Body Systems Technology, Inc. et al.; Analysis To Aid Public Comment

[Federal Register Volume 64, Number 126 (Thursday, July 1, 1999)]
[Notices]
[Pages 35661-35662]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16709]


=======================================================================
-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION

[File No. 9823177]


Body Systems Technology, Inc. et al.; Analysis To Aid Public 
Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

-----------------------------------------------------------------------

SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the draft 
complaint that accompanies the consent agreement and the terms of the 
consent order--embodied in the consent agreement--that would settle 
these allegations.

DATES: Comments must be received on or before August 30, 1999.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 600 Pennsylvania Avenue, NW, Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Donald D'Amato, New York Regional 
Office, Federal Trade Commission, 150 William Street, Suite 1300, New 
York, NY 10038, (212) 264-1223.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46, and Section 2.34 of 
the Commission's Rules of Practice, 16 CFR 2.34, notice is hereby given 
that the above-captioned consent agreement containing a consent order 
to cease and desist, having been filed with and accepted, subject to 
final approval, by the Commission, has been placed on the public record 
for a period of sixty (60) days. The following Analysis to Aid Public 
Comment describes the terms of the consent agreement, and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(June 24, 1999), on the World Wide Web, at ``http://www.ftc.gov/os/
actions97.htm.'' A paper copy can be obtained from the FTC Public 
Reference Room, Room H-130, 600 Pennsylvania Avenue, NW, Washington, DC 
20580, either in person or by calling (202) 326-3627.
    Public comment is invited. Comments should be directed to: FTC/
Office of the Secretary, Room 159, 600 Pennsylvania Avenue, NW, 
Washington, DC 20580. Two paper copies of each comment should be filed, 
and should be accompanied, if possible by a 3\1/2\ inch diskette 
containing an electronic copy of the comment. Such comments or views 
will be considered by the Commission and will be available for 
inspection and copying at its principal office in accordance with 
Section 4.9(b)(6)(ii) of the Commission's Rules of Practice (16 CFR 
4.9(b)(6)(ii)).

Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission has accepted, subject to final 
approval, an agreement to a proposed consent order from Body Systems 
Technology, Inc. (``BST''), a corporation, and William E. Chace and 
James D. Davis, individually and as officers of the corporation 
(``proposed respondents'').
    The proposed consent order has been placed on the public record for 
sixty (60) days for the receipt of comments by interested persons. 
Comments received during this period will become part of the public 
record. After sixty (60) days, the Commission will again review the 
agreement and comments received and will decide whether it should 
withdraw from the agreement and take appropriate action or make final 
the agreement's proposed order.
    This matter involves proposed respondents' making of health-related 
advertising claims on the Internet and elsewhere for their shark 
cartilage capsules, una de gato capsules, and una de gato liquid. The 
proposed complaint alleges that BST and its two principal officers 
violated Section 5 of the Federal Trade Commission Act (``FTC Act'') by 
making the following unsubstantiated claims: BST's una de gato products 
are or are likely to be an effective treatment of cancer, HIV/AIDS, and 
arthritis; and BST's shark cartilage capsules are effective in the 
prevention and treatment of cancer. The proposed complaint also alleges 
that the proposed respondents violated Section 5 of the FTC Act by 
falsely representing that research studies show that BST's una de gato 
products are or are likely to be an effective treatment of cancer, HIV/
AIDs,

[[Page 35662]]

and arthritis; and by falsely representing that published laboratory 
studies prove that BST's shark cartilage capsules are effective in the 
prevention and treatment of cancer.
    Paragraph I of the proposed consent order prohibits proposed 
respondents from representing that BST's shark cartilage capsules or 
any other product or program is effective in the prevention of cancer 
or is effective in the treatment of cancer unless, at the time the 
representation is made, respondents possess and rely upon competent and 
reliable scientific evidence that substantiates the representation.
    Paragraph II of the proposed consent order prohibits proposed 
respondents from representing that BST's una de gato capsules, BST's 
una de gato liquid, or any other product or program is or is likely to 
be an effective treatment of cancer, is or is likely to be an effective 
treatment of HIV/AIDS, or is or is likely to be an effective treatment 
of arthritis unless, at the time the representation is made, proposed 
respondents possess and rely upon competent and reliable scientific 
evidence that substantiates the representation.
    Paragraph III of the proposed consent order prohibits for any food, 
dietary supplement, drug, or any program, representations about the 
health benefits, performance, efficacy, or safety of such product or 
program, unless, at the time the presentation is made, proposed 
respondents possess and rely upon competent and reliable scientific 
evidence that substantiates the representation.
    Paragraph IV of the proposed consent order prohibits for any 
product or program, misrepresentations about the existence, contents, 
validity, results, conclusions, or interpretations of any test, study, 
or research.
    Paragraph V of the proposed consent order allows proposed 
respondents to make any representation that is specifically permitted 
in the labeling for any product by regulations promulgated by FDA 
pursuant to the Nutrition Labeling and Education Act of 1990.
    Paragraph VI of the proposed consent order allows proposed 
respondents to make any representation for any drug that is permitted 
by the FDA in the drug's labeling.
    Paragraph VII of the proposed consent order governs proposed 
respondents' notification, termination, and monitoring requirements 
with respect to BST distributors. Proposed respondents are required to 
send a letter to distributors that informs then that it is against the 
law to make false claims about any BST product or program or to make 
health-related claims about any product or program of BST that are not 
substantiated by competent and reliable scientific evidence. The letter 
further states that distributors must agree not to use, rely on, or 
distribute any advertising or make oral representations containing 
false or unsubstantiated claims. Further, distributors must agree to 
submit all advertising to BST for approval prior to dissemination. The 
letter informs distributors that failure to comply with these terms 
will result in immediate termination, and if BST believes that the 
distributor has made false or unsubstantiated claims it will report the 
violation to the Federal Trade Commission. The proposed respondents are 
required to have their distributors sign, date, and return the letter 
as a condition of remaining a distributor.
    Paragraph VIII is a record-keeping provision that requires proposed 
respondents to maintain records of all notification letters sent to 
distributors, communications between respondents and distributors 
referring or relating to the requirements of Paragraph VII, and any 
other materials created pursuant to Paragraph VII of the proposed 
order.
    Paragraph IX of the proposed consent order requires the proposed 
respondents to provide full refunds for a specified period of time to 
all purchasers of their shark cartilage capsules, una de gato capsules, 
and una de gato liquid identifiable prior to the time the respondents 
stopped making, and took aggressive steps to stop its distributors from 
making, the alleged deceptive claims.
    Paragraph X of the proposed order requires the proposed respondents 
to provide the FTC with a monitoring report detailing the steps 
respondents have taken to comply with the redress requirements.
    Paragraph XI of the proposed order contains record keeping 
requirements for materials that substantiate, qualify, or contradict 
claims covered by the proposed order. Paragraph XII of the proposed 
order requires distribution of a copy of the order to current and 
future officers and agents. Paragraph XIII provides for Commission 
notification upon a change in the corporate respondent and Paragraph 
XIV requires Commission notification when the individual respondent 
changes his business or employment. Paragraph XV requires the proposed 
respondents to keep and maintain all records demonstrating compliance 
with the terms and provisions of the order. Paragraph XVI provides for 
the termination of the order after twenty (20) years under certain 
circumstances.
    The purpose of this analysis is to facilitate public comment on the 
proposed order, and it is not intended to constitute an official 
interpretation of the agreement and proposed order or to modify in any 
way their terms.

    By director of the Commission.
Benjamin I. Berman,
Acting Secretary.
[FR Doc 99-16709 Filed 6-30-99; 8:45 am]
BILLING CODE 6750-01-M