| **Analysis of Proposed Consent Order    to Aid Public Comment**

The Federal Trade Commission has accepted an agreement, subject to final approval, to a    proposed consent order from respondent USDrives Corporation.

The proposed consent order has been placed on the public record for sixty (60) days for    reception 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 and take other appropriate action or make final the agreement’s    proposed order.

This matter concerns advertising, packaging, labeling and promotional practices related    to the sale of optical drives that read information on compact disc read-only memory discs    ("CD-ROM drives"). The Commission’s complaint charges that respondent    misrepresented that its CD-ROM drives were all or virtually all made in the United States    when, in truth and in fact, its CD-ROM drives were assembled in the United States of    primarily imported parts. In addition, the complaint charges that respondent    misrepresented that CD-ROM drives that were made in China of primarily non-U.S. parts were    all or virtually all made in the United States.

The proposed consent order contains a provision that is designed to remedy the charges    and to prevent the respondent from engaging in similar acts and practices in the future.    Part I of the proposed order prohibits the respondent from misrepresenting the extent to    which any CD-ROM drive is made in the United States. The proposed order would allow    respondent to represent that a CD-ROM drive is made in the United States so long as all,    or virtually all, of the component parts of the CD-ROM drive are made in the United States    and all, or virtually all, of the labor in manufacturing the CD-ROM drive is performed in    the United States. 

Part II of the proposed order requires the respondent to maintain materials relied upon    in disseminating any representation covered by the order. Part III of the proposed order    requires the respondent to distribute copies of the order to certain company officials and    employees. Part IV of the proposed order requires the respondent to notify the Commission    of any change in the corporation that may affect compliance obligations under the order.    Part V of the proposed order requires the respondent to file one or more compliance    reports. Part VI of the proposed order is a provision whereby the order, absent certain    circumstances, terminates twenty years from the date of issuance.

The purpose of this analysis is to facilitate public comment on the proposed consent    order. It is not intended to constitute an official interpretation of the agreement and    proposed order or to modify in any way their terms. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|