Television Institute, Inc., American

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IN THE MATTER OF AMERICAN TELEVISION INSTITUTE, INC. 1 ET AL. COMPLAINT, FINDINGS, AND ORDER IN REGARD TO TIIE ALLEGED VJOLATIO:Il OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 3060. Complaint, Feb. 16, 1931-Decision, Apr. 20, 1938 Where a corporation and certain individuals, theretofore partners, and otnce~s thereof and in control of its sales policy and business practices; engaged 1° sale and distribution of correspondence courses of study in radio an~ te t~ vision and In sale and distribution of equipment for radio and television 1.0 members of the public In various States and in the District of Columbia, b substantial competition with others engaged in sale and distribution of su~e courses of study in same and allied fields or In other subjects, and in 811 and distribution of similar equipment as aforesaid- "fleiP (a) Commonly placed the advertising of their said courses under the r 10· te · Wanted" heading in the classified section of newspapers of general In state circulation, with request that the person replying write newspaper ts . ugeu ' which advertisement appeared, and thereby contacted, through tbeir epersons seeking employment In particular field dealt in, and told tbose r d plying that they were selling courses of study and equipment and inforDl~e them that they would secure jobs or positions upon completion of cour of instruction offered; ted (b) Represented through their aforesaid advertising media, that there exls to a shortage of radio television operators and that several young men were se be selected and trained for positions in radio television at expense of ~ 00! olffering the course until actually employed, and that payment of $1 Jlle total cost of course was deferred until enrollee should have finished sa cts and secured a television job paying a salary of $125 a month or better, fll o! being there was no such shortage, they did not select or restrict nu~berbnt their students, none of the students were trained at their expen~e, 10g students paid for course at rate of $10 a month, and statement as to de!~;;ead $100 of total cost, as above set forth, had capacity and tendency to nu student into belief that jobs were available in field in question; u"b tbrs "'(c) Represented that they operated wide-spread employment agency, llllt which students were placed In paying positions upon graduation, and JsiO!l they owned or operated a huge laboratory in which radio and teleV nd· equipment was made In great quantities, and operated radio television. b;~nte casting stations wherein their pupils were given opportunity for gra t o! residence study, and that aforesaid individual officers were engfneersncb certain television broadcasting stations, facts being they did not operat~srnb· an agency through which students were placed as aforesaid, nor sn~h there oratory, very few positions are available in field in question, in which 'd 00t are currently practically no commercial positions available, and they dl adu' operate broadcasting stations affording their pupils opportunity for gr ate residence training; and ture, (d) Depicted on letterheads used by them and in other advertising neral pied picture of a large building in Chicago, of which at one time they occu ~ 0 ( two floors, and represented on said letterheads that they were englll~e~beir certain television broadcasting stations, facts being that, while one 0 Al\IERICAN TELEPHONE INSTITUTE, INC., ET AL. 1139 1138' Complaint number was designer and erecting engineer of said stations, they were not w· engineers thereof, as aforesaid;

lth capacity and tendency to mislead a substantial portion of student public into erroneous belief that such representations were true and to cause them to enroll as students on account thereof, and with result that trade was Unfairly diverted to them from competitors engaged as hereinbefore set forth, and who do not misrepresent or otherwise publish untrue claims concerning their courses in advertising, selling and distributing same in coml!e!dlllerce; to the substantial injury of such competition in commerce: 'That such acts and practices were to the prejudice and injury of the public and competitors and constituted unfair methods of competition. Karl Stecher for the Commission. zr. r. 8. R. Rabinojf, of Chicago, Ill., for respondents. Co:uplaint te P~suant to the provisions of an Act of Congress, approved Seprn.~. r 26, 1914, entitled "An Act to create a Federal Trade Com- F' 1 ~810n, to define its powers and duties, and for other purposes," the l':l e~a~ Trade Commission, having reason to believe that American ton evlsion Institute, Inc., a corporation, U. A. Sanabria, R. B. Fuller- Tel' a~~ A. H. Zamotany, as individuals and officers of the American as l" 181~n Institute, Inc., a corporation, and as copartners, trading to .. · american Television Institute and as Sanabria Television Labora- .tes I ·llnf . ' leremafter referred to as respondents, have been and are using fine~1 ~ Inet!IOds of competition in commerce, as "commerce" is deceed' In said act, and it appearing to said Commission that a proissu In~ by it in respect thereof would be in the public interest, hereby pes lts complaint stating its charges in that respect as follows: a co.AnaoR.A.PII 1. Respondent, American Television Institute, Inc., is StatPoration, organized in 1936, doing business under the laws of the .A.. of Illinois. Respondents U. A. Sanabria, R. B. Fullerton, and B lnstit. Zamotany, are copartners, trading as American Television llals ute, and as Sanabria Television Laboratories. Said individthe a~re also president, vice president, and treasurer, respectively, of and b o~e-named corporation, and manage and direct its sales policies allre usllless practices. The principal office and place of business of Ue:Pondents is at 433 East Erie Street, Chicago, Ill. engarrP~n?ents are now, and have been for several months last past, stud;e. 10 t~1e sale and distribution of correspondence courses of "ariou 1~ radio and television to members of the public located in Itespo~d states of the United States and in the District of Columbia. caused t~n~s now cause, and during the time herein mentioned have their Dl eir correspondence courses, when sold, to be shipped from ace of business in Chicago, Ill., to the purchasers thereof 1140 FEDERAL TRADE COI\Il\IISSION DECISIONS Complaint 26 F. T. C. located in the various States of the United States other than th~ State of Illinois and in the District of Columbia. There is now, an has been, at all times mentioned herein, a constant current of trade and commerce, by the respondents, in said correspondence cours~s, between and among the various States of the United States, and 10 the District of Columbia.

Respondents are now, and at all times herein mentioned have been, in substantial competition with other corporations, firms, copartner· ships, and individuals, engaged in the sale and distribution of corre· spondence courses of study in the same and allied fields, or in other subjects, in commerce among the various States of the United States and in the District of Columbia. . PAn. 2. The respondents, in soliciting the sale of and selling t!1e1r correspondence courses, now circulate in and among the va;10~ States of the United States and during all the time herein mention ha.Ne circulated certain statements and representations purporting ~ 0 describe the nature and extent of respondents' business and of thel~ courses, and tlie advantages to be realized by students of their coursed of instruction, in newspapers, periodicals, booklets, circulars, and general business correspondence, and through agents to pupils 1111 ~ prospective pupils. Such statements and representations serve a arerepresentations on the part of respondent that several young men d· to be selected and trained for positions in radio television at respond ents' expense until actually employed; that a 70-lesson course IS· offeref r' 0collection of the tuition fee being deferred until a job is secured 11 the student at $125 per month, or better; that respondents operate J wide-spread employment agency through which students are pht~" in paying positions upon graduation; that there is a shortage of ra 1 • television operators; that respondents own or operate a huge labol'~IJ. tory in which radio and television equipment is manufactured 1t· great quantities; that respondents operate radio television broadca·~y ing stations wherein respondents' pupils are given the opportuJll IJ for graduate residence study, and that the individual respondents al' engineers of certain radio stations.

Respondents make many other similar statements and represent!lf tions with respect to the size and importance of respondents' placde 0! business and the position occupied in the radio television world 0 the officers of the American Television Institute, Inc. 1' a The aforesaid representations are grossly exaggerated, mislead 10~ and untrue. In truth and in fact the respondents do not selec~, 0d restrict the number of their pupils, and said pupils are not trai~~e at respondents' expense. A 70-lesson course is not offered. and .125tuition fee is not deferred until a job is secured for the pupil at $ AMERICAN TELEVISION INSTITUTE, INC., ET AL. 1141 1138 Findings Per n1month or more. Respondents do not operate an employment agency through which their students are placed in employment upon ~raduation. There is no shortage of radio television operators. respondents do not manufacture radio television equipment in great 6uantities, and they do not own or operate any radio or television roadcasting stations. The individual respondents are not engi- 11 t~e:s of any radio broadcasting station. The statements made in p e~r. advertising with respect to the size of their business and the 0~ 8 ;hons occupied in the radio television world of the present officers; le American Television Institute, Inc., are untrue. ~n. 3. The use by respondents of the representations set forthhere1 h and n ~s had, and now has, the capacity and tendency to mislead st d deceive and has and does mislead a substantial portion of the t~ ent public into the erroneous belief that such representations are of e and to cause them to enroll as students of respondents on account sp such erroneous beliefs. There are among the competitors of relle ents, ~s mentioned in paragraph 1 hereof, individuals, parten 8 llps, firms, and corporations, engaged in the sale of correspondre~e courses in radio television, and allied fields, who do not mis- \\'is resent .the size and nature of their business in any way or otheradve P~bhsh claims for their courses which are untrue, who likewise ''ar·ertlse, sell and distribute their correspondence courses among the By 1 ~~s States of the United States and in the District of Columbia. spo l e representations aforesaid, trade is unfairly diverted to reandn~ents from such competitors, thereby substantial injury is being here· as been done by respondents to competition in commerce, as p ln set out.

to t~n .. 4·. The above-alleged acts and practices of respondent are all tors e Injury and prejudice of the public and respondents' competi- \\·iti . and constitute unfair methods of competition in .commerce enti t~~e intent and meaning of Section 5 of an Act of Congress, :Powe e An Act to create a Federal Trade Commission, to define its 1914. rs and duties, and for other purposes," approved September 26, REPORT, FINDINGS AS TO THE FACTS, AND ORDER p and ~sua~t to the provisions of the Federal Trade Commission Act 'I'ra.:~ YCVIrtue of the authority vested in it by said act, the Federal '-le om · ·SC'tveci .t mission on February 16, 1937, issued and subsequently televi ~ s com~laint in this proceeding upon respondents American ton a s~n Institute, Inc., a corporation, U. A. Sanabria, R. n. Fuller- 'lel~v1·n· A. H. Zamotany, as individuals and officers of American Slon Instl t . .Allleri T I.~ e, Inc., a corporatwn, and as copartners tradmg as can elev1swn Institute, and Sanabria Television Laboratories, 26F. ..r.c. Findings ·t· in charging them with the use of unfair methods of competi 10~ commerce in violation of the provisions of said act. After the tssu· ance of said complaint and the filing of respondents' answers theretd ,V. T. Kelley, chief counsel for the Federal Trade C~mmis~ion, 8~0 S. R. Rabinoff, counsel for respondents, executed a stipulation as. the facts, wherein it was agreed that the statement of facts t~erel~ recited might be taken as the facts in this proceeding and in heu ? testimony in support of the charges stated in the complaint or rn opposition thereto, and that the Commission might proceed up~~ such statement of facts to make its report, stating its findings as 'd the facts (including inferences which it might draw from .the 5~1 r stipulated facts) and its conclusion based thereon, and enter 1ts or \ disposing of the proceeding without the presentation of argun1en_ or the filing of briefs. Said stipulation as to the facts was sufibtd quently aproved by the Commission and was duly recorded and e. in the office of the Commission. Thereafter, the proceeding regu larly came on for final hearing before the Commission pn said coJlld plaint, the answers thereto and said stipulation as to the facts, 8~y the Commission having duly considered the same and being now fu t advised in the premises finds that this proceeding is in the ~nteres_ of the public and makes this its findings as to the facts and Its con elusion drawn therefrom.

FINDINGS AS TO THE FACTS • !\ PARAGRAPH 1. Respondent, American Television Institute, Inc.; 1:ue corporation organized in 1936 and doing business under and by v~ ':l of the laws of the State of Illinois. Respondents, U. A. Sa~a 11r~;R. B. Fullerton, and A. H. Zamotany, were copartners tradm, a· American Television Institute and as Sanabria Television Labo;be tories from prior to February 1935, until the year 1936 w~en so£ respondent corporation was formed and succeeded to the busin?~ nt the partnerships. Said individuals are also president, vice-pres! e 11 ~and treasurer, respectively, of the above-named corporation, and Jll;he age, direct and control its sales policies and business practices. E st principal office and place of business of all respondents is at 433 a Erie Street, Chicago, Ill. . 0£ Respondents are, and were, engaged in the sale and distribut~ontbe correspondence courses of study in radio and television and tn Jll• sale and distribution of equipment for radio and television to Jlle nd hers of the public located in various States of the United Sta~es ~be in the District of Columbia. Respondents now cause, and during nd times herein mentioned have caused, their correspondence cou~ses 11 in equipment, when sold, to be shipped from their place of busllless AMERICAN TELEVISION INSTITUTE, INC., ET AL. 1143 Findings Cfhicago, Ill., to the purchasers thereof located in the various States ~· th~ United States, other than the State of Illinois, and in the f IstrlCt of Columbia. There is now, and has been at all times men- 1'Ioned herein a constant current of trade and commerce by the -aedondents in said correspondence courses and equipment between ·o~ 0amongolumbiathe various States of the United States and in the District in Responde~ts are now, and at all times herein mentioned have been, -sh·substantial competition with other corporations, firms, copartnerr Ips and individuals engaged in the sale and distribution of corll ondence courses of study in the same and allied fields, or in other -co Jects, and in the sale and distribution of similar equipment, in .D.rnt~ercelS l'l t f among the various States of the United States, and in the -attn.c.. 2.o TheColumbia.respondents, their agents and representatives, have ge vertis~d the said correspondence courses in newspapers having a rn~erallnterstate circulation. The newspaper advertising was com- 11 in Y placed in the classified section under the "Help Wanted'' headth!· Su<;h advertisements contained a request that persons answering Pe:U Write the newspaper in which the advertisement appeared. saidsons W~o sought employment in the particular fields with which "-'er advertisements dealt, replied to them as directed and said replies thee ~ollected by agents or representatives of the respondents who :an ~ea ter. contacted the said persons and fixed the time and place for sai;nterview. At these interviews the persons who had answered ·cou ad,·ertisements were told that the respondents were selling rses of t d .how . s u y and eqmpment. The persons so contacted were, J.l}efever, Informed that they would secure jobs or positions upon com- ~on of the course of instruction offered by respondents. -vert1•spondents further represented, in substance, through their ad- Sing m d'llelect d e 1a above described, that several young men were to be -t~~Penese and. trained for positions in radio television at respondents' ~ffer d until actually employed; that a 70-lesson course was being and ~h for the price of $287, payable $10 at the time of enrollment, lllent ~balance in monthly instalments of $10 each except that payhave; . $100 of said amount was deferred until the enrollee should a sal nished respondents' course and secured a television job paying 1V'ide:ry of $125 per month or better; that respondents operated a in Pays;read employment agency through which students were placed lno' p ..~f lad' "' os1tions upon graduation; that there existed n. shorta.!!e 1o tel · · ~ ln10'8 1 b evision operators; that respondents owned or operated a:fa~ur ad o~atory in which radio and television equipment was manue In great quantities; that respondents operated radio tele- Findings 26Jl'.T.0· vision broadcasting stations wherein respondents' pupils wer~ ~ive~ the opportunity for graduate residence study, and that the indrVldua respondents were engineers of certain television stations. . In fact, respondents did not select or restrict the number of thetr students. None of said students were trained at respondents' ;rpense but paid for the courses at the rate of $10 per month. 1e statement that the collection of a portion of the tuition :fee wa~ deferred until a television job was secured by the student 'at $125.P~r month had the capacity and tendency to mislead the student lD d~ believing that jobs were available in the field of television. Respol~ lents did not operate a widespread employment agency through whtC~ students were placed in paying position upon graduation. In fnc\\' very few positions are available in the field of television. Up to 110 6 there has been no shortage of radio television operators. There nrf now practically no commercial positions available in the field d~O television. The respondents' representation that they operated ra 1e 1television broadcasting stations wherein their pupils were given t 1b opportunity for graduate residence training was not true, alth n there are now in respondents' laboratory a large number o:f televts ts receiving and transmitting sets which are being used by responde» in the graduate residence training o:f their students. . . <f PAR. 3. On letterheads used by respondents and in other advertlS literature appeared a picture of a large building in Chicago, ; known as the American Furniture Mart. The respondents. at 0~5time occupied two floors of that building, although no mention ;e. made of that :fact on the advertising matter and letterhead~s. b 1t spondents' place o£ business is no longer located in said build111g, ~­ at 433 Erie Street in Chicago, Ill. Such letterheads also bore. rep~e­ sentations that individual respondents were engineers of certftll1 te t vision broadcasting stations when, as a matter o£ :fact, they were ~ 0 ; However, respondent U. A. Sanabria was the designer and erec~~; engineer of the said stations. Since respondents have mo~ed t :eY place of business :from the American Furniture Mart building t have not used such stationery. . bove PAR. 4. The use by respondents of the representations heretna tial set forth has had the capacity and tendency to mislead a substan re· portion of the student public into the erroneous belief that such rep of sentations were true and to cause them to enroll as students no' respondents on account of such erroneous belie£. There are aJll~of the competitors of respondents mentioned in paragraph 1 her nl~ individuals, partnerships, firms, and corporations engaged in the s nd of correspondence courses of radio television and allied fi~lds 11 0!1' other fields who do not misrepresent or otherwise publish cl:11J11S c AMERICAN TELEVISION INSTITUTE, INC., ET AL. 1145 Order rni.ng their courses which are untrue, and who advertise, sell and t lstrlbute their correspondence courses in commerce among and bet~een the various States of the United States. By the representac ons aforesaid, trade is unfairly diverted to respondents from such c~lnpetitors; thereby substantial injury is done to competition in ~lnerce as herein set out.

an AR. 5. Respondents for more than 1 year last past have not made hi Y of the statements or representations above referred to. Since fo ~y 1, 1937, they have been selling the same course and equipment in \~he original sum of $287 without any deferred charges. While ents e ~arly stages of development of respondents' business, respondno . did have a small laboratory wherein they manufactured a 1a1~ 11111 al quantity of television equipment, today, respondents have aof!~ te~e~ision laboratory wherein they manufacture a large quantity evlston equipment for sale throughout the country. CONCLUSION viJhe afo~esaid acts and practices of respondents, American Teleand0~Institute, Inc., a corporation, U. A. Sanabria, R. B. Fullerton, 'lel . ·.II. Zamotany, as individuals and officers of The American .A.rnev~slon Institute, Inc., a corporation, and as copartners trading as as hl'lc~n Television Institute and Sanabria Television Laboratories, of r erem alleged, are to the prejudice and injury of the public and tioned~pondents' competitors and constitute unfair methods of competi- C01ll1n. c~mmerce within the intent and meaning of the Federal Trade lllission Act.

ORDER TO CEASE AND DESIST 'I'his pr d' .lniss· ocee mg havmg been heard by the Federal Trade Comresp 10~ upon the complaint of the Commission, the answers of the l\elJ~n en~s and a stipulation as to the facts executed by ,V, T. Rabi y, ;chief counsel for the Federal Trade Commission, and S. R. Waiv ~ ' counsel for respondents, the filing of briefs having been and e ' and .the Commission having made its findings as to the facts of th co;clusion that said respondents have violated the provisions t e. ederal Trade Commission Act. 1 Inc zg 01'dered, That respondents, American Television Institute, ., a corp ·and A l oratwn, and its officers, U. A. Sanabria, R. B. Fullerton, Atneri · I. Zamotany, individually and as copartners trading as their rcan T~revision Institute and Sanabria Television Laboratories, . espectlve l' . d ' . .With th . epresentahves, agents an empwyees, m connection sponde e offermg for sale, sale and distribution of their corrence courses of study and instruction in radio and television 1146 FEDERAL TRADE CO:Ml\IISSION DECISIONS Order 20F. T.C.

and in the sale and distribution of equipment for radio and televis~on in interstate commerce or in the District of Columbia do forthwlth cease and desist from- 1. Representing in any manner that a limited number o£ persons are to be selected and trained for positions in radio television; 2. Representing in any manner that students are trained at respondents' expense;

3. Representing in any manner that anyone other than the student himself pays for his course of training; .. 4. Representing through advertisements in classified advertlslng pages of newspapers, magazines, advertising literature or in any other manner under such headings as "Help 'Vanted" or ":Men Wanted" or in any other manner that respondents are offering cjl· ployment or that employment will be offered to persons who answer said advertisements;

5. Representing that all or any part of the tuition fee for the course of instruction is deferred until a television job is secured; 6. Representing that respondents operate a widespread employ· ment agency or that students are placed in paying positions upon ~araduation ·, .. n 7. Representing that there is a shortage of radio televlS10 operators;

8. Representing that they operate radio television broadcasting stations; . 9. Representing in any manner that their place of business ~s larger or that they have greater business facilities than actually 15 the case;

10. Representing that any of said respondents or their age~ts, servants or employees are engineers of television broadcastlllg stations; . 5 It i8 further ordered, That the respondent shall, within 60 dart after service upon it of this order, file with the Commission a rep?rb in writing setting forth in detail the manner and form in whlC it has complied with this order.

JUSTIN HAYNES & CO., INC. 1147 Syllabus