Federal Register / Vol. 61, No. 242 / Monday, December 16, 1996 / Notices 66041 may not keep perishable food items the proposed respondent to keep and Pennsylvania Ave, NW, Washington, sufficiently cold to prevent the growth maintain all advertisements and DC 20580. (202) 326–3741 of harmful bacteria on the food, or that promotional materials containing any Ann Malester, Federal Trade Koolatron’s maximum internal heating representation covered by the proposed Commission, S–2308, 6th and temperature is not high enough to kill order. In addition, the proposed order Pennsylvania Ave, NW, Washington, or prevent the growth of certain harmful (Part VI) requires distribution of a copy DC 20580. (202) 326–2682 bacteria on perishable food items. of the consent decree to current and SUPPLEMENTARY INFORMATION: Pursuant The proposed consent order contains future officers and agents. to section 6(f) of the Federal Trade provisions designed to remedy the Part VII provides for Commission Commission Act, 38 Stat. 721, 15 U.S.C. violations charged and to prevent notification upon a change in the 46, and § 2.34 of the Commission’s rules proposed respondent from engaging in corporate respondent. The proposed of practice (16 CFR 2.34), notice is similar acts in the future. order also requires the filing of hereby given that the above-captioned Part I of the proposed order, in compliance report(s) (Part VIII). Finally, consent agreement containing a consent connection with any product for use in Part IX provides for the termination of order to cease and desist, having been the storage of food, prohibits the the order after twenty years under filed with and accepted, subject to final proposed respondent from certain circumstances. approval, by the Commission, has been misrepresenting: (1) The comparative or The purpose of this analysis is to placed on the public record for a period absolute ability of such product to facilitate public comment on the of sixty (60) days. The following refrigerate or cool food items or proposed order, and it is not intended Analysis to Aid Public Comment medicines or to maintain proper cold to constitute an official interpretation of describes the terms of the consent storage temperatures; (2) the the agreement and proposed order or to agreement, and the allegations in the comparative or absolute ability of such modify in any way their terms. accompanying complaint. An electronic product to heat or warm food items; (3) Donald S. Clark, copy of the full text of the consent the comparative or absolute ability of Secretary. agreement package can be obtained from such product to hold its cooling [FR Doc. 96–31802 Filed 12–13–96; 8:45 am] the Commission Actions section of the capacity after being unplugged from a FTC Home Page (for December 9, 1996), power source; or (4) the effect of BILLING CODE 6750±01±P on the World Wide Web, at ‘‘http:// operating such product off a car battery www.ftc.gov/os/actions/htm.’’ A paper when the car is not running, including [File No. 971±0016; 971±0017] copy can be obtained from the FTC the amount of power used by the Public Reference Room, Room H–130, product in such circumstances or the J.C. Penney Company, Inc.; Thrift Sixth Street and Pennsylvania Avenue, potential for such use to drain the car Drug, Inc.; Analysis To Aid Public NW., Washington, DC. 20580, either in battery of all power. Part II, in Comment person or by calling (202) 326–3627. connection with any product for use in Public comment is invited. Such AGENCY: Federal Trade Commission. the storage of food, prohibits any comments or views will be considered representation about the benefits, ACTION: Proposed consent agreement. by the Commission and will be available performance, efficacy, or safety of such SUMMARY: In settlement of alleged for inspection and copying at its product, unless proposed respondent violations of federal law prohibiting principal office in accordance with possesses and relies upon competent unfair or deceptive acts or practices and § 4.9(b)(6)(ii) of the Commission’s rules and reliable evidence, which when of practice (16 CFR 4.9(b)(6)(ii)). appropriate must be competent and unfair methods of competition, this reliable scientific evidence, that consent agreement, accepted subject to Analysis of Proposed Consent Order To substantiates the representation. final Commission approval, would Aid Public Comment Part III of the proposed order, in require, among other things, Penney, the The Federal Trade Commission connection with Koolatron or any parent company of Thrift Drug, to divest (‘‘Commission’’) has accepted, subject to substantially similar product, prohibits a total of 161 drug stores in North and final approval, an agreement containing any representation about the South Carolina by March 1997. The a proposed Consent Order from J.C. effectiveness, usefulness, or agreement settles allegations that Penney Company, Inc. and its wholly- appropriateness of such product for Penney’s acquisition of Eckerd owned subsidiary Thrift Drug, Inc. cooling food items, unless proposed Corporation and 190 Rite Aid stores in (collectively ‘‘J.C. Penney/Thrift’’) under respondent also discloses that such these two states would violate federal which J.C. Penney/Thrift would be product may not keep perishable food antitrust laws by allowing the firm to required to divest a total of 34 Thrift items sufficiently cold in some raise prices for pharmacy services to Drug retail drug stores in the Raleigh- circumstances to prevent the growth of health insurance companies and other Durham and Charlotte, North Carolina harmful bacteria on the food. Part IV of third party payors. metropolitan areas and all of the Rite the proposed order, in connection with DATES: Comments must be received on Aid retail drug stores in the state of Koolatron or any substantially similar or before February 14, 1997. North Carolina and in the Charleston, product, prohibits any representation ADDRESSES: Comments should be South Carolina metropolitan area, to a about the effectiveness, usefulness, or directed to: FTC/Office of the Secretary, Commission-approved purchaser. The appropriateness of such product for Room 159, 6th St. and Pa. Ave., NW., agreement is designed to remedy the heating or warming food items, unless Washington, DC. 20580. anticompetitive effects resulting from proposed respondent also discloses that J.C. Penney/Thrift’s acquisitions of both FOR FURTHER INFORMATION CONTACT: use of the product for such purposes the Eckerd Corporation and the Rite Aid may pose a risk of buildup of harmful William J. Baer, Federal Trade drug stores in North Carolina and South bacteria on the food. Commission, H–374, 6th and Carolina. The proposed order (Part V) contains Pennsylvania Ave, NW, Washington, The proposed Consent Order has been record keeping requirements for DC 20580. (202) 326–2932 placed on the public record for sixty materials that substantiate, qualify, or George S. Cary, Federal Trade (60) days for reception of comments by contradict covered claims and requires Commission, H–374, 6th and interested persons. Comments received 66042 Federal Register / Vol. 61, No. 242 / Monday, December 16, 1996 / Notices during this period will become part of likely from the combination of J.C. divestiture provisions of the Order the public record. After sixty (60) days, Penney/Thrift, Eckerd and Rite Aid. within thirty (30) days following the the Commission will again review the The proposed Consent Order would date this Order becomes final, and every agreement and the comments received remedy the alleged violations by thirty (30) days thereafter until J.C. and will decide whether it should replacing the lost competition that Penney/Thrift has fully complied with withdraw from the agreement or make would result from the acquisitions. the divestiture provisions of the final the agreement’s proposed Order. Under the proposed Consent Order, J.C. proposed Order. The proposed complaint alleges that Penney/Thrift is required to divest The purpose of this analysis is to the proposed acquisitions, if within four (4) months of November 21, facilitate public comment on the consummated, would constitute 1996, the date J.C. Penney/Thrift signed proposed Order, and it is not intended violations of section 7 of the Clayton the Consent Agreement, the following: to constitute an official interpretation of Act, as amended, 15 U.S.C. 18, and fourteen (14) Thrift drug stores in the the agreement and proposed Order or to section 5 of the FTC Act, as amended, Charlotte metropolitan area; twenty (20) modify in any way their terms. 15 U.S.C. 45, in the market for the retail Thrift drug stores in the Raleigh- Donald S. Clark, sale of pharmacy services to third-party Durham metropolitan area; all Rite Aid Secretary. payors. drug stores in North Carolina (110 [FR Doc. 96–31803 Filed 12–13–96; 8:45 am] The retail sale of pharmacy services to stores); and all Rite Aid drug stores in BILLING CODE 6750±01±P third-party payors refers to prescription the Charleston, South Carolina drugs sold by retail outlets such as drug metropolitan area (17 stores). In the store chains, independent drug stores, event that J.C. Penney/Thrift does not [File No. 942±3251] food stores and mass merchandise acquire the Rite Aid stores in North stores, to third-party payors, which Carolina and South Carolina, then J.C. Natural Innovations, Inc.; William S. include insurance carriers, health Penney/Thrift will have five (5) months Gandee; World Media T.V., Inc.; maintenance organizations, preferred from November 21, 1996, to sell the 34 Analysis To Aid Public Comment provider organizations, and corporate Thrift drug stores in Charlotte and AGENCY: Federal Trade Commission. employers. Third-party payors provide Raleigh-Durham, North Carolina. The ACTION: Proposed consent agreements. retail pharmacy service benefits to their proposed Order specifies that the 34 beneficiaries, typically through Thrift drug stores will go to a single SUMMARY: In settlement of alleged intermediaries known as pharmacy purchaser to ensure competition by violations of federal law prohibiting benefit management (‘‘PBM’’) firms that recreating a chain of sufficient size and unfair or deceptive acts or practices and create and administer retail pharmacy coverage to serve as an alternative unfair methods of competition, these networks on behalf of third-party anchor pharmacy chain for a PBM retail two consent agreements, accepted payors, whereby third-party payor pharmacy network. subject to final Commission approval, beneficiaries may go to any pharmacy Under the proposed Order, if the would, among other things, require the participating in the network to have divestiture is not accomplished within respondents to have scientific proof to prescriptions filled. In establishing the required time period, then the back up any pain relief or other health these pharmacy networks, third-party Commission may appoint a trustee to or medical benefit claims they make in payors rely on competition between divest not only the 34 Thrift drug stores the future. The agreement settles large pharmacy chains to drive down and the Rite Aid stores in North Commission allegations stemming from the cost of pharmacy services. In Carolina and Charleston, South the advertising and sale of Natural markets where only a small number of Carolina, but also the remaining sixty- Innovation’s ‘‘The Stimulator,’’ a pharmacy chains compete, third-party three (63) Rite Aid stores in South purported pain relief device widely payors pay higher rates for pharmacy Carolina, representing the entire advertised in an informercial titled services. Where a single pharmacy chain package of Rite Aid stores that J.C. ‘‘Saying No To Pain,’’ which was controls a large share of pharmacy Penney/Thrift had proposed to acquire. created and distributed by World Media. locations in a given area, that chain is Further, under the proposed Order, J.C. DATES: Comments must be received on able to extract higher prices, and this Penney/Thrift is prohibited from or before February 14, 1997. situation is exacerbated when the acquiring any of the Rite Aid stores in ADDRESSES: second largest pharmacy chain in that North Carolina and Charleston, South Comments should be given area has a much smaller number Carolina until it has entered into an directed to: FTC/Office of the Secretary, of pharmacies than the largest one. agreement, approved by the Room 159, 6th St. and Pa. Ave., NW., J.C. Penney/Thrift’s proposed Commission, to divest those stores. The Washington, DC 20580. acquisitions of Eckerd and the Rite Aid Commission has not required a hold FOR FURTHER INFORMATION CONTACT: stores in North Carolina and South separate agreement in this case because Lesley Anne Fair, Federal Trade Carolina will give the combined entity the proposed Order contemplates a Commission, S–4002, 6th and a dominant position in the state of short divestiture time period; the Pennsylvania Ave., NW, Washington, North Carolina and its three major appointment of a trustee should the DC 20580. (202) 326–3081. metropolitan areas—Charlotte, divestiture not occur within the SUPPLEMENTARY INFORMATION: Pursuant Greensboro, and Raleigh-Durham—and prescribed time period; and a to section 6(f) of the Federal Trade in Charleston, South Carolina, the prohibition against J.C. Penney/Thrift’s Commission Act, 38 Stat. 721, 15 U.S.C. second largest metropolitan area in acquiring any of the North Carolina and 46, and § 2.34 of the Commission’s rules South Carolina, and as a result, the the Charleston, South Carolina Rite Aid of practice (16 CFR 2.34), notice is ability to increase prices for the retail stores until it has entered an agreement hereby given that the above-captioned sale of pharmacy services to third-party with a Commission-approved purchaser consent agreements containing consent payors. Further, timely entry is unlikely to divest those stores. orders to cease and desist, having been in the market for the retail sale of Under the provisions of the proposed filed with and accepted, subject to final pharmacy services to third-party payors Order, J.C. Penney/Thrift is also approval, by the Commission, have been in these geographic markets on the scale required to provide the Commission placed on the public record for a period necessary to offset the competitive harm with a report of compliance with the of sixty (60) days. The following