992-3276

                          UNITED STATES OF AMERICA
                          FEDERAL TRADE COMMISSION

   COMMISSIONERS:
          Timothy J. Muris, Chairman
          Sheila F. Anthony
          Mozelle W. Thompson
          Orson Swindle
          Thomas B. Leary

                              In the Matter of

                       GATEWAY, INC., a corporation.

                             DOCKET NO. C-4015
                             DECISION AND ORDER

   The Federal Trade 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 complaint which the Western Region 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

   The respondent, its attorneys, and counsel for the Commission having
   thereafter executed an agreement containing a consent order, an
   admission by the 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 the respondent has
   violated the said Act, and that a 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:

          1. Respondent Gateway, Inc. ("Gateway"), is a Delaware

     _________________________________________________________________

          Analysis of Proposed Consent Order to Aid Public Comment
     _________________________________________________________________

   The Federal Trade Commission has accepted, subject to final approval,
   an agreement containing a consent order from Gateway, Inc.
   ("Gateway").

   The proposed consent order has been placed on the public record for
   thirty (30) days for receipt of comments by interested persons.
   Comments received during this period will become part of the public
   record. After thirty (30) 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 agreement's proposed
   order.

   Gateway advertises and sells personal computers, computer peripherals,
   software, and Internet services to the public. This matter concerns
   allegedly false and deceptive advertising of Gateway's Internet access
   service, "Gateway.net." The Commission's proposed complaint alleges
   that Gateway advertised that with the purchase of certain computer
   models, Gateway.net Internet access service would be included for free
   for one year, or could be purchased for a flat fee, such as $14.95 a
   month. In fact, for many consumers one year of Gateway.net was not
   free or obtainable for a flat fee, because these customers incurred
   long distance charges to access Gateway.net, or were charged $3.95 per
   hour by Gateway for the use of a "toll-free" telephone number to
   access the service. The Commission's proposed complaint challenges
   these "free" or "flat-fee" ads as both misrepresentations and as
   failures to disclose material facts under Section 5 of the FTC Act.
   Further, the complaint alleges that Gateway falsely represented that
   the use of its "toll free" 1-888 number to connect to the Internet was
   free to consumers. In fact, Gateway charged consumers $3.95 per hour
   for the use of this "toll-free" number.

   The proposed consent order contains provisions designed to prevent
   Gateway from engaging in similar acts and practices in the future.
   Part I of the proposed order prohibits the company from
   misrepresenting the price or cost of any Internet access service, or
   of any "toll-free" telephone number. Under the order, the term
   "Internet access service" is defined as "any service that enables a
   consumer to access the Internet or any other electronic network."

   Part II of the order prohibits representations regarding the price or
   cost of any "1-800" or "toll-free" telephone number provided to the
   consumer by Gateway unless it discloses, clearly and conspicuously,
   the dollar amounts of any hourly surcharges and any other fees it

                                                                 9923276

                          UNITED STATES OF AMERICA
                          FEDERAL TRADE COMMISSION

                              In the Matter of

                       GATEWAY, INC., a corporation.

                             DOCKET NO. C-4015

                                 COMPLAINT

   The Federal Trade Commission, having reason to believe that Gateway,
   Inc., 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 Gateway, Inc. is a Delaware corporation with its
   principal office or place of business at 610 Gateway Drive, North
   Sioux City, South Dakota 57049.

   2. Respondent has manufactured, advertised, labeled, offered for sale,
   sold, and distributed products and services to the public, including
   personal computers, computer peripherals, software, and Internet
   services.

   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 has caused to be disseminated
   advertisements for certain of its personal computers, including but
   not necessarily limited to the attached Exhibits A through F. These
   advertisements contain the following statements and depictions:

          A. (MAGAZINE ADVERTISEMENT)

          "The Gateway Essential Line: powerful PCs at practical prices.


          Okay, maybe you don't need an astrophysics supercomputer. But
          you still want a fast processor and ample memory and drive
          space. Look no further than Gateway Essential PCs. With video,
          sound and Intel processors - and affordable prices - they're
          compromise-free PCs. Each one includes a year on the Internet.1
          Pick a model, and we'll customize it the way you want.

                          UNITED STATES OF AMERICA
                          FEDERAL TRADE COMMISSION
                              In the Matter of
                     GOTTSCHALKS, INC., a corporation.

                             FILE No. 992 3004
                     AGREEMENT CONTAINING CONSENT ORDER

   The Federal Trade Commission has conducted an investigation of certain
   acts and practices of Gottschalks 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 Gottschalks, Inc., by its duly
   authorized officer, and counsel for the Federal Trade Commission that:

   1. Proposed respondent is a California corporation with its principal
   office or place of business at 7 River Park Place E., Fresno, CA
   93720.

   2. Proposed respondent admits all the jurisdictional facts set forth
   in the draft complaint.

   3. Proposed 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; and


          c. All rights to seek judicial review or otherwise to challenge
          or contest the validity 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 sixty
   (60) 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.