Amoco Chemical Company

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IN THE MATTER OF AMOCO CHEMICAL COMPANY, ET AL.

CONSENT ORDER, ETC , IN REGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT , Aug. 9, 1994 Docket C-3514. Complaint, Aug. 9, 1994- Decision This consent order prohihits, among other things, two Delaware corporations from misrepresenting the extent to which any polystyrene cup, plate, and other food service product or packaging material is capable of being recycled or the extent to which recycling collection programs are available, and from representing that such products offer any environmental benefit unless the respondents possess competent and reliable scientific evidence that substantiates the claim. Appearances For the Commission: C. Steven Baker and Timothy T. Hughes. For the respondents: Pro se.

COMPLAINT The Federal Trade Commission, having reason to believe that Amoco Chemical Company, a corporation, and Amoco Foam Products Company, a corporation, ("respondents ), have violated the provisions of the Federal Trade Commission Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, alleges:

PARAGRAPH 1. Respondents are Delaware corporations. Amoco Chemical Company dominates and controls the acts and practices of its wholly-owned subsidiary, Amoco Foam Products Company. Amoco Chemical Company has its principal offices or place of business at 200 East Randolph Drive, Chicago, Ilinois. Amoco Foam Products Company has its principal offices or place of business at 400 Northridge Road, Atlanta, Georgia. PAR. 2. Respondents have manufactured, advertised, labeled, otlered for sale, sold, and distributed polystyrene products, including plates, cups, and other food service polystyrene products to the public under the trade name "Snacker " and under private labels. offered for Respondents have also manufactured, advertised, labeled, AMOCO CHEMICAL COMPANY, ET AL. 195 194 Complaint sale, sold, and distributed polystyrene food service products to caterers, cafeterias, restaurants and other institutional buyers. PAR. 3. The acts and practices of respondents alleged in this complaint have been in or affecting commerce, as "commerce" is defined in Section 4 of the Federal Trade Commission Act. PAR. 4. Respondents have disseminated or have caused to be disseminated product advertising, labeling, packaging and other promotional materials, for Amoco s "Snacker," and other polystyrene food service products, including but not necessarily limited to the attached Exhibits A through C.

The aforesaid Amoco polystyrene product (Exhibit A) sold under private label includes the following statement on each cup: RECYCLABLE The aforesaid "Snacker" product packaging (Exhibit B) includes the following statement:

RECYCLABLE The aforesaid Amoco polystyrene product (Exhibit C) includes the following statement on the front of the packaging: 100% RECYCLABLE FOAM PLA TES PAR. 5. Through the use of the statemenls contained in Ihe advertising, packaging and labeling referred to in paragraph four including but not necessarily limited to the packaging and labeling attached as Exhibits A through C, respondents have represented directly or by implication, that their polystyrene products are recyclable.

PAR. 6. In truth and in fact, while polystyrene food service products are capable of being recycled, the vast majority of consumers cannot recycle them because there are only a few collection facilities nationwide that will accept them for recycling. Complaint 118 FTC. Therefore, the representation set forth in paragraph five was, and is false and misleading.

PAR. 7. Through the use of the statements contained in the advertising, packaging and labeling referred to in paragraph four including but not necessarily limited to the advertisements attached as Exhibits A- , respondents have represented, directly or by implication, that at the time they made the representations set forth in paragraph five, respondents possessed and relied upon a reasonable basis that substantiated such representations. PAR. 8. In truth and in fact, at the time they made the representations set forth in paragraph five, respondents did not possess and rely upon a reasonable basis that subslantiated such representations. Therefore, the representation set forth in paragraph seven was, and is, false and misleading.

PAR. 9. The acts and practices ofrespondents as alleged in this complaint constitute unfair or deceptive acts or practices in or affecting commerce in violation of Section Sea) of the Federal Trade Commission Act.

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;:, 151/2 imc (ll :: x 6 ;: /1 (G) Matthews CONVERTER: COLORS 6TH 5TH 4TH 3AD 2ND IST 052 021 116 DATE:REF. _286 8-NO. RED STANDARD BLUE12- ORAGE YELLOW flex 14-5323 AMOCO CHEMICAL COMPANY, ET AL. 201 194 Decision and Order DECISION AND ORDER The Federal Trade Commssion having initiated an investigation of certain acts and practices of the respondents named in the caption hereof, and the respondents having been furnished thereafter with a copy of a draft of complaint which the Chicago Regional Office proposed to present 10 the Commission for its consideration and which, if issued by the Commission, would charge respondents with violation of the Federal Trade Commission Act; and The respondents and counsel for the Commission having thereafter executed an agreement conlaining a consent order, an admission by the respondents of all the jurisdictional facts set forth in the aforesaid draft of complaints a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondents that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission s Rules; and The Commission having thereafter considered the matter and having detennined that it had reason to believe that the respondents have violated the said Act, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, now in further conformity with the procedure prescribed in Section 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

1. Respondents Amoco Chemical Company and Amoco Foam Products Company are corporations organized, existing and doing business under and by virtue of the laws of the State of Delaware. Amoco Chemical Company dominates and controls the acts and practices of its wholly-owned subsidiary, Amoco Foam Products Company.

Respondent Amoco Chemical Company has its principal offices or place of business at 200 East Randolph Drive, Chicago, l1linois. Respondent Amoco Foam Products Company has its principal otIces or place of business at 400 Northridge Road, Atlanta, Georgia. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

Decision and Order 118 FTC. ORDER DEFINITIONS For purposes of this order, the following definitions shall apply: The term competent and reliable scientific evidence means tests, analyses, research, sludies, or other evidence based on the expertise of professionals in the relevant area, that has been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results.

The term product or packaging material" means any product or packaging material that is offered for sale, sold or distributed to the public by respondents, their successors and assigns, under any brand name of respondents, their successors and assigns; and also means any product or packaging material s01d or distributed to the public by third parties under private labeling agreements with respondents their successors and assigns.

It is ordered, That respondents, Amoco Chemical Company, a corporation, and Amoco Foam Products Company, a corporation their successors and assigns, and their officers, representatives agents, and employees, directly or through any corporation subsidiary, division, or other device, in connection with the advertising, labeling, promotion, offering for sale, saJe, or distribution of any polystyrene food service product or polystyrene packaging material in or affecting commerce, as "commerce " is defined in the Federal Trade Commssion Act, do forthwith cease and desist from misrepresenting, in any manner, directly or by implication the extent to which:

(1) Any such product or packaging material is capable of being recycled; or (2) Recycling collection programs for such product or packaging material are available.

AMOCO CHEMICAL COMPANY, ET AL. 203 194 Decision and Order II.

It is further ordered, That respondents, Amoco Chemical Company, a corporation, and Amoco Foam Products Company, a corporation, their successors and assigns, and their officers representatives, agents, and employees, directly or through any corporation, subsidiary, division, or other device, in connectio!! with , sale, orthe advertising, labeling, promotion, offering for sale distribution of any plastic food service product or plastic packaging material in or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from representing, in any manner, directly or by implication, that any such product or packaging material offers any environmental benefit unless at the time of making such representation, respondents possess and rely upon competent and reliable evidence, which when appropriate must be competent and reliable scientific evidence, that substantiates such representation.

II.

It is further ordered That for five (5) years after the last date of dissemination of any representation covered by this order, respondents, or their successors and assigns, shall maintain and upon request make available to the Federal Trade Commission for inspection and copying:

A. All materials that were relied upon in disseminating such representation; and B. All tests, reports, studies, surveys, demonstrations, or other evidence in their possession or control that contradict, qualiy, or call into question such representation, or the basis relied upon for such representation, including complaints from consumers. IV.

It is further ordered That respondents shall distribute a copy of this order to each of their operating divisions and to each of their officers, agents, representatives, or employees engaged in the preparation and placement of advertisements, promotional materials product labels or other such sales materials covered by this order. Decision and Order 118 FTC. It is further ordered, That respondents shall notify Ihe Commission at least thirty (30) days prior to any proposed change in the corporations such as a dissolution, assignment, or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries, or any other change in the corporations which may affect compliance obligations under this order. VI.

It is further ordered, That respondents shall, within sixty (60) days after service of this order upon them, and at such other times as the Commission may require, file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with this order.

HAWTHORNE COMMUNICATIONS , INC. 205 205 Complaint