[Federal Register: March 17, 1999 (Volume 64, Number 51)] [Notices] [Page 13205-13206] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr17mr99-65] ======================================================================= ----------------------------------------------------------------------- FEDERAL TRADE COMMISSION [File No. 992-3025] R.J. Reynolds Tobacco Company; Analysis to Aid Public Comment AGENCY: Federal Trade Commission. ACTION: Proposed Consent Agreement. ----------------------------------------------------------------------- SUMMARY: the consent agreement in this matter settles alleged violations of federal law prohibiting unfair or deceptive acts or practices or unfair methods of competition. The attached Analysis to Aid Public Comment describes both the allegations in the draft compliant that accompanies the consent agreement and the terms of the consent order--embodied in the consent agreement--that would settle these allegations. DATES: Comments must be received on or before May 17, 1999. ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, Room 159, 6th St. and Pa. Ave., NW., Washington, DC 20580. FOR FURTHER INFORMATION CONTACT: Joel Winston or Beth Grossman, FTC/S- 4002, Washington, DC 20580. (202) 326-3153 or 326-3019. SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 2.34 of the Commission's Rules of Practice (16 CFR 2.34), notice is hereby given that the above-captioned consent agreement containing a consent order to cease and desist, having been filed with and accepted, subject to final approval, by the Commission, has been placed on the public record for a period of sixty (60) days. The following Analysis to Aid Public Comment describes the terms of the consent agreement, and the allegations in the complaint. An electronic copy of the full text of the consent agreement package can be obtained from the FTC Home Page (for March 3,1999), on the World Wide Web, at ``http://www.ftc.gov/os/ actions97.htm.'' A paper copy can be obtained from the FTC Public Reference Room, Room H-130, Sixth Street and Pennsylvania Avenue, NW, Washington, DC 20580, either in person or by calling (202) 326-3627. Public comment is invited. Such comments or views will be considered by the Commission and will be available for inspection and copying at its principal office in accordance with Section 4.9(b)(6)(ii) of the Commission's Rules of Practice (16 CFR 4.9(b)(6)(ii)). Analysis of Proposed Consent Order to Aid Public Comment The Federal Trade Commission has accepted an agreement to a proposed consent order from R.J. Reynolds Tobacco Company (``Reynolds''). The proposed consent order has been placed on the public record for sixty (60 days for receipt of comments by interested persons. Comments received during this period will become part of the public record. After sixty (60) days, the Commission will again review the agreement and the comments received, and will decide whether it should withdraw from the agreement or make final the agreements' proposed order. This matter involves an alleged deceptive representation for Winston cigarettes, that Reynolds has advertised do not contain additives. According to the FTC complaint, through these advertisements, Reynolds represented that smoking Winston cigarettes, because they contain no additives, is less hazardous to a smoker's health than smoking otherwise comparable cigarettes that contain additives. The complaint alleges that Reynolds did not have a reasonable basis for the representation at the time it was made. Among other reasons, according to the complaint, the smoke from Winston cigarettes, like the smoke from all cigarettes, contains numerous carcinogens and toxins. The proposed consent order contains provisions designed to prevent Reynolds from engaging in similar acts and practices in the future. Part I of the order requires Reynolds to include the following clear and prominent disclosure in certain advertising for its Winston cigarettes: No additives in our tobacco does NOT mean a safer cigarette. (The order requires a similar disclosure in advertising for other tobacco products Reynolds advertises as having no additives.) The disclosure must be included in all advertising for Winston no-additive cigarettes, regardless of whether that advertising contains a ``no additives'' claim, for a period of one year beginning no later than July 15, 1999. The disclosure must be included in all Winston advertising that represents (through such phrases as ``no additives'' or ``100% tobacco'') that the product has no additives, for the duration of the order. This Part also contains certain exemptions from the disclosure requirement: Advertisements not required to bear the Surgeon General's health warning; Certain ads for bona fide events or teams sponsored by Winston which contain neither a ``No additives'' claim nor any other selling message or product description; and If Reynolds possesses scientific evidence demonstrating that its ``no additives'' cigarette poses materially lower health risks than other cigarettes of the same type. Part I also specifies the manner in which the disclosure must be made, which is exemplified by two model advertisements attached to the order. In general, the disclosure must be within a rectangular box that is no less than 40% of the size of the box containing the Surgeon General's warning. Part II of the order requires Reynolds to instruct each of its sales representatives to remove or sticker, with the applicable disclosure, any advertisement displayed in a retail establishment representing that Winston cigarettes have no additives. All such actions must be completed by July 15, 1999. Part III-VII of the order require Reynolds to keep copies of relevant advertisements and materials substantiating claims made in the advertisements; to provide copies of the order to certain of its personnel; to notify the Commission of changes in the composition or formula of Winston cigarettes that may affect the order; to notify the Commission of changes in corporate structure; and to file compliance reports with the Commission. Part VIII provides that the order will terminate after twenty (20 years under certain circumstances. The purpose of this analysis is to facilitate public comment on the proposed order, and it is not intended to constitute an official interpretation of the agreement and proposed order to modify in any way their terms. [[Page 13206]] By direction of the Commission. Donald S. Clark, Secretary. Concurring Statement of Commissioner Orson Swindle R.J. Reynolds Tobacco Co., File No. 992-3025 I have voted to accept this consent agreement for public comment because the remedies, including corrective statement in Winston Advertisements for one year, are warranted by the facts of this case. The nationwide advertising campaign for ``no additives'' Winston cigarettes, launched in August 1997, is unusually extensive. Based on my reading of the record, I am convinced that many consumers interpret ads containing express ``no additives'' claims to mean that Winstons are not as harmful as other cigarettes, and such health claim is presumably important to consumers in their purchasing decisions. Based on the extent and magnitude of the ongoing ad campaign and the demonstrated strength of the implied health claim, I am willing to infer that the claim will linger in the minds of consumers for one year absent a corrective statement. I am particularly concerned about a lingering effect of the ads because of the well-recognized health risks of smoking. Under these circumstances, I support the corrective advertising remedy contained in the proposed consent order. [FR Doc. 99-6486 Filed 3-16-99; 8:45 am] BILLING CODE 6750-01-M