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The Federal Trade Commission has proposed to settle a deceptive advertising case brought against the R.J. Reynolds Tobacco company for claims regarding its "no additive" cigarettes.

The agreement includes provisions for so-called "corrective advertising," a new legal remedy made possible by law professor John Banzhaf, ASH's Executive Director,  who many years ago brought legal actions to persuade the Federal Trade Commission to adopt the new remedy of "corrective advertising," under which a manufacturer found guilty of deceptive advertising may be required to confess his deception to the public in future ads, and to persuade the agency to provide funding for public interest participation.  See Campbell Soup Co., 77 F.T.C. 664 (1970); Firestone Tire & Rubber Co., 81 F.T.C. 398 (1971).

Below is an FTC press release describing the settlement, followed by a link to the major legal documents.

FTC Accepts Settlement of Charges That
Ads For Winston "No Additive" Cigarettes Are Deceptive

 Settlement Requires R.J. Reynolds to Disclose in Future Ads that "No Additives" Does
 Not Mean a Safer Smoke

 R.J. Reynolds Tobacco Co. has agreed to settle Federal Trade Commission charges that its ads for
 Winston "no additives"cigarettes are deceptive. The agency alleged that Reynolds implied in its
 advertisements, without a reasonable basis, that Winston cigarettes are safer to smoke because they
 contain no additives. Under the settlement, which the FTC has accepted for public comment,
 Reynolds has agreed to make the following prominent disclosure in future Winston ads: "No
 additives in our tobacco does NOT mean a safer cigarette."

 According to the FTC's Director of Consumer Protection Jodie Bernstein, "Reynolds' disclosure
 should clear up any misconception that cigarettes without additives are safer to smoke than other
 cigarettes. Frankly, there's no such thing as a 'Safe Smoke.'"

 The use of ingredients other than tobacco in the manufacture of cigarettes has been a matter of some
 concern for a number of years, the FTC said. While some additives are used to affect the taste of
 the cigarette, others are thought to affect the physical properties of the cigarette, such as its burn
 rate.

 According to the FTC's complaint outlining the charges, Reynolds represented that because they
 contain no additives, Winston cigarettes are less hazardous than otherwise comparable cigarettes
 that contain additives. The complaint alleges that Reynolds did not have a reasonable basis for the
 representations at the time they were made. Among other reasons, the agency alleged, the smoke
 from Winston cigarettes, like the smoke from all cigarettes, contains numerous carcinogens and
 toxins.

 The proposed settlement would require Reynolds to include a disclosure in most advertising for
 Winston or any other tobacco products Reynolds advertises as having no additives. According to
 the proposed order, the disclosure must be included in all advertising for Winston no-additive
 cigarettes, regardless of whether that advertising contains a "no additives" claim, for a period of one
 year beginning no later than July 15, 1999. Thereafter, the disclosure must be included in all
 Winston advertising that represents (through such phrases as "no additives" or "100% tobacco") that
 the product has no additives. The disclosure is not required if Reynolds has scientific evidence
 demonstrating that its "no additives" cigarette poses materially lower health risks than other
 cigarettes.

 The proposed settlement requires that the disclosure must be placed in a rectangular box 40 percent
 of the size of the Surgeon General's warning, in a clear and prominent location. Reynolds also would
 have to instruct each of its sales representatives to remove or sticker, with the applicable disclosure,
 any advertisement displayed in a retail establishment representing that Winston cigarettes have no
 additives.

 In 1984, Congress amended the Federal Cigarette Labeling and Advertising Act to require cigarette
 manufacturers to submit to the Secretary of Health and Human Services a list of all ingredients
 added to the cigarettes they manufacture. The Secretary is required to keep this information
 confidential, but to report to Congress information about any ingredient that the Secretary believes
 to pose a health risk to smokers.

 The Commission vote to accept the proposed consent agreement for public comment was 4-0 with
 Commissioner Orson Swindle issuing the following concurring statement: "I have voted to accept
 this consent agreement for public comment because the remedies, including a corrective statement in
 Winston advertisements for one year, are warranted by the facts of this case. The nationwide
 advertising campaign for "no additives" Winston cigarettes, launched in August 1997, is unusually
 extensive. Based on my reading of the record, I am convinced that many consumers interpret ads
 containing express "no additives" claims to mean that Winston's are not as harmful as other
 cigarettes, and such a health claim is presumably important to consumers in their purchasing
 decisions. Based on the extent and magnitude of the ongoing ad campaign and the demonstrated
 strength of the implied health claim, I am willing to infer that the claim will linger in the minds of
 consumers for one year absent a corrective statement. I am particularly concerned about a lingering
 effect of the ads because of the well-recognized health risks of smoking. Under these circumstances,
 I support the corrective advertising remedy contained in the proposed consent order."

 The proposed consent agreement will be published in the Federal Register shortly. The agreement
 will be subject to public comment for 60 days, after which the Commission will decide whether to
 make it final. Comments should be addressed to the FTC, Office of the Secretary, 600
 Pennsylvania Avenue, N.W., Washington, D.C. 20580.

 NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law
 violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to
 future actions. Each violation of such an order may result in a civil penalty of $11,000.

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