Publisher s display allowance plan given conditional approval, A magazine publisher has received conditional…

No. 75. Publisher s display allowance plan given conditional approval, A magazine publisher has received conditional approval from the Federal Trade Commission of its promotional assistanee program proposed for the New York City area. The Commission said its understanding is that the program would operate substantial1y as fol1ows: Each competing retail magazine sener in or out of the area would be notified of the program by first class maiJ by the publisher and afforded the opportunity to choose either of two plans for each publication of the publisher he sens. Under Plan 1, the dealer would be given a rebate of 10% of the cover priee for each copy of a magazine sold, provided he maintained two displays (fun cover exposed, flat stack or vertical display) of the publication through its "on sale" period in (1) the maximum tramc area of his newsstand and (2) on the main or auxiliary racks. Under Plan 2, the dealer would be given a rebate of 5 % on the same basis as under Plan 1 for maintaining one display in the maximum traffc area. "Maximum traffc area" means: where the retailer sells most of his magazineswhere the largest display of magazines is located. In the event of a sel1-out of an issue, the dealer would agree to reorder immediately. Both the publisher and its distributor would spot check on dealer compliance. A dealer would submit quarterly reports together with statements of performance to the pu blisher to claim his rebate.

The Commission s advice was that " implementation of the Program as described probably would not result in violation of laws administered by the Commission provided (l) the program is offered to c1igible new entrants into magazine retaiJing when they receive their initial shipment of magazines and (2) the notice to dealcrs is changed to include a definition of ' maximum traffc area ' conf"01'ming to the meaning set forth above. " (File No. 653 7033, released July 27 , 1966.