Clairol, Inc.

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IN THE MATTER OF CLAIROL, INC., AND JOAN GELD, LEON A. SPILO, AND MORRIS GELB COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Doclcet 8615. Complaint, Sept. 80, 1988-Decision, Oct. 8, 1941 Where three individuals engaged, through a corporation, since dissolved, which they controlled, in the competitive interstate sale and distribution of hair dyeing preparations which they designated generally as "Clairol," and more specifically as "Instant Clairol" and "Progressive Clairol"; in advertisements in circulars, leaflets, display cards and other advertising material distributed among retailers and beauty shops, and by them among the pur<~ha-sing public, and also through extensive advertisements in trade journals and in advertisements which said individuals inserted in newspapers, or caused to be Inserted therein. by dealers and beauty shopg; directly or by implication- ( a) Represented that their said products were not hair dyes, but preparations which reconditioned and supplied nourishment to the hair, and restored the natural or youthful color thereof, imparting thereto color which was permanent; facts being said preparations were shampoos which contained certain dyeing ingredients and their effect on the color of the hair was due solely to such ingredients, they were Incapable of reconditioning the• hair or restoring the natural or youthful color thereof, and their effect was not permanent, since they served only to color the hair to which applied and had no effect upon new hair, and they were incapable of supplying nourishment to the hair; and (b) Represented that said preparations were harmless and safe for use, and were made or compounded in Paris, France, and that as many as 12 million treatments thereof had been used in America in 1 year; facts being said "Instant Clairol" contained paratolylene diumine, and would result in irritation or rash to uset·s allergic to such coal tar derivative, and blindness might r~>sult from its use for dyeing eyelashes or eyebrows; said preparations were compounded in the United States and not In Paris, France; and the actual number of treatments used in America in 1 year was not in excess of 1,500,000 ;

With tendency and capacity to mislead and deceive a substantial portion of the purchasing public into the erroneous and mistaken belief that such. representations were true, and to cause such portion of the public, because of said belief, to purchase substantial quantities of their preparations, and with result of diverting substantial trade to them from their competitors, among whom are those who do not misrepresent their products: Held, That such acts and practices, under the circumstances set forth, were to the prejudice of the public and competitors, and constituted unfair methods of competition in commerce and unfair and deceptive acts and practices therein.

Before Mr. Edward E. Reardon, trial examiner. CLAIROL, INC., ET AL. 1451 1450 Complaint Mr. John M. Russell for the Commission.

Mr. John 1Vattawa, of "\Vashington, D. C., for respondents. Complaint Pursuant to the provisions of the Federal Trade Commission Act, and. by virtue of. the authority vested in it by said act, the Federal Trade Commission having reason to believe that Clairol, Inc., a cor- Poration, and Joan Gelb, Leon A. Spilo, and Morris Gelb, individuals, hereinafter referred to as respondents, have violated the Provisions of the said act, and it appearing to the Commission that a Proceeding by it in respect thereof would be in the public interest, hereby issues its complaint, stating its charges in that respect as follows:

PARAGRAPH 1. Respondent, Clairol, Inc., is a corporation organized, e:x:isting and doing business under and by virtue of the laws of the State Q£ New York, and respondents, Joan Gelb, Leon A. Spilo, and Morris ~elb, individuals, are president, vice president, and secretary, respectively, thereof. The individual respondents have dominant control of the advertising policies and business activities of said corporate respondent, and all of said respondents have cooperated. each with the other and have acted in concert in doing the acts and things hereinafter alleged. Respondents' office and principal place of business is located at 1321Vest Forty-sixth Street, in the city of New York, State of New York.

PAR. 2. Respondents now are, and for more than two years last past have been, engaged in the business of compounding and soliciting the sale of and selling, directly and through retail dealers and salesmen, two hair dyeing preparations, both generally known as Clairol and each specifically known as Progressive Clairol and Instant Clairol, respectively. Respondents cause said products, when sold, to be trans- Ported from their place of business in the State of N"ew York to purchasers thereof located in other States of the United States and in the District of Columbia. Respondents maintain, and at all times mentioned herein have maintained, a course of trade in said. Clairol preparations in commerce between and among the various States of the Dnited States, and in the District of Columbia. PAR. 3. In the course and conduct of their said business, respondents are in active and substantial competition with other corporations and individuals and with partnerships and firms engaged in the sale and distribution of similar products in commerce between and among the Various States of the United States and in the District of Columbia. Complaint 33F.T. O.

Among such competitors there are many who do not make any misrepresentations or false statements concerning the qualities and properties of their respective products and of their effectiveness when used. PAR. 4. In the course and conduct of their said business and for the purpose of inducing the purchase of said Clairol preparations by members of the ·purchasing public, respondents, by means of statements in radio broadcasts, advertisements inserted in magaziiies, trade journals, display cards, bulletins and in other printed matter distributed among: the trade and locally used by it in advertising said products and through other advertising media circulated generally throughout the United States, have made and are making many representations, directly and indirectly, as hereinafter stated, concerning the qualities and effectiveness of said Clairol preparations. Among and typical of said representations made by the respondents are the following:

Clairol is not a dye.

Don't dye your: hair-Clairolit.

Clairol does not contain the harsh metallic salts that dyes contain. I can't use common old-fashioned dyes. I can't use anything but Clairol •..Clairol. • • • reconditions, obliterates the gray • • •. Something effective, yet not a dye • • • colors white or gray hair com· pletely, permanently in one treatment.

Naturally with Clairol • • • your hair regains and retains its youth. • • • restore it to its youthful beauty and endow it with all the shimmering loveliness of its original and natural shade. • • • the trained technician will apply these corrective oils to your hair and scalp and as these nourishing unguents are deeply absorbed by the hair shaft and follicles the Clairol tints • • • Imparts color that Is permanent. Clairol Baby, yes, sir, her hair is ev'ry girl's de-si-re. Clairol • • • harmless way to beauty. Clairol • • • safe 'enough to bathe ln. Last year In .America alone twelve million of Clairol shampoo tint treatments were used.

:Mury of ~aris presents Clairol. It is • • • absolutely safe. All of said statements, together with similar statements appearing: in respondents' advertising literature and in and through other said advertising media, purport to be descriptive of respondents' said Clairol hair dyeing preparations and of their effectiveness when used. In all of their advertising literature, and through other means, respondents, directly or indirectly by implication, insinuation or otherwise, through statements and representations herein set out and otherstatements of similar import and effect, represent: By advertising Progressive and Instant Clairol as merely Clairol, that all of their claims. concerning both are applicable to each of said preparations. That they are not dyes. That they do not contain the harsh, metallic· CLAIROL, INC., ET AL. 1453 1450 Complaint salts that dyes contain. That they recondition and restore hair to its natural and youthful color and loveliness. That they contain beneficial oils nnd unguents which nourish the hair, as they are deeply absorbed by the hair shaft and follicles. That they permanently color white, gray or other shades of hair. That Instant and Progressive Clairol are both absolutely harmless and safe to use. That even every girl should prefer her hair colored with Clairol to its own llatural color. That 12 million Clairol shampoo tint treatments are llsed annually in America alone. That respondents have an office and place of bpsiness in Paris, France, where said Clairol preparations are made.

PAR. 5. The above-mentioned representations, implications, and insinuations used by the respondents in the manner above described in connection with the offering for sale and selling of said Clairol preparations are false,· misleading, and deceptive. In truth and in fact Progressive and Instant Clairol are both dyes, or shampoos containing dyes. The statement that they do not contain the harsh, metallic salts dyes contain is therefore unwarranted. They do not recondition or restore hair to its natural or youthful color and loveliness. They contain no beneficial oils and unguents, and have no properties which in any way nourish or benefit the hair. Neither of said preparations Permanently colors white, gray or other shades of hair, new hair growing out thereafter will not be colored thereby. Instant Clairol is not harmless but dangerous when used by persons unable to pass a certain physical test, written notice of which is required by law in New York City to be stated on each bottle sold there. Every girl's hair will not be improved by using either of respondents' said products. The implication that 12 million Clairol shampoo tint treat- :rnents are used annually in America alone is a gross exaggeration and vastly exceeds the number of such treatments used here. None of the respondents has any office or place of business in Paris, France, ~nd said Clairol preparations are not made there but are compounded In New York.

PAR. 6. The true facts are that there is nothing which will recondition or restore hair to its natural or youthful color. There is no known product which, when externally applied, will nourish the hair or hair shaft and follicles, or correct the cause of gray or faded hair or do more than impart color to existent hair. The slightest growth of the hair shows the natural color thereof and thus announces and proclaims that a hair dye has been used which accentuates lines and wrinkles and usually makes the face look hard. PAR. 7. Each and all of the false and misleading statements and representations made by the respondents in describing their said prod- 435526m--42--vol.S8----92 Findings 33F.T.C· ucts and their effectiveness when used, as hereinabove set out, were a~d are calculated to, and have had and now have a tendency and capacity to mislead and deceive a substantial portion of the purchas· ing public into the erroneous belief that all of said representations are true. As a direct result of this erroneous and mistaken belief a number of the consuming publi~ have purchased a substantial vol· ume of respondents' products, with the result that trade has been diverted unfairly to respondents from competitors likewise engaged in the business of distributing and selling similar preparations who truthfully advertise their respective products and th,e effectivene:s thereof when used. As a result thereof, injury has been done, and IS now being done, by respondents to competition in commerce among and between the various States of the United States and in the District of Columbia.

PAR. 8. The aforesaid acts and practices of respondents, as herein alleged, are all to the prejudice and injury of the public and of respondents' -competitors, and constitute unfair methods of compe· tition and unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission, on September 30, 1938, issued and sub· sequently served its complaint in this proceeding upon the respond· ents, Clairol, Inc., a corporation, and Joan Gelb, Leon A. Spilo, and Morris Gelb, individuals, charging them with the use of unfair methods of competition in commerce and unfair and deceptive acts and practices in commerce in violation of the provisions of said act. After the issuance of said complaint and the filing of respondents' answer thereto, testimony and other evidence in support of the alle· gations of the complaint were introduced by John M. Russell, attorney for the Commission, and in opposition thereto by John 1Vattawa, attorney for respondents, before Edward E. Reardon, a trial examiner of the Commission theretofore duly designated by it, and such testi· mony and other evidence were duly recorded and filed in the office of the Commission. Thereafter, the proceeding regularly came on for final hearing before the Commission on the complaint, answer, testi· mony and other evidence, report of the trial examiner upon the ev~­ dence and the exceptions thereto, briefs in support of and in opposl· tion to th0 complaint, and oral argument; and the Commission, baV· ing duly considered the matter and being now fully advised in tl~e premises, finds that this proceeding is in the interest of the pubhc and makes this its findings as to the facts and its conclusion drawn therefrom.

CLAIROL, INC., ET AL. 1455 1450 Findings FINDINGS AS TO THE FACTS PARAGRAPH 1. For approximately seven years prior to November 4, l940, respondent Clairol, Inc. was a corporation organized, existing, ~nd doing business under and by virtue of the laws of the State of ew York. The individual respondents, Joan Gelb, Leon A. Spilo, and Morris Gelb, were president, vice president, and secretary, respectively, of the corporate respondent. They had dominant control ?f the business activities and practices of the corporation, including lts advertising policies and practices. The office and principal place ~f business of all of the respondents was located at 132 'Vest Forty- Sixth Street, New York City, N.Y .

. ~n October 14, 19-±0, a new corporation was organized by the ~ndiViclual respondents, such corporation being organized under the aws of the State of Connecticut and being known as Clairol, Incorrorated. The individual respondents were the sole incorporators of he new corporation and constitute its board of directors. They1 •10ld the same· official positions in the new corporation as they held the ?ld cor~)oration, Joan ~elb bein¥ president, Leon A. Spilo -Ing VIce president, andl\Iorns Gelb bemg secretary. The new corporation, Clairol, Incorporated, was organized for the iurpose of taking! over the business formerly conducted by Clairol, 1nc., respondent herein. On October 31, 1940, respondent Clairol, · ~c ..transferred to Clairol, Incorporated, all of its business and P11YSlcal assets, which were moved to the new corporation's principal )1 ace of business in Stamford, Conn. On November 4, 1940, respond~ ent Clairol, Inc. was dissolved .

• PAn. 2. Prior to November 4, 1940, the respondents were engaged ~n the sale and distribution of cert~in hair dyeing preparations des- ~inated generally as "Clairol" and more specifically designated as th n.stant Clairol' -and "Progressive Clairol." Respondents cau,-;ed h e~r preparations, when sold, to be transported from their place of · Usmess in the State of New York to purchasers thereof located in ~~rious other States of the United States and in the District of Colum- . Ia. Respondents maintained a course of trade in their preparations ~n commerce among and between the Yarious States of the United states and in the District of Columbia.

PAR. 3. In the course and conduct of their business, the respondents Were in active and substantial competition with other corporations nnd individuals and with firms and parhwrships engaged in the sale a~d distribution, in commerce among and between the various States ? the United States and in the District of Columbia, of preparations ~ntended for the same purposes as those for which respondents' reparations were intended.

1456 FEDERAL TRADE COMMISSION DEClSIONS Findings 33 F. '1'. (J. PAR. 4. In the course and conduct of their business and for the purpose of promoting the sale of their preparations, the responde~ts have advertised their preparations by means of circulars, leaflets, d1:· play cards and other advertising material distributed among retail dealets and beauty shops, and through such agencies among members of the purchasing public. Respondents have also advertised e:s:t~n­ sively in trade journals and have inserted advertisements in daily newspapers, or have caused such advertisements to be inserted in such papers by dealers and beauty shops. Among and typical of the state-, ments and representations which have appeared in respondents advertisements and advertising material are the following: Clairol is not a dye.

Don't dye your hair-Clah·ol it.

Clairol does not contain the harsh metallic salts that dyes contain. I can't use common ohl-fashioned dyes. I can't use anything but Clairol • • •.

Clairol • • • reconditions, obliterates the gray • • •. Something effective, yet not a dye • • • colors white or gray bair cmupletely, permanently in one treatment. • Naturally wit~ Clalrol • • • your bar regains and retains its youth. • • • restore it to its youthful beauty and endow it with all the shi!liDler· ing loveliness of its original and natural shade. • • • the trained technician will apply these corrective oils to your bait and scalp and as these nourishing unguents are deeply absorbed by the )lair shaft and follicles the Clairol tint • • • imparts color that is permanent. Clairol * • • harmless way to beauty. · Clairol • • • safe enough to bathe in. l\Iury ot Paris presents Clairol. It Is • • • absolutely safe. Last year in America alone twelve million of Clnirol shampoo tint treatiilents were used.

PAn. 5. Through the use of these statements ·and representatio~s and others of similar import, the respondents have represented, dl· rectly or by implication, that their preparations are not hair dyes; that the preparations recondition the hair, and restore the natural or youthful color of the hair; that the color imparted to the hair by the use of the preparations i~ permanent; that the preparations supply nourishment to the hair; that the preparations are harmless and sa.fe for use; that the preparations are made or compounded in Purls, France; and that as many as 12 million treatments of the prepara· tions have been used in America in 1 year.

PAR. 6. The Commission finds that respondents' preparations are shampoos which contain certain dyeing ingredients. The effect pro· uuced upon the color of the hair through the use of the preparnti~ns is due solely to such dyeing ingredients. The preparations are Ill· capable of reconditioning the hair or restoring the natural or youth· ful color of the hair. Nor is the effect produced by the preparations CLAIROL, IKC., ET AL. 1457 1450 Order P~r:rnanent, as the preparations serve only to color the hair to which t~ey are applied, and have no effect upon new hair. The preparations are incapable of supplying nourishment to the hair . . 'lhe Commission further finds that the preparation Instant Clairol 13 not in all cases harmless or safe for use, as it contains the drug Phratolylene diamine, a coal tar derivative, and in those cases where ; e.us~r is allergic to such drug, the use of the preparation will result Irritation or rash. In no event should the preparation be usedt or dyeing the eyelashes or eyebrows, as blindness may result. The Preparations are not made or compounded in Paris, France, but are ~~rnpounded in the United States. The number of treatments of Ae P~eparations represented by respondents as having been used in ~ rn:rica in 1 year is grossly exaggerated. The actual number was :not In excess of 1,500,000.

PAR. 7. The Commission therefore finds that the representations ~ade by the respondents with respect to their preparations, as set 0~h in paragraphs 4 and 5 hereof, are misleading and deceptive. AR. 8. The Commission further finds that the use by the respond- ~~tsho~ these misleading and deceptive represent~tions wi.th respect d t. eir preparations has the tendency and capacity to mislead and receive a substantial portion of the purchasing public into the erthneous and mistaken belief that such representations are true, and > e tendency and capacity to cause such portion of the public to1 s ~rchase substantial quantities of respondents' preparations as a rell t of such erroneous and mistaken belie£. As a result substantialt •trade has been diverted to the respondents from their competitors, urnong whom are those who do not misrepresent their products. CONCLUSION t 'r~e acts and practices of the respondents as herein found are all ~0 t ~ prejudice of the public and of respondents' competitors, and 1lonshtute unfair methods of competition in commerce and unfair and i:ceptive acts and practices in commerce within the intent and meang of the Federal Trade Commission Act.

ORDER TO OEASE AND DESIST Jn''r~is proceeding having been heard by the Federal Trade Comspiss~n Upon the complaint of the Commission, the answer of re- :n on ents, testimony and other evidence taken before Edward E. n on, .trial examiner of the Commission theretofore duly desig- '('orn b.y It, in support of and in opposition to the allegations o£ the 1 P amt, report of the trial examiner upon the evidence, and ex- Order 33F. T.C.

ceptions thereto, briefs in support of and in opposition to the co~· plaint, and oral argument; and the Commission having made 1ts findings as to the facts and its conclusion that the respondents have violated the provisions of the Federal Trade Commission Act. It is ordered, That said individual respondents, Joan Gelb, Leon A. Spilo, and Morris Gelb, their representatives, agents, and employ~es, directly or through any corporate or other device, in connection wit~ the offering for sale, sale and distribution in commerce, as "commerce~ is defined in the Federal Trade Commission Act, of their cosmetic preparations designated generally as "Clairol" and more specifically designated as "Instant Clairol" and "Progressive Cla.irol," or ~nY other preparations of substantially similar composition or possessingsubstantially similar properties, whether sold under the same names or under any other names, do forthwith cease and desist from: 1. Representing that said preparations are not hair dyes. 2. Representing that said preparations recondition the hair, or restore the natural or youthful color of the hair. ·r· 3. Representing that the effect produced upon the color of the hal by the use of said preparations is permanent. . 4. Representing that said preparations supply nourishment to the h~~ . 5. Representing that said preparations are made or compounded lD France.

6. Representing that the number of treatments of said preparationf> used by the public is greater than is the fact. 7. Representing that said preparation Instant Clairol is harmless or safe for use. . It is further ordered, That said individual respondents shall, within 60 days after service upon them of this order, file with the Commissi~D a report in writing setting forth in detail the manner and form IIl which they have complied with this order. . d The corporate respondent, Clairol, Inc., having been dissolv~ r It is further ordered, That this proceeding be, and it hereby is, dis~ missed as to said corporate respondent.

KAY'S CUT RATE', ETC. 1459 Syllabus