Advisory opinion letter to Mr. Steinbach: Guide 7 of the Commission’s Guides (May 29, 1969)

Dear Mr. Steinbach :

It is my understanding that the above matter has been assigned to you for consideration and appropriate handling. After I wrote to Mr. Shea on March 26, 1970, requesting an advisory opinion as to the Plan of our client, National In-Store Advertising Co., I had some further discussion with our client concerning Guide 7 of the Commission’s Guides (May 29, 1969). Our client wants to make certain that it will be complying with this Guide and it has authorized me to advise you that it will inform all competing customers that if they take part in the plan, they will receive the larger of either: (A) Four (4) Dollars per year for each bascart used or sign placed (or some other specified amount to all competing customers), or; (B) One-percent (1%) of the total amount paid by said competing customer to any third party whose product is advertised in said plan. Our client hopes that this will comply completely with Guide 7. If not, please let us know and our client will attempt to amend its plan

to comply.
Sincerely yours,
Donald IK. Graham

ADVISORY OPINIONS WITH REQUESTS THEREFOR 1727

Letter of Request
March 26, 1970
Dear Mr. Shea:

This firm represents the National In-Store Advertising Company, Inc. which is incorporated under the laws of the State of Mississippi. Our client is planning to enter into a tripartite promotional plan and the purpose of this letter is to request an advisory opinion from the Commission concerning the validity of this plan. The basic plan of our client is to lease advertising space on bascarts or similar equipment from supermarkets and other stores and establishments. Our client would pay to the supermarket and other competing customers $1.00 per 18 weeks period for each bascart upon which our client’s advertising appears. The amount paid by our client would be the same to all lessors, i.e. $1.00 for each bascart. Our client would furnish to the lessors advertising signs which would be affixed by the Jessors to their bascarts. In the event a store or other establishment which desires to participate in the plan does not use bascarts or similar equipment, it would be given an opportunity to lease equivalent space to our client on a counter or wall of its premises. The size of such signs would be the same size as the signs on the bascarts and the amount. paid to the lessor would be the same, i.e. $1.00 for each such sign. After our client has leased this advertising space, from a supermarket or store, it would rent such space to third parties for the advertising of their products. The lessors and such third parties would have no direct relationship and there would be absolutely no financial arrangements between them with respect to the advertising by our client. It is the intention of our client to give all competing supermarkets, stores and other such establishments the opportunity to participate in the plan on proportionally equal terms to the extent possible. Any competing customer desiring to participate in the plan would be permitted to do so and our client would pay each customer the same amount for each advertising sign placed on a bascart or elsewhere on the premises. No special allowances would be made to any customer. Our client will take reasonable action to inform al] competing customers of the availability of its plan. Notice of the availability and essential features of the plan will be placed periodically in publications of general distribution in the trade in each area where our client offers its plan. In the event competing customers do not elect to participate in the plan at its inception, they will be permitted to participate at any later time if they so desire. Our client also will attempt to contact competing customers directly to the extent possible. This will be done by mail and by direct personal contact: by salesmen where pos- 1728 EDERAL TRADE COMMISSION DECISIONS sible. If these methods of notification prove inadequate, other methods will be utilized.

As indicated above, all supermarkets and other stores and outlets which have bascarts may participate in the plan. However, all other competing customers may also participate even though they do not use bascarts. Such customers will be permitted to lease advertising space to -our client on the same terms as the customers using bascarts. No competing customer will be excluded from the plan by our client and no customer will receive more favorable terms than any other. Our client will inform all competing customers of the details of its plan and in so doing will provide them with sufficient information to give a clear understanding of the exact terms of the offer, including all alternatives, and the conditions upon which payment will be made. Our client will take reasonable precautions to see that services it is paying for are furnished. This will be done by periodic checks of the premises-of the supermarkets and other competing customers leasing advertising space to our client. Our client intends to operate its business on a national basis. It will offer its plan to all competing retailers in any area where the plan is put: into effect.

In entering into lease agréements our client will make every effort to comply with Guide 18 of the Guides for Advertising Allowances and Other Merchandising Payments and Services which was promulgated by the Federal Trade Commission on May 29, 1969. Please let us know if additional information concerning this plan is required and we will see that you receive it promptly. In the event the member of the Commission’s staff who reviews this plan finds any objection to it, we would greatly appreciate his contacting us and giving our client an opportunity to revise the plan in order to eliminate the objection.

. We hope that this request for an advisory opinion can be given prompt attention and we will look forward to an early reply. Sincerely yours, Donald K. Graham Statistical reporting program implemented through a national

institute. (File No. 703 7107)
Opinion Letter
June 10, 1970
Dear Mr. Conner:

Reference is made to your request for an advisory opinion governing a proposed statistical reporting program to be implemented through the National Plant Food Institute.

ADVISORY OPINIONS WiLH KiQurp1o satis vey ee The plan you have submitted and accompanying papers are incorporated by reference herein. In summary, however, the Commission understands your proposed. plan to be as follows:

Those industry members who are members of National Plant Food Institute will be invited and urged to participate in the program. Industry members who are not members of National Plant Food Institute will also be invited and urged to participate in the program. Individual companies will confidentially provide specified data to a third party. The third party, preserving the confidentiality of the data as to individual companies, will assemble the information received and will derive therefrom specified ratios and aggregate figures. These ratios and aggregates will be made freely available on a non-diseriminatory basis to all who may have need of them. No projections or estimates as to the future are contemplated. There is nothing inherently unlawful in what you propose and the Commission would not object if you were to implement your plan. Your are cautioned, however, that an unlawful trade restraint would result if you were through concerted action improperly to use the gathered information in a way which would restrict the freedom of

action of those who buy and sell.
By direction of the Commission.
The Proposal as Submitted
July 15, 1969