know that you have women in nursing homes --

R. Pollack: Right.

Show Host: -- and gentlemen in retirement communities who are taking these.

R. Pollack: Yes. And they find them very effective.

(Exhibit B, p. 4).

(k) Show Host: If you're thinking, oh, well, cold season is over, we're already into April 1st, let me tell you, many, many, many of our viewers and studies will prove that the Cold-Eezers Plus are also effective on airborne allergies. If you are just about to get into ragweed season in your part of the country, if you are constantly dealing with allergic reactions to all of the pollen, if you have to deal with sinus infections because you're just breathing in the junk, this is the alternative. . . . What does Cold-Eezers Plus do? Well, it's the zinc. The zinc that's included within this product literally prohibits the virus or the airborne allergies from adhering to the tissue inside your nose.

(Exhibit C. p. 1)

(l) Show Host: Well, and this is also going to help -- from what the information has told us and what from viewers tell us, this is going to help during your allergy season, because you guys have a lot of beautiful flowering plants out that way. So, this is going to help if you are ever subject to allergy attacks.

(Exhibit C, p. 2)

(m) Show Host: But I'm telling you something, I'm always sick. November of every year, I get strep throat, tonsillitis, I always get some sort of horrible throat ailment. And, you know, this year, I didn't get it and I really am a firm believer in these. I think that they're preventing me from getting sick.

(Exhibit D, p. 4).

(n) C. Phillips: We're suggesting to moms, get Cold-Eezer Plus in the house.

Show Host: Um-hum.

C. Phillips: Have it ready, and at the very first hint of a cold, start applying it. But even before then, try to use it as a preventative measure, so that if you know that the child has had an exposure, which is school, they can take one a day -

Show Host: Um-hum.

C. Phillips: -- to try to prevent getting a cold.

Show Host: And you're talking about schools, I mean, everywhere you go, I mean, other children have it, other adults have it, you're just always exposed.

C. Phillips: Always exposed, exactly. You touch things.

Show Host: Um-hum.

C. Phillips: You touch a doorknob and you go up and you touch your nose, you've got the chance to have it.

Show Host: Right.

C. Phillips: So, what we're saying is, point one, if you don't have it in the house, get some in the house so that you have it to use at the very first sign of a cold.

Show Host: Um-hum.

C. Phillips: That's the important thing. This year we're saying, have it around and take one a day. Give your child one before he goes to school, that way, it can possibly prevent that child from getting a cold.

(Exhibit E, p. 2).

(o) C. Phillips: It's also excellent for allergies.

Show Host: Oh, really?

C. Phillips: Absolutely.

(Exhibit E, p. 5)

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

(a) Daily use of Cold Eeze will prevent users from contracting colds.

(b) Use of Cold-Eeze will prevent users from contracting colds.

(c) Use of Cold Eeze will reduce the risk of contracting pneumonia.

(d) Use of Cold Eeze will relieve or reduce the symptoms of hay fever or allergies.

(e) Use of Cold Eeze will reduce the severity of cold symptoms in children.

(f) Daily use of Cold Eeze will prevent children from contracting colds.

6. Through the means described in Paragraph 4, respondent has represented, expressly or by implication, that, it 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, respondent 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. The acts and practices of respondent as alleged in this complaint constitute unfair or deceptive acts or practices, and the making of false advertisements, in or affecting commerce in violation of Sections 5(a) and 12 of the Federal Trade Commission Act.

IN WITNESS WHEREOF, the Federal Trade Commission has caused its complaint to be signed by its Secretary and its official seal to be hereto affixed at Washington, D.C. this _______________ day of _______________, A.D., 199__.

By the Commission.

Donald S. Clark