Three-way promotional program set up by outdoor advertiser and financed by participating grocery ehains and…
68 F.T.C. 1269 · date not parsed · Digest No. 6
source volume section (68 F.T.C. 1269)
Text is machine-OCR of the printed volume and may contain errors. Advisory opinions are the Commission's views on proposed conduct, not binding orders.
No. 6. Three-way promotional program set up by outdoor advertiser and financed by participating grocery ehains and their suppliers. The Federal Trade Commission announced today that it had recently rendered an advisory opinion dealing with the legality of a proposal by an outdoor advertiser to set up advertising displays featuring food products which wil be financed by payments from food suppliers and chain grocery and drugstores. The Commission said it has accumulated considerable experience with similar tripartite promotional programs in which the promoter of the plan places himself between the supplier and the retailer who indirectly receives the benefits of the payments made by the supplier to the promoter.
The fact that the promoter acts as middleman in the operation of the plan has heen held to be of no legal significance, the Commission said. Instead, it views such plans as an integrated whole and treats them, under proper circumstances, as though the contracts or arrangements were made directly between the suppliers and the participating retailers.
Viewed in this light, the Commission advised, it would appear that the proposed program is expressly tailored to fit the needs of the participating suppliers' larger customers and therefore completely lacks the element of proportionally equal treatment of all those suppliers competing customers which is required by Section 2 (d) of the Robinson-Patman amendment to the Clayton Act. The Commission said that it is "safe to assume that each of the suppliers who wil be asked to participate in this proposal have customers in the area other than grocery and drug chains. Such suppliers would risk liability under Sections 2(d) and 2(e) of the Clayton Act by participating in any joint promotional venture which is not even ofIered to such customer or which, if ofIered, would be at a prohibitive cost to small retailers or which would be impractical for those retailers who may only handle a few of the products of the suppliers participating in the plan. The law requires that all of these customers must receive proportionally equal treatment, Thus, the suppliers who participate in (thisJ plan must make certain that the smaller retailers are ofIered a chance to participate and must ofIer a suitable alternative to those retailers for whom the plan is functionally unavailable." (File No. 653 7050. released Nov. , 1965.