Compliance opinion as to whether a furniture manufacturer’s proposed plan to grant special price quotations…

ADVISORY OPINIONS 1167 Compliance opinion as to whether a furniture manufacturer’s proposed plan to grant special price quotations, under certain conditions, to dealers competing in bid situations would violate the order issued on June 30, 1967 (71 F.T.C. 1579), Dkt. C-1248.

Opinion Letter
January 31, 1978
Dear Mr. Moran:

The Commission has considered the request which is contained in your letter of April 27, 1977, as supplemented by letter of August 5, 1977, wherein you seek the Commission’s advice pursuant to Section - 8.61(d) of the Commission’s Rules. This advice is sought to determine whether a proposed course of conduct whereby Herman Miller would grant special price quotations, under certain conditions, to dealers competing in bid situations, would be violative of the Commission’s order issued on June 30, 1967, in the captioned matter. The proposed plan would grant special price quotations to dealers in bid situations only. In order to receive the special price in a specific situation, a dealer would have to certify that it will submit a bid on that specific job. In addition, in order to obtain special pricing a dealer will have to agree that on the specific job he will not bid products competitive to those products for which he will obtain special price quotations from Herman Miller. This special pricing will be available to all dealers who carry the Herman Miller line, provided that the above conditions are satisfied, and all dealers will be so notified. The above outlined plan is to operate in the context of bid solicitation by institutions. When an institution solicits bids for furniture, it may do so by specifying items by brand name (e.g., 30 Herman Miller desk chairs), or by descriptive specifications (7.e., by specifying size, color, finish, etc., for each item). Such a bid solicitation may involve a large number of different items, and, when brand names are specified, different items may call for different brands. It is the . Commission’s understanding that, under the proposed plan, when bids are solicited by specifying brands, and different items call for different brands, a dealer handling multiple lines who plans to quote the Herman Miller items and the non-Herman Miller items will receive special pricing from Herman Miller. It is also the Commission’s understanding that when bids are solicited by descriptive specifications rather than by brand name, a multiple line dealer who wishes to bid Herman Miller products for some items and competing brands for _ other items will be precluded by the proposed plan from receiving

Herman Miller’s special pricing on the items he wishes to bid Hermar Miller.

It is the Commission’s opinion, based on the facts submitted, that the proposed plan, if implemented, may raise questions under Section 5 o/ the Federal Trade Commission Act, and under the order issued in the | above-captioned proceeding. If there are dealers who wish to quote Herman Miller products on some items and competing brands on othe: items, they will not be able to do so and still receive Herman Miller’s special price. In effect, the Herman Miller special price might not actually be available to all dealers who wish to take advantage of it and this would constitute a discrimination against those dealers.

By direction of the Commission.
Supplemental Letter Relative to Request
August 5, 1977