[Federal Register Volume 66, Number 98 (Monday, May 21, 2001)]
[Notices]
[Pages 27973-27974]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-12678]


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FEDERAL TRADE COMMISSION

[File No. 002 3061]


Juno Online Services, Inc.; 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 complaint 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 June 14, 2001.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 600 Pennsylvania Avenue., NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Darren Bowie or Laura Sullivan, FTC/S-
4002, 600 Pennsylvania Ave., NW., Washington, DC 20580. (202) 326-2018 
or 326-3327.

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 an accepted by the 
Commission, has been placed on the public record for a period of thirty 
(30) 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 May 15, 2001), on the World 
Wide Web, at http://www.ftc.gov/os/2001/05/index.htm A paper copy can 
be obtained from the FTC Public Reference Room, Room H-130, 600 
Pennsylvania Avenue, NW., Washington, DC 20580, either in person or by 
calling (202) 326-3627.
    Public comment is invited. Comments should be directed to: FTC/
Office of the Secretary, Room 159, 600 Pennsylvania Ave., NW., 
Washington, DC 20580. Two paper copies of eac comment should be filed, 
and should be accompanied, if possible, by a 3\1/2\ inch diskette 
containing an electronic copy of the comment. 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, subject to final 
approval, an agreement containing a consent order from Juno Online 
Services, Inc. (``Juno'').
    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.
    Juno is an Internet service provider with approximately 842,000 
subscribers to its fee-based services and nearly 4 million total active 
subscribers. Juno typically charges subscribers a flat monthly fee for 
its fee-based services. The company's subscriber revenues reached early 
$34.5 million for 1999 and $73.9 million last year.

[[Page 27974]]

    This matter concerns allegedly false claims for its ``free'' and 
fee-based online services. The Commission's proposed complaint alleges:
    <bullet> Juno falsely represented that consumers participating in 
its free trial periods for its fee-based Internet service could cancel 
at any time before the free trial expired and avoid incurring charges, 
and Juno failed to disclose the restrictive procedures that subscribers 
must follow to cancel this service;
    <bullet> Juno misrepresented the duration of its free trial offers 
for its fee-based service and, in other instances, failed to disclose 
that these free trial periods must be completed within a month;
    <bullet> Juno misrepresented that there were no additional costs 
associated with using its free Internet service, and failed to 
adequately disclose important information about potential long distance 
telephone toll charges (``toll charges'') in promoting its free, fee-
based and free trial period offers;
    <bullet> Juno failed to adequately disclose in its advertising for 
certain rebate programs both the possibility of incurring toll charges 
while using its fee-based Internet service and applicable cancellation 
penalties; and
    <bullet> Juno misrepresented that its Internet service was 
available for purchase at certain prices, when it was not, and 
concurrently misrepresented the purpose for which it solicited credit 
card and other personal identifying information from consumers
    The proposed consent order contains several provisions designed to 
prevent Juno from engaging in similar acts and practices in the future 
and requires redress for certain injured consumers.
    Part I of the proposed consent order prohibits Juno from 
misrepresenting the price or cost of any electronic mail, Internet or 
other online service (``Internet services''). The Part also prohibits 
Juno from misrepresenting the ability or terms by which consumers can 
cancel these Internet services, or the amount of time consumers have to 
use these services during a free trial period before fees are charged. 
Part I further prohibits Juno from falsely representing that Internet 
service is available for purchase--when it is not--and from falsely 
representing why it requests or collects credit card or any other 
personal identifying information from consumers.
    Part II of the proposed consent order prohibits Juno from beginning 
to compute the billing cycle or free trial period for its Internet 
services before the consumer is able to use these services. In cases, 
however, where it is necessary to provide consumers with a software 
upgrade or hardware installment before they can use these services as 
advertised, Juno can comply with this Part if it clearly and 
conspicuously discloses when it will begin to compute the billing cycle 
or free trial period for these consumers before they register for these 
services.
    Part III of the proposed consent order requires Juno to clearly and 
conspicuously disclose obligations that consumers have to cancel their 
Internet service and the procedures consumers must follow to 
effectively cancel their service.
    Part IV of the proposed consent order requires Juno to provide 
consumers with reasonable means to cancel its Internet services, at a 
minimum providing for cancellation through e-mail and a toll-free 
telephone number. The Part further requires Juno to maintain adequate 
customer support to promptly handle requests for cancellation, 
terminating service before the next billing cycle.
    Parts V and VI of the proposed consent order require Juno to 
disclose clearly and conspicuously potential toll charges associated 
with sing its services and any cancellation penalties.
    Part VII of the proposed consent order requires that Juno provides 
consumers with reasonable means to determine the telephone numbers 
available for accessing its Internet services and the town or city 
where these numbers are located--at least making this information 
available in a directory posted on its Web site and through a toll-free 
telephone number. The Part further requires Juno to maintain adequate 
customer support to respond to consumer inquiries about its access 
telephone numbers.
    Part VIII of the proposed consent order prohibits Juno from using 
or disclosing the personal identifying information obtained by the 
company in connection with its deceptive dry test advertisements. The 
Part further conditions the Commission's approval of this consent order 
on the veracity of representations made by Juno that: (1) did not 
collect credit card numbers provided by consumers responding to these 
dry test advertisements; (2) it has since deleted any other personal 
identifying information that it did collect from consumers in 
connection with these advertisements; and (3) it did not share this 
information with any third party.
    Part IX of the proposed consent order prohibits Juno from providing 
the means and instrumentalities for any third party to violate any 
provision of the consent order.
    Part X of the proposed consent order requires Juno to offer 
reimbursement to certain consumers for toll charges incurred in the 
first two months of subscribing to its Internet services. Eligible 
consumers include those who: (a) subscribed to Juno's Internet service 
as part of a rebate program that required the purchase of another 
product or service and subscription to respondent's Internet services 
for a period of more than a month; and (b) cancelled their subscription 
and either (i) identified the unavailability of a local access number 
as a reason for the cancellation; or (ii) complained to Juno about 
incurring telephone toll charges. Eligible consumers are required to 
supply Juno with a copy of their telephone bill(s) reflecting the 
amount of the toll charges they incurred. Consumers, however, who 
incurred such toll charges at least 18 months prior to the date on 
which they mailed their application form, also can prove their claim 
with (a) a copy of a check or other form of payment; or (b) a written 
declaration indicating the amount of the toll charges that they 
incurred. Consumers who provide these alternative proofs of claim are 
entitled to receive a reimbursement not to exceed a maximum dollar 
amount.
    Parts XI through XV of the proposed consent order are standard 
record keeping and compliance provisions. Part XIII requires that 
respondent provides a summary and explanation of the consent order 
requirements and the consent order to all retailers and other parties 
who promoted its Internet services as part of a rebate program. Part 
XVI of the proposed consent order ``sunsets'' the order after twenty 
years, with certain exceptions.
    The purpose of this analysis is to facilitate public comment on the 
proposed order. It is not intended to constitute an official 
interpretation of the agreement and proposed order or to modify in any 
way their terms.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 01-12678 Filed 5-18-01; 8:45 am]
BILLING CODE 6750-01-M