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1
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STIPULATED FINAL ORDER - WILLIAM LANE
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EXTRACTED KEY WORDS
FEDERAL TRADE COMMISSION CARTILAGE CONSULTANTS FTC ENTRY SETTLEMENT WILLIAM LANE ACT REPRESENTATION RELIEF PURSUANT CIVIL COMPLAINT DISTRIBUTOR DRUG SALE ATTORNEYS PERMANENT INJUNCTION JURISDICTION OFFICERS BUSINESS ADVERTISING PENNSYLVANIA AVE WASHINGTON PLAINTIFF ALLEGATIONS EMPLOYEES PERSONAL SERVICE PROMOTIONAL MATERIALS LABELING |
DEBRA A. VALENTINE
General Counsel
DARREN A. BOWIE
SARAH L. KNAPP
Federal Trade Commission
600 Pennsylvania Ave., NW, Rm S-4002
Washington, DC 20580
(202) 326-2018, - 2619
(202) 326-3259 (facsimile)
DAB-1003
SLK-6862
Local Counsel
MICHAEL A. CHAGARES
Chief, Civil Division
United States Attorney, District of New Jersey
970 Broad Street, Suite 700
Newark, NJ 07102
(973) 645-2839
MC-5483
Attorneys for Plaintiff
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
FEDERAL TRADE COMMISSION, Hon.
Plaintiff Civil Action No.
V.
STIPULATED FINAL ORDER FOR
LANE LABS-USA, INC., PERMANENT INJUNCTION
CARTILAGE CONSULTANTS, INC. ASTO CARTILAGE CONSULTANTS,
I. WILLIAM LANE, AND ANDREW J. LANE, INC., AND I. WILLIAM LANE
Defendants.
Plaintiff, the Federal Trade Commission ("FTC" or "Commission"), filed a Complaint
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2
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STIPULATED FINAL ORDER - ANDREW LANE
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EXTRACTED KEY WORDS
FEDERAL TRADE COMMISSION LANE ENTRY FTC SETTLEMENT ACT PURSUANT UNITED STATES COMPLAINT REPRESENTATION RELIEF ANDREW CIVIL DISTRIBUTOR DRUG PERMANENT INJUNCTION LANE LABS-USA JURISDICTION OFFICERS LANE LABS BUSINESS NATIONAL CANCER INSTITUTE ADVERTISING PROMOTION PENNSYLVANIA AVE WASHINGTON UNITED STATES ATTORNEY ALLEGATIONS PERSONAL SERVICE |
DEBRA A. VALENTINE
General Counsel
DARREN A. BOWIE
SARAH L. KNAPP
Federal Trade Commission
600 Pennsylvania Ave., NW, Rm S-4002
Washington, DC 20580
(202) 326-2018, - 2619
(202) 326-3259 (facsimile)
DAB-1003
SLK-6862
Local Counsel
MICHAEL A. CHAGARES
Chief, Civil Division
United States Attorney, District of New Jersey
970 Broad Street, Suite 700
Newark, NJ 07 102
(973) 645-2839
MC-5483
Attorneys for Plaintiff
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
FEDERAL TRADE COMMISSION, Hon.
Plaintiff Civil Action No.
V.
LANE LABS-USA, INC., STIPULATED FINAL ORDER FOR
CARTILAGE CONSULTANTS, INC., PERMANENT INJUNCTION AND
I. WILLIAM LANE, AND ANDREW J. LANE, SETTLEMENT OF
MONETARY RELIEF AS TO
LANE LABS-USA, INC. AND
ANDREW J. LANE
Plaintiff, the Federal Trade Commission ("FTC" or "Commission"), filed a Complaint
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3
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PITOFSKY STATEMENT
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EXTRACTED KEY WORDS
CLINICAL TRIALS FUND COMMISSIONER LANE LABS-USA CANCER PUBLIC STATEMENT CHAIRMAN ROBERT PITOFSKY COMMISSIONER MOZELLE THOMPSON COLLEAGUE COMMISSIONER SWINDLE ORDER PROVISION DEFENDANT LANE LABS-USA PAY NATIONAL CANCER TREATING CANCER NCI UNDERTAKES GOVERNMENT FUNDS REVIEW FUND ACQUISITION EXCEPTION DIRECT MONEY IMPORTANCE EVALUATING SHARK CARTILAGE THERAPY |
Public Statement of Chairman Robert Pitofsky and
Commissioner Mozelle W. Thompson
LANE LABS-USA, INC.
We appreciate the concerns raised by our colleague, Commissioner
Swindle, regarding an order provision that allows defendant Lane
Labs-USA, Inc., to pay $450,000 to provide shark cartilage for the
National Cancer Institute's ("NCI") clinical trial to determine
whether shark cartilage is effective in treating cancer. When NCI
undertakes a clinical trial, the government funds the study after
extensive review but does not typically fund acquisition of the
product. In our view, it is highly unusual -- and likely to remain the
exception -- to direct money to help fund clinical trials. Given the
importance of evaluating shark cartilage as a therapy, we think the
public interest is best served by the approach taken here.
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4
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COMPLAINT
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EXTRACTED KEY WORDS
DEFENDANTS CARTILAGE ACT LANE FTC ACT SHARK CARTILAGE SKINANSWER REPRESENTATIONS BENEFIN LANE LABS ADVERTISING FOOD PRACTICES DRUG CONSUMERS VIOLATION CARTILAGE CONSULTANTS EFFECTIVENESS SKIN CANCER DISTRICT JERSEY FALSE ADVERTISING BUSINESS TRANSACTS PROMOTIONAL MATERIALS UNITED STATES RELIEF COURT LABS ENTERPRISE |
DEBRA A. VALENTINE
General Counsel
DARREN A. BOWIE
SARAH L. KNAPP
Federal Trade Commission
600 Pennsylvania Ave., NW, Rm S-4002
Washington, DC 20580
(202) 326-2018, - 2619
(202) 326-3259 (facsimile)
DAB-1003
SLK-6862
Local Counsel
MICHAEL A. CHAGARES
Chief, Civil Division
United States Attorney, District of New Jersey
970 Broad Street, Suite 700
Newark, NJ 07 102
(973) 645-2839
MC-5483
Attorneys for Plaintiff
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
FEDERAL TRADE COMMISSION, Hon.
Plaintiff Civil Action No.
V.
LANE LABS-USA, INC., Verified Complaint for
CARTILAGE CONSULTANTS, INC., injunction and Other
I. WILLIAM LANE, and Relief
ANDREW J. LANE,
Defendants.
Plaintiff, the Federal Trade Commission ("FTC" or "Commission"), by its
attorneys, allege:
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5
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SWINDLE STATEMENT
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EXTRACTED KEY WORDS
CLINICAL TRIALS PAY PROPOSED ORDER CANCER ADVERTISERS COMMISSION EFFICACY CLAIMS BENEFIN SUBSTANTIATION SHARK CARTILAGE FUND CONSUMER REDRESS TREATING PROPOSED CONSENT AGREEMENT JUDGEMENT PAID PROCEEDS DISSENTING PREVENTING CURING CANCER VIII SUPPORT PRIOR REQUIRING ADEQUATE SUBSTANTIATION DISSEMINATING VIOLATION LAW DECEPTION |
Statement of Commissioner Orson Swindle
Concurring in Part and Dissenting in Part
In Lane Labs- Usa, Inc., File No. 982-3558
The proposed complaint in this case alleges that Lane Labs made the
unsubstantiated claim that BeneFin, a shark cartilage product in the
form of powder or caplets, is effective in preventing, treating, and
curing cancer. Among other things, the settlement agreement with Lane
Labs (Section VIII) would require that the company pay a $1 million
judgment. Of the total amount to be paid, Lane Labs would be allowed
to pay $450,000 for a National Cancer Institute ("NCI") clinical trial
to determine whether shark cartilage is effective in treating cancer
(Section VIII.B. of the proposed order). I do not support allowing
Lane Labs to use its assets to fund a clinical trial of shark
cartilage.
Lane Labs did not conduct clinical tests of BeneFin prior to making
its claim that the product is effective in preventing, treating, and
curing cancer. It is well established that advertisers are required to
have adequate substantiation for their claims before disseminating
advertising with those claims. FTC Policy Statement Regarding
Advertising Substantiation, reprinted in Thompson Medical Co., Inc.,
104 F.T.C. 648, 839 (1984), aff'd, 791 F.2d 189 (D.C. Cir. 1986). Lane
Labs's failure to obtain adequate substantiation before making its
efficacy claims thus was a clear violation of the law.
Lane Labs raked in substantial sums from Benefin sales while it was
making its unsubstantiated efficacy claims. Instead of requiring that
Lane Labs pay the entire $1,000,000 judgment into a fund for consumer
redress, the Commission allows Lane Labs to use $450,000 of the
judgment to pay for a clinical trial that could help substantiate its
efficacy claims. In other words, the Commission is permitting Lane
Labs to use some of the proceeds from its deceptive efficacy claims to
pay for clinical trials that it was legally obligated to conduct
before it ever made its efficacy claims. If the Commission allows
advertisers that do not engage in necessary pre-dissemination testing
to use the proceeds of their deception to pay for post-dissemination
testing, it creates an incentive for advertisers not to test products
prior to disseminating their claims. In my view, it is not in the
public interest for the Commission to create an incentive for
advertisers to violate the law.
My colleagues may support allowing Lane Labs to pay for the NCI
clinical trial based on their good-faith belief that the public
interest would be well-served by a clinical trial of the efficacy of
shark cartilage as a cancer treatment. I agree that spending money on
cancer research promotes the general welfare. But a consumer redress
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6
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AGREEMENT
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EXTRACTED KEY WORDS
CONSUMERS REPRESENTATION COMPLAINT INTERNET DISCLOSURE COMMISSION ADVERTISEMENTS COST PROVIDER ACCESS SERVICE PRICE PROPOSED RESPONDENT REBATE FEDERAL TRADE COMMISSION PROMOTION SALE PURCHASE CHARGES AGREEMENT MANNER AMOUNT SUCCESSORS HYPERLINK DRAFT COMPLAINT MATERIALS DIRECTORS AFFECTING COMMERCE ONLINE SERVICES PROXIMITY |
UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
)
In the Matter of ) FILE NO. 992-3282
)
BUY.COM INC., ) AGREEMENT CONTAINING
a corporation. ) CONSENT ORDER
)
)
The Federal Trade Commission has conducted an investigation of certain acts and
practices of BUY.COM 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 BUY.COM Inc., by its duly authorized officer,
and counsel for the Federal Trade Commission that:
Proposed respondent BUY.COM Inc. is a Delaware corporation with its principal office
or place of business at 85 Enterprise, Aliso Viejo, California 92656.
2. Proposed respondent admits all the jurisdictional facts set forth in the draft
3. Proposed respondent waives:
a. Any further procedural steps;
b. The requirement that the Commission's decision contain a statement of
fact and conclusions of law; and
c. All rights to seek judicial review or otherwise to challenge or contest the
of the order entered pursuant to this agreement.
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.
Page 1 of 8
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
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