[Federal Register Volume 64, Number 51 (Wednesday, March 17, 1999)]
[Notices]
[Pages 13205-13206]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-6486]


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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.

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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