UNITED STATES OF AMERICA
In the Matter of
GATEWAY, INC., a corporation.
FILE NO. 992 3276
AGREEMENT CONTAINING CONSENT ORDER
The Federal Trade Commission has conducted an investigation of certain acts and practices of Gateway, Inc., a corporation ("proposed respondent"). Proposed respondent, having been represented by counsel, is willing to enter into an agreement containing a consent order resolving the allegations contained in the attached draft complaint. Therefore,
IT IS HEREBY AGREED by and between Gateway, Inc., by its duly authorized officers, and counsel for the Federal Trade Commission that:
1. Proposed respondent Gateway , Inc. ("Gateway"), is a Delaware corporation with its principal office or place of business at 610 Gateway Drive, North Sioux City, South Dakota 57049.
2. Proposed respondent admits all the jurisdictional facts set forth in the draft complaint.
3. Proposed respondent waives:
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 complaint, will be placed on the public record for a period of thirty (30) days and information about it publicly released. The Commission thereafter may either withdraw its acceptance of this agreement and so notify proposed respondent, in which event it will take such action 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 proposed 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, 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 This agreement contemplates that, if it is accepted by the Commission, and if such acceptance is not subsequently withdrawn by the Commission pursuant to the provisions of Section 2.34 of the Commission's Rules, the Commission may, without further notice to proposed respondent, (1)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 attached draft complaint and its decision containing the following order in disposition of the proceeding, and (2) make information about it public. When so entered, the order 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 order shall become final upon service. Delivery of the complaint and the decision and order to proposed respondent by any means specified in Section 4.4 of the Commission's Rules shall constitute service. Proposed 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. No agreement, understanding, representation, or interpretation not contained in the order or in the agreement may be used to vary or contradict the terms of the order.
7. Proposed respondent has read the draft complaint and consent order. It understands that it may be liable for civil penalties in the amount provided by law and other appropriate relief for each violation of the order after it becomes final.
For the purposes of this order, the following definitions shall apply:
1. Unless otherwise specified, "respondent" shall mean Gateway, Inc., its successors and assigns and its officers, agents, representatives, and employees.
2. "Clear(ly) and conspicuous(ly)" shall mean as follows:
The disclosure shall be in understandable language and syntax. Nothing contrary to, inconsistent with, or in mitigation of the disclosure shall be used in any advertisement or on any label.
3. In the case of advertisements disseminated by means of an interactive electronic medium, such as software, the Internet, and online services, a disclosure made "through the use of a hyperlink" shall mean a hyperlink that in itself is clear and conspicuous, is clearly identified as a hyperlink, is labeled to convey the nature and relevance of the information it leads to, is on the same Web page, online service page or other electronic page, and proximate to the triggering representation, and takes the consumer directly to the disclosure on the click-through electronic page or other display window or panel.
4. "Internet access service" shall mean any service that enables a consumer to access the Internet or any other electronic network.
5. "Commerce" shall mean as defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. § 44.
IT IS ORDERED that respondent, directly or through any corporation, partnership, subsidiary, division, or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any Internet access service, in or affecting commerce, shall not misrepresent, in any manner, expressly or by implication:
IT IS FURTHER ORDERED that respondent, directly or through any corporation, subsidiary, division, or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any Internet access service, in or affecting commerce, shall not make any representation, in any manner, expressly or by implication, about the use of "1-800," "1-877," or "1-888 " telephone numbers, or any other telephone numbers for which respondent is the toll free subscriber unless it discloses, clearly and conspicuously, the dollar amounts of any hourly surcharges and any other fees charged by respondent for use of such numbers.
IT IS FURTHER ORDERED that respondent, directly or through any corporation, subsidiary, division, or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any Internet access service, in or affecting commerce, shall not make any representation, in any manner, expressly or by implication, about the price or cost to consumers of such service, unless it discloses, clearly and conspicuously:
Provided, that in the case of advertisements disseminated through an interactive electronic medium, respondent may make the disclosures required by Part III. A through D above through the use of a hyperlink labeled: "Additional Phone Charges May Apply. Click Here."
Provided, further, that in the case of television advertisements, respondent may comply with Part III. A through D above by making the audio and visual disclosures through the use of the phrase "Additional Phone Charges May Apply. Call [a telephone number which is free to consumers] for Details," and by clearly and conspicuously disclosing the information required by Part III. A through D above at the time consumers contact respondent through the telephone number.
IT IS FURTHER ORDERED that respondent, directly or through any corporation, subsidiary, division, or other device, in connection with the advertising, promotion, offering for sale, sale or distribution of any Internet access service, in or affecting commerce, shall prior to consumers incurring any financial obligation for such service or any other product or service sold in connection with such service, maintain adequate customer support to respond to consumer inquiries, including but not limited to, an adequately staffed, telephone number which is free to consumers and a directory on the Internet, to determine the telephone numbers available for accessing any such service and the town or city where those numbers are located.
IT IS FURTHER ORDERED that respondent, directly or through any corporation, subsidiary, division, or other device, shall offer reimbursement to certain local access subscribers to Gateway.net services as provided in this Part.
IT IS FURTHER ORDERED that respondent and its successors and assigns shall, for five (5) years after the last date of dissemination of any representation covered by this order, maintain and upon request make available to the Federal Trade Commission for inspection and copying:
IT IS FURTHER ORDERED that respondent and its successors and assigns, shall deliver a copy of this order to all current and future officers and directors, and to all current and future managing employees, agents, and representatives having responsibilities with respect to the subject matter of this order. Respondent shall deliver a copy of this order to current personnel within thirty (30) days after the date of service of this order, and, for a period of three (3) years from the date of service of this order, to future personnel within thirty (30) days after the person assumes such position or responsibilities.
IT IS FURTHER ORDERED that respondent and its successors and assigns, shall notify the Commission at least thirty (30) days prior to any change in the corporation that may affect compliance obligations arising under this order, including but not limited to a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor corporation; the creation or dissolution of a subsidiary, parent or affiliate that engages in any acts or practices subject to this order; the proposed filing of a bankruptcy petition; or a change in the corporate name or address. Provided, however, that, with respect to any proposed change in the corporation about which respondent learns less than thirty (30) days prior to the date such action is to take place, respondent shall notify the Commission as soon as is practicable after obtaining such knowledge. All notices required by this Part shall be sent by certified mail to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580.
IT IS FURTHER ORDERED that respondent and its successors and assigns, shall, within ninety (90) days after the date of service of this order, and at such other times as the Federal Trade Commission may require, file with the Commission a report, in writing, setting forth in detail the manner and form in which it has complied with this order.
This order will terminate twenty (20) years from the date of its issuance, or twenty (20) 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:
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 Part 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.
Signed this day of , 2001.
LINDA K. BADGER, ESQ.
REIMBURSEMENT NOTIFICATION AND REQUEST
[Name and Address of Recipient]
Our records indicate that you registered as a local access subscriber to Gateway.net between January 19, 1999 and April 1, 1999, and that you incurred charges for the use of that service between January 19, 1999 and August 15, 1999. Gateway is offering reimbursement to certain Gateway.net subscribers who, by error, were not adequately warned that they would be charged $3.95 per hour for the use of a toll-free telephone number to access the service. Gateway initiated this reimbursement program in August, 1999 and is committed to providing refunds to customers who did not understand that a fee would be charged for the use of these numbers. We would, therefore, like to offer you reimbursement for the fees you paid, if we have not already done so.
Gateway recently settled a dispute with the Federal Trade Commission that dealt with, among other things, the adequacy of advertising disclosures to warn customers of possible phone charges for Internet access. Our agreement with the Commission provides that we continue the process we had already begun of refunding fees to customers such as you.
To request and receive your refund, simply sign the bottom of this letter, stating that you have not already received reimbursement from us, and return the entire letter within 60 days in the enclosed, postage pre-paid envelope. You should return this original letter, and make a copy for your records. If you have not been fully reimbursed already, we will be pleased to send you a check within one month after we receive your signed form. If you have any questions about this letter, please call us at [toll-free telephone number].
I have not been reimbursed for the $3.95 per hour charges I incurred to access Gateway.net between January 19, 1999 and August 15, 1999; and
I request that a check be sent for the charges I paid.
REIMBURSEMENT NOTICE LETTER ENVELOPE
FORWARD & ADDRESS CORRECTION REQUESTED
[Address or address window]
ATTENTION: NOTICE OF REIMBURSEMENT ENCLOSED
REIMBURSEMENT CHECK ENVELOPE
FORWARD & ADDRESS CORRECTION REQUESTED
[Indicates a check is enclosed]