Announced Actions for June 18, 1996

The Federal Trade Commission today announced the following actions. The FTC staff contact is Dan Ducore, 202-326-2526.

1. Commission action regarding applications for prior approval: Following a public comment period, the FTC has ruled on applications from the following:
   
   • The FTC has approved the plan of Oerlikon-Buhrle Holding AG, of Zurich, Switzerland, to divest its Balzers-Pfeiffer GmbH turbomolecular pump business by means of an initial public offering (IPO) of stock in Pfeiffer Vacuum Technology AG. The divestiture was required under a 1995 Commission order settling charges that Oerlikon-Buhrle’s acquisition of Leybold AG would reduce competition in two product markets, including the market for turbomolecular pumps which are used in the manufacturing of semiconductors and in other applications. The FTC also denied Oerlikon-Buhrle’s petition to extend the Feb. 14 deadline for completing the divestiture, and said it reserves the right to appoint a trustee and/or seek civil penalties to enforce the order. (See Feb. 6, 1995 news release for more details about the 1995 consent order; Docket No. C-3555; Commission vote to approve the divestiture was 4-1, Commissioner Mary L. Azcuenaga dissenting. The Commission issued a letter and said in a separate statement: “Asset divestitures by means of an IPO raise issues not presented in traditional divestitures, and therefore such transactions should be reviewed and approved with caution. Because the IPO is not an ongoing business, it is more difficult to assess whether the new entity can effectively operate the business. Moreover, given that an IPO typically would be put together by the respondent, we lack the usual assuances that flow from an arm’s-length negotiation between the respondent and a third-party buyer.” The Commission added, however, that it reviewed a wide variety of information that supported its conclusion that “the Pfeiffer IPO is likely to create an effective, independent competitor in the turbomolecular pump market.”)

     (In her dissenting statement, Commissioner Azcuenaga cited the lack of an identifiable and independent acquiring company to engage in arm’s length negotiations with Oerlikon-Buhrle, and continuing entanglements between Oerlikon-Buhrle and Pfeiffer that “may provide opportunities for Oerlikon-Buhrle to control the proposed entity or a channel for anticompetitive communications.”)

   • The FTC has approved the plan of The Penn Traffic Company, of Syracuse, New York, to divest the former Acme supermarket in Towanda, Pennsylvania, to Hurley’s Super Markets, of Dushore, Pennsylvania; and the former Acme supermarket in Pittston, Pennsylvania, to Michael and Lisa Bruno, of Pittston. The divestitures were required under a 1995 consent order that is designed to restore competition allegedly lost when Penn Traffic acquired 45 Acme markets. (See Jan. 19, 1995 news release for more details regarding the consent order; Docket No. C-3577; Commission vote to approve divestitures was 5-0.)
   • The FTC has approved the application of The Stop & Shop Companies, Inc., of Quincy, Massachusetts, to divest one supermarket each in Marshfield, Saugus, and Medford, Massachusetts, to Star Markets Company, Inc., of Cambridge, Massachusetts. The application for these divestitures also sought FTC approval to divest a fourth store, in Watertown, to Star, and that remains pending at the FTC. The divestitures are among 17 required under a 1995 consent order designed to restore supermarket competition in five areas of Massachusetts that allegedly was lost when Stop & Shop acquired Purity Supreme, Inc. (See Nov. 1, 1995 news release regarding the consent agreement; Docket No. C-3649; Commission vote to approve the divestitures was 5-0.)

   Commission action regarding petitions to reopen and modify FTC orders: Following a public comment period, the FTC has ruled on the following petition:

   • At the request of IVAX Corporation, of Miami, Florida, the FTC has modified a 1995 consent order so as to end the obligation of IVAX to obtain FTC approval before acquiring any interest in any entity that manufactures, or is an exclusive distributor for another manufacturer of, extended-release generic verapamil (used in treating patients with chronic cardiac conditions) in the United States. (See Dec. 23, 1994 news release for more details regarding the 1995 consent order; Docket No. C-3565; Commission vote to modify the order was 5-0.)

   Consent agreements given final approval: Following a public comment period, the Commission has made final consent agreements with the following seven entities, who were charged with deceptively advertising their products or services on the Internet. (See March 14, 1996 news release for more details about the FTC’s crackdown on deceptive marketing in cyberspace.) The Commission action makes the orders binding on the respondents. The staff contact is Steve Baker, Chicago Regional Office, 312-353-8156.

   • Robert Serviss, doing business as Excel Communications, of Stamford, Connecticut, settling charges that he promoted a work-at-home opportunity on the Internet using false and unsubstantiated earnings claims. The consent order requires Serviss to have substantiation for any profits, sales or earnings claims he makes about any business opportunity he markets. (Docket No. C-3669; Commission vote on June 12 was 5-0.)
   • Rick Rahim, doing business as NBDC Credit Resource Publishing, of Springfield, Virginia, settling charges that he falsely advertised on the Internet that his credit repair program, which advises consumers to misrepresent their Social Security numbers in order to obtain a new credit identity, is legal. The consent order prohibits Rahim from misrepresenting the legality of any credit repair product he advertises, and requires him to make certain disclosures in ads for such products that misrepresenting one’s Social Security number or certain other information may be a federal crime. (Docket No. C-3671; Commission vote on June 12 was 5-0.)
   • Brian Coryat, doing business as Enterprising Solutions, of Santa Barbara, California, settling charges that he falsely advertised on the Internet that consumers could use his credit repair kit to remove negative, but accurate and up-to-date, information from their credit reports; and that he made false and unsubstantiated claims about the earnings potential of those who purchased his Credit Repair Agency business. The consent order prohibits Coryat from making similar credit repair misrepresentations, and requires him to have evidence to back up earnings or sales claims for any business opportunity he markets. (Docket No. C-3666; Commission vote on June 10 was 5-0.)
   • Randolf D. Albertson, doing business as Wolverine Capital, of Plainwell, Michigan, settling charges that he falsely advertised on the Internet he could obtain cash grants for clients. The consent order prohibits Albertson from misrepresenting the number of people who are approved for grants or the services or assistance he provides in obtaining any financial product or service, and requires him to have evidence to back up such claims. (Docket No. C-3670; Commission vote on June 12 was 5-0.)
   • Sherman G. Smith, doing business as Starr Communications, of Salt Lake City, Utah, settling charges that he made false and unsubstantiated earnings claims in his Internet advertising for the “U.S. Government Tracer Business Program,” which purportedly would show consumers how to make money tracking down people due refunds after they had paid off their mortgages. The consent order requires Smith to have substantiation for profits, earnings or sales claims for any business opportunity he markets. (Docket No. C-3668; Commission vote on June 12 was 5-0.)
   • Lyle R. Larson, doing business as Momentum, of Bellevue, Washington, settling charges that he falsely advertised on the Internet that, through his “legal” program, consumers could remove negative, but accurate and up-to-date information from their credit reports. The consent order prohibits such false claims and requires Larson to make certain disclosures in ads for credit repair products that misrepresenting one’s Social Security number or certain other information may be a federal crime. (Docket No. C-3672; Commission vote on June 12 was 5-0.)
   • Timothy R. Bean, doing business as DMC Publishing Group, of Laguna Hills, California, settling charges that he made false earnings claims in Internet advertising for his program to operate a home-based publishing and printing business. The consent order requires him to have evidence to back up earnings and sales claims for any business opportunity he markets. (Docket No. C-3665; Commission vote on June 10 was 5-0.)

Copies of the documents referenced above are available from the FTC’s Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC’s World Wide Web site at: http://www.ftc.gov