Mono Service Company

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.. IN THE MA'ITER OF MONO SERVICE COMPANY COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 4834. Complaint, Sept. 16, 1942-Decision, Jan. 19, 1943 Where a corporation, eognged In the manufacture of paper cups, and in the competitive interstate sale and distribution thereof, Including certain ice cream cups, lids of some of which, bearing star on Inside thereof, entitled chance lee cream purchaser securing a cup enclosed therew.ith to extra cup-- Sold its said cups and lids so marl\ed to wholesulers, jubbPrs, and lee cream manufacturers who resold them, so packed, to retailers for sale to the purchasing, publlc In accordance with aforesaid sales plan, ln_volvlng game or sale of chance to procure additional cup for original purchase money, and use of a lottery scheme or game of chance in distribution of ice cream to consuming public; and thereby Supplied to and placed in the hand!) of othet·s the means of conducting lotteries, contrary to an established publlc policy of the United States Government, and in competition with many who' do not use any such plan or method; With the result that many dealers and ultimate purchaset·s of lee cream were attracted by Its said sales plan and the element of chance involved therein, and were lndu,ced thereby to buy and sell lts merchandise in preference to that of its competitors aforesaid; and with tendency and capacity to divert trade in commerce unfairly to lt from them: Held, That such acts and practices, under the circumstances set forth, were all to the prejudice and Injury of the public and of competitors, and constituted unfair methods of competition In commerce and unfair acts and practices therein.

Mr. J. lV. Brookfield, Jr. for the Commission. Complaint Pursuant to the provisions of the Federal Trade Commission Act, and by virtue of the authority vested in it by said act, the Federal Trade Commission having reason to believe that Mono Service Co., 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 interest of the public, hereby issues its complaint stating its charges in that respect as follows:

PARAGRAPH 1. Respondent, l\Iono Service Co., is a corporation, organized and operating under the laws of the State of New Jersey with its principal office and place of business ]ocated at 3-19 Oraton Street, Newark, N. J. Respondent is now and for sometime last past bas been engaged in the manufacture of paper cups including cups Complaint 36F.T. C.

for the packing of ice cream and in the sale and distribution thereof to dealers, jobbers, and ice cream manufacturers in commerce behveen and among the various States of the United States and in the District of Columbia. Respondent causes and has caused said cups when sold to be transported from its aforesaid place of business in Newark, N. J., to purchasers thereof at their respective points of location in the various States of the United States other than the State of New Jersey and in the District of Columbia. There is now and has been for sometime last past a course of trade by respondent in said paper · cups in commerce between and among the various States of the United States and in the District of Columbia.

In the course and conduct of said business respondent is now and has been in competition with other corporations and with individuals and firms engaged in the sale and distribution of like or . similar articles of merchandise in commerce between and among the various States of the Unitetl States and in the District of Columbia. PAn. 2. In the course and conduct of its business as described in paragraph 1. hereof, respondent manufactures and sells, and has manufactured and sold and distributed, to ice cream manufacturers and dealers certain of its ice cream cups so printed, packed, and assembledas to involve the use of a lottery scheme or game of chance when used by retail dealers to distribute ice cream to the purchasing qnd consuming public.

·. Respondent's methods of printing and packing its ice cream cups ate as follows :

Its cups are packed with an unattached lid for each cup. Some of the said lids have printed on the reverse side thereof a "star." Its cups are sold to manufacturers or packagers of ice cream who fill the cup with ice cream and affix the lids. Retail dealers, and othersJ who sell ice cream packed in respondent's cups award an extra cup of ice cream to the purchaser of a cup of ice cream having a star appearing under the lid. The consuming purchaser is unable to determine whether the ice cream cup has a star appearing under the lid until after the cup has been purchased and the lid removed; whether a purchaser of the ice cream will receive an additional cup of ice cream for his original purchase money is therefore decided wholly by lot or chance.

Respondent has printed and packed and distributed other ice cream cups to be w;;ed as a. means of conducting lotteril's or games of chance which vary in detail but are the same in principle as those above describl'd.

PAn. 3. 'The wholesale dealers and jobbers and ice cream manufactnrPrs to whom respondent sells the above describrd ice cream cups, MONO SERVICE CO. 127 125. Finding;~ the lids of which are marked with a star, resell said cups as packed by respondent to retail dealers and said retail dealers sell and distribute said cups to the purchasing public in accordance with the aforesaid sales plan. Respondent thus supplies to and places in the hands of others the means of conducting lotteries in the sale of its products and ice cream in accordance with the sales plan hereinabove set forth. The use by respondent of said sales plan or method in the sale and distribution of its merchandise and the sale of said merchandise by and through the use thereof and by the aid of said sales plan or method is a practice of a sort which is contrary to an established public policy of the Government of the United States. PAR. 4. The sale o£ said ice cream cups to the purchasing public in the manner above alleged involves a game of chance or the sale of a chance to procure an additional cup of ice cream. Many individuals, firms, and corporations who manufacture, sell or distribute merchandise in competition with the responuent, as above alleged, do not use said sales plan or methou or any sales plan or method involving a game of chance or the sale of a chance to win something by chai1ce or any other sales plan or method that is contrary to public policy. Many dealers and ultimate purchasers o£ ice cream cups are attracted by respondent's said method and sales plan and by the element of chance involved therein and have been and are induced to buy and sell respondent's merchandise in preference to merchandise offered for sale and sold by said competitors of respondent who do not use th same or equivnlent sales plans or methods. The use of said sales plan or method by respondent because of said game of chance has the tendency and capacity to unfairly divert trade in commerce be~ tween and among the various States of the United States and in the District of Columbia to respondent from its said competitors who do not use the same or equivalent sales plans or methods. PAR. 5. The aforesaid acts and practices of respondent, as hereinabove alleged are all to the prejudice anu injury of the public and of respondent's competitors and constitute· unfair methods of competition in commerce and unfair acts and practic~s in commerce within the intent and meaning of the li'ederal Trade Commission Act. UEPOnT, Fnwrxos AS TO Tile FACTs, AND ORDER Pursuant to the provisions of the Federal Tra<le Commission Act, the Commission on SPptember 16, HH2, issued, and thereafter served, its complaint in this proceeding upon respondent, Mono Service Co., a corporation, charging it with the use of unfair methods in competition in commerce and unfair acts and practices in commerce in violation of the provisions of said act. On September 29, 1942, the re- Findings 36F. T. C.

spondent filed its answer, in which answer it admitted all the material allegations of fact set forth in said complaint and waived all intervening procedure and further hearing as to said facts. Thereafter, the proceeding regularly came on for final hearing before the Commission on said complaint and answer thereto; and the Commission, having duly considered this 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 a·s to the facts and its conclusion drawn therefrom.

FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent, l\Iono Service Co., is a corporation, organized and operating under the laws of the State of New Jersey with its principal office ald place of business located at 349 Oraton Street, Newark, N. J. · Respondent is now and for sometime last rast has been engaged in the manufacture of paper cups including cups for the packing of ice cream and in the sale and distribution thereof to dealers, jobbers and ice cream manufacturers in commerce between and among the various States of the United States and in ihe District of Columbia. Respondent causes and has caused said cups when sold to be transported from its aforesaid place of business in Newark, N. J., to purchasers thereof at their respective points of location in the various States of the United States other than the State of New Jersey and in the District of Columbia. There is now and has been for sometime last past a course of trade by respondent in said paper cups in commerce between and among the various States of the United States and in the District of Columbia. In the course and conduct of said business respondent is now and has been in competition with other corporations and with individuals and firms engaged in the sale and distribution of like or similar articles of merchandise in commerce between and among the various States of the United States and in the District of Columbia. PAR. 2. In the course and conduct of its business as described in paragraph 1 hereof, respondent manufactures and sells, and has manufactured and solu and distributed, to ice cream manufacturers and dealers certain of its ice cream cups so printed, packed, and assembled as to involve the use of a lottery scheme or game of chance when used by retail dealers to distribute ice cream to the purchasing and consuming public.

Respondent's methods of printing and packing its ice cream cups are as follows :

Its cups are packed with an unattached lid for each cup. Some of the said lids have printed on the reverse side thereof a "star." MONO SERVICE CO. 129 125 Findings Its cups are sold to manufacturers or packagers of ice cream who fill the cup with ice cream and affix the lids. Retail dealers, and others, who sell ice cream packed in respondent's cups award an extra cup of ice cream to the purchaser of a cup of ice cream having a star appearing under the lid. The consuming purchaser is unable to determine whether the ice cream cup lias a sta,r appearing under the lid until after the cup has been purchased and the lid removed; whether a purchaser of the ice cream will receive an additional cup qf ice cream for his original purchase money is therefore decided wholly by lot or chance.

Respondent has printed and packed and distributed other ice cream cups to be used as a means of conducting lotteries or games of chance which vary in detail but are the same in principle as those above described.

PAR. 3. The wholesale dealers and jobbers and ice cream manufacturers to whom respondent sells the above described ice cream cups, the lids of which are marked with a star, resell said cups as packed by respondent to retail dealers and said retail dealers sell and distribute said cups to the purchasing public in accordance with the aforesaid sales plan. ·Respondent thus supplies to and places in the hands of others the means of conducting lotteries in the sale of its products and ice cream in accordance with the sales plan hereinabove set forth. The use by respondent of said sales plan or method in the sale and distribution of its merchandise and the sale of said merchandise by and through the use thereof and by the aid of said sales plan or method is a practice of a sort which is contrary to an established public policy of the Government of the United States. PAR. 4. The sale of said ice cream cups to the purchasing public in the manner above found involves a game of chance or the sale of a chance to procure an additional cup of ice cream. Many individuals, firms, and corporations who manufacture, sell, or distribute merchandise in competition with the respondent, as above found, do not use .said sales plan or method or any sales plan or method involving a game of chance or the sale of a chance to win something by chance or any other sales plan or method that is contrary to public policy. Many dealers and ultimate purchasers of ice cream cups are attracted by respondent's said method and sales plan and by the element of chance invqlved therein and have been and are induced to buy and sell respondent's merchandise in preference to merchandise offered for sale and sold by said competitors of respondent who do not use the same or equivalent sales plans or methods. The use of said sales plan or method by respondent because of said game of chance has the tendency Order 3GF.T. C.

and capacity to unfairly divert trade in commerce between and among the various States of the United States and in the District of Columbia to respondent from its said competitors who do not use the same or equivalent sales plans or methods.

CONCLUSION The aforesaid acts and practices of respondent as hereinabove found are all to the prejudice and injury of the public and of respondent's competitors and constitute unfair methods of competition in commerce and unfair acts and practices in commerce within the intent and mean· ing 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 and the answer of respondent, in which answer respondent admits all the material allegations of fact set forth in said complaint and states that it waives all intervening procedure and further hearing as to said facts, and the Commission having made its findings as to the facts and conclusion that said respondent has violated the provisions of the Federal Tmde Commission Act.

It i~ ordered, That the respondent, Mono Servic~ Co., 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 ice cream cups or other similar containers in commerce as "commerce'' is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Selling or distributing to jobbers or wholesale dealers or to retail dealers direct, ice cream cups, or other similar containers, so printed or assembled that sales of ice cream or other merchandise to the general public, when packed in said cups or other similar containers, are to be made or, due to the manner in which such cups or other similar containers are printed and assembled at the time they are sold by respondent, may be made by means of a. game of chan~, gift enterprise, or lottery scheme.

2. Packing or assembling cup lids in packages or assortments of ice cream cups or other similar containers for sale with ice cream or other merchandise to the public at retail, which cup lids are printed for use; or which may be used, in distributing or selling ice cream cups or other similar containers together with ice cream or other merchandise by means of a lottery scheme, game of chance, or gift en~rprise. MOXO SERVICE CO. 131 125 Order 3. Furnishing to retail or wholesale dealers or jobbers, cup lids or containers, some of. which are so printed as to be used in distributing extra cups or containers of ice cream or other merchandise to pur· chasers of cups. or containers containing ice cream or other merchan· dise when the distribution of such extra cups or containers is deter· mined by lot or chance.

It is furtlwr ordered, That the respondent, l\Iono Service Co., a corporation, shall; within 60 days after service upon it of this order~ file with the Commission a report in writing, setting forth in detail the manner n.nd form in whi~h it has complied with the order to cease and desist hereinabove set forth.

Syllabus 3GF.T. C.