In the item of drug preparations listed above, which comprised 42.4 percent of the advertised products, a substantial proportion of the related advertising contained flagrant misrepresentations or representations which disclosed possible injurious results to the public and for that reason were given preferred attention. Requests for advice.-Many requests have been received from radio stations, advertisers, and advertising agencies for advice and information concerning certain advertisers and their products. The Commission cannot give the information requested in many cases either because the matter may be under investigation or it is not fully advised of all the facts and cannot render opinions therein; and, in any case, it is not the Commission policy to pass on the merits of products advertised. It treats as confidential all proceedings prior to acceptance of a stipulation or issuance of a complaint. After a stipulation has been accepted and approved, or a complaint issued, the facts concerning such proceedings are for the public record and available to anyone who may request them. Number of cases handled.-During the fiscal year ended June 30, 1939, the Commission, through its Radio and Periodical Division, sent questionnaires to advertisers in 679 cases and to advertising agencies in 44 cases, negotiated 230 stipulations accepted and approved by the Commission for discontinuance of misleading representations, and settled or closed by its various methods of procedure 394 such cases. In 26 cases the issuance of complaint was recommended, 18 for failure to stipulate and 8 without giving the advertiser an opportunity to stipulate because of gross deception or danger to the public involved in the practice. In 15 cases previously settled by stipulation complaints were recommended for violation of the terms of those stipulations. In 135 cases the division recommended filing the assembled data and closing the cases without prejudice to the right of the Commission to reopen them at any time the facts warranted. Four cases were closed because the Post Office Department had issued fraud orders against the advertisers and 11 because the Post Office Department had accepted affidavits of discontinuance of business from the parties concerned. Others were closed because, prior to the Commission's contact, the advertisers had discontinued advertising or selling without intent to resume, and others because the advertisers were able to justify their claims. On April 26, 1938, the Commission directed that all vendoradvertisers who signed stipulations should report within 60 days the manner and form of their compliance therewith, as had theretofore been required of respondents against whom cease and desist orders had issued. During the current fiscal year 236 such compliance reports were received and filed by the Commission in cases. originating in the Radio and Periodical Division. Fifty-four of these compliance reports related to stipulations approved during the preceding fiscal year. Following preliminary examination of the advertising matter concerning 29 products, reports were submitted to the Commission recommending investigations to determine whether injunctive or criminal procedure was warranted. Four hundred and fourteen cases were pending before the division on July 1, 1938; 743 on June 30, 1939. Commission has access to scientific services.-Effective cooperation continued with other departments of the Government. The Commission has access to the laboratories, libraries, and other facilities of Federal Government agencies, including the National Bureau of Standards, United States Public Health Service, and the Food and Drug Administration, Bureau of Home Economics, and Bureau of Animal Industry of the Department of Agriculture, to any of which it may refer a matter for scientific opinion. Since the passage of the Wheeler-Lea amendment to the Federal Trade Commission Act, the Commission has established the nucleus of a competent medical staff under the supervision of a physician assigned to it by the United States Public Health Service, so that therapeutic claims of advertisers can be competently and carefully examined in the light of quantitative formulas. When necessary, the Commission obtains medical and other scientific information and opinions from nongovernmental hospitals, clinics, and laboratories. Such material and cooperation are often particularly helpful in enabling the Commission to reach sound and fair conclusions with respect to scientific and technical questions which come before it, and especially so in connection with much of the work of the Radio and Periodical Division. Procedure in advertising cases.-If a published or broadcast advertisement coming to its attention appears on its face to be misleading, the Radio and Periodical Division sends a questionnaire to the advertiser, requesting a sample of his product, if this is practicable, and a quantitative formula, if the product is a compound, and also requesting copies of all advertisements published or commercial continuities broadcast (if such continuities are not already on file) during a specific period, together with copies of all booklets, folders, circulars, form letters, and other advertising literature used. Upon receipt of these data, the claims, sample, and formula are referred to an appropriate technical agency of the Government for a scientific opinion. Upon receipt of the opinion the advertising is carefully scrutinized, and portions of the copy that in the light of the evidence at hand, still appear to be false or misleading, are marked as excerpts and numbered. A copy of this numbered list and a copy of the opinion received, are sent to the advertiser, who is extended the privilege of submitting such evidence as he may desire in support of the representations found in his advertising. He may answer by letter or, upon his request, may confer with the Radio and Periodical Division in person or through counsel. If, after a consideration of all available evidence at hand and furnished by the advertiser, the questioned claims appear to be true, the division reports the matter to the Commission with the recommendation that the data be filed without action. If, on the other hand, it appears from the evidence before it that the advertising is false or misleading, the division refers the matter to the Commission with recommendation that application for complaint be docketed, and either complaint issued or the matter returned to the division for negotiation of a stipulation, provided the matter is one appropriate for stipulation procedure and the advertiser desires to dispose of it by such voluntary agreement to cease and desist from the objectionable representations involved. If the Commission approves according opportunity to stipulate, the division prepares a stipulation and forwards it to the advertiser for execution. Should he object to any of its provisions, he may discuss them by mail or in person. If and when he agrees upon the terms of the stipulation and signs and returns it, the matter is again reported to the Commission with recommendation that the stipulation be accepted and the case closed without prejudice. Simplified methods adopted. The object of all Commission procedure is to prevent unfair methods of competition and unfair and deceptive acts and practices in commerce, and experience has shown that this can be accomplished not only by cease and desist orders, but by the stipulation method, which is effective and speedy as well as inexpensive for both Government and advertiser. |