The Brunswick-Balke-Collender Company

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IN THE :MATI'ER OF THE BRUNSWICK-BALKE-COLLENDER COMPANY COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF 8EC. 5 OF.AN ACT OF CO:'\'GRESS .APPROVED SEPT. 26, 1914, AND OF SEC. 3 OF AN ACT OF CONGRESS APPROVED OCT. 15, 1914 Docket 360-9. Complaint, Sept. 23, 1938-Decision, Dec. 7, 1942 Where a corporation which (1) had long been engaged In the manufacture and competitive offer and sale, among other commodities, of- bowling pins and bowling supplies to, principally, owners and operators of bowling alleys; ("2) produced from 6a to 80 percent of all of said products sold and distributed In the United States; (3) installed the alleys and furnished the pins and supplies on a lease basis for many years for the annual tournament for tenpin bowlers of the American Bowling Congress at a saving thereto of many thousands of dollars as compared with what it would otherwise have to pay for the alley Installations and pins, without considering the cost of supplies and servicing; and ( 4) was the only manufacturer allowed to advertise bowling equipment at the tournaments In question, its said advertisements being forwarded to all participants; In connection with & sales promotion. plan Which it Inaugurated and carried on for several years as "The Brunswick $34,000 Red Crown Bowling Sweepstakes," and under which it awarded substantial prizes In money and merchandise to the winning bowling teams and members thereof (required under conditions laid down by It to play for 7 consecnt!Ye weeks three games a week "Qualifying Round Play" and to engage under a similar weekly schedule In 6 weeks of so-called "Prize Play"), organized In five classes composed of teams of relatively equal skill, with prizes of equal value provided for all of the five classes, awarded both on weekly basis and on the basis of the best performance for the six weeks of "Prize Play"; and In connection with which It furnished to qualifying proprietors advertising material, entry blanks, and banners as official "Brunswick Sweepstakes Bowllng Alleys"- { a) 1\Iade It a condition, In order for alleys to qualify for the sweepstakes contest, that their owners and operators must purchase four sets of their "King" plus or two sets of "King" pins and three sets of their "Queen" pins, nnd not less than $15 worth of supplies for each alley In their estab· lishments--quantlties sufficient to supply the full requirements of the average alley for the full bowling season;

(b) Engaged In an extensive adYertlsing plan through advertisements In various periodicals distributed among such proprietors, and through adver· tising cartoons played upon the fear of losing business,. through stressing the alleged reaction of customers of those alleys which had qualified and the dissatisfaction of customers of those who had not none so; and Issued various advertising calculated to arouse the Interest of bowlers In the sweepstakes for the purpose of Inducing them to demand that the proprietors of the alleys In which they bowled qualify their estatlishments for the sweepstakes, and Instructed thein salesmen to call proprietors' attention to THE BRUNSWICK-BALKE-COLLENDER CO. 737 736 Complaint such demand; Intending thereby to bring at least 80 percent of all bowling establishments Into the Sweepstakes plan ;

With the result that a substantial number of proprietors who had previously purchased pins and supplies in whole or in part from competitors were Induced to qualify their establishment!!, as aforesaid, and competitors were deprived of their patronage and suffered substantial loss; there was a tendency, through aforesaid contracts made with proprietors in order for latter to qualify for said contest, to eliminate as customers of competitors some 1,700 proprietors who owned and controlled a substantial portion of all the bowling alleys available to the public; proprietors were induced to purchase pins and supplies which they would not otherwise have purchased from it, and to purchase from it exclusively, without regard to comparative price or quality, and irrespective of their need or desire; trade was diverted from competitors to it, and by reason of its dominant position, competition in sale of such products was unreasonably restrained and lessened and there was a tendency to create in it a monopoly In the sale thereof; and the effect of such contracts-which constituted, In effect, contracts for sale of goods on the condition, agreement, or understanding that the proprietors should not use ?r deal In products of competitors-by reason of Its dominant position and the number of contracts negotiated by it, was substantially to lessen competition and tend to create a monopoly In 1t in aforesaid products:

Hew, (1) That such acts and practices were all to the prefudice and injury of the public and competitors, and constituted unfair methods of competition ·In commerce and unfair acts and practices therein; and (2) That said acts and practices, In requiring proprietors to enter Into contracts to purchase pins and supplies s~dent for their requirements and for the entire season In order to qualify as aforesaid, and under which, in effect, they were not to use or deal In competitive supplies, with effect, by reason of Its said dominant position, of substantially lessening competition and tending to create a monopoly in products in question, constituted a violation of section 3 of the Clayton Act.

Before Mr. Edward E. Reardon, trial examiner. Mr. Daniel J. Murpl~y for the Commission.

Mr. Frank W. Sullivan of Mayer, Meyer, Austrian & Platt, of Chicago, Ill., for respondent.

Complaint Pursuant to the provisions of the Federal Trade Commission Act and the Act of Congress approved October 15, 1914 (Public No. 212, 15 U. S. C., sec. 12, et seq., the Clayton Act), and by virtue of the authority vested in it by said acts, the Federal Trade Commission, having reason to believe that The Brunswick-Balke-Collender Co. has violated the provisions of said acts, and it appearing to the Com- :tnission that a proceeding by. it in respect thereof would be in th~ federal TRADE, CO:M:MISSION DECISI10NS738' . Complaint 35F.T.C.

public interest, hereby issues its complaint, stating its charges in that respect as follows :

Count 1 PARAGRAPH 1. The Brunswick-Balke-Collender Co., hereinafter. referred to as the respondent, is a corporation, organized and existing under the laws of the State of Delaware and has its principal office and place of business at 629 South Wabash Avenue, Chicago, Ill. The said respondent is now, arid for many years prior hereto has been, engaged in the business of manufacturing, offering for sale, and selling, among other commodities, bowling pins, bowling balls, and miscellaneous bowling supplies and equipment, hereinafter ..referred to as bowling equipment, necessary for the play and conduct of the game known as American tenpins or duckpins, popularly known, and hereinafter referred to, as bowls, and in the course and conduct of its business the respondent has been, and is now, offering for sale, and has been, and is now, selling and shipping, bowling equipment in commerce across State lines to various purchasers thereof at said purchasers' respective places of business located in the several States of the United States other than the State from which said bowling equip~ent has been, and is now being, shipped by the respondent. PAR. 2. In the course and conduct of its business as aforesaid the respondent has been, and is now, engaged in ac~ive and substantial competition with other manufacturers and sellers of bowling equipment who, in competition with the respondent, have been, and are now, manufacturing bowling equipment and have been, and are now, offering for sale, selling and shipping bowling equipment in commerce across State lines to various purchasers thereof at said purchasers' respective places of business located in the several States of the United States other than the States from which said bowling equipment has been, and is now being, shipped by said other manufacturers and sellers.

PAR. 3. For many years prior hereto the respondent has manufactured and sold, and does now manufacture and sell, the greater part of all bowling equipment manufactured and sold in the United States, the respondent's production and sales thereof having been, and now being, in excess of the aggregate of its several competitors' production and sales. . · PAR. 4. The game of bowls is played on hardwood runways known as bowling alleys and may be played by individuals or by teams of individuals. The owners and operators of bowling alleys are the principal purchasers of bowling equipment in .the United States and are the principal customers of the respondent and of the respondent's THE BRUKSWICK-BALKE-COLLENDER CO. . 739 736 Complaint competitors. The greater number of bowling alleys in the United States are public alleys in the sense that the members of the general public 'are allowed to play the aforesaid game or to bowl thereon for a consideration fixed by the owners or operators of such alleys, who own or operate the same for profit and are dependent therefor upon the patronage and use of said alleys by the members of the general public. · PAR. 5. Prior to the month of February 1937, the respondent contrived, during said month allfl.ounced, and therea,after extensiv€ly advertised and conducted on a national scale a certain contest which it termed "The Brunswick $34,000 Red Crown Dowling Sweepstakes" and by which it offered and awarded substantial prizes in money and merchandise to the wiJ1ning participants in said contest, which was governed by the following rules fixed and announced. by the respondent, to wit :

(a) The contest was open to all five-men. bowling teams which held membership in the American Dowling Congress, or bowled in bowling leagues sanctioned by the American Bowling Congress, and filed contest entry blanks with the respondent on or before, or postmarked not later than, October 24,1937.

(b) Teams were required to play, ·and to complete prior to December 19, 1937,21 games of bowls, played at the rate of 3 games per week for 7 consecutive weeks, which series of games was known as . "Qualifying Round Play."

(c) On the basis of each team's average score in Qualifyi~g Round Play each team entered in the contest was, at the close of such play, placed in one of five classes of teams, the membership of each class being selected from, and composed of, teams of more or less equal skill, as reflected by such teams' respective average scores in Qualifying Round Play. · (d) After the conclusion of Qualifying Round Play, and for a period of 6 consecutive weeks beginning January 24, 1938~ teams were to engage in so-called "Prize Play," each .team being required to play three games of bowls per week during such play. On the basis of scores established during Prize Play the respondent made six weekly awards of prizes consisting of $250, $150 and $100 in cash to the teams in each class having, respectively, in their respective classes, the highest, the second highest and the third highest total scores for each respective week of Prize Play. To each member of the teams having the fourth, fifth, sixth, and seventh highest total scores ih their respective classes during each respective week of Prize Play th~ :respondent awarded a bowling ball.

740 FEDERAL TRAD_E· COMMISS>ION DEClSIONS Complalnt 35F.T. C.

(e) At the conclusion of Prize Play the respondent awarded "Grand Prizes" of $750, $250, $150 and $100 in cash to the. teams in each class having, respectively, in their respective classes, the· highest, the second highest, the third highest, and the fourth highest total scores for the six weeks of Prize Play. To each member of each team having the fifth, sixth, seventh, eighth, and ninth highest total scores in their respectives classes for the 6 weeks of Prize Play the respondent awarded a bowling ball, and to each member of each team having the tenth, eleventh, twelfth, thirteenth, fourteenth, fifteenth, sixteenth, seventeenth, eighteenth, and nineteenth highest total scores in their respective classes during Prize Play the respondent awarded a pair of bowling shoes.

(f) In order to be eligible for the contest all teams were required to bowl all contest games in bowling alley establishments displaying the so-called "Official Brunswick Sweepstakes Emblem" and on socalled -"Official Brunswick Sweepstakes Dowling Alleys," and each team was required to bowl its Prize Play in the same bowling establishment in which it had bowled its Qualifying Round Play .. (g) In or.der to qualify bowling alleys as "Official Brunswick Sweepstakes Bowling Alleys" the proprietors or operators of the bowling establishments in which bowling alleys were located were· required to purchase from the respondent, and to display in their bowling establishments, the Official Brunswick Sweepstakes Emblem, in consideration for the sale of which said emblem by the respondent to said proprietors and operators the respondent required said proprietors and operators to purchase from it for each alley in their· respective establishments not less than four sets of bowling pins at_ a price of $45, more or-less, and $15 worth of miscellaneous bowling equipment, regardless of whether said proprietors or operators were or were not in need of, or did or did not desire to purchase, said bowling pins and miscellaneous bowling equipment or either of them for their bowling establishments or alleys, and in addition thereto the respondent required some of said proprietors or operators to employ the respondent to recondition or resurface some or all of the bowling alleys located in their respective bowling establishments at a cost to them of $10 per alley, more or less, regardless of whether said proprietors or operators did or did not need or desire to have their. said bowling alleys reconditioned or resurfaced.

PAR ..6. For the average or ordinary bowling alley located in the United States, and for the greater number of bowling alleys located in the United States, four sets of bowling pins and $15 worth. of miscellaneous bowling equ~pment are equal to or in excess of the· THE BRUNSWICK-BALKE-COLLENDE'R CO. 741 736 Complaint quantity of bowling pins and miscellaneous bowling equipment necessary to serve the requirements of said alleys for a full bowling season of 1 year, and are equal to or in excess of the quantity of bowling pins and miscellaneous bowling equipment purchased therefor by the proprietors or operators of said alleys for or during a full bowling season of 1 year, all of which was well known to the respondent prior to and at the time the respondent contrived the aforesaid {!Contest and throughout the entire period during which said contest was advertised and conducted by the respondent. PAR. 7. The respondent duly conducted said contest pursuant to the aforesaid rules thereof, except as hereinafter noted, and did sell to numerous proprietors and operators of bowling establishments located in the United States, and ship in commerce across State lines between and among the several States of the United States to said proprietors and operators, so-called Official Brunswick Sweepstakes Emblems, bowling pins and miscellaneous bowling equipment, and did demand and require that said proprietors and operators execute a written form <>f agreement providing that failure on their part to accept delivery of or to make payment for said bowling pins and miscellaneous bowling -('quipment at the time or times specified in said agreement operated to disqualify from the aforesaid contest· all contest entrants bowling in the said proprietors' or operators' respective bowling establishments, .and, except as hereinafter noted, the respondent did refuse to sell or ship so-called Official Brunswick Sweepstakes Embl~ms to any proprietors or operators of bowling establishments unless said proprietors <>r operators purchased from the respondent bowling pins and miscellaneous bowling equipment in the quantity and amount set forth above in subparagraph (g) of paragraph 5, without regard to whether said proprietors or operators needed or desired to purchase said bowling pins and miscellaneous bowling equipment or either of them. Many .sllles of bowling pins and miscellaneous bowling equipment which were shipped 'in commerce across State lines by the respondent to purchasers thereof were made by the respondent to proprietors or operators of bowling establishments who did not need or desire to purchase said bowling pins or miscellaneous bowling equipment or -either of them, or if needing the same did not desire to purchase them from the respondent, but were required by the respondent to, and did, purchase said bowling pins and miscellaneous bowling equipment from the r.respondent in order to obtain from the respondent so-called O$cial Brunswick Sweepstakes Emblems necessary to qualify bowling alleys .as so-called Official Brunswick Sweepstakes Bowling Alleys. 742 FEDERAL TRADE COMMISSION DECISI•ONS Complaint 3GF.T. C.

P.An. 8. In conducting the aforesaid contest and in selling and shipping in comm.erce across State lines, as afpresaid, bowling equipment and so-called Official Brunswick Sweepstakes Emblems the respondent: (a) Induced some purchase.rs of said "equipment ancl emblems to purchase the same by wilfully anu falsely representing to said purchasers that competitors of said purchasers had qualified the bowling alleys in their respective establishments as Official Brunswick Sweepstakes '13owling Alleys, when such was not a fact. (b) C~erced some purchasers of said equipment and emblems to purchase the same by threatening to open and operate in competition with said purchasers Official Brunswick Sweepstakes Bowling Alleys if such purchasers f~filed to qualify their respective alleys as such by purchasing said equipment and emblems.

(c) Wilfully and falsely represented to purchasers of said equipment and emblems that the aforesaid contest was being conducted without cost or expense to them, and that. the respondent's price on said equipment had not been increased for the purpose of raising funds with which to defray the cost of said contest, when in truth and in fact said purchasers were required to purchase equipment and emblems as aforesaid in order to qualify their respective bowling alleys for said contest and the respondent had increased the price of bowling pins ancl other bowling equipment for the purpose of raising funds with which to defray the cost of said contest.

(d) Willfully and falsely represented to "purchasers of said equipment that the terms ·and conditions upon which bowling alleys might be qualified for said contest were uniform and the same to all proprietors and operators of bowling establishments, when in truth and in fact the respondent permitted certain proprietors and operators of bowling establisr.ments to qualify their respective alleys for said contest upon terms different from, and more favorable than, the terms accorded ·by the respondent to other and competing proprietors and operators of bowling estnblishments. · PAR. 9. The respondent's intent and purpose in announcing and conducting the aforesaid contest, and the results ·and effects of said contest, were and are to divert trade from the respondent's competitors to the respondent, to coerce and cause customers and prospective customers of respondent's competitors to refrain from purchasing bowling equipment from respondent's competitors and to purchase the s~me from the respondent exclusively, without regard to the comparative price or quality of bowling equipment manufactured and_sold by the respondent and that manufactured and sold by the respondent's competitors and irrespective of whether said customers were or were not THE BRUNSWICK-BALKE-COLLENDER CO. 743 736 Complaint jn need of or did or did not desire to pur·~hase said bowling equipment, to coerce and cause purchasers of bowling equipment to purchase such items and quantities thereof as were or might be required by the re-. spondent, without regard to said purchasers' need or desires, to divert trade and patronage· from proprietors or operators of bowling establi.shments who did not qualify the bowling alleys in their respective establishments as so-called Official Brunswick Sweepstakes Bowling · Alleys and to transfer such trade and patronage to proprietors or . operators of bowling establishments who dld so qualify the bowling alleys in their respective establishments, to injure and oppress in their respective businesses competitors of the respondent and .those proprietors and operators of bow ling establishments who did not qualify the bowling alleys in their respective establishments as Official Brunswick Sweepstakes Bowling Alleys and unreasonably to restrain trade in the manufacture and sale of bowling equipment and in the operation of bowling establishments. · PAR. 10. The effects and results of the conduct by the respondent of the aforesaid contest have been and now are to cause and require many customers of respondent's competitors to cease purchasing bowling equipment from respondent's competitors and to purchase the same exclusively. from the respondent, to cause many prospective customers of respondent's competitors to purchase bowling equipment exclusively. from th~ respondent, to deprive many purchasers of bowling equipment of the privilege of purchasing the same from respondent's competitors and the right-freely to purchase such equipment or items thereof in such amounts and at such times as they wish and from such sources as they desire to patronize, to restrict and limit purchasers of bowling equipment to the purchase of the respondent's bowling equipment exclusively and to deprive such purchasers and the general public 'of the benefit of free and active competition in the manufacture and sale of bowling equipment, substantially to injure competition in the _manufacture and sale of bowling equipment, unduly and unreasonably to hinder, obstruct, restrain, and lessen competition in the manufacture and sale of bowling equipment and to te:od to create in the respondent a monopoly in the manufacture and sale of bowling equipment. · PAR. 11. The acts and practices of the respondent as herein alleged are all to the prejudice of competitors of the respondent and of the public, have a dangerous tendency to hinder and prevent, and have actually hindered and prevl:'nted, competition in the sale of bowling equipment in commerce within the intent and meaning of the Federal Trade Commission Act, have unreasonably restrained ~u,..h commerce in_ bowling equipment, and constitute unfair methods CO~USS'ION DECIS]ONS744 FEDERAL TRADE Findings 35F.T.C.

of competition in commerce and unfair acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. · Count g PARAGRAPH 1. Paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, and 11 of Count 1 of this complaint are, by reference, incorporated herein and made a part of this paragraph.

P .AR. 2. The effect of the acts and practices of the respondent as herein alleged and the sale by the respondent of bowling equipment and so-cal_led Official Brunswick Sweepstakes Emblems in the manner and form and under the circumstances above set forth has been and is now, substantially to lessen competition in the manufacture and sale of bowling equipment and has tended, and now tends, to create in the respondent a monopoly in the manufacure . and sale of bowling equipment within the intent and meaning of section 3 of the above-mentioned Act of Congress approved October 15, 1914 (15 U. S. C., sec. 14), and the aforesaid acts and practices of the respondent and the sale by respondent of bowling equipment and so-called Official Brunswick Sweepstakes Emblems in the manner and form and under the circumstances above set forth, with the effect aforesaid, constitute violations of said section 3 of the Act of Congress approved October 15, 1914 (15 U.S. C., sec. 14). REPonT, FINDINGS As TO TIIE F Acrs, AND OnnEn Pursuant to the provisions of the Federal Trade Commission Act and pursuant to the provisions of an Act of Congress entitled) "An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes," approved October 15, 1914, commonly lmown as the Clayton Act, the Federal Trade Commission, on Sept~mber 23, 1938, issued and subsequently served its complaint in this proceeding upon the respondent, The Brunswick-Balke-Collender Co., a corporation, charging it with the use of unfair methods of competition in commerce and unfair acts and practices in commerce in violation of the provisions of the Federal Trade Commission Act and also charging it with vi.Plation of the provisions of section 3 of said Act of Congress entitled, "An Act to supplement existing laws against unlawful restraints and monopolies, .and ·for other purposes." After the issuance of said complaint and the filing of respondent's answer thereto, testimony and other evidence in support of the allegations of said complaint were introduced by Daniel J. Murphy, attorney for the Commission, and in opposition THE BRtJNSWICK-BAL:tte-COLLENDER CO. 745 736 Findings to the allegations of the complaint by Frank "\V. SullivanT attorney for the respondent, before Edward E. Reardon, a trial examiner of the Commission theretofore duly designated by it, and said testimony and other evidence were duly recorded and filed in the office of the Commission.

Thereafter, this proceeding regularly came on for final hearing before the Commission on said complaint, answer thereto: testimony and other eviden·ce, report of the trial examiner upon the evidence and exceptions filed thereto, briefs in support of the complaint and in opposition thereto, and oral arguments of counsel; and the Com-, mission, having duly considered the matter and being now fully advised in the premises, finds that this proceeding is in the interest of the public and makes this its findings as to the facts and its ronclusion drawn therefrom.

FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent, -The Brunswick-Balke-Collender Co., is a corporation, organized and existing under the laws of the ·State of Delaware and bas its principal office and place of business at 629 South ·wabash Avenue, Chicago, Ill. The said respondent is now, and for many years last past has been, engaged in the business of manufacturing, offering for sale, and selling; among other commodities, bowling pins and bowling supplies. In the course and conduct of its said business,. respondent causes and has caused said products, when sold, to be shipped from its place of business in the State of Illinois to purchasers thereof located in various other States of the United States. Respondent maintains, an<;l at all times mentioned herein has maintained, a course o£ trade in said bowling pins and bowling supplies in commerce among and between the various States of the United States. , PAR. 2. In the course and conduct o£ its aforesaid business the respondent has been, and is now, engaged in active and substantial competition with other manufacturers and sellers of bowling pins and· bowling supplies, who, in competition with respondent, have· b~en and are now offering for sale, f?selling, and shipping bowling Pins and bowling supplies in commerce among and between the "'arious States of the United States.

·par. 3. For many years the respondent has manufactured and solq the greater part o£ the bowling equipment manufactured and sold in the United States, and respondent's production and sales of ten: Pins and bowling supplies are in excess of the aggregate of its several competitors and constit~te from 65 to 80 percent of all the te~pins 746 ]i'EDE-RAL TRADE COMMISSIION DECISIONS -Findings 35F.T.C.

and bowling supplies sold and distributed in the United States. The owners and operators of bowling alleys are the principal purchasers of tenpins and bowling supplies in the United States and are the principal customers of the respondent and of the respondent's competitors. The greater number of bowling alleys in the United States are public alleys in the sense that members of the general public are allowed to play thereon for a consideration fixed by the owners or perators of such alleys, who own or operate the same for profit and who are dependent therefor upon the patronage and use of said alleys by the members of the general public.

PAR. 4. Prior to the month of February 1937, the respondent inaugurated, and during said month announced and thereafter extensively advertised and conducted on a national scale, a certain contest which was termed "The Brunswick $34,000 Red Crown Bowling Sweepstakes," by which it offer·ed and awarded substantial prizes in moneys and merchandise to winning participants in said contest, which was governed by certain rules announced by respondent. The tules of said contest were as follows:

(a) The contest was open to all 5-men bowling teams which held membership in the American Bowling Congress or bowled in bowling leagues sanctioned by the American Bowling Congress. (b) Teams were required to play, and to complete prior to December 1937, 21 games of tenpins played at the rate of 3 games per week for 7 consecutive weeks, which series o.f games was known as "Qualifying .Round Play."

(c) On the basis of each team's average score in Qualifying Round Play, each team entered in the contest was, at the close of such play, placed in one of five classes of teams, the membership of each class being selected from, and composed of, teams of more or less eqt1al skill as reflected by such team's respective average scores in Qualifying Round Play.

(d) After the conclusion of Qualifying Round Play and for a period of 6 consecutive weeks beginning January 24, 1938, teams were to engage in so-called "Prize Play," each team being required to ·play 3 games of tenpins per week during such play. On the basis of scores established during Prize Play, the respondent made 6 weekly awards of prizes, consisting of $250, $150; and $100 in cash to the teams in each class having, respectively, in their respective classes the highest, the second highest, and the third highest .total scores for each respective week of Prize Play. To each member of the teams having the fourth, fifth, sixth, and seventh highest total scores in tht>ir respective classes during each respective week of Prize Play, the respondent awarded a bowling ball. TH.E BRUNSWICK-BALKE·COLLENDER CO.

736 Findings (e) At the conclusion of Prize Play, the respondent awarded· "grand prizes" of $750, $250, $150, and $100 in cash to the teams in -each class having, respectively, in their respective classes, the highest, the second highest, the third highest, and the fourth highest total scores for the past 6 weeks of Prize Play. ·To each member of each team having the fifth, sixth, seventh, eighth, and ninth highest total scores in their respective classes for the six weeks of Prize Play, the respondent awarded a bowling ball, and to each member of eacldeam having the tenth, eleventh, tw~lfth, thirteenth, fourteenth, fifteenth, .sixteenth, seventeenth, eighteenth, and nineteenth highest total scores in their respective classes during the Prize Play, the 'respondent awarded a pair of bowling shoes.

. . (f) All teams were required to bowl all contest games, including Qualifying Round Play, in bowling-alley establishments displaying the official Brunswick Bowling Sweepstakes Emblem and on so-called Official Brunswick Sweepstakes Bowling Alleys, and each team was required to bowl its Prize Play in the same Official Brunswick Sweepstakes bowling establishments where Qualifying Round Play was bowled. Similar contests were conducted by the respondent during the 1938-39 season and also during the 1939-40 season. . PAR. 5. The Brunswick Sweepstakes contest. applied only to the game of tenpins arid did not apply to the games of candlepins and duckpins, which are played with pins of different size and shape, with different weights of balls, and· under different rules than the game of.tenpins.

PAR. 6. For the purpose of maintaining uniformity in its Sweep-. stakes contests, the respondent required that all teams competing in the Sweepstakes must have a membership in the American Bowling Congress. The American Bowling Congress was organized in 1805 for the purpose of regulating the game of tenpins and promulgates rules, regulations, and specifications to govern the game of tenpins. All members of the Congress who participate in contests sanctioned by the American Bowling Congress must bowl only upon alleys complying with the specifications of the American Bowling Congress and ~erti.fied by it. These specifications cover the dimensions of the alleys, which must not be less than 41 inches and not more than 42 inches in width. The length must be 60 feet from the foul line to the center of the head pin, with a clear run back of the foul line of not less than 15 feet, the pin spots to be 12 inches apart, with rear pins 3 inches from the pit edge of the alleys. The specifications also cover the dimensions and weight of the pins and the weight, size, and balance of the. bow ling balls. · 748 FEDERAL TRADE COML.IISSION DECISI·ONS Findings 35F. T. C.

PAR. 7. The American Bowling Congress since 1901 has conducted an "Annual Tournament" for tenpin bowlers. The number of participants. in these tournaments has been steadily growing in each succeeding tournament. The 1940 .tournament, held in Detroit, Mich., had 32,000 contestants and lasted sixty-two days. For the conduct of these tournaments, the respondent, each year, except for the year 1907, has installed the alleys and furnished the pins and supplies on a lease basis and has serviced the alleys during the tournament. In the 1940 tournament, the respondent installed and serviced forty alleys and provided approximately 6,000 sets of tenpins on a lease basis for a consideration of $12,500. In addition, the respondent is the only manufacturer allowed to advertise bowling equipment at these tournaments, for which privilege the respondent pays $1,000 for an advertisement in the tournament schedule, which is forwarded to all participants. If the American Bowling Congress were to pay for said alley installations the cost would be from $60,000 to $64,000 at $3,000 to $3,300 a set of two alleys, and the cost of pins would be about $71,000 at $11.85 a set, making a total of approximately · $133,000 without considering the cost of supplies and servicing of the alleys. . PAR. 8. There has been a marked increase in the number of bowlers and the interest in bowling, as indicated by the membership in the American Bowling Congress. The membership of the American Bowling Congress was as follows for the respective seasons: Season: Teams 1935-36-------------------------------------------- 51,743 1936-37~------------------------------------------- 63,153 1937-38----~--------------------------------------- 91,975 1939-401938-39---------------------------------------~----____________________________________________ 103,330130,560 Teams consist of from 5 to 7 members. There has likewise. been a marked increase in the value of bowling alleys and accessories manufactured in the United States, as shown by the biannual census of manufacturers issued by the United States Department.of Commerce, which lists such values as follows:

1933---------------------------------~---------------- $475,350 1935--------------------~----------------------------- 1,613,801 1931---------------------------------------~---------- 3,231,719 PAR. 9. There are approximately 7,500 to 8,000 bowling alley proprietors in the United States. This total includes many establish-· ments which could not qualify under the specifications provided by the rules of the American Bowling Congress and also establislunents operating duckpin and candlepin alleys. Approximately 70 percent to 85 percent of the alleys are used for tenpins. In 1940 there were THE BRUNSWICK-BALKE-COLLENDER CO. 749 736 Findings 4,700 tenpin bowling establishments certified by the American Bowling Congress. There. were at least 1,769 proprietors of bowling alleys who qualified for respondent's 1937 Sweepstakes contest. PAR. 10. The manufacture of tenpins is confined to approximately six manufacturers, including the respondent and one manufacturer who sells and has sold its entire output to the respondent for the past 18 years. The sales of tenpins made by the respondent forthe years 1935-38 are as follows:

Bets of tenpin• 1935-----~--------------------------------------------- 51,500 1936--------------------------------------------------- 76,304 1937 --------------------------·------------------------- 87, 747 1938--------------------------------------------------- 92,619 PAR. 11. The respondent manufactures three grades of tenpins which are known as King pins, Queen pins, ·and Duke pins. All of these pins are manufactured from maple wood and compiy with the American Bowling Con·gress specifications. The King pin is the best quality tenpin manufactured by the respondent. It was introduced in April 1936 at the price of $10.75 per set, which price was increased to $11.85 per set effiective October 1, 1936. Respondent's second quality pin, the Queen pin, was sold at the price of $8.95 per set until October 1, 1936, at which time the price wa; increased to $9.45 per set. Respondent's third quality pin, the Duke pin, was sold at $5.95 per set until October 1, 1936, at which time the price of this pin was increa"sed to $6.45 per set. PAR. 12. For the purpose of promoting a widespread interest in respondent's Sweepstakes contest and giving all classes of bowlers an opportunity to participate, regardless of their proficiency, teams "Were divided into five classes, as follows: Class A--5-man teams whose 3-game series score in Qualifying Round Play averaged over 2,950. .

Class B-5-man teams whose 3-game series score m Qualifying Round Play averaged/ between 2,650 and 2,949. Class C-5-man teams whose 3-game series score in Qualifying Round Play averaged between 2,400 and 2,649. Class D-5-man teams whose 3-game series score in Qualifying Round Play averaged between 2,100 and 2,399. Class E-5-man teams whose 3-game series score in Qualifying Round Play averaged under 2,100.

~The Qualifying Round Play consisted of 21 games played in 7 successive weeks, and under "the above classification a bowler having a low average game had the same opportunity for the prize awards. as a better bowler, as each bowler would compete with others in his. same class. The pri?ie awards were the same for each class. . ::i09H9m--43-vol. 35-lio 750 FEDERAL TRADE C01.IMISSION DECISIONS Findings 35F.T.C.

PAR. 13. In order to qualify their alleys for the Sweepstakes con• test promoted by the respondent, it was nece~sary for propriet~rs of bowling alleys to purchase from the respondent four sets of King pins or two sets of King pins. and three sets of Queen pins for each and every alley in their establishments and, in addition thereto, to purchase not less than $15 worth of supplies for each and every alley in their establishments. Upon making such purchases from the respondent the establishments then became Official Brunswick Sweepstakes bowling establishments and were furn.ished by the respondent with various advertising material, entry blanks, and banners. PAR. 14. During the year 1937 the respondent placed advertisements in various periodicals distributed among bowling-alley proprietors, of which the following is a typical example: ATTE~TIO~ BOWLING PROPRIETORS We suggest that you DO NOT PLACE ANY ORDERS FOR TENPINS OR CONTRACT FOit RESURFACING OF ALLEYS lmtll you hear .

Tile BIGGEST PROFIT MAKING NEWS IN BOWLING HISTORY from your BRUNSWICK !'alesman WAIT NOW .C.'D AVOID REGRETS LATER PAR. 15. The advertising plan of the responaent was based upon two elements-the opportunity for profit and fear of losing business, with primary stress being placed by the respondent on the fear motive in its advertising and selling campaign. Several advertising cartoons issued by the respondent depicted bowlers in high glee because the proprietors of the bowling establishments where they bowleu had "tied in" with the Brunswick Sweepstakes, nnu such bowlers were varimtsly quoted as follows: The proprietor of our place has the Interest of bowlers at heart 100%. Mighty swell of our proprietor to get us In this! I am glad we bowl here I I am sure glad our team bowls at this place. Other bowlers are depicted as dissatisfied because their proprietors . had not "tied in" with the Brunswick Sweepstakes, and such bowlers were variously quoted as follows: · I am going to see our league secretary about moving out of this joint I We're going where we'll get a crack at that $34,000 prize list and I don't mean maybe! Just becau~e we bowl at the wrong place we wereq't in the morley I That burns me up! THE BRUNSWICK-BALKE-COLLENDER CO. 751 '736 Findings PAR~ 16, Various advertising was also issued by the respondent caleulated to arouse the interest of the bowler in the Sweepstakes for the purpose of inducing bowlers to demand that the proprietors of alleys in which they bowled qualify their establishments for the Sweep- .stakes. Salesmen were instructed to call the attention of the proprietors to this result, as is indicated by the following typical statement issu~d by respondent to its. salesmen: Bowlers' interests are going to be focused on this tournament. Never before bas there been one of this size without 1 penny's expense to anyone. Thf'y see these entry blanks all over town (we expect to print millions of them), they see the banners in all the better places, they see the buttons on the fellows' coats. They notice posters on the bulletin boards. Don't you see how all this is going to make almost everyone in this community want to participate? If ~hey ca~'t get into this tournament they're going to want to know why. Every ~perator tying into this plan will be able to say "come and get it." The fellows who don't go along. are going to be out in the cold. You know and I know that bowiin.g teams don't always stay at the same alley year after year. 1\Iany of ·them have left alleys and gone to other places for Jess important reasons than through inabll!ty to participate in this gigantic tournament. I don't see how a single proprietor who bas the interests of his bowlers at heart could think of passing up a plan such as this to help himself and the bowlers at the same time. Pr,lctlcally everybody in your community is going to know about it. • • .• nowlers ·are going to be interested right ot! the bat and this is all put out right .at the beginning of the season. If they're bowling at a place that is not a i)art of this campaign there is a chance that they may P.Ven Organize another team and come to a place where theo)Y can participate. · PAR~ 17. It was the respondent's plan to bring at least 80 percent -of all ~bowling establishments into the sweepstakes plan, and the fear motive was to be chiefly used for this purpose. This is indicated . by instructions issued to salesmen, which read in part as follows: Tht•refore, we know that we are puttln~ it very low when we say that this campaign will cost your company well over $:10,000. For that reason we expect . every salesman to sell better than 80% of the bowling alleys in each territory. We cannot permit salesmen to attack with this plan in a we~k and haphazard manner. Each man should stuuy the sales story that follows and learn it. • • • Your company is growing rapidly and is on the lookout for top notch men to advanee up the ladder. We cannot continue with men who don't take· advantage of opportunities such as this well planned campaign. In other I Words, this campaign will be used as a yardstick to measure the ability of our salesmen. Anyone who cannot make his quota with a plan as perfect as this ·one does not deserve the title of "Brunswick Salesman." SELLING INSTRUCTJ.ONS • There are ()nly two outstanding reasons for anyone in business to make a 'Purchase: ' (1) IU: o~der to make a profit.

{2) Fear ot losing customers In case purchase is not made. 752 FEDERAL TRADE COMMISSIION DECISIQNS Findings 35F.T. C~ It Is granted that there are other reasons, . but their Importance· is sosmall in comparison to the two stated above that they can be entirely overlooked at this time. Thus, in planning your sales story ask yourself "Am I building a picture of profit coming to this man and at the same time am I making him see that ,there is a great possibility of his losing business, losing customers, if he does not enter into this Idea?" Have every statement o! yours lead up to or prove these two outstanding points. This is ·not cheaptalk as developed by schools of salesmanship. It is the result of years of successful selling experience and has always succeeded in getting the business regardless of the product sold. In the sales story which follows, note how each and every part of this campaign is used to sell the product on the profit or fear idea.

PAR. 18. The respondent duly conducted said contest pursuant tothe rules hereinbefore described and did sell to numerous proprietors and operators-of bowling establishments located in the United States,_ bowling pins and miscellaneous bowling pins and miscellaneous bowling supplies, viz, four sets of King pins or two sets of King- pinsand three sets of Queen pins and $15 worth of supplies for each alley in the establishment of such proprietors and operators. PAR. 19. Based upon the testimony of operators and proprietorsof bowling establishments and upon the testimony of dealers in, and salesmen of, bowling pins and bowling supplies, the Commission findsthat four sets of King pins or two sets of King pins and three setsof Queen pins three sets of Queen pins and $15 worth of miscellaneoussupplies for each alley are sufficient tQ supply the full requirements' of the average bowling alley for the full bowling season. A substantial number of the proprietors of bowling alleys who w.ere induced by the respondent to qualify their establishments ior the sweepstakes plan had previously purchased bowling pins and bowling sup- . plies in whole or in part from competitors of the respol}dept. As a result, competitors of respondent were deprived of the patronageof such proprietors and suffered a substantial loss of customers and of sales because of respondent's sweepstakes plan. PAR. 20. The contracts made by the respondent with proprietorsof bowling establishments in order to qualify for the sweepstakes contest, by reason of the quantity purchases required in such contracts, had a tendency to eliminate as customers or prospective customers of respondent's competitors approximately 1,769 proprietors of bowling establishments who own or control a substantial portion of all the bowling alleys available to the public, and respondent's, competitors were thereby precluded from an opportunity to sell bowling pins or bowling supplies to such alleys which .had been so qualified. Furthermore, as a result of respondent's advertising and sales campaign, proprietors of bowling establishments were induced,. through fear of losing business and through dem-ands of bowling THE. BRUNSWICK-BALKE-COLLENDER CO. 753 "736 Findings customers, to qualify their alleys for- respondent's sweepstakes contest and to purchase bowling pins and supplies from the respondent which they would not otherwise have purchased from the respondent. P .AR. 21. Through the use of the itforesaid acts and practices by the respondent, trade hls been diverted from respondent's competitors to respondent through and by means of respondent's sweepstakes plan, and customers and prospective customers of respondent's competitors have been induced to refrain from purchasing bowling pins and supplies from respondent's competitors and t~ purchase the same from the respondent exclusively, without regard to the comparative price or quality of the bowling pins and supplies manufactured and sold by the respondent and those manufactured and sold by respondent's competitors, and irrespective of whether said customers were or were not in need of, or did or did not desire to purchase, said bowling pins and supplies.

· P .AR. 22. The Commission further finds that by reason of the dominant position of the respondent in the sale and distribution of bowling·pins and bowling supplies, the use of the acts and practices by the respondent as herein described, has substantially injured competition in the sale of bowling pins and supplies, has unduly and unreasonably hindered, obstructed, restrained, and lessened competition in the manufacture and sale of said bowling pins and supplies, and has a tendency to create in the respondent a monopoly in the manufacture and sale of bowling pins and bowling supplies and to deprive purchasers and the general public of the benefit of free and active competition in the manufacture and sale of bowling pins and supplies.

P .AR. 23. The Commission further finds that the contracts made by the r_respondent with the various bowling-alley proprietors in order to qualify their alleys for the. "Brunswick $34,000 Red Cross Bowling Sweepstakes," by reason of their requirement that such proprietors purchase sufficient bowling pins and supplies to fill their needs or requirements for the bowling season, constituted, in effect, ·contracts for the sale of goods on the condition, agreement, or under- . standing that such proprietors should not use or deal in bowling pins or bowling supplies of competi.tors of the respondent; and, by reason of the· dominant position held by the respondent in the sale and distribution of bowling pins and bowling supplies and the number of contracts negotiated by the resppndent, the effects of such contracts were substantially to lessen competition and tend to create a monopoly in the respondent in bowling pins and bowling. supplies. Order 35F. T. C~ CONCLUSION The aforesaid acts and practices of the respondent as herein found nre all to the prejudice and injury of the public and of said respondent's competitors, and constitute unfair methods of competition in commerce and unfair acts and practices in commerce within the intent a,nd meaning of the Federal Trade Commission Act; and the acts and practices of the respondent in requiring proprietors of bowling alleys to ~nter into contracts to purchase a quantity of bowling pins and bowling supplies sufficient for their requirements for the entire b9wling season in order to. qualify their bowling establishments for the "Brunswick $34,000 Red Cross Bowling Steep- · stakes," with the effect that such contracts constituted a condition, agreement, or understanding that such purchasers shall not use or deal in bowling pins or bowling supplies of respondent;s competitors have, by reason of the dominant position of the respondent in the sale and distribution of bowling pins and bowling supplies, the effect of substantially lessening competition and a tendency to create a monopoly in bowling pins and bowling supplies, and constitute a violation of section 3 of the Act of Congress of the 'United States. entitled, "An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes," conlm.only known as the Clayton Act.

ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, the answer of therespondent,_ testimony anu other evidence taken before Edward E. Reardon, a trial examiner of the Commission theretofore duly designatecl by it, in support of the allegations of the complaint and in opposition thereto, report of the trial examiner upon the eviuence and exceptions filed thereto, briefs filed in support of the complaint and in opposition thereto, and oral arguments of counsel; and the Commiss~on having made its findings as to the facts and its con· · elusion that said respondent bas violated the provisions of the• Federal Trade Commission Act and has violated the provisions of that certain act of the Congress of the United States entitled, "An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes," approved October 15, 1914, commonly known as the Clayton Act.

It is ordered, That the respondent, The Brunswick-Balke-Collender Co., a corporation, and its officers, agents, representatives, and employees, directly or through any corporate. or other device in con- THE BRUNSWICK-BALKE-COLLENDER CO. 755 736 Order nection with the offering for sale, sale, and distribution of bowling . pins, bowling supplies, bowling equipment, or other similar products in commerce as "commerce:' is defined in the Federal Trade Cominission Act, do forthwith cease and desist from: 1. Using any sales promotion plan or method of sale which indudes the promotion or operation of any bowling contest which requires a bowling-alley proprietor, in order to qualify for such contest, to purchase from the respondent all or substantially all of his bowling pins, bowling supplies, or bowling equipment for the bowling sen.son during which such contest is hell!. 2. The use of any sa]es promotion plan or contest for the purpose, or having the effect, of coercing bowling-alley proprietors into purrhasing all or substantially all of' their bowling pins, bowling supplies, or bowling equipment from rrspondent. It is further ordered, That the respondent, The Brunswick-Balke- Collender Co., a corporation, and its officers, agents, representatives, and employees directly or through any corporate or other device i:q connection with the sale, or the making of any contract for the sale, of bowling pins, bowling supplies, bowling equipment, or other similar products in commerce as "commerce" is defined in that Act of Congress entitled, "An Act to supplement existing laws against unlawful .restraints and monopolies, and for other purposes," approved October 15, 1914, commonly known as the Clayton Act, do forthwith cease and desist from :

1. Selling, or making any contract for the sale of, bowling pins, bowling supplies, bowling equipment, or other similar products on the condition, agreement, or understanding that the purchaser thereof . shall not use bowling pins, bowling supplies, bo\vling equipment, or other similar products other than those acquired from the respondent; 2. Using any sales promotion plan or method of sale which includes the promotion or operation of any bow.ling contest which requires a bowling alley proprietor to purchase or agree to purchase all or substantially all of his bowling pins, bowling supplies, or bowling equip- :rnent for the bowling season, where such sale or contract of sale is in effect a sale on the condition, agreement, or: understanding that the purchaser thereof shall not use bowling pins, bowling supplies, or bowling equipment not manufactured or sold by the respondent. It is furtht!r ordered, That the respondent shall, within (iO 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 com- Plied with this order.

Syllabus 35F.T.C.