Broadcast of suppliers' commercials in retail stores conditionally approved

No. 65. Broadcast of suppliers' commercials in retail stores conditionally approved.

In an advisory opinion announced today, the Federal Trade Commission has given conditional approval to the proposal of a promotional concern to arrange for the broadcast of suppJiers commercia1s in retail stores.

The concern presently provides-for a monthly charge-re- ,

ADVISORY OPINION DIGESTS 1237 tailers with a tape player unit, necessary speakers and tapes for retailer controIled in-store background music. The concern proposes to add on the tapes commercia1 messages of various manufacturers who supply products sold by retailers. The commercials wil play at timed intervals. The concern wiU solicit various manufacturers for the commercials on a contract basis, record the messages, retain all money paid by supp1iers for the service, and offer the background music"commercia1 tapes and equipment free of charge to all retai1ers on a nondiscriminatory basis in particular classifications of retailers in each geographic area in which the promoter markets his service. The Commission said the issue here "is whether this particular program is likely to result in the discriminatory furnishing of services or faciJities by the manufacturers who might participate. The answer is whoIly dependent upon the manner in which it is administered. "

The Commission pointed out that the proposal as submitted would not be subject to objection if (1) all customers entit1ed to participate are notified of the program s avai1ability, (2) the selection of trade areas and the definition of the same , in fact include all customers competing in the distribution of the products of all participating manufacturers, and (3) the classification of retailers chosen to participate, such as food stores, does not exclude any retai1ers in another classification who in fact compete in the distribution of the products of the participating manufacturers.

Simply stated " the Commission said the law in this area requires a seIler to treat his customers with fairness, whether in respect to the prices he charges, the aIlowances he pays, or the services he furnishes. This obj ective cannot be achieved by resort to mechanical formulas, but only by constant attention to the prevailng facts in any given situation. What may look fair on the drawing board may be found unfair in the market and, if , the market must prevai1. With the reservations above as to actual market conditions, it is the Commission s opinion that this proposal is not otherwise subject to objection. " (File No. 643 7031, released June 25, 1966.

Modified Ju1y 11, 1968, p. 1211 herein.