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 General Motors Corp., Campbell-Ewald Co., and McCann-Erickson, Inc., corporations, hereinafter referred to as respondents, have violated the provisions of 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 General Motors Corporation is a corporation, organized, existing and doing business under and by virtue of the laws of the State of Delaware, with its principal office and place of business located at 3044 W. Grand Blvd., Detroit, Mich.

PAR. 2. Respondent Campbell-Ewald Co. 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 3044 W. Grand Blvd., Detroit, Mich.

PAR. 3. Respondent McCann-Erickson, 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 485 Lexington Avenue, New York, N.Y.

PAR. 4. Respondent General Motors Corporation is now, and for some time last past has been, engaged in the manufacture, distribution, sale, and advertising of Chevrolet Vega and Buick Opel automobiles.

PAR. 5. Campbell-Ewald Co. is now, and for some time last past has been, an advertising agency of General Motors Corp., and now and for some time last past, has prepared and placed for publication and has caused dissemination of advertising material, including, but not limited to, the advertising referred to herein, to promote the sale of Chevrolet Vega automobiles.

PAR. 6. Respondent McCann-Erickson, Inc. is now, and for some time last past has been, an advertising agency of General Motors Corporation, and now and for some time last past, has prepared and placed for publication and has caused dissemination of advertising material, including, but not limited to, the advertising referred to herein, to promote the sale of Buick Opel automobiles.

PAR. 7. Respondent General Motors Corporation causes the said products, when sold, to be transported from its places of business in various States of the United States to purchasers located in various other States of the United States and in the District of Columbia. Respondent General Motors Corporation, maintains, and at all times

Complaint published as amended by administrative law judge, Feb. 26, 1973, Mar. 14, 1973 and Mar. 19, 1973.

mentioned herein has maintained, a course of trade in said products in commerce as "commerce" is defined in the Federal Trade Commission Act. The volume of business in such commerce has been and is substantial.

PAR. 8. In the course and conduct of their businesses, respondents have disseminated, and caused the dissemination of, certain advertisements concerning the said automobiles in commerce, as "commerce❞ is defined in the Federal Trade Commission Act, by means of radio broadcasts transmitted by radio stations located in various States of the United States, and in the District of Columbia, having sufficient power to carry such broadcasts across state lines, for the purpose of inducing and which were likely to induce, directly or indirectly, the purchase of said automobiles in commerce as "commerce" is defined in the Federal Trade Commission Act.

PAR. 9. Typical of the statements and representations in said advertisements, disseminated as aforesaid, but not all inclusive thereof, are the following:

(a) a radio commercial prepared for use by local dealers during the period Feb. 10, 1971 to Feb. 21, 1971, and May 1, 1971 to June 5, 1971, numbered C-V-1-1262-RT-60, entitled "DRIVE A VEGA," contains the following text:

ANNCR: There's only one way, really, to find out what a Chevy Vega is all about, and that's to drive one. Road and Track Magazine drove one and wound up saying * * * "Vega is beyond a doubt the best handling passenger car ever built in the U.S." Notice they didn't say the best handling little car * * * or the best handling economy car, but simply * * * the best handling passenger car. Now if you find that a little hard to swallow, we'll understand. After all, who'd expect an economical little car like Vega to be a hero on the highway? You'd expect it to be *** well * * * economical. And Vega is. But Vega is more. Actually, it handles more like a sports car than an economy car. The steering is quick and easy yet nice and firm on straightaways. Acceleration is brisk, braking is excellent, the ride is smooth and quiet. (PAUSE) Vega. The little car that does everything well.

(b) a radio commercial broadcast on the CBS radio network on Feb. 12, 1971 at 6:00 P.M. Eastern Daylight Time, entitled “DON'T BUY” contains the following text:

The new Opel 1900* * * lubed-for-life chassis.

PAR. 10. Through the use of said advertisement, identified in Paragraph Nine(a), and others similar thereto not specifically set out herein, disseminated as aforesaid, respondents General Motors Corporation and Campbell-Ewald Co. have represented, directly and by implication, that at the time that said respondents made the claims set forth in Paragraph Nine(a), said respondents had a reasonable basis from which to conclude that the Chevrolet Vega is the best handling passenger car ever built in the United States.

PAR. 11. In truth and in fact, at the time that respondents General

Motors Corporation and Campbell-Ewald Co. made the claims set forth in Paragraph Nine(a), said respondents had no reasonable basis from which to conclude that the Chevrolet Vega is the best handling passenger car ever built in the United States.

Therefore, the statements and representations set forth in Paragraphs Nine(a) and Ten were, and are, deceptive or unfair acts or practices.

PAR. 12. Through the use of said advertisement, identified in Paragraph Nine(b), and others similar thereto not specifically set out herein, disseminated as aforesaid, respondents General Motors Corporation and McCann-Erickson, Inc. have represented, directly and by implication, that at the time that said respondents made the claim set forth in Paragraph Nine(b), said respondents had a reasonable basis from which to conclude that the chassis of the Buick Opel 1900 never needs lubrication.

PAR. 13. In truth and in fact, at the time that respondents General Motors Corporation and McCann-Erickson, Inc. made the claim set forth in Paragraph Nine(b), said respondents had no reasonable basis from which to conclude that the chassis of the Buick Opel 1900 never needs lubrication.

Therefore, the statements and representations set forth in Paragraphs Nine(b) and Twelve were, and are, deceptive or unfair acts or practices.

PAR. 14. Respondents General Motors Corporation and CampbellEwald Co. have represented, through the use of the aforesaid advertisement and otherwise, directly and by implication, that the Chevrolet Vega is the best handling passenger car ever built in the United States.

At the time of said representation, said respondents had no reasonable basis to support said representation pertaining to the handling qualities of Chevrolet Vega automobiles.

Therefore, the aforesaid acts and practices were, and are, deceptive or unfair.

PAR. 15. Respondents General Motors Corporation and McCannErickson, Inc. have represented, through the use of the aforesaid advertisement and otherwise, directly and by implication, that the chassis of the Buick Opel 1900 never needs lubrication.

At the time of said representation, said respondents had no reasonable basis to support said representation pertaining to the economy of Buick Opel automobiles.

Therefore, the aforesaid acts and practices were, and are, deceptive or unfair.

PAR. 16. In the course and conduct of its aforesaid business, and at all

times mentioned herein respondent General Motors Corporation, has been and now is in substantial competition in commerce with corporations, firms and individuals engaged in the sale and distribution of automobiles of the same general kind and nature as that sold by respondent.

PAR. 17. In the course and conduct of their aforesaid businesses, and at all times mentioned herein, respondents Campbell-Ewald Co. and McCann-Erickson, Inc., have been, and now are, in substantial competition in commerce with other advertising agencies.

PAR. 18. The use by respondents of the aforesaid unfair or deceptive statements, representations and practices has had, and now has, the capacity and tendency to mislead members of the consuming public into the erroneous and mistaken belief that said statements and representations were and are true and into the purchase of substantial quantities of Chevrolet Vega and Buick Opel automobiles. As a result thereof, substantial trade is being unfairly diverted to respondent from its competitors.

PAR. 19. The aforesaid acts and practices of respondents as herein alleged, were and are all to the prejudice and injury of the public and of respondents' competitors and constituted, and now constitute, unfair or deceptive acts or practices in commerce and unfair methods of competition in commerce in violation of Section 5 of the Federal Trade Commission Act.

DECISION AND ORDER AS TO GENERAL MOTORS COPRORATION

AND MCCANN-ERICKSON, INC.

The Commission having issued its complaint on Dec. 11, 1972, charging the respondents named in the caption hereof with violation of the Federal Trade Commission Act, and the respondents having been served with a copy of that complaint; and

The Commission having duly determined upon motion certified to the Commission that, in the circumstances presented, the public interest would be served by waiver here of the provision of Section 2.34(d) of its rules which provides that the consent order procedure shall not be available after issuance of complaint; and

The respondents and counsel for the Commission having executed an agreement containing a consent order, an admission by respondents of all the jurisdictional facts set forth in the complaint, 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 set forth in such complaint, and waivers and provisions as required by the Commission's Rules; and

The Commission having thereafter considered the aforesaid agree

ment and having determined that it provides an adequate basis for appropriate disposition of this proceeding, and having provisionally accepted said agreement, and the agreement containing consent order having been placed on the public record for a period of sixty (60) days, now in further conformity with the procedure prescribed in Section 2.34(b) of its rules, the Commission hereby makes the following jurisdictional findings, and enters the following order in disposition of the proceeding:

1. Respondent General Motors Corporation 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 3044 W. Grand Blvd., in the city of Detroit, State of Michigan.

Respondent McCann-Erickson, 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 485 Lexington Ave., in the city of New York, State of New York.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of respondents, and the proceeding is in the public interest.

ORDER

I

It is ordered, That respondent General Motors Corporation, a corporation, its successors and assigns, and its officers, agents, representatives, and employees, directly or through any corporation, subsidiary, division or other device, in connection with the advertising, offering for sale, sale or distribution of any automobile, in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Representing directly or by implication, in any manner, including the use of any endorsement, testimonial or statement made by any individual, group or organization, that any automobile is superior in handling to any other automobile or all other automobiles, unless at the time that any such representation is first disseminated:

(a) respondent has a reasonable basis for such representation, which shall consist of a competent scientific test or tests that substantiate such representation; and

(b) respondent's agents, employees or representatives who are responsible for engineering approval of any advertisement containing such representation rely on such test or tests in approving such advertisement and provide to respondent's agents, employees or representatives who are responsible for approval of such advertise