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1
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DECISION & ORDER
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EXTRACTED KEY WORDS
COMMISSION TRADE TRADING PROGRAM COMPLAINT FEDERAL TRADE COMMISSION GRANITE INVESTMENTS DISCLOSURE BUSINESS ADVERTISEMENT REPRESENTATION ELLERY COLEMAN SALE CONSUMER REASON DIRECTS FUTURES ACT VIOLATION PROMOTION AFFECTING COMMERCE JURISDICTION MATTER ORDINARY CONSUMER SUCCESSORS EMPLOYMENT MANNER PROFITS ENDORSEMENT TERMINATE |
0023053
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
COMMISSIONERS:
Robert Pitofsky, Chairman
Sheila F. Anthony
Mozelle W. Thompson
Orson Swindle
Thomas B. Leary
In the Matter of
ELLERY COLEMAN, individually and doing business as
GRANITE INVESTMENTS.
DOCKET NO. C-3948
DECISION AND ORDER
The Federal Trade Commission ("Commission"), having initiated an
investigation of certain acts and practices of the respondent named in
the caption hereof, and the respondent having been furnished
thereafter with a copy of a draft of complaint which the Bureau of
Consumer Protection proposed to present to the Commission for its
consideration and which, if issued by the Commission, would charge
respondent with violation of the Federal Trade Commission Act; and
Respondent, his attorney, and counsel for the Commission having
thereafter executed an agreement containing a consent order, an
admission by respondent of all the jurisdictional facts set forth in
the aforesaid draft of complaint, a statement that the signing of said
agreement is for settlement purposes only and does not constitute an
admission by respondent that the law has been violated as alleged in
such complaint, or that the facts as alleged in such complaint, other
than jurisdictional facts, are true and waivers and other provisions
as required by the Commission's Rules; and
The Commission having thereafter considered the matter and having
determined that it had reason to believe that respondent has violated
the said Act, and that complaint should issue stating its charges in
that respect, and having thereupon accepted the executed consent
agreement and placed such agreement on the public record for a period
of thirty (30) days, now in further conformity with the procedure
prescribed in § 2.34 of its Rules, the Commission hereby issues its
complaint, makes the following jurisdictional findings and enters the
following order:
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2
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CONSENT AGREEMENT
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EXTRACTED KEY WORDS
RESPONDENT COMMISSION COMPLAINT EXXON CORPORATION AGREEMENT FEDERAL TRADE COMMISSION GASOLINE OCTANE CONSENT ORDER REPRESENTATION ENGINE EXXON SERVICE STATIONS JURISDICTIONAL FACTS CONSUMER BROADCAST OCTANE RATING INTAKE VALVE DEPOSIT ACCORDANCE TRADE COMMISSION ACT PROPOSED ORDER ENGINE PERFORMANCE SUBSTANTIATION TARGET AUDIENCE WRITTEN REPORT ORDER ENTERED PURSUANT ADVERTISING AVERAGE FREQUENCY RELIABLE TESTING DEMONSTRATING ADVERTISEMENTS |
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
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)
In the Matter of ) DOCKET NO. 9281
)
EXXON CORPORATION, ) AGREEMENT CONTAINING
a corporation. ) CONSENT ORDER
)
)
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THIS AGREEMENT, by and between Exxon Corporation, hereinafter sometimes referred
to as respondent, and its attorney, and counsel for the Federal Trade Commission, is entered into
in accordance with the Commission's Rule governing consent order procedures. The parties
hereby agree that:
1. Respondent Exxon Corporation is a New Jersey corporation, with its offices and
principal place of business located at 225 E. John W. Carpenter Freeway, Irving, Texas 75062.
2. Respondent has been served with a copy of the complaint issued by the Federal
Trade Commission charging it with violations of Section 5 (a) of the Federal Trade Commission
Act, and has filed an answer to the complaint.
3. Respondent admits all the jurisdictional facts set forth in the complaint.
4. Respondent waives:
a. Any further procedural steps;
b. The requirement that the Commission's decision contain a statement of
findings of fact and conclusions of law;
c. All rights to seek judicial review or otherwise to challenge or contest the
validity of the order entered pursuant to this agreement; and
d. Any claim under the Equal Access to Justice Act.
5. This agreement shall not become part of the public record in the proceeding unless
and until it is accepted by the Commission. If this agreement is accepted by the Commission it
Page 1 of 9
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3
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COMPLAINT
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EXTRACTED KEY WORDS
EXXON ANNOUNCER RESPONDENT COMMISSION COMPLAINT MAINTENANCE COSTS REPRESENTATION FEDERAL TRADE COMMISSION POWER SUPREME ACT PARAGRAPH CONSUMERS OCTANE GASOLINE ALLEGES ENGINE PRACTICES AFFECTING COMMERCE FACTS VIOLATION ADVERTISEMENTS ENGINE CLEANER RELIABLE PERFORMANCE SWITCHING AUTOMOBILE MAINTENANCE COSTS SUCCESSORS ADMINISTRATIVE LAW JUDGE ALLEGATIONS APPEALING |
9323022
B203151
UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
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)
In the Matter of ))
EXXON CORPORATION, ) DOCKET NO. 9281
a corporation. ))
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COMPLAINT
The Federal Trade Commission, having reason to believe that Exxon Corporation, 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 is a New Jersey corporation with its principal office or place of business at
225 E. John W. Carpenter Freeway, Irving, Texas 75062.
2. Respondent has advertised, offered for sale, sold, and distributed gasoline and other
petroleum products to the public, including Exxon Supreme 93 octane gasoline, Exxon Plus 89
octane gasoline, and Exxon Regular 87 octane gasoline.
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 caused to be disseminated advertisements for Exxon
gasoline, including but not necessarily limited to the attached Exhibits A through E. These
advertisements contain the following statements and depictions:
A. Announcer: There's a new gasoline. . .
Man: What's new about it?
Announcer: With the power to drive down maintenance costs.
[Video: Flashing display of consecutive words in
large bold type across width of screen:
WITH THE POWER TO DRIVE DOWN
MAINTENANCE COSTS ]
Man #2: Really?
Woman: Are you serious?
Announcer: Yes we are! New Exxon 93 Supreme keeps your engine cleaner.
Woman #2: Clean is good.
Announcer: So it can help drive down maintenance costs.
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4
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AZCUENAGA STATEMENT
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EXTRACTED KEY WORDS
COMMISSION EXXON GASOLINE CONSUMER RELIEF INJUNCTION EFFECTIVENESS DECEPTIVE CLAIMS CONSENT ORDER DOCKET COMPLAINT SETTLEMENT PROVISION CONSUMER MISPERCEPTIONS CAMPAIGN OCTANE EXXON CORPORATION CONTEMPLATED RELIEF PREMIUM GASOLINE CONSUMER EDUCATION ASSURANCE SURVEY DISSENTING BARRING DETERRENT SUBSTANTIAL CIVIL PENALTIES LITIGATION NARROWING REMEDY |
Statement of Commissioner Mary L. Azcuenaga
Concurring in Part and Dissenting in Part
in Exxon Corporation, Docket No. 9281
Last year, the Commission issued a complaint against Exxon Corporation
and, in accordance with its practice, a Notice of Contemplated Relief,
the title of which is self-explanatory. The complaint alleged that
Exxon had made certain deceptive claims concerning the need for its
premium gasoline. Today the Commission approves a settlement and
issues a final decision and order that provides less relief than the
Commission contemplated when it issued the complaint and less relief
than it ordered against other companies that previously have settled
similar charges. I agree that the core provision of the order barring
the allegedly deceptive claims is appropriate, but I cannot agree to
the omission of a broader provision barring Exxon from making
unsubstantiated claims concerning "the relative or absolute attributes
of any gasoline with respect to engine performance, power (or) . . .
acceleration."
An injunctive provision covering not just the specific claims
challenged in the complaint, but also, future deceptive claims of a
similar nature is a common feature in Commission advertising orders.
It provides an important deterrent, because any future advertising
claims that do not comport with it are punishable by substantial civil
penalties. The Commission previously has challenged similar
advertising claims by three other gasoline companies, all of which,
unlike Exxon, agreed to settlements without litigation, and all of
which consented to inclusion of the broader injunctive relief omitted
from this order.
Exxon's advertisements seem likely to have contributed to consumer
misperceptions about the attributes of and the need for premium
gasoline as much as gasoline advertisements run by the other
companies. The more lenient injunctive coverage in Exxon's order will
be less effective in deterring future deception and may create
perverse incentives. In the future, companies may believe it is in
their interest to decline negotiated settlement until after litigation
has commenced if they think that the Commission will reward greater
intransigence.
Narrowing the injunction might be worthwhile if some other effective
remedy were added, and the order adds a provision that requires Exxon
to produce and disseminate a 15-second television commercial and
distribute a certain number of copies of a brochure. Given the
apparently entrenched consumer misperceptions allegedly created by
Exxon's challenged claims about the need for and attributes of premium
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