Conditional approval given party promotional plan

No. 74. Conditional approval given party promotional plan.

The Federal Trade Commission has given conditional approval to a promotional concern s plan to provide a music service to supermarkets which would include "spot" advertisements paid for by their suppliers.

The requesting party would set up a background music network specializing in supermarkets. It would own the equipment and insta11 same without charge to the store operator. About every 21/2 minutes a "spot" advertisement paid for by advertiser-suppliers to the store would be made over the network for eaeh of which , each partieipating store outlet would receive a smaJI commission.

In addition, the requesting party wi11 offer an in-store promotion service to advertiser-suppliers so that they may provide proportiona11y equal treatment for nonparticipating stores, who will receive either in-store advertising materials or cash payments based on a designated formula. Most of the advertisements would feature products sold in the stores. In some stores, announcements regarding house brands could be made by means of separate circuits. Advertisers would pay for the service on a per spot-per store basis. The contracts between the parties are to contain a clause to the effect that suppliers agree not to discriminate between participating and nonparticipating customers.

In the advisory opinion the Commission said that "implementation of the plan probably would not result in violation of Commission administered statutes. This approval is being given conditiona11y and is contingent on the plan when in operation Hctually providing on a realistic basis for promotional assistance to a11 competitors entitled to it under Sections 2 (d) and (e) of the Robinson-Patman Amendment to the Clayton Act. " (File

No. 653 7027, released July 22, 1966.
Modified July 11 1968 69 F. C. 1211.
ADVISORY OPINION DIGEST 1861