Pronto File Corp

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IN THE MATTER OF PRONTO FILE CORPORATION COMPLADIT, FI~DINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 3111. Complaint, Feb. 18, 1939-Decision, Jan. 8, 1941 Where a corporation engaged in manufacture of steel card cabinets and in interstate sale and distribution thereof, in competition with othet·s engaged in sale and distribution in commerce of such products- Stated in and on folders, cards, and circulars which it distributed and caused to be distributed to its dealer-purchasers and prospective purchasers in various States and in the District of Columbia, and in which its products were pictorially and descriptively represented, that same wet·e being offet·ed at a 50 percent reduction in price, and set forth, in juxtaposition to such pictorial representations and descriptions, price in black numerals which was struck through with red lines and for which, in each case, was substituted, in red numerals, price of half as much, and furnished to dealer-customers, for a consideration, and for distribution to consuming public, such cards, alld represented, as aforesaid, as generally understood by dealers and consuming public, that price in black, canceled as above set forth, was regulnr and customary selling price for product to which it applied, and substituted price, in red, a reduced one, facts being prices set forth in red type, as above set forth, constituted usual and customary pt·ices quoted and charged consuming public by it, and black type prices, ·canceled as aforesaid, were not its regular and customary prices; With effect of deceiving and misleading substantial portion of purchasing public into en·oneous belief that its products were being offered at a rl'duced price equal to 50 percent of their retail value and usual and customary retail selling price, and with result, as consequence of such misrepresentation of customary selling price of its products and offer thereof at pretended reduced price, that trade was diverted unfairly to it from many competitors who do not misrepresent usual and customary selling price of their products and do not offer same at pretended reduced prices; to the injury of competition In commerce: Held, That such acts and practices, under the circumstances set forth, were all to the prejudice and injury of the public and competitors, and constituted unfair methods of competition in commerce, and unfair and deceptive acts and practices therein.

Before llfr. John lV. Addison, trial examiner. 11/r. Jesse D. J(WJh for the Commission.

Weisman & Doslww. of New York City, for respondent. Col\lrLAINT Pur<:uant to the provisions of the Federal Trade Commission Act, nnd by virtue of the authority vested in it by said act, the Federal PRONTO FILE CORP. 335 334 Complaint Trade Commission having reason to believe that Pronto File Corporation, a corporation, hereinafter referred to as respondent, has violated the provisions of the 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. Pronto File Corporation is a corporation organized, existing; and doing business under and by virtue of the laws of the State of New York, and having its office and principal place of business at 349 Broad way in the city of New York, State of New York. PAR. 2. The respondent is now, and has been for more than 1 year last past, engaged in the manufacture, sale, and distribution of steel filing cabinets. Respondent sells said products to dealers and members of the purchasing public situated in various States of the United States, and causes said products when sold by it to be transported from its aforesaid place of business in the State of New York to the purchasers thereof at their respective points of location in various States flf the United States other than the State of New York, and in the District of Columbia. Respondent maintains, and 1at all times herein has maintained, a course of trade in commerce in said product among and between the various States of the United States and in the District of Columbia.

PAR.. 3. Respondent is engaged in competition in commerce among and between the various States of the United States and in the District of Columbia with other corporations and with partnerships, firms, and individuals selling and distribu.ting steel filing cabinets in said commerce.

PAR. 4. In the course and conduct of its business as described in paragraph 2 hereof, the respondent, in soliciting the sale of and selling its products as aforesaid, has published and caused to be published, and has distributed and caused to be distributed to its dealer purchasers and prospective purchasers located in various States of the United Stat~s and in the District of Columbia, folders, cards, and circulars in which its products are pictorially and descriptively represented. It is also stated in and on said folders, cards, and circulars that such products are being offered at a 50 percent reduction in price. In juxtaposition to the pictorial representations and descriptions of each product offered, a price is set forth in black numerals, which are struck through with red lines, and a price of half as much is substituted in red numerals in each case. Such cards are furnished by respondent to its dealer customers for a consideration for distribution to the consuming public.

Findings 32F.T. C.

PAR. 5. Such method of stating the selling price is generally understood by dealers and the consuming public to be a representation that the price in black type and canceled by the red line is the retail value and the regular and customary selling price of the product to which it applies, and the substituted price in red type is a reduced price. PAR 6. The aforesaid representations made by the respondent in the manner above described are false and misleading. In truth and jn fact the prices set forth in red type as reduced prices are not the result of a reduction of the ordinary and customary retail price, but are the usual and customary prices quoted and chargedi the consuming public, and the prices in black type and canceled by the red lines are not and were not respondent's regular and customary prices. PAR. 7. The use by respondent of the above described false and misleading representations has had, and has, the capacity and tendency to, nnd does~ deceive and mislead a substantial portion of the purchasing public into the erroneous belief that respondent's products are being offered at a reduced price equal to 50 percent of their retail value and of the usual and customary retail selling price. PAR. 8. Among the competitors of respondent doing business in commerce as aforesaid, there are many who do not misrepresent the usual and customary selling prices of their products competitive with the products of respondent, and do not offer products at pretended reduced prices. As a result of respondent's misrepresentations of the customary selling price of these products and its offer of them at pretended reduced prices, trade has been diverted unfairly to respondent from its said competitors in such commerce, and thereby injury has . been done and is being done by respondent to competition in commerce among and between the various States of the United States and in the District of Columbia.

PAR. 9. The aforesaid acts and practices of respondent as herein alleged are all to the prejudice and injury of the public and of respondent's competitors and constitute unfair methods of competition and unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission on February 18, 1939, issued, and on February 20, 1939, served, its complaint in this proceeding upon respondent Pronto File Corporation, a corporation, charging its with the use of unfair methods of competition and unfair and deceptive acts and practices in commerce in violation of the provisions of thl) PRONTO FILE CORP. 337 Findings said act. The respondent, on April 3, 1939, filed its answer in this proceeding. Thereafter, a stipulation was entered into whereby it was stipulated and agreed that a statement of facts agreed to by the respondent and its counsel, Herman L. 'Veisman, Esq., and Jesse D. Kash, trial attorney for the Commission, and read into the record at a hearing held in New York City on 1\Iay 16, 1940, subject to the approval of the Commission, may be taken as the facts in this proceeding and in lieu of testimony in support of the charges of the complaint, or in opposition thereto, and that the said Commission may proceed upon said statement of facts to make its report, stating its findings as to the facts and its conclusion based thereon and enter its order disposing of the proceeding without the presentation of argument. Thereafter, this proceeding regularly came on for final hearing by the Commission on said complaint, answer and stipulation, said stipulation having been approved, and accepted, and the Commission having duly considered the same and being now fully advised in the premises, finds that this proceeding is in the interest of the public, and makes its findings as to the facts and its conclusion drawn therefrom:

FINDINGS AS TO THE FACTS PARAGRAPII 1. The respondent, Pronto File Corporation, is a corporation organized, existing,· and doing business under and by virtue of the laws of the State of New York and having its office and principal place of business at 349 Broadway in the city of New York, State of New York.

PAR. 2. The respondent is now, and has been for more than 1 year last past, engaged in the manufacture, sale, and distribution of steel card cabinets. Respondent sells said products to dealers and members of the purchasing public situated in various States of the United States and causes said products, when sold by it, to be transported from its aforesaid place of business in the State of New York to the purchasers thereof at their respective points of location in various States of the United States other than the State of New York and in the District of Columbia. Respondent maintains, and at all times mentioned herein has maintained, a course of trade in conm1erce in said products among and between the various States of the United States and in the District of Columbia.

PAR. 3. Respondent is engaged in competition in commerce among and between the various States of the United States and in the District of Columbia with other corporations and with partnerships, firms and individuals selling and distributing steel card cabinets in said commerce.

Findings 32F.T.C.

PAR. 4. In the course and conduct of its business as described in paragraph 2 hereof, the respondent, in soliciting the sale of and selling its products as aforesaid, has published and caused to be published, and has distributed and caused to be distributed to its dealer purchasers and prospective purchasers located in various States of the United States and in the District of Columbia, folders, cards, and circulars in which its products are pictorially and descriptively represented. It is also stated in and on said folders, cards, and circulars that such products are being offered at a 50 percent reduction in price. In juxtaposition to the pictorial representations and descriptions of each product offered, a price is set forth in black numerals, which are struck through with red lines, and a price of half as much is substituted in red numerals in each case. Such cards are furnished by respondent to its dealer customers for a consideration for distribution to the consuming public.

PAR. 5. Such method of stating the selling price is generally understood by dealers and the consuming public to be a representation that the price in Elack type and cancelled by the red line is the regular and customary selling price of the product to which it applies, and the substituted price in red type is a reduced price. PAR. 6. The aforesaid representations made by the respondent in the manner above described are false and misleading. In truth and in fact the prices set forth in red type as reduced prices are not the result of a reduction of the ordinary and customary retail price, but are the usual and customary prices quoted and charged the consuming public, and the prices in black type and cancelled by the red lines are not and were not respondent's regular and customary prices. PAR. 7. The use by respondent of the above described false and misleading representations has had and has the capacity to and does deceive and mislead a ~ubstantial portion of the purchasing public into the erroneous belief that respondent's products are being offered at a reduced price equal to 50 percent of their retail value and the usual and customary retail selling price.

PAR. 8. Among competitors of respondent doing business in commerce as aforesaid there are many who do not misrepresent the usual and customary selling price of their products competitive with products of the respondent and do not offer products at pretended reduced prices. As a result of respondent's misrepresentation of the customary selling price of these products and its offer of them at pretended reduced prices, trade has been diverted unfairly to respondent from its said competitors in commerce and thereby injury has been done and is being done by respondent to competition in commerce among PRONTO FILE CORP. 339 334 Order and between the various States of the United States and in the District of Columbia.

CONCLUSION The aforesaid acts and practices of respondent as herein found are all to the prejudice and injury of the public and of respondent's comretitors and constitute unfair methods of competition in commerce and unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. ORDER TO CE..<\SE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, answer of respondent and a stipulation as to the facts, and the Commission having made its findings as to the facts and its conclusion that respondent has violated the provisions of the Federal Trade Commission Act. It i8 ordel•ed, That the respondent, Pronto File Corporation, a corporation, its officers, representatives, agents, and employees, directly or through any corporate or other device, in connection with the offering for sale, sale and distribution of steel card filing cabinets in commerce, as commerce is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

Representing that the prices at which respondent's steel card filing cabinets are offered for sale constitute special or reduced or clearance sale prices when such prices are the usual and customary prices at which such products are offered for sale and sold by respondent in the normal and regular course of business.

It is further ordered, That the respondent shall in 60 days after service upon it of this order file with the Commission a report in writing setting forth in detail the manner and form in which it has complied with this order.

Syllabus 32F.T.C.