Central Buying Service, Inc

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IN THE :h{A'l"ler OF CENTRAL BUYING SERVICE, INC.

COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SUBSEC. (C) OF SEC. 2 OF AN ACT OF CONGRESS APPROVED OCT. 15, 1914, AS AMENDED Docket 4259. Complaint, Aug. ~2, .1940-Decision, July 8, 1942 Where a corporation, eng~ged in New York City as resident commission buyer in providing information, facilities, hnd purch.,asing services to operators of retail stores or buyeis of commodities such as millinery, engaged in resale thereof through retail stores or departments thereof which they operated, and in executing their orders-either following instructions or exercising their own judgment as to details-by trnn~mlttlng them to seller manufacturers, competitively engaged with other manufacturers and wholesalers, who shipped the goods to the buyer for whose account the purchases were made, and billed him and received_puyment direct- Received and accepted from sellers on merchandise purchased by it for and on . behalf of afqresuid buyers, and while acting in fact as their agent, buying representative, or other intermediary, commissions varying from 3 to 7 percent of the sales price of the goods thus purchased: lleld, That such receipt and accero:mce, and payment of brokerage fees and commissions, us above set forth, constituted a violation of the provisions of subsection (c) of Section 2 of the Clayton Act, as amended by the Robinson- Patman Act. . Mr. Edwards. BagsdaJe for the Commission.

Mr. Alfred McOormacle and Mr. Harmon Dwncombe, of the firm of Cravath, DeGersdorff, Swaine & 'Vood, of New York City, for respondent ..

COMPLAINT 'lhe !federal Trade Commission having reason to believe that the Party respondent named in the caption hereof and hereinafter more P~rticularly designated has, since June 19, 1936, violated and is now VIolating the provisions of subsection (c) Section 2, of the Clayton Act, as amended by the Robinson-Patman Act; approved June 19, 1936, c. 592, Section 1, 49 Stat, 1526 (15 U.S. C. A. 13 (c)), hereby issues its complaint: . · --~ • PARAGRAPH 1. Central Buying Service, Inc., is a corporation organlZ~d and existing under thelaws of the State of New york, with its trlncipal place of business located at 101 'Vest Thirty-Seventh Street, ew York, N. Y.

PAR. 2. Respondent is a resident commission buyer and since the date of its incorporation has been and is now engaged in the business of Providing information, facilities, and purchasing services to a number 509749m-43-vol. 35-·-s 78 FE.DERAL TRADE COMMISSION DEIOISIONS Complaint 35F.T.C.

of indivichwls, partnerships, and corporations in ·the purchase of com· modities such as millinery. These individuals, partnerships, and cor· . porations operate retail stores or departments of retail stores or . otherwise resell such goods. Their places of business are located in various States of the United States and the District of Columbia. PAR. 3. For many years last past respondent has received and it is now receiving and accepting orders from buyers to purchase for their accounts certain requirements. Following instructions as to number, price, color, fabric, and style contained in each order so received, or if the orders contain no such instructions, then exercising through its officers and employees its own judgment as to s~ch details, respondent .executes these said orders by transmitting the same to various manu· · facturers and purchasing fot buyers: accounts the desired merchandise. The millinery or other· goods so purchased is selected by respondent :from displays made each day in its office by salesmen of various manu· facturers or such merchandise is selected from displays made in the showrooms of manufacturers. Occasionally buyers will personally visit the New York market and will call at the office of respondent where they are offered the facilities ancl buying service of the said respondent. These buyers are ad vised as to the showrooms maintained by manufacturers and are conducted to these showrooms by an officer or employee of respondent who assists them in selecting and purchas· ing the desired merchandise. · All orders for the purchase of merchandise, whether such orders are placed by respondent upon orders received through the mail or from selections made by the buyer as above set forth, are made out on forms supplied and provided for that purpose by respondent and. delivered to the manufacturers from whom merchandise is so pur· -chased. The manufacturers ship the goods direct to the buyer for whose account such purchases were made, bill the buyer direct, and receive payment direct from the buyer. Respondent makes no charge to and receives no compensation from its clients for the purch~sing service rendered and facilities supplied as hereinabove set forth· .Respondent at all times has been, and is now acting in fact for and in behalf of such clients.

PAR. 4. In the course 'and conduct of its business aforesaid, in the manner; method, nnd ·form as nforesaid, respondent, acting in fact for and in behalf of buyers, caused and now causes the said manufac· . turers to ship, and the snicl manufacturers do ship, commodities' so· purchased from the State in which said commodity wns located at the time of the purchase into and through various other States of the United States and the District of Columbia, directly to the. pur· chasers thereof in the States of their respective location. CENTRAL BUYING SERVICE,, INC. 79 '17 . Findings ' PAR. 5. In the course and conduct of its business, as aforesaid, and \Vhile acting in fact for and in behalf of buyers as aforesaid, respondent has, since June 19,1936, received and accepted and is now receiving and accepting from some sellers a commission on all merchandise purchased from such manufacturers by respondent for and on behalf of buyers as aforesaid. The commission so received and accepted by respondent varies from 3% to 7% of the sales price of the goods so llurchased.

PAn. 6. The receipt and acceptance by respondent of commissions from sellers on purchases made from such sellers by respondent, for the account of and while acting in fact for and in behalf 0f such buyers, in the manner and under the circumstances as hereinabove set forth, is in violation of subsection (c) of Section 2 of the act de- . scrib~d in the preamble hereof. · • REPORT, FINDINGS AS TO THE FACTs, AND ORDER t Pursuant to the provisions of an act of Congress, entitled "An act • supplement existing laws against unlawful restraints and monop- 0°. lles and for other purposes," approved October 15, 1914 (the Clayton }{ ct~, a;; amended by an act of Congress approved June 19, 1936 (the 0hlnson-Patman,Act) (U.S. C. Title 15, Sec.13), the Federal Trade Conunission on August 22, 1940, issued and subsequently served its colnplaint in this proceeding upon the party respondent named in the c~~tion hereof, charging said respondent with violating the pro- "isions of subsection (c) of Section 2 ·of said Clayton Act, as amended. After the issuance of said complaint and the filing of respondent's ~.nsw~r, the Commission entered its order granting respondent's mo- /on for permission to withdraw said answer and to substitute there- . or an· onswer admitting all the material allegations of fact set forth hn sa.id complaint and waiving all intervening procedure and further earing as to said facts. The respondent has also waived oral argulllent and the filing of briefs. Thereafter, this proceeding regularly calne on for final hearing before the Commission on the said complaint llnd substitute answer, and the Commission having duly considered the ~llJne and being now fully advised in the premises, makes this its find- Ings as to the facts and its conclusion drawn therefrom. FINDINGS AS TO TIIE FACTS I i PARAGRAPH 1. Central Buying Service, Inc., is a corporation organ- ~ze.d ~nd existing under the laws of the State of New York, with its ~rlnc1pal place of business located at 101 West Thirty-seventh Street, ew York, N. Y.

80 FEDE-RAL TRADE COMMISSION DE•CISIONS Findings 35F. T.O. , PAR. 2. Respondent is a resident commission buyer and since the date of its incorporation has been and is now engaged in the business of providing information, facilities, and purchasing services to a nuJ!l· ·her of individuals, partnerships, and.corporations in the purchase of commodities such as millinery. These individuals, partnerships and corporations operate retail stores or departments of retail stores or otherwise resell such goods. Their places of business are located ill various States of the United States and in the District of Columbia· P.AR. 3. For many years last past respondent has received and it is now receiving and accepting orders from buyer.s to purchase for their accounts certain requirements: Following instructions as to number, price, color, fabric, and style contained in each order so received, or if the orders contain no such instructions, then exercising through its officers and employees its own judgment as to such details, respondent executes these said orders by transmitting the same to various manu· facturers and purchasing for buyers' accounts the desired merchandise· The millinery or other goods so purchased is selected by respondent from displays made each day in its office by ,salesmen of various manu· facturers or such merchandise is selected from displays made in the showrooms of manufacturers. Occasionally buyers will personally visit the New York market and will call at the office of respondent, where they are offered the facilities .and ,buying service of the said respondent. These buyers are advised as to the showrooms main· tained by manufacturers and are conducted to these showrooms by all officer or employee of respondent who assists them in selecting and purchasing the desire9, merchandise. · All orders for the purchase of merchandise, whether such orders are placed by respondent upon orders received through the mail ot' from selections made by the buyer as above set forth, are made out oil forms supplied and provided for that purpose by respondent. and delivered to the manufacturers from whom merchandise is tso pur· chased: The manufacturers ship the goods direct to the buyer for whose account such purchases were made, bill the buyer direct, and receives payment direct from the buyer. Respondent makes no charge to and receives no compensation from its clients for the purchasing service rendered and facilities supplied as hereinabove set forth· Respondent at all times has been and is now acting in fact for and ill behalf of such clients.

P .AR. 4. In the course' and conduct of its business aforesaid, in the manner, method, and form as aforesaid, respondent, actirig in fact for and in behalf of buyers, caused and now causes the said manufacturers to ship, and the said manufacturers do ship, commodities so p~rchased from the State in which said commodity was located at the time of the • , CENTRAL BUYING SERVICE,, INC. 81 77 Order Purchase into and through various other States of the United States ~nd the District of Columbia, directly to the purchasers thereof in the states of their respective location.

Pan. 5. In the course and conduct of its business, as aforesaid,' and '\\>while acting in fact for and in behalf "'f buyers as aforesaid, respond- ?nt has, since June 19, 1936, received and·accepted and is now receiv- Ing a~d accepting from some sellers a commission on all merchandise Purchased from such manufacturers by respondent for and on behalf {)f buyers as aforesaid. The commission so received and accepted by respondent varies from 3 to 7 percent of the sales price of the goods so purchased.

CONCLUSION lender the facts and circumstances set forth in the foregoing findings ~s t~ the facts, the Commission concludes that the respondent, Central uy1ng Service, Inc., a corporation, is engaged· in business in com- ~erce as agent, buying representative, or other intermediary in fur- ~lshing trade information, facilities, and purchasing services in buying rom representative competitive sellers, manufacturers, and whole- Salers of millinery or other commodities for many retail dealers, de- ~artment stores, and other purchasers; and has acted in fact for, or in ehalf of, or under the direct or indirect control of such buyers, in Purchasing millinery or other commodities from said competitive sellers, tnanufacturers, and wholesalers. In the course of such commerce and while acting i'n fact as agent, buying representative, or other interlnediary in connection with the buying of millinery and other com- ·~ {0d~i~~ for such buyers, respondent received remuneration in the . t?~tn. 6f commissions or otherwise from such representative competi- . lve sellers, manufacturers, and wholesalers from whom respondent Purchased such millinery and other commodities for such retail dealers, department stores, and other purchasers in violation . of · the }:lr?V'isions of subsection (c) of Section 2 of "An act to supplement e:listing laws against unlawful restraints and monopolies and for otqer ~Urposes," approved October 15, 1914 (the Clayton Act), as amended an act of Congress approved June 19, 1936 (the Robinson-Patman 1 ct) (U.S. C. Title 15, Sec. 13).

ORDER TO CEASE AND DESIST ._, .'rhis proceeding having been heard by the Federal Trade Comllllssion upon the complaint of the Commission and the substitute answer duly filed by l:'respondent, Central Buying Service, Inc., a 82 FE.DERAL TRADE COMMISSION DEGISIONS Order 35F. T.O.

corporation, which answer admits all of the material allegations of fact set forth in said complaint to be true and waives all other inter· vening procedure and further hearing as to said facts, and the Com· mission having made its findings as to the facts and conclusion-herein that respondent, Central Buying Service, Inc., a corporation, ha9 violated the provisions of "An act to supplement existing laws against unlawful restraints and monopolies and for other purposes," approved . October 15, 1914 (the Clayton Act), as amended by an act of Congress approved June 19, 193G (the Robinson-Patman Act) (U. S. C. Title 15, Sec. 13) • . It is ordered, That. the respondent, Central Buying Service, lnc., a. corporation, .its officers, directors, representatives, agents, and em· ployees, directly or through any corporate or other device in or in connection with the purchase of millinery or other commodities in commerce, as commerce is defined in the aforesaid Clayton Act, 119 amended, do forthwith cease' and desist from: Receiving or accepting directly or indirectly anything of value !i9 brokerage, commission,. or other compensation, or any allowance or discount in lieu thereof, from any seller on or in connection with pur· chases made from such seller (a) when such purchases are made for respondent's own account, or (b) when such purchases are made a9 agent or buying representative. of the purchase:r;, <;>r (a) when in making' such purchases respondent is acting in fac~~l9!'. 91'·~n behalf, or is sub· ject to the direct or indirect control, of the pli.tl!1Vt~~i.;· :o;, It is further ordered, That the respondent· sh~JJ, 7-<Y#hin 60 day9 after service upon it of this order, file with the C6min~§$,iq)~.~ report in writing, setting forth in detail the m~nner and form ir11!tJ.fP.4ti~l#l9 complied with this order. J; \i.l ,.J:~yt. .t ~1 . ( ' L. W. POWERS CO. 83 Complaint