Palazzolo, J

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IN THE MATTER OF J.PALAZZOLO ';

COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION 01<' SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 191-l Docket 3062. Complaint, F'eb. 16, 1931-Decision, Apr. 19, 1939 Where an individual engaged in offer and sale of various toilet preparations, including one known as "Otello Watf'r" and "L'Acqua Otello," for bead, scalp, and hair; in advertising his said. product in circulars and folders and in the pape-rs and other publications circulated throughout the United States, and by various broadcasts- (a) Represented said "L'Acqua Otello" or "Otello 'Vater" us not a dye, but "a preparation which gives your hair a natural color aud vitality," and "a miraculous water which regenerates the hair bulb and brings baclc vitality," and which "rejuvenates the roots of tl;le hairs, thus bringing back I'~ the natural color of the hair and vitality," and "restot·es gray hair to its natural color or vitality,'' facts being said product was a dye, contained in equal quantities ingredients which are constituent parts of similar hair dyes known and advertised as such, was not in any sense a miraculous water, and did not have what could be tf'rmed in any sense water as a I • component part, and would not rejuvenate the roots or bulbs of the hair or give hair a natural color and vitality, or restore natural color to gray hair; and (b) Represented that said preparation ended and destroyed dnndruf'r and stopped it and. baldness and falling hair, and restored to its natural color or vitality gray hair, facts being it was not an effecti'l"e cure for falling hair and dandruff and would uot end latter and baldness and stop falling hair and destroy dandmff, nor give hair a natural color and vitality, or produce any new hair, and representations made by him with respect to nature and effect of his product were false and misleading; With tendency and capacity to mislead and deceive substantial portion of purchasing public into erroneous belief that such representations we1·e true, and with result, as direct consequence of such mistaken and erroneous belief induced by his said advertising and representations as above set forth, that substantial number of purchasing public bought substantial quantities of his said product and trade was unfairly dil"erted to him from others engaged ln like and similar business and in sale of preparations for head and hair, and who truthfully advertise their products: Held, Tllllt such acts and practices were all to the prejudice and injury of the public and competitors and constituted unfair methods of competition. Before Mr. John J, Keenan, trial examiner. Mr. Merle P. Lyon for the Commission.

Mr. George ,C. La~·e, of New York City, for respondent. 1474 FEDERAL TRADE COl\Il\IISSIO:N DECISIOXS Complaint 28F.T.C.

Complaint Pursuant to the provisions of an Act of Congress, approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," the Federal Trade Commission, having reason to believe that J. Palazzolo, an individual, of New York City, N. Y., has been and now is using unfair methods of competition in commerce, as "commerce" is defined in said act, and it appearing to said Commission that a proceeding by it in respect thereof will be in the public interest, hereby issues its complaint and states its charges in that respect as follows:

PARAGRAPH 1. Respondent, J. Palazzolo, is an individual trading as J. Palazzolo, with his office and principal place of business located at 43G East Fourteenth Street, New York City, State of New York. Respondent is now, and has been for several years last past, engaged, among other things, at said location, in the manufacture and sale of a hair dye for use in the dyeing of white or gray hair, which he designates and has designated "Otello "\Vater" and also "L'Acqua Otello." He sells said product directly to the consumers and also to druggists, who in turn sell the same directly to consumers. Respondent's method of sale is usually through the mails. In the ~course and conduct of his business respondent ships, or causes to be shipped or transported, his said product when so sold from the State of New York to said purchasers thereof located in points in various States of the United States other than the State of New York. There is now, and his been during all of the times herein mentioned, a constant current of trade in commerce of said product so sold by said respondent between and among the various States of the United States and in the District of Columbia. PAR. 2. In the Course and conduct of said business respondent is now, and has been during all the times herein mentioned, engaged in substantial competition with various corporations, firms, and individuals selling or offering for sale to the general public, hair dyes and compounds used for the purpose of dyeing white and gray hair, in the manner set out in paragraph 1 hereof, in commerce among and between the various States of the United States and in the District of Columbia.

PAR. 3. In the course and conduct of his business as aforesaid, respondent, in soliciting the sale and in selling said product, has ad- >ertised, the same in newspapers, magazines, and periodicals of general circulation, by mans of radio broadcasts, and in pamphlets, printed testimonials, and other printed mattH, and by and through J'. PALAZZOLO 1475 1473 Complaint the use of photographs and other pictures and on labels attached to, and in circulars inclosed in, the boxes or containers thereof. In, by, and through each and all of the advertising media above enumerated .!I respondent has made and is making, expressly or by implication, the .I i following statements or representations: (a) L'Acqua Otello is not a dye but is a pre>paration which gives your hair a natural color, vitality.

(b) Otello Water for gray hair Is not a tincture but a compound that restores gray hair to its natural color.

(c) It (Otello \Vater) ends dandrutr, baldness. (d) Ote>llo Water is not a dye but a miraculous water which re>gen('rates the hair bulb and brings back vitality.

(e) Otello Watet· de!ltroys dandruff, stops falling l1air. (f) Otello Water for white hair is not a dye. (g) Ote>llo Water restores gray hair to its natural color or vitality. (h) Otello Water rejuvenates the roots of the hairs thus bringing back the natural color of the hair and vitality.

PAR. 4. The statements and representations set forth in the pre- ~eding paragraph are false and misleading in that: (a) "Otello Water" or "L'Acqua Otello" is a dye. (b) The use of "Otello Water" will not re;;store gray hair to lts natural color <>r vitality.

(c) The use of "Otello \Vater" does not regenerate the hair bulb. (d) The use of "Otello Water" does not end dandruff or baldness or atrect the same beneficially.

(e) The use of "Otello Water" does not stop falling hair. (f) ''Otello Watl'l"" is not a miraculous water. It is not a water at all and it is a misnomer to cull it a water. It is in fact a typical lad and sulphur hair dye.

(g) "Otello Water" for white hair is a dye. (h) "Ot!'llo Water>r" dops not restore gray hair to its natural color or vitality. (i) The use of "OtPllo Water" do('S not rejuvenate the roots of the hair and does not bring back the natural color of the hair and vitality. PAR. 5. Said statements and representations set forth in paragraph 3 so made by respondent have, and have had, the tendency and ~apacity to induce the members of the public and prospective pur- ~hasers to form the mistaken and erroneous belief that said statements and representations are true, and acting in such erroneous belief, the said purchasing public has been induced to purchase, and has purchased, respondent's products, thereby unfairly diverting trade to respondent from its said competitors to the injury of competition in commerce among and between the various States of the United States and to the injury of the public.

PAR. 6. The above alleged acts and practices are each and all to the prejudice of the public and of respondent's competitors and constitute unfair methods of competition within the intent and meaning FEDERAL TRADE CO~BIISSIO:N DECISIO:SS 1476 Findings 28F. T.C.

o£ Section 5 of an Ac,t of Congress, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," approved September 26, 1914. REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission on February 16, 1937, issued and thereafter served its complaint. in this matter upon respondent Joseph Palazzolo, individually and trading as J. Palazzolo, charging him with unfair methods of competition in commerce in violation of the provisions of said act. After the issuance of said complaint and the filing of respondent's answer thereto, testimony and other evidence in support of the complaint were introduced by Merle P. Lyon, attorney for the Commission, and by respondent on behalf of him- Relf, before John J. Keenan, an examiner of the Commission theretofore duly designated by it. All of said testimony and other evidence was duly recorded and filed in the office of the Commission. Thereafter, the proceeding regularly came on for final hearing before the Commission on the said complaint, the answer thereto, testimony, and other evidence, briefs in support of the complaint and in opposition thereto, and the oral arguments of counsel; and the Commission, having duly considered the matter, and being now fully advised in the premises, finds that this proceeding is in the interest of the public and makes this its findings as to the facts and its conclusion drawn therefrom.

FINDINGS AS TO THE FACTS P ARAGRAPII 1. The respondent Joseph Palazzolo, trading under the trade name and style of J. Palazzolo, with his principal place of ·business at 436 East Fourteenth Street, New York City, N. Y., has been engaged in the business of offering for sale and selling various toilet preparations, among which is a preparation known as "Otello 'Vater" and "L'Acqna Otello," a preparation, for use on the head, scalp and hair. Respondent causes said preparation, when sold, to be transported from his aforesaid place of business in the State of New York to purchasers thereof at respective points of location in various States of the United States other than in the State of New York. Respondent maintains, and at all times mentioned herein has maintained, a course of trade in commerce in said preparation among and between the various States of the United States. In the course and conduct of his said business respondent has been and is now in active competition with various partnerships, corporations and other firms or inrlividuals also engaged in the sale and distribution of like and J. PALAZZOLO 1477 1473 Findings similar preparations in commerce between and among the varwus States of the United States.

PAR. 2. In the course and conduct of his business as described in paragraph 1 hereof, respondent, in soliciting the sale of the said preparations dealt in by him and in particular ''Otello Water," also known as ''L'Acqua Otello," and in selling and distributing same and in inducing the public to purchase said preparations, has, by means of Yarious advertising circulars and folders, and by means of a<h·ertisements inserted in the daily newspapers and other publications circulated throughout the United States and by various radio broadcasts, made statements and representations concerning the character and nature of said preparation and concerning the results obtained from its use. Among the said representations made by respondent are the following:

(a) L'Acqua Otello is not a dye, but is a preparation which gives your hair a natnrnl color and vitality.

(b) Otello Water for gray hair is not a tincture but a compound which restores grny hair to its natural color.

(c) It (Otello Water) ends dandruff and baldness. ( 11) Otello Water Is not a dye but a miraculous water which rt>generates the hair bulb and brings back vitality.

(e) Ot«:>llo Water Destroys Dandruff; stops falling hair. (f) Otello water for white hair is not a dye. (g) Otello Water restores gray hair to its natural color or vitality. (h) Otello Water rejuvenates the roots of the hairs, thus bringing back the natural color of the hair and vitality.

PAR. 3. The aforesaid statements by the respondent, together with statements of similar import and meaning not herein set out but disseminated as aforesaid, purport to be descriptive of respondent's I' preparation and its effectiveness in use. In the manner and by the I means aforesaid respondent represents directly and by implication r' . that such preparation is an effective cure for dandruff and falling hair, will give the hair a natural color and vitality, restores the natural color to gray hair, ends dandruff and baldness, destroys danclruff and stops falling hair, rejuvenates the roots of the hair and thus restores the natural color and vitality to the hair, and that such preparation is not a dye but is a miraculous water which rejuvenates the hair bulb and brings back vitality to the hair. P.<~.R. 4. The representations made by the respond.ent with respect to the nature and effect of the product when used are false and misleading in that the respondent's preparation is not an effective cure for dandruff and falling hair. Said product will not give the hair a natural color and vitality. Said product will not restore the natural color to gray hair; will not end dandruff and baldness; 1478 FEDERAL TRADE CO?.Il\IISSION DECISIONS Or<l~:>r 28F.T.C.

destroy dandruff, and stop falling hair. Said product will not rejuvenate the roots of the hair and thus restore the natural color and vitality to the hair. Said preparation is a dye and not a miraculous water which rejuvenates the hair bulb and brings vitality back to the hair. The formula for the said preparation contains, among other things, precipitated sulphur and lead acetate in equal quantities, which ingredients are constituent parts of similar hair dyes that are known and advertised as hair dyes. The said preparation is not in any sense a miraculous water. The only liquid ingredients in said preparation are glycerin and bayrum, and therefore it does not have what can be termed in any sense water as a component part. Users of said preparation will not have the roots or bulbs of the hair rejuvenated; will not secure a natural color and vitality of the hair; will not end dandruff and baldness, and will not stop falling hair or produce any new hait·. The said preparation is in truth and in fact a hair dye.

PAR. 5. Each of the false, misleading, deceptive, and untrue representations made by respondent in offering for sale and selling his product were and are calculated to and had, and now have, a tendency and capacity to mislead and deceive a substantial portion of the purchasing public into the erroneous belief that said representations are true. Further, as a direct consequence of such mistaken and erroneous belief, induced by the advertising and representations of the respondent, as aforesaid, a substantial number of the purchasing public have purchased a substantial quantity of said product, with the result that trade has been unfairly diverted from other corporations, individuals, firms and partnerships engaged in like and similar business and in the sale of preparations for the head and hair, who truthfully advertise their products.

CONCLUSION The acts and practices of the respondent herein, as set out in the foregoing findings as to the facts, are all to the prejudice and injury of the public and of respondent's competitors, and constitute unfair methods of competition in commerce within the intent and meaning of the provisions of the Federal Trade Commission Act. ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, the answer of respondent, testimony, and other evidence taken before John J. Keenan, an examiner of the Commission theretofore duly designated by it, in .T, PALAZZOLO 1479 1473 Order support of the allegations of said complaint and in opposition thereto, briefs filed herein, and oral arguments by Merle P. Lyon, counsel for the Commission, and by George G. Lake, counsel for the respondent, and the Commission having made its findings as to the facts and its conclusion that said respondent has violated the provisions of the Federal Trade Commission Act.

It is ordered, That the respondent, Joseph Palazzolo, individually and trading as J. Palazzolo, or under any other name or names, his agents, representatives, and employees, directly or through any corporate or other device, in connection with the offering for sale, sale and distribution in commerce, as commerce is defined in the Federal I iTrade Commission Act, of the hair and scalp lotion or preparation now designated by the names "Otello ·water" and "L'Acqua Otello," or any other preparation composed of substantially similar ingredients, or possessing substantially similar properties, whether sold under those names or under any other names, do forthwith cease and desist from:

1. Representing that said preparation is not a dye or is other than a dye.

2. Representing that the use of said preparation will restore the natural color to the hair, regenerate the hair bulb, restore vitality to the hair or rejuvenate, invigorate, or nourish the roots of the hair. 3. Representing that said preparation is a cure or remedy for Uandruff Ol' will uestroy dandruff.

4. Representing that the use of said preparation will cause a new I< growth of hair, will cause hair to regrow or will prevent the falling t of hair. ' 5. Representing through the use of the word "water" in the trade name of said preparation or in any other manner or by any other :means or device that said preparation is a water. It is further ordel·ed, That the respondent shall, within 60 days after service upon him of this order, file with the Commission a report in writing setting forth in detail the manner and form in which he has complied with this order.

1480 FEDERAL TRADE COl\Il\IISSION DECISIONS Syllabus 28F.T.C.