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[Federal Register Volume 60, Number 238 (Tuesday, December 12, 1995)]
[Notices]
[Pages 63715-63717]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-30215]

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FEDERAL TRADE COMMISSION
[File No. 952-3391]

The Dannon Company, Inc.; Consent Agreement With Analysis To Aid 
Public Comment

AGENCY: Federal Trade Commission.

ACTION: Consent agreement.

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SUMMARY: In settlement of alleged violations of federal law prohibiting 
unfair acts and practices and unfair methods of competition, this 
consent agreement, accepted subject to final Commission approval, would 
prohibit the Tarrytown, NY-based frozen yogurt manufacturer from 
misrepresenting the fat, calories, saturated fat, or cholesterol in any 
of its frozen yogurt products. The consent agreement settles 
allegations stemming from nutritional claims made in advertisements for 
Dannon's line of Pure Indulgence frozen yogurt.

DATES: Comments must be received on or before February 12, 1996.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 6th St., and Pa. Ave., NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Justin Dingfelder, Bureau of Consumer 
Protection, Federal Trade Commission, S-4631, 6th Street & Pennsylvania 
Ave., NW., Washington, DC 20580, (202) 326-3017.
    Peter Metrinko, Bureau of Consumer Protection, Federal Trade 
Commission, S-4624, 6th Street & Pennsylvania Ave., N.W., Washington, 
DC 20580, (202) 326-2104.

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 following consent agreement containing a consent order 
to cease and desist, having been filed with and accepted, subject to 
final approval, by the Commission, has been placed on the public record 
for a period of sixty (60) days. Public comment is invited. 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)).

United States of America Before Federal Trade Commission

    In the Matter of The Dannon Company, Inc., a corporation .

[File No. 952-3391.]

Agreement Containing Consent Order To Cease and Desist

    The Federal Trade Commission having initiated an investigation of 
certain acts and practices of The Dannon Company, Inc., hereinafter 
sometimes referred to as proposed respondent, and it now appearing that 
proposed respondent is willing to enter into an agreement containing an 
Order to cease and desist from the use of the acts and practices being 
investigated,
    It is hereby agreed by and between The Dannon Company, Inc., by 
this duly authorized officer and attorneys, and counsel for the Federal 
Trade Commission, that:
    1. Proposed respondent The Dannon Company, Inc., is a corporation 
organized, existing and doing business under and by virtue of the laws 
of the State of Delaware, with its office and principal place of 
business located at 120 White Plains Road, Tarrytown, NY 10591.
    2. Proposed respondent admits all the jurisdictional facts set 
forth in the draft complaint here attached.
    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;
    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.
    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 contemplated thereby, will be placed on the public record for 
a period of sixty (60) days and information in respect thereto publicly 
released. The Commission thereafter may either withdraw its acceptance 
of this agreement and so notify the proposed respondents, 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.
    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 attached draft complaint, or that the facts 
as alleged in the attached draft complaint, other than the 
jurisdictional facts, are true.
    6. This agreement contemplates that, if it is accepted by the 
Commission, and if such acceptance is not subsequently withdrawn by the 
Commission pursuant to the provisions of Sec. 234 of the Commission's 
Rules, the Commission may, without further notice to proposed 
respondent: (1) Issue its complaint corresponding in form and substance 
with the draft complaint attached hereto and its decision containing 
the following Order to cease and desist in disposition of the 
proceeding; and (2) make information public in respect thereto. When so 
entered, the Order to cease and desist shall have the same force and 
effect and may be altered, modified or set aside in the same manner and 
within the same time provided by statute for other orders. Delivery by 
the Postal Service of the complaint and decision containing the agreed-
to Order to proposed respondent's address as stated in this agreement 
shall constitute service. Proposed respondent waives any right it may 
have to any other manner of service. The complaint may be used in 
construing the terms of the Order, and no agreement, understanding, 
representation, or interpretation not contained in the Order or the 
agreement 

[[Page 63716]]
may be used to vary or contradict the terms of the Order.
    7. Proposed respondent has read the proposed complaint and Order 
contemplated hereby. It understands that once the Order has been 
issued, it will be required to file one or more compliance reports 
showing that it has fully complied with the Order. Proposed respondent 
further understands that it may be liable for civil penalties in the 
amount provided by law for each violation of the Order after it becomes 
final.

Order

I

    It is ordered that respondent The Dannon Company, Inc., a 
corporation, its successors and assigns, and its officers, agents, 
representatives, and employees, directly or through any partnership, 
corporation, subsidiary, division or other device, in connection with 
the manufacture, advertising, packaging, labeling, promotion, offering 
for sale, sale or distribution of any frozen food product, in or 
affecting commerce, as ``commerce'' is defined in the Federal Trade 
Commission Act, do forthwith cease and desist from misrepresenting, in 
any manner, directly or by implication, through numerical or 
descriptive terms or any other means, the existence or amount of fat, 
saturated fat, cholesterol or calories in any such product. If any 
representation covered by this Part either directly or by implication 
conveys any nutrient content claim defined (for purposes of labeling) 
by any regulation promulgated by the Food and Drug Administration, 
compliance with this Part shall be governed by the qualifying amount 
for such defined claim as set forth in that regulation.

II

    Nothing in this Order shall prohibit respondent from making any 
representation that is specifically permitted in labeling for any such 
product in regulations promulgated by the Food and Drug Administration 
pursuant to the Nutrition Labeling and Education Act of 1990.

III

    It is further ordered that respondent, its successors and assigns, 
shall pay to the Federal Trade Commission, by cashier's check or 
certified check made payable to the U.S. Treasury and delivered to the 
Associate Director for Enforcement, Bureau of Consumer Protection, 
Federal Trade Commission, 6th and Pennsylvania Ave., NW, Washington, DC 
20580, the sum of $150,000. Respondent shall make this payment on or 
before the tenth day following the date of entry of this Order. In the 
event of any default on any obligation to make payment under this 
section, interest, computed pursuant to 28 U.S.C. 1961(a), shall accrue 
from the date of default to the date of payment.

IV

    It is further ordered that, for three (3) years after the last date 
of dissemination of any representation covered by this Order, 
respondents, or its successors and assigns, shall maintain and upon 
request make available to the Federal Trade Commission for inspection 
and copying:
    1. All labeling, packaging, advertisements and promotional 
materials setting forth any representation covered by this Order;
    2. All materials that were relied upon to substantiate any 
representation covered by this Order; and
    3. All test reports, studies, surveys, demonstrations or other 
evidence in its possession or control, that contradict, qualify, or 
call into question such representation or the basis upon which 
respondent relied for such representation, including complaints from 
consumers.

V

    It is further ordered that respondent shall notify the Federal 
Trade Commission at least thirty (30) days prior to any proposed change 
in the respondent such as dissolution, assignment, or sale resulting in 
the emergence of a successor corporation, the creation or dissolution 
of subsidiaries or any other change in the corporation which may affect 
compliance obligations arising out of this Order.

VI

    It is further ordered that respondent shall, within thirty days 
after service of this Order, distribute a copy of this Order to each of 
its operating divisions, and to each of its officers, agents, 
representatives, or employees engaged in the preparation or placement 
of advertisements, promotional materials, product labels or other 
materials covered by this Order.

VII

    It is further ordered that respondent shall, within sixty (60) days 
after service of this Order, file with the Commission a report, in 
writing, setting forth in detail the manner and form in which it has 
complied or intends to comply with this Order.

VIII

    It is further ordered that this order will terminate twenty years 
from the date of its issuance, or twenty years from the most recent 
date that the United States or the Federal Trade Commission files a 
complaint (with or without an accompanying consent decree) in federal 
court alleging any violation of the order, whichever comes later; 
provided, however, that the filing of such a complaint will not affect 
the duration of:
    A. Any paragraph in this order that terminates in less than twenty 
years;
    B. This order's application to any respondent that is not named as 
a defendant in such complaint; and
    C. This order if such complaint is filed after the order has 
terminated pursuant to this paragraph.
    Provided further, that if such complaint is dismissed or a federal 
court rules that the respondent did not violate any provision of the 
order, and the dismissal or ruling is either not appealed or upheld on 
appeal, then the order will terminate according to this paragraph as 
though the complaint was never filed, except that the order will not 
terminate between the date such complaint is filed and the later of the 
deadline for appealing such dismissal or ruling and the date such 
dismissal or ruling is upheld on appeal.
Benjamin I. Berman,
Acting Secretary.

Analysis of Proposed Consent Order to Aid Public Comment

    The Federal Trade Commission has accepted an agreement to a 
proposed consent order from The Dannon Co., Inc., (``respondent'' or 
``Dannon'').
    The proposed consent order has been placed on the public record for 
sixty (60) days for receipt of public 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 or make final the agreement's proposed 
order.
    This matter concerns claims made by Dannon in its advertising for 
Pure Indulgence frozen yogurt.
    The Commission's complaint in this matter charges Dannon with 
engaging in deceptive and unfair acts or practices in connection with 
the advertising of Pure Indulgence. The complaint alleges that 
respondents manufactured, advertised, offered for sale, sold or 
distributed a frozen yogurt sold under the name ``Pure Indulgence,'' 
which it represented 

[[Page 63717]]
was low in fat, low in calories, and lower in fat than ice cream. At 
the serving size for frozen yogurt commonly consumed, Pure Indulgence 
was not low in fat or low in calories. Further, Pure Indulgence was not 
lower in fat than many ice creams.
    The Commission's complaint alleges that the above representations 
for certain flavors of Pure Indulgence, at the time the advertising was 
disseminated, were false and misleading.
    The consent order contains provisions designed to remedy the 
violations charged and to prevent Dannon from engaging in similar 
deceptive and unfair acts in the future.
    Part I of the Commission's order prohibits respondent, in 
connection with the manufacture, advertising, packaging, labeling, 
promotion, offering for sale, sale or distribution of any frozen food 
product, from misrepresenting, in any manner, directly or by 
implication, through numerical or descriptive terms or any other means, 
the existence or amount of fat, saturated fat, cholesterol or calories 
in any such product. However, if any representation covered by this 
Part either directly or by implication conveys any nutrient content 
claim defined (for purposes of labeling) by any regulation promulgated 
by the Food and Drug Administration, compliance with this Part shall be 
governed by the qualifying amount for such defined claim as set forth 
in that regulation.
    Part II of the order provides that nothing in the order shall 
prohibit respondent from making any representation that is specifically 
permitted in labeling for any such product in regulations promulgated 
by the Food and Drug Administration pursuant to the Nutrition Labeling 
and Education Act of 1990.
    Under the terms of Part III of the order, respondents shall pay 
$150,000.00 to the U.S. Treasury.
    Part IV of the order requires Dannon to maintain copies of all 
materials relating to advertisements covered by the order and all 
documents relating to substantiation of advertising claims covered by 
the order.
    Part V requires Dannon to notify the Commission of any changes in 
corporate structure that might affect compliance with the order.
    Part VI requires Dannon to distribute copies of the order to 
certain company officials and employees and certain other 
representatives and agents of Dannon.
    Part VII requires Dannon to file with the Commission a report 
detailing compliance with the order.
    Part VIII provides for termination of the order twenty years from 
the date of issuance.
    The purpose of this analysis is to facilitate public comment on the 
proposed order, and it is not intended to constitute an official 
interpretation of the agreement and proposed order or to modify any of 
their terms.

[FR Doc. 95-30215 Filed 12-11-95; 8:45 am]
BILLING CODE 6750-01-M
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