It is further ordered, That respondents deliver a copy of this order to cease and desist to each operating division and to all present and future personnel of respondents engaged in the consummation of any extension of consumer credit or in any aspect of preparation, creation or placing of advertising, and that respondents secure a signed statement acknowledging receipt of said order from each such person. It is further ordered, That respondents notify the Commission at least thirty (30) days prior to any proposed change in the corporate respondents such as 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 arising out of the order.

It is further ordered, That the individual respondent named herein promptly notify the Commission of the discontinuance of his present business or employment and of his affiliation with a new business or employment. Such notice shall include respondent's current business address and a statement as to the nature of the business or employment in which he is engaged as well as a description of his duties and responsibilities.

It is further ordered, That no provision of this order shall be construed in any way to annul, invalidate, repeal, terminate, modify or exempt respondents from complying with agreements, orders or directives of any kind obtained by any other agency or act as a defense to actions instituted by municipal or State regulatory agencies. No provisions of this order shall be construed to imply that any past or future conduct of respondents complies with the rules and regulations of, or the statutes administered by the Federal Trade Commission.

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

IN THE MATTER OF

BRISTOL-MYERS COMPANY, ET AL.

DISMISSAL ORDER, OPINION, ETC., IN REGARD TO ALLEGED
VIOLATION OF THE FEDERAL TRADE COMMISSION ACT

Docket 8897. Complaint, Sept. 12, 1972 - Decision, Apr. 22, 1975 Order setting aside the initial decision of the administrative law judge and dismissing the complaint against a New York City seller and distributor of aerosol spray

anti-perspirants and its advertising agency for alleged false television demonstrations.

Appearances

For the Commission: Lynne C. McCoy, William S. Busker and Charles E. Ludlam.

For the respondents: Gilbert H. Weil and Jay Sands Davis, Weil, Lee & Bergin, New York City, for Bristol-Myers Company. Leonard Orkin and Patricia Hatry, Davis, Gilbert, Levine & Schwartz, New York City, for Ogilvy & Mather, Inc.

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 the Bristol-Myers Company, a corporation, and Ogilvy & Mather, Inc., a corporation, 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 Bristol-Myers Company 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 345 Park Ave., in the city of New York, State of New York. Respondent Ogilvy & Mather, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of New York with its principal office and place of business located at 2 E. 48th St., in the city of New York, State of New York.

PAR. 2. Respondent Bristol-Myers Company now and for some time last past, has been engaged in the sale and distribution of Dry Ban spray anti-perspirants, which when sold, are shipped to purchasers located in various states of the United States. Thus respondent BristolMyers maintains, and at all times mentioned herein has maintained, a substantial course of trade in said spray anti-perspirants in commerce, as "commerce" is defined in the Federal Trade Commission Act.

Respondent Ogilvy and Mather, Inc., now and for some time last past, has been the advertising agency for Bristol-Myers Company and now, and for some time last past, has prepared and placed for publication advertising material, including but not limited to the advertising referred to herein, to promote the sale of Bristol-Myers' Dry Ban spray anti-perspirant.

PAR. 3. Respondent Bristol-Myers Company at all times mentioned herein has been, and now is, in substantial competition in commerce

with individuals, firms and corporations engaged in the sale and distribution of spray anti-perspirants of the same general kind and nature as those sold by respondent Bristol-Myers Company.

PAR. 4. In the course and conduct of its business and for the purpose of inducing the sale of the said Dry Ban spray anti-perspirant, respondents have advertised Dry Ban by means of demonstrations, and various statements used in connection therewith, in television broadcasts transmitted by television 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.

Said demonstrations and the statements used in connection therewith are contained in the following commercials, entitled "Rusty Rev," "Show-Up," "Dry Manhattan," "Spotty Performance," and "Glasses."

In the first four commercials, the same demonstration is used, whereby the "leading spray” and Dry Ban both are sprayed on a dark surface. The other spray appears white and thick; whereas, the Dry Ban appears completely clear and dry. At the conclusion of the demonstration, the voice-over asks, "Which do you prefer?"

In the commercial entitled "Glasses," two girls in an elevator spray Dry Ban and “a leading anti-perspirant spray" on separate eyeglass lenses. The "leading anti-perspirant spray" appears white and thick; whereas, the Dry Ban spray appears completely clear and dry. At this point, Girl #1 states, "I see the difference." The voice-over later announces, "Clear Dry Ban helps keep you feeling clean and dry."

PAR. 5. Through the use of the aforesaid demonstrations and the statements and representations used in connection therewith, respondents represent, directly or by implication, that said demonstrations are evidence which actually proves that Dry Ban is superior to competing anti-perspirant sprays because it is a dry spray that is not wet when applied to the body and because it leaves no visible residue when applied to the body.

PAR. 6. In truth and in fact:

1. Dry Ban is not a dry spray and it is wet when applied to the body, and

2. After application to the body, Dry Ban dries out leaving a visible residue.

The aforesaid demonstrations, including the statements and representations used in connection therewith, are not evidence which actually proves that Dry Ban is superior to competing anti-perspirant sprays. Therefore, the advertisements containing said demonstrations are false, misleading and deceptive.

PAR. 7. The use by the respondents of the aforesaid false, misleading and deceptive advertising and representations used in connection

therewith has had, and now has, the tendency and capacity to mislead and deceive a substantial portion of the purchasing public into the erroneous and mistaken belief that said advertising and representations were and are true, and into the purchase of a substantial quantity of respondent Bristol-Myers' spray anti-perspirant because of such erroneous and mistaken belief.

PAR. 8. The aforesaid acts and practices of respondents, as herein alleged, were and are, all to the prejudice and injury of the public and of respondent Bristol-Myers' competitors, and constituted, and now constitute, unfair and deceptive acts and practices and unfair methods of competition in commerce, in violation of Section 5 of the Federal Trade Commission Act.

INITIAL DECISION BY DANIEL H. HANSCOM, ADMINISTRATIVE LAW JUDGE

NOVEMBER 28, 1973

ALLEGATIONS OF COMPLAINT

In a complaint served on Sept. 20, 1972, the Commission charged Bristol-Myers Company (hereinafter "Bristol-Myers") and its advertising agency, Ogilvy & Mather, Inc. (hereinafter "Ogilvy & Mather") with utilizing false, misleading, and deceptive practices in the advertising and sale of Bristol-Myers' Dry Ban spray anti-perspirant in violation of Section 5 of the Federal Trade Commission Act.

The complaint alleged that respondents promoted Dry Ban through a series of television commercials "Rusty Rev," "Show-Up," "Dry Manhattan," "Spotty Performance," and "Glasses," each of which compared Dry Ban with a "leading" competitive spray by means of a demonstration. In the first four commercials, the "leading spray" and Dry Ban were both sprayed on a surface. According to the complaint, the "leading spray" appeared white and thick, whereas Dry Ban appeared completely clear and dry. A voice asked, "Which do you prefer?" In "Glasses," two girls in an elevator sprayed Dry Ban and “a leading anti-perspirant spray" on separate eyeglass lenses. The "leading anti-perspirant spray" appeared white and thick, whereas Dry Ban appeared completely clear and dry. One of the girls then said, “I see the difference." According to the complaint, the demonstration in each of the commercials represented to the consuming public that it was evidence actually proving that Dry Ban was superior to competing anti-perspirant sprays because it was a dry spray that was not wet when applied to the body, and because it left no visible residue.

The complaint charged, however, that Dry Ban was not in truth a dry

spray, that it was wet when applied to the body, that after application it left a visible residue, and that the demonstration in each commercial was not evidence actually proving the contrary. Accordingly, the commercials and the demonstrations in each were challenged as being false, misleading and deceptive.

Bristol-Myers and Ogilvy & Mather denied these allegations in answers filed Oct. 10, 1972, and Oct. 18, 1972, respectively. After pretrial proceedings, including discovery by each side and the disposition of a number of motions and other matters, hearings on the merits were completed and the record was closed on July 5, 1973. As a result of certain contentions relating to the product coverage of the notice order advanced by complaint counsel for the first time in their proposed findings, proceedings were reopened by the undersigned on Aug. 31, 1973, on motion of respondent Bristol-Myers to permit the offer of evidence limited to the product coverage of the order proposed by complaint counsel. A hearing was held on Oct. 9, 1973, and the record was again closed on Oct. 10, 1973.

This matter is now before the undersigned for initial decision based on the allegations of the complaint, answers, evidence, and the proposed findings of fact, conclusions, and briefs filed by counsel for respondents and complaint counsel. All proposed findings of fact, conclusions and arguments not specifically found or accepted herein are rejected. The undersigned, having considered the entire record, makes the following findings and conclusions and issues the order set out at the end hereof:

FINDINGS OF FACT

Respondents

1. Respondent Bristol-Myers 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 at 345 Park Avenue, New York, N.Y. Bristol-Myers markets a wide variety of overthe-counter pharmaceuticals, cosmetics, and household products, including such well-known items as Bufferin, Excedrin, Bromo Quinine, Sal Hepatica, Vitalis, Clairol, and many others (CX 84; BMRX 2; Edmondson, Tr. 1627).1 Respondent Bristol-Myers has since 1968 been engaged in the sale and distribution of Dry Ban spray anti-perspirant (CX 86(1)). Annual sales volume of all products by Bristol-Myers is over $1,000,000,000, and total advertising expenditures are approximately $225,000,000 (Edmondson, Tr. 1630).

2. Respondent Ogilvy & Mather is a corporation organized, existing and doing business under and by virtue of the laws of the State of New

"CX" - Complaint Counsel's Exhibit; "BMRX" - Bristol - Myers' Exhibit; "OMRX" - Ogilvy & Mather's Exhibit; "Tr."-Transcript Page.