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Arizona Automobile Dealers Association; Proposed Consent Agreement With Analysis To Aid Public Comment

American Government Special Collections Reference Desk

American Government Topics:  Arizona Automobile Dealers Association

Arizona Automobile Dealers Association; Proposed Consent Agreement With Analysis To Aid Public Comment

Donald S. Clark
Federal Trade Commission
March 21, 1994


[Federal Register Volume 59, Number 54 (Monday, March 21, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 94-6536]


[[Page Unknown]]

[Federal Register: March 21, 1994]


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FEDERAL TRADE COMMISSION
[File No. 931 0056]

 

Arizona Automobile Dealers Association; Proposed Consent 
Agreement With Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: In settlement of alleged violations of federal law prohibiting 
unfair acts and practices and unfair methods of competition, this 
consent agreement, accepted subject to final Commission approval, would 
prohibit, among other things, an Arizona association consisting of 
approximately 199 dealers from restricting, regulating, or interfering 
with truthful, non-deceptive comparative or price advertising or 
advertising concerning financing among members in the future.

DATES: Comments must be received on or before May 20, 1994.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
room 159, 6th St. and Pa. Ave., NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Ralph Stone, FTC/San Francisco 
Regional Office, 901 Market St., suite 570, San Francisco, CA 94103. 
(415) 744-7920.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Sec. 2.34 of the 
Commission's Rules of Practice (16 CFR 2.34), notice is hereby given 
that the following 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. Public comment is invited. 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 
Sec. 4.9(b)(6)(ii) of the Commission's Rules of Practice (16 CFR 
4.9(b)(6)(ii)).

Agreement Containing Consent Order To Cease and Desist

    In the matter of Arizona Automobile Dealers Association, a 
corporation, File No. 931 0056.

    The Federal Trade Commission, having initiated an investigation of 
certain acts and practices of the Arizona Automobile Dealers 
Association, a corporation, and it now appearing that the Arizona 
Automobile Dealers Association, hereinafter sometimes referred to as 
``AADA'' or ``proposed respondent,'' is willing to enter into an 
agreement containing an order to cease and desist from the acts and 
practices being investigated.
    It is hereby agreed by and between AADA, by its duly authorized 
officer, and its attorney, and counsel for the Federal Trade Commission 
that:
    1. AADA is a corporation organized, existing, and doing business 
under and by virtue of the laws of the State of Arizona, with its 
office and principal place of business at 4701 North 24th Street, suite 
B-3, Phoenix, Arizona 85064-2717.
    2. AADA admits all the jurisdictional facts set forth in the draft 
of Complaint here attached.
    3. AADA waives:
    (a) Any further procedural steps;
    (b) The requirement that the Commission's decision contain a 
statement of findings of fact and conclusions of law;
    (c) All rights to seek judicial review or otherwise to challenge or 
contest the validity of the Order entered pursuant to this agreement; 
and
    (d) All claims under the Equal Access to Justice Act, 5 U.S.C. 504.
    4. This agreement shall not become part of the public record of the 
proceeding unless and until it is accepted by the Commission. If this 
agreement is accepted by the Commission, it, together with the attached 
draft of Complaint contemplated thereby, will be placed on the public 
record for a period of sixty (60) days and information in respect 
thereto publicly released. The Commission thereafter may either 
withdraw its acceptance of this agreement and so notify the proposed 
respondent, in which event it will take such action as it may consider 
appropriate, or issue and serve its Complaint (in such form as the 
circumstances may require) and decision, in disposition of the 
proceeding.
    5. This agreement is for settlement purposes only and does not 
constitute an admission by proposed respondent that the law has been 
violated as alleged in the draft of Complaint here attached, or that 
the facts as alleged in the draft of Complaint, other than the 
jurisdictional facts, are true.
    6. This agreement contemplates that, if it is accepted by the 
Commission, and if such acceptance is not subsequently withdraw by the 
Commission pursuant to the provisions of Sec. 2.34 of the Commission's 
Rules, the Commission may, without further notice to proposed 
respondent, (a) issue its Complaint corresponding in form and substance 
with the draft of Complaint here attached and its decision containing 
the following Order to cease and desist in disposition of the 
proceeding and (b) make information public in respect thereto. When so 
entered, the Order to cease and desist shall have the same force and 
effect and may be altered, modified or set aside in the same manner and 
within the same time provided by statute for other orders. The Order 
shall become final upon service. Delivery by the U.S. Postal Service of 
the Complaint and decision containing the agreed-to Order to proposed 
respondent's address as stated in this agreement shall constitute 
service. Proposed respondent waives any right it may have to any other 
manner of service. The Complaint may be used in construing the terms of 
the Order, and no agreement, understanding, representation, or 
interpretation not contained in the Order or the agreement may be used 
to vary or contradict the terms of the Order.
    7. Proposed respondent has read the proposed Complaint and Order 
contemplated hereby. Proposed respondent understands that once the 
Order has been issued, it will be required to file one or more 
compliance reports showing that it has fully complied with the Order. 
Proposed respondent further understands that it may be liable for civil 
penalties in the amount provided by law for each violation of the Order 
after it becomes final.

Order

I

    It is ordered that, for purposes of this Order, the terms 
``respondent'' or ``AADA'' mean the Arizona Automobile Dealers 
Association, its directors, committees, officers, delegates, 
representatives, agents, employees, successors, and assigns.

II

    It is further ordered that AADA, directly or indirectly, or through 
any person or any corporate or other device, in or in connection with 
its activities as a trade association, in or affecting commerce, as 
``commerce'' is defined in the Federal Trade Commission Act, shall 
forthwith cease and desist from:
    A. Prohibiting, restricting, regulating, impeding, declaring 
unethical, interfering with, advising against, or discouraging: (1) 
Truthful, non-deceptive discount or price advertising or (2) any person 
or organization from otherwise engaging in truthful, non-deceptive 
discount or price advertising;
    B. Prohibiting, restricting, regulating, impeding, declaring 
unethical, interfering with, advising against, or discouraging 
truthful, non-deceptive advertising concerning the terms or 
availability of consumer credit;
    C. Prohibiting, restricting, regulating, impeding, declaring 
unethical, interfering with, advising against, or discouraging: (1) 
Truthful, non-deceptive disparaging or comparative advertising or (2) 
any person or organization from otherwise engaging in truthful, non-
deceptive disparaging or comparative advertising; and
    D. Inducing, suggesting, urging, encouraging, or assisting any non-
governmental person or organization to take any action that if take by 
respondent would violate this Order; Provided That nothing contained in 
this Order shall prohibit AADA from formulating, adopting, 
disseminating to its members, and enforcing reasonable ethical 
guidelines governing the conduct of its members with respect to 
advertising, including unsubstantiated representations, that AADA 
reasonably believes would be false or deceptive within the meaning of 
Section 5 of the Federal Trade Commission Act.

III

    It is further ordered that AADA shall:
    A. Within thirty (30) days after the date this order becomes final, 
remove from its Standards for Advertising Motor Vehicles, and from any 
other existing policy statement or guideline, any provision, 
interpretation or policy statement that is inconsistent with the 
provisions of part II of this Order including, but not limited to 
sections 4, 5, 6, and 11;
    B. Within thirty (30) days after the date this Order becomes final, 
publish in Topics or in any successor publication, (a) this Order, (b) 
the accompanying Complaint, (c) any revision of the Standards for 
Advertising Motor Vehicles or any other existing policy statement or 
guideline of AADA made pursuant to part III.A. of this Order, and (d) a 
complete revised version of the Standards for Advertising Motor 
Vehicles.
    C. Within thirty (30) days after the date this Order becomes final, 
distribute by first-class mail a copy of this Order and the Complaint 
to each of its members;
    D. For a period of five (5) years after the date this Order becomes 
final, provide each new member who joins AADA with a copy of the Order 
and Complaint within thirty (30) days of membership in AADA;
    E. Within sixty (60) days after the date this Order becomes final, 
and annually thereafter for a period of five (5) years on the 
anniversary of the date this Order became final, file with the 
Secretary of the Commission a verified written report setting forth in 
detail the manner and form in which AADA has complied with and is 
complying with this Order; and
    F. For a period of five (5) years after this Order becomes final, 
maintain and make available to Commission staff for inspection and 
copying, upon reasonable notice, all documents that relate to the 
manner and form is which AADA has complied, and is complying with this 
Order.

IV

    It is further ordered that AADA notify the Commission at least 
thirty (3) days prior to any change in AADA, such as dissolution or 
reorganization resulting in the emergence of a successor corporation or 
association, or any other change in the corporation or association 
which may affect compliance obligations arising out of this Order.

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 the Arizona 
Automobile Dealers Association (``AADA'').
    The proposed consent order has been placed on the public record for 
sixty (60) days for reception 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 the comments received and will decide whether it should 
withdraw from the agreement or make final the agreement's proposed 
order.

Description of the Complaint

    A complaint prepared for issuance by the Commission along with the 
proposed order alleges that the members of AADA agreed to restrict 
truthful, non-deceptive advertising. More specifically, the complaint 
alleges that AADA adopted, published, and enforced its Standards for 
Advertising Motor Vehicles that: (1) Prohibits discount advertising; 
(2) restricts the advertising of consumer credit terms; and (3) 
prohibits disparaging advertising.
    The complaint alleges that AADA's agreement to restrict advertising 
injured consumers by depriving them of truthful information pertinent 
to the purchase of new automobiles and trucks.

Description of the Proposed Consent Order

    The proposed order would prohibit AADA from restricting: Truthful, 
non-deceptive discount or price advertising; truthful, non-deceptive 
advertising concerning the terms or availability of consumer credit; 
and truthful, non-deceptive disparaging or comparative advertising. It 
would further prohibit AADA from inducing or encouraging any non-
government person or organization from taking an action that violates 
the order.
    The proposed order would permit AADA to adopt and enforce 
reasonable ethical guidelines governing the conduct of its members with 
respect to advertising, including unsubstantiated representations, that 
AADA reasonably believes would be false or deceptive within the meaning 
of Section 5 of the Federal Trade Commission Act.
    The proposed order would require AADA to make its Standards for 
Advertising Motor Vehicles consistent with the order and revoke any 
interpretations that conflict with the order. It would also require 
AADA to distribute the order to its members, publish the complaint and 
order in its monthly newsletter, file compliance reports, retain 
certain documents, and notify the Commission of certain changes in its 
corporate structure.
    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.
    The proposed consent order has been entered into for settlement 
purposes only and does not constitute an admission by AADA that the law 
has been violated as alleged in the compliant.
Donald S. Clark,
Secretary.
[FR Doc. 94-6536 Filed 3-18-94; 8:45 am]
BILLING CODE 6750-01-M



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