Tobacco Documents Online

Under the code's terms, advertising may not "represent that cigarette smoking is essential to social prominence, distinction, success, or sexual attraction. " As made public in April , A-14, ATRR No. 147, 5/5/64), the code would! prohibit testimonials from athletes or ,;elebrities who might have special appeal to persons: under 21, as well as cigarette adver- ng or promotion in school, college, or university publications or on campuses. The ~ode further specifies that cigarette advertising may not appear on television or radio pro- jrams, or in publications, directed primarily to persons under 21. Violation of the code not as a rould require the violator to pay to the administrator "as liquidated damages, anda penalty, a sum, not to exceed $100, 000 as determined by the administrator after considera= s tton by him of relevant facts. " . ' -"J The companies said the code is subject to clearance under the antitrust laws by the artment of Justice. The Department's approval of the code was solicited in April. Meanwhile, the Commerce Department has issued a report entitled "Self-Regulation`-.' ;', Advertising, submitted to Secretary or Commerce Luther H. Hodges by his Advertismg sory Committee. Although the report does not represent any official view of the Depart- ' t of Commerce, Secretary Hodges explained, it should be "a helpful compendium of the rience in self-regulation in advertising, a compendium which can be of great interest to ` bose people and those industries who wish to see the self-regulation of advertising reinforced kd expanded. " Examining the diverse structure of the American advertising industry, the report states ,Ibat "the greatest hope for the more productive and beneficial operation of our private enter- se system lies in the stimulation of even greater degree of self-regulation, "' The report „ scribes four main types of. self-regulation--(1) by individual advertisers, companies, and rporations, (2) by individual industries and industry groups, (3) by advertising trade asso- lations, clubs, bureaus, and related organizations, and (4) by advertising media, publishers /odbroadcasters acting both independently and through their own media groups. Copies of the report are available from the Superintendent of Documents, Washington, C., at 60 cents per copy. -0- ~6CEPTIVE PRACTICES- FTC SETS JULY 20 HEARING TO ~ SS TRADE PRACTICE RULES FOR GYPSMNSY DISCUU IDUTR In order to eliminate and prevent unfair trade practices in the gypsum industry, the ederai Trade Commission is scheduling a July 20 hearing to consider trade practice rules. interested' persons are invited to attend the hearing or to submit written views not later 6n June 18. By notice published in the June 11 issue of the Federal Register (29 F. R. 7568), the 1bmmission points out that copies off proposed rules suggested by industry members are al- dy on file at the Commission's Washington office and are available from the Commission request. After full consideration of all oral and written comments, the Commission 8, it will contemplate final action on promulgation of trade practice rules for the industry. The industry is composed principally of firms engaged in the manufacture, sale, and tribution of calcined gypsum building products,, including, but not limited to, wallboard, sheathing, plaster, and block. The rules would be aimed at discriminatory pricing and motion policies, commercial bribery, deceptive invoicing, exclusive sales arrangements, amation of competitors or false disparagement of their products, and other unfair trade tices. Under the FTC's Revised' Procedures: and Rules of Practice adopted July 9, 1963 (p. X-1, ~TRR No, 104, 7/9/63), trade practice rules are defined as rules "designed to eliminate and vent, on a voluntary and industry-wide basis, trade practices which are violative of laws inistered by the Commission. " They provide the basis for voluntary and simultaneous : donment of unlawful practices by industry members. 1'T'nr TTI 1G"2

'A - 6 6-16-64 The Commission modifies its consent order against Morris Paper Co., Pittsburg, and sets'.34 .1 aside a consent order and dismisses the complaint against Southland Distributors, Inc., Dallaa8' (ATD Catalogs, Inc., New York City, Docket 8100, 6/4/64) "s When it issued cease -and -desist orders April 3 against ATD Catalogs, Inc. , New Yor City, and its members (p. A-22, ATRR No, 147, 5/5/64), the Commission noted that most°of the members agreed to consent orders. Among the jobbers who chose to litigate, however' some had no stock interest in the catalog publisher and had no officers or principals holding positions in the publishing firm. The Commission found that these jobbers were not acquaint with the internal administration of the catalog publisher and were not chargeable with actual o constructive knowledge that the advertising payments from the manufacturers were not avail able on proportionally equal terms to competing jobbers. The Commission also noted that the~ consent orders issued against Morris and Southland, both ATD members, were somewhat br, ' in scope than the orders issued in the litigated cases against nonconsenting ATD members:"1 Consequently, the Commission gave the consenting parties 60 days to request that orders'a I them L-•e limited in scope to correspond with orders issued against the members who litigated' Noting that Morris made such a request, the Commission says that it has determined "that the request should be granted to the extent that it is consistent with the orders issued in the *~* litigated proceedings. " Under the terms of the order, Morris is forbidden to induce ; or receive payments from toy manufacturers when it knows that such payments are not avail i h ll l ll i ith M i on proport ona y equa terms to a ot er customers compet ng w orr s. ~~ '_nw With respect to Southland, the Commission notes that the firm filed a motion to set as the consent order and dismiss the complaint on the grounds that it did not hold stock in ATD',i' officers or principals do not concurrently hold positions in the publishing corporation, and i0 received no dividends from ATD. In its April 3 actionD the Commission dismissed charges inT, the litigated proceedings against jobbers in positions similar to that of Southland. In dismissinZ the complaint against Southland, the FTC now says the facts stipulated in the consent agreemeqt would have precluded the issuance of an order against Southland if it had chosen to contest tl} " proceeding, :., YK The Commission concludes that,if the issue of knowledge had been litigated as to Sou u land, "it is unlikely that the result would have been different than in the case of the nonstock-4: holding jobbers involved in the litigated portion of this proceeding. Since there is no necess3tyr for going outside the record as presently constituted to reach that conclusion, the complaint"~against respondent Southland Distributors, Inc., will be dismissed. " :I~~ , *V - 0 DECEPTIVE PRACTICES FORMER NEW JERSEY GOVERNOR MEYNER TO ADMINISTER CIGARETTE ADVERTISING CODE ..,. Still awaiting justice Department approval of its proposal for self-regulation, the cig- arette industry has named former New Jersey Governor Robert B. Meyner to administer the cigarette advertising code. Governor Meyner would be given "complete and final authority", to determine whether cigarette advertising complies with the standards of the code and to en- force the code in all other respects, according to the cigarette companies. In accepting the post, Governor Meyner expressed the view that "it is better for indusi to regulate itself, and the cigarette companies are attempting to do this." He views his posit. as "an impartial, objective administrator of a strict code regulating all advertising in the in- dustry. " The code is designed to establish uniform standards for cigarette advertising and to provide a means whereby compliance with the code can be ascertained promptly and fairly on a consistent basis, 2y4497363$