UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION

In the Matter of

SHELL OIL COMPANY and SHELL CHEMICAL COMPANY, corporations.

FILE NO. 982-3107

AGREEMENT CONTAINING CONSENT ORDER

The Federal Trade Commission has conducted an investigation of certain acts and practices of Shell Oil Company and Shell Chemical Company, corporations ("proposed respondents"). Proposed respondents, having been represented by counsel, are willing to enter into an agreement containing a consent order resolving the allegations contained in the attached draft complaint. Therefore,

IT IS HEREBY AGREED by and between Shell Oil Company and Shell Chemical Company, by their duly authorized officers, and counsel for the Federal Trade Commission that:

1.a. Proposed respondent Shell Oil Company is a Delaware corporation with its principal office or place of business at One Shell Plaza, 910 Louisiana Street, Houston, Texas 77002-4916.

 

1.b. Proposed respondent Shell Chemical Company is a Delaware corporation with its principal office or place of business at One Shell Plaza, 910 Louisiana Street, Houston, Texas 77002-4916. Shell Chemical Company is a wholly owned subsidiary of Shell Oil Company.

 

2. Proposed respondents admit all the jurisdictional facts set forth in the draft complaint.

 

3. Proposed respondents waive:

a. Any further procedural steps;

b. The requirement that the Commission's decision contain a statement of findings of fact and conclusions of law; and

c. All rights to seek judicial review or otherwise to challenge or contest the validity of the order entered pursuant to this agreement.

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 draft complaint, will be placed on the public record for a period of sixty (60) days and information about it publicly released. The Commission thereafter may either withdraw its acceptance of this agreement and so notify the proposed respondents, 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 respondents that the law has been violated as alleged in the draft complaint, or that the facts as alleged in the draft 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 withdrawn by the Commission pursuant to the provisions of Section 2.34 of the Commission's Rules, the Commission may, without further notice to the proposed respondents, (1) issue its complaint corresponding in form and substance with the attached draft complaint and its decision containing the following order in disposition of the proceeding, and (2) make information about it public. When so entered, the order 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 of the complaint and the decision and order to proposed respondents' address as stated in this agreement by any means specified in Section 4.4 (a) of the Commission's Rules shall constitute service. Proposed respondents waive any right they may have to any other manner of service. The complaint may be used in construing the terms of the order. No agreement, understanding, representation, or interpretation not contained in the order or in the agreement may be used to vary or contradict the terms of the order.

 

7. Proposed respondents have read the draft complaint and consent order. They understand that they may be liable for civil penalties in the amount provided by law and other appropriate relief for each violation of the order after it becomes final.

ORDER

DEFINITIONS

For purposes of this order, the following definitions shall apply:

1. "Competent and reliable scientific evidence" shall mean tests, analyses, research, studies, or other evidence based upon the expertise of professionals in the relevant area, that has been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results.

 

2. "Fuel additive product" shall mean a product that is added to gasoline by a consumer, including but not limited to gasoline or fuel treatments, octane boosters, and octane treatments.

 

3. "Fuel additive ingredient" shall mean any active ingredient marketed for use in any fuel additive product.

 

4. "PEP molecule" shall mean polyether pyrolidone, a patented fuel additive ingredient.

 

5. Unless otherwise specified, "respondents" shall mean Shell Oil Company, a corporation, and Shell Chemical Company, a corporation, their successors and assigns, and their officers, agents, representatives, and employees.

 

6. "Commerce" shall mean as defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. § 44.

I.

IT IS ORDERED that respondents, directly or through any corporation, subsidiary, division, or other device, in connection with the manufacturing, advertising, labeling, promotion, offering for sale, sale, or distribution of any fuel additive product or fuel additive ingredient in or affecting commerce, shall not make any representation, in any manner, expressly or by implication:

A. That such product or ingredient will significantly improve engine power and acceleration in motor vehicles generally;

 

B. That such product or ingredient is superior to any other fuel additive product in improving engine power and acceleration in motor vehicles generally; or

 

C. Regarding the performance, benefits, efficacy, attributes or use of such product or ingredient,

unless, at the time the representation is made, respondents possess and rely upon competent and reliable scientific evidence that substantiates the representation.

II.

IT IS FURTHER ORDERED that respondents, directly or through any corporation, subsidiary, division, or other device, in connection with the advertising, labeling, promotion, offering for sale, sale, or distribution of any fuel additive product or fuel additive ingredient in or affecting commerce, shall not misrepresent, in any manner, expressly or by implication, the existence, contents, validity, results, conclusions, or interpretations of any test, study, or research.

III.

IT IS FURTHER ORDERED that respondents, and their successors and assigns shall, within thirty (30) days after the date of service of this order, send by first class mail, return receipt requested, a copy of this order along with the Commission's complaint in this matter to each trade customer that purchased a product that contained the "PEP" molecule.

IV.

IT IS FURTHER ORDERED that respondents, and their successors and assigns shall, for five (5) years after the last date of dissemination of any representation covered by this order, maintain and upon request make available to the Federal Trade Commission for inspection and copying:

A. All advertisements and promotional materials containing the representation;

 

B. All materials that were relied upon in disseminating the representation; and

 

C. All tests, reports, studies, surveys, demonstrations, or other evidence in its possession or control that contradict, qualify, or call into question the representation, or the basis relied upon for the representation, including complaints and other communications with consumers or with governmental or consumer protection organizations.

V.

IT IS FURTHER ORDERED that respondents, their successors and assigns shall deliver a copy of this order to all current and future principals, officers, directors, managers, employees, agents, and representatives having responsibilities with respect to the subject matter of this order, and shall secure from each such person a signed and dated statement acknowledging receipt of the order. Respondents shall deliver this order to current personnel within thirty (30) days after the date of service of this order, and to future personnel within thirty (30) days after the person assumes such position or responsibilities.

VI.

IT IS FURTHER ORDERED that respondents, and their successors and assigns shall notify the Commission at least thirty (30) days prior to any change in the corporation that may affect compliance obligations arising under this order, including but not limited to a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor corporation; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this order; the proposed filing of a bankruptcy petition; or a change in the corporate name or address. Provided, however, that, with respect to any proposed change in the corporation about which respondents learn less than thirty (30) days prior to the date such action is to take place, respondents shall notify the Commission as soon as is practicable after obtaining such knowledge. All notices required by this Part shall be sent by certified mail to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580.

VII.

IT IS FURTHER ORDERED that respondents and their successors and assigns shall, within sixty (60) days after the date of service of this order, and at such other times as the Federal Trade Commission may require, file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with this order.

VIII.

This order will terminate twenty (20) years from the date of its issuance, or twenty (20) years from the most recent date that the United States or the Federal Trade Commission files a complaint (with or without an accompanying consent decree) in federal court alleging any violation of the order, whichever comes later; provided, however, that the filing of such a complaint will not affect the duration of:

A. Any Part of this order that terminates in less than twenty (20) years;

 

B. This order's application to any respondent that is not named as a defendant in such complaint; and

 

C. This order if such complaint is filed after the order has terminated pursuant to this Part.

Provided, further, that if such complaint is dismissed or a federal court rules that the respondents did not violate any provision of the order, and the dismissal or ruling is either not appealed or upheld on appeal, then the order will terminate according to this Part as though the complaint had never been filed, except that the order will not terminate between the date such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal.

Signed this _______________ day of _______________, 199___

SHELL OIL COMPANY

By: ________________________________
An officer of the corporation

SHELL CHEMICAL COMPANY

By: ________________________________
An officer of the corporation

____________________________ Michael Dershowitz Counsel for the Federal Trade Commission

____________________________ Barry J. Cutler Baker & Hostetler Attorney for Respondents

________________________________
Sydney M. Knight
Counsel for the Federal Trade Commission

________________________________
Theodore H. Hoppock
Counsel for the Federal Trade Commission

APPROVED:

_________________________________
C. Lee Peeler
Associate Director
Division of Advertising Practices

_________________________________
Joan Z. Bernstein
Director
Bureau of Consumer Protection