Birmingham Automotive Jobbers Association

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IN THE MATTER OF BIRMINGHAM AUTOMOTIVE JOBBERS ASSOCIATION ETAL.

COMPLAINT AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 2382. Complaint, Jfay 6, 1935-order, Aug. 9, 1935 Consent order requiring that respo~dent association, and the officers, members, directors, agents, etc., thereof, in connection with the sale and offer for sale in interstate commerce of automobile parts and accessories, forthwith cease and desist from,- (a) Carrying out an agreement, combination, understanding and conspiracy among themselves, or between or among any two or more of them, or with others, acting directly by or through the respondent association by which they, or any of them, fix and maintain uniform prices to be exacted by them from their purchasers of automobile parts and accessories; (b) Using any of the methods of competition alleged in the complaint, to wit, combining and conspiring to fix and maintain uniform prices through entering into and complying with agreements to (1) use and abide by manufacturers' resale schedules for sale of such parts and accessories, (2) fix uniform prices for sale of such parts and equipment, and for jobs involving labor only, and for those involving both parts and labor, or (3) schedules of discounts to be allowed certain classes of purchasers of such parts and accessories, ( 4) requiring certain classes of purchasers to resell parts and accessories purchased from the members at manufacturers' list prices or association prices, and (5) that each member before making any change in price of any part, accessory or labor except closeout items is either to notify the association secretary in writing or each member before putting such change into effect; or (c) Doing or permitting by understanding, agreement, or combination among themselves, or between or among any two or more of them, or with others, acting directly, or by or through respondent association, the doing of such acts and practices as hereinabove set forth, and as in the order specified in detail; and Ordered further that complaint be dismissed without prejudice as to respondent Auto Electric & Carburetor Co. for the reason that said respondent has not technically been a member of respondent association since Aprll 1934, attempted to resign therefrom on September 1'5, 1934, and has had no active or apparent participation therewith since November 15, 1934, as in said order set forth.

Before .Mr. W. W. Sheppard, trial examiner. Mr. Morton Nesmith for the Commission.

J,J r. Oliver Henderson, of Birmingham, Ala., for re.spondent. Complaint Pursuant to the provisions of an Act of Congress approved September 26, 1914, entitled "An Act to create a Federal Trade Com- Complaint 21F.T. C.

mission, to define its powers and duties, and for other purposes", the Federal Trade Commission, having reason to believe that the Birmingham Automotive Jobbers Association, an unincorporated association, its officers as follows: G. E. ·wood ward, president; M. H. Johnson, vice president; A. J. Seigal, second vice president; and Oliver Henderson, secretary-treasurer; and its members as follows: Alabama Auto Parts Company, a corporation, Birmingham Electric Battery Company, a corporation, Cruse-Crawford ·wheel & Rim Company, a corporation, Lawson Auto Parts Company, a corporation, Southern Bearing & Parts Company, a corporation, A. J. Brown, doing business under the trade name and style of Simplex Piston Ring Company, and A. D. Slye, doing business under the trade name and style of Slye's Auto Supply Company, have been and are using unfair methods of competition in commerce as "commerce" is defined in said act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint, stating its charges in that respect as follows :

PARAGRAPH 1. The respondent, Birmingham Automotive Jobbers Association, is a voluntary unincorporated trade association organized in 1933 of the corporations and individuals hereinafter named, with their principal places of business in or around the city of Birmingham, State of Alabama, and who are engaged in the business of jobbing automobile parts and accessories to garages, automobile dealers, fleet owners, and the like, located both within the State of Alabama and in neighboring States, and said members are banded together in respondent association for the purpose of protecting their common interests, and said respondent members now constitute and since the organization of respondent association have constituted a majority of the jobbers of automobile parts and accessories in and around the city of Birmingham, State of Alabama, and occupy a dominant position in and about the surrounding territory in such trade. Said respondent, Birmingham Automotive Jobbers Association, will hereinafter be designated as respondent association. The principal office and place of business of said respondent association is Room 200, Clark Building, in the city of Birmingham, State of Alabama. Its officers are and continuously since its organization have been the following, who are hereinafter referred to as respondent officers:

G. E. 1Voodward, president, whose principal place of business is located at 305 South Twenty-first Street, in the city of Birmingham, State of Alabama.

BIRMINGHAM AUTOMOTIVE JOBBERS ASS'N ET AL. 231 229 Complaint M. H. Johnson, vice president, whose principal place of business is located at 2300 Second Avenue South, in the city of Birmingham, State of Alabama.

A. J .. Seigal, second vice president, whose principal plaoe of busi· ness is located at 514 South Eighteenth Street, in the city of Birmingham, State o.f Alabama; and Oliver Henderson, secretary-treasurer, whose principal place of business is located at Room 200 Clark Building, in the city of Birmingham, State of Alabama.

The members o.f said respondent association are now and have been since its organization the following, who are hereinafter referred to as respondent members:

Alabama Auto Parts Company, a corporation organized and exist-. ing under and by virtue of the laws of the State of Alabama, with its principal office and place of business at 514 South Eighteenth Street, in the city of Birmingham, State of Alabama. Auto Electric & Carbureter Company, a corporation organized and existing under and by virtue of the laws of the State of .Alabama, with its principal office and place of business at 517 South Twenty-second Street, city of Birmingham, State of Alabama. Birmingham Electric Battery Company, a corporation organized and existing under and by virtue of the laws of the State of Alabama, with its principal office and place of business at 2300 Second Avenue South, in the city of Birmingham, State of Alabama. Cruse-Crawford 'Vheel & Rim Company, a corporation organized and existing under and by virtue of the laws of the State of Alabama, with its principal office and place of business at 2015 Third Avenue South, in the city of Birmingham, State of Alabama. Lawson Auto Parts Company, a corporation organized and existing under and by virtue of the laws of the State of Alabama, with its principal office and place of business at Avenue "E" and Twentyfirst Street, in the city of Birmingham, State of Alabama. Southern Bearing & Parts Company, a corporation organized and existing under and by virtue of the laws of the State of Alabama, with its principal office and place of business at 305 South Twentyfirst Street, in the city of Birmingham, State of Alabama. A. J. Brown, doing business under the trade name and style of Simplex Piston Ring Company, with its principal office and place of business at 209 South Eighteenth Street, in the city of Birmingham, State of Alabama; and A. D. Slye, doing business under the trade name and style of Slye's Auto Supply Company, with its principal office and place of business at 2105 Avenue "E", Ensley, Ala.

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Complaint 21 F. T. C. PAR. 2. All of the respondent members described in paragraph 1 hereof are now and have been for several years last past engaged in the busines of jobbing and wholesaling automobile parts and accessories. All of said respondent members, except A. J. Brow.n, doing business under the trade name and style of Simplex Piston Ring Company, and A. D. Slye, doing business under the trade name and style of Slye's Auto Supply Company, operate machine shops in conjunction with their jobbing businesses. All of said respondent members, except A. J. Brown, doing business under the trade name and style of Simplex Piston Ring Company, and A. D. Slye, doing business under the trade name and style of Slye's Auto Supply Company, in the course and conduct of their . businesses as aforesaid, have caused and still cause such automobile parts and accessories, when sold by them to be transported from their respective places of business into and through various States of the United States other than the State of Alabama to the purchasers thereof in such other States, and there is now and there has been for more than two years last past a constant current of trade and commerce in such parts and accessories by the said respondent members. Said respondent members, A. J. Brown, doing business under the trade name and style of Simplex Piston Ring Company~ and A. D. Slye, doing business under the trade name and style of Slye's Auto Supply Company, are members of the respondent association, Birmingham Automotive Jobbers Association, and have abided by the rules, regulations, and agreements of said association more particularly hereinafter set out.

Said respondent members now constitute, and since the organization of respondent association in July 1933 have constituted a majority of the automobile parts and accessories jobbers in the city of Birmingham, State of Alabama, and occupy a dominant position in and about the territory in which they sell such automobile parts and accessories.

PAR. 3. In September 1933, or thereabouts, the said respondent members named in paragraph 1 hereof, for the purpose of eliminating price competition among themselves, entered into and they have since carried out and are still carrying out an agreement, combination, understanding, and conspiracy among themselves, hereinafter more particularly described, through and by means of said respondent, Birmingham Automotive Jobbers Association, and its aforesaid officers, by which agreement, combination, understanding, and conspiracy they have fixed and maintained and still fix and maintain uniform prices to be exacted by them from their purchasers of automobile parts and accessories.

BIRMINGHAM AUTOMOTIVE JOBBERS ASS'N ET AL. 233 229 Complaint Pursuant to and for the purpose of carrying out the said agreement, combination, understanding, and conspiracy entered into by the said respondent members among themselves and through the said respondent association and respondent officers, the :respondent members, among other things, have done the following: (a) Agreed that they would use and abide by and pursuant to such agreement have used and have abided by the manufachlrers' resale schedules in the selling of all automobile parts and accessories.

(b) Agreed to fix from time to time, and pursuant to such agreement have fixed from time to time uniform prices at which automotive parts and equipment should be sold. (c) Agreed to fix from time to time, and pursuant to such agreement have fixed from time to time uniform prices ~or various :repair jobs involving only labor, (d) Agreed to fix from time to time, and pursuant to such agreement have fixed from time to time uniform prices for various repair jobs involving both automobile parts and lrubor. (e) Agreed to fix from time to time, and pursuant to such agreement have fixed from time to time schedules of discounts to be allowed by them to certain classes of purchasers of automobile parts and accessories.

{f) Agreed to require and pursuant to such agreement have required certain classes of their purchasers to resell the automobile parts and accessories purchased from respondent members at the list prices of the manufacturers thereof or at prices .fixed by the respondent association.

(g) Agreed that wherever and whenever a member should deem it fit to make a change in any price or prices on any automobile part, accessory, or labor, except closeout items, that said member would either notify the secretary of said respondent association in writing, or e~ch member before such change should be put into effect.

PAR. 4. The aforesaid alleged acts and practices of the respondents had and still have the tendency and capacity to constrain all jobbers of automobile parts and accessories doing business in the territory above mentioned to uniformly sell the aforesaid products to their dealer-customers, garage owners, fleet owners, and the like, at the prices fixed by said respondent association, and its members as hereinbefore set out, and hence to hinder and suppress all price competition in the jobbing of said products in said territory, particularly among the members of the association, and further to hinder and Order 21F.T.C.

restrain price competition between all their dealer-customers in said territory.

Respondents' said practices thus tended and still tend to unduly hinder and obstruct the free and natural flow of commerce in the channels of interstate commerce, enhance prices to the purchasing public, and have otherwise deprived the public of the benefits that would flow from normal competition among and· between the respondents and their dealer-customers. Such agreement, understanding, combination, and conspiracy and the things done thereunder and pursuant thereto as above alleged, constitute unfair methods of competition in commerce within the intent and meaning of Section 5 of an Act of Congress entitled "An Act to create a Federal Trade ;Commission, to define its powers and duties, and for other purposes", approved September 26, 1914.

ORDER TO CEASE AND DESIST The respondents, Birmingham Automotive Jobbers Association, an unincorporated trade association, its officers, G. E. ·woodward, M. H. Johnson, A. J. Seigal, and Oliver Henderson, and its members, Alabama Auto Parts Company, a corporation; Birmingham Electric Dattery Company, a corporation; Cruse-Crawford "Wheel & Rim Com- J>any, a corporation; Lawson Auto Parts Company, a corporation; Southern Bearing & Parts Company, a corporation; A. J. Brown, doing business under the trade name and style of Simplex Piston Ring .Company; and A. D. Slye, doing business under the trade name and style of Slye's Auto Supply Company, having heretofore filed their respective answers to the complaint in this proceeding, and having subsequently filed with this Commission their motion that they respectively be permitted to withdraw their said answers and be permitted to file in lieu thereof a substitute answer in which they and each of them consent that the Commission without trial, without evidence, and without findings as to the facts or other intervening procedure, might make, enter, issue, and serve upon said respondents, an order to cease and desist from the methods of competition alleged in the complaint; and the Commission having duly considered the motion and said answer, and being fully advised in the premises-- It is thel·e{ore ordered, That the said motion be and the same is hereby granted; that the said answers heretofore filed be and the same nre hereby withdrawn; and that the said proposed substituted answer be and the same is hereby filed in lieu of the said answers so withdrawn.

BIRMINGHAl\I AUTOl\IOTIVE JOBBERS ASS'N ET AL. 235' 229 Order It is further ordered, That the above-named respondents, their respective officers, directors, agents, servants, employes, and successors, in connection with the business of selling, and offering for sale, auto- :rnobile parts and accessories in interstate commerce, forthwith cease and desist from carrying out an agreement, combination, understanding, and conspiracy among themselves, or between or among any two or more of them, or with others, acting directly by or through the respondent association by which they, or any of them, fix and maintain uniform prices to be exacted by them from their purchasers of automobile parts and accessories; that they and each of them further cease and desist from using any of the methods of competition alleged in the complaint; and that they further cease and desist from doing or permitting by understanding, agreement, or combination among themselves, or between or among any two or more of them, or with others, acting directly, or by or through respondent association, the following acts and practices:

(1} Abiding by manufacturers' resale schedules in the selling of all automobile parts and accessories.

(2} Fixing prices at which such articles should be sold. (3) Fixing prices for certain repair jobs involving only labor. (4} Fixing prices for repair jobs involving both automobile parts and labor.

(5) Fixing or maintaining a schedule of discounts to be allowed by them to certain classes of purchasers of automobile parts and accessories.

(6} Requiring their customers to resell such articles so purchased from them at list prices of the manufacturer thereof, or at prices fixed by respondent association, and (7) Requiring every member of respondent association, before a price change is to be effected by them or any of them, except close-out items, to notify either the secretary of respondent association or each member in writing.

It is further ordered, that within 60 days from the date of service of this order upon said respondents, they shall file with the Commission a report in writing setting forth in detail the manner and form in which they have complied with this order. ORDER OF DISMISSAL It appearing that the respondent Auto Electric & Carburetor Company attempted to resign from respondent association on September 15, 1934, and the association refused to accept such resignation, arid Order 21F. T.C.

it further appearing that said Auto Electric & Carburetor Company has not technically been a member of said association since April 1934 because of nonpayment of dues, and has had no active or appar· ent participation with the respondent association since November 15, 1934, the same having been duly considered and understood by the Commission- It is therefore ordered, That the complaint herein be and the same is hereby dismissed, without prejudice, as to the respondent Auto Electric & Carburetor Company.

I ! ·I I AMERICAN SHELL PRODUCTS CO. 237 Complaint