The Curtiss Candy Co.

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IN THE MATTER OF THE CURTISS CANDY CO.

MODIFmD ORDER TO CEASE AND DESIST IN REGARD TO VIOLATIONS OF SEC. 3, AND SUBSECS. (a), (0), (e), (f) OF SEC. 2 OF AN ACT OF CONGRESS AP. PROVED OCT. 15, 1914, AS AME:-DED BY AN ACT APPROVED JUNE 19, 1036; TOGETIIEI WITH SPECIAL CONCURRING OPINION OF COMMISSIONER MASON DOckets 4556 and 4G73. Order; Ang. , 1951 Order modifying cease and desist order issued on November 12, 1947, 44 F. T. C. 237 at 274 , so as to require respondent, in connection with the purchase of corn sirup or glucose or other candy ingredients, and in the sale of candy or other candy products to cease and desist from the various unlawful and discriminatory practices as in said modified order set out. Before Mr. Jolv L. Hornr and Mr. J. Earl Cox trial examiners. Mr. Austin H. Forkner for the Commission. , for Walker, Atwood, Zukowski IIfcFarland of Chicago, II!. respondent.

Mr. Wiliam A. Quinlan and lift. Richard F. Wilkins of .Washing- Inc.ton, D. C., for National Candy Wholesalers Association, intervenors.

1:iodified ORDER 1'0 CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission and answer of the respondent filed in Docket No. 4550, and upon thc amended and supplemental complaint of the Commission and answer of the respondent fied in Docket No. 4673 (which proceedings were consolidated by the Commission on October 11, 1944), testimony and other evidence in support of and in opposition to the allegations of said comp1paints taken before a trial examiner of the Commission theretofore duly designated by it, report of the trial examiner upon the evidence and exceptions filed thereto, briefs in support of the complaints and in opposition thereto, and oral argument of counsel; and the Commission having made its findings as to the facts and its conclusion that the respondent had violated the provisions of section 3 of the 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, and subsections (a), (d), (e), and (f) of section 2 of said Clayton Act, as , 1936, commonlyamended by an act of Congress approved June 19 known as the Robinson-Patman Act, on November 12, 1D47 issued and on Kovcmber 14, 1947, served upon said respondent its order 162 FEDERAL TRADE COMlnssIO DECISIONS Order 48 F. T. C. to ceaso and desist. Thereafter, this matter came on for hearing before the Commission upon a mob on, filed on behalf of the respondent requesting certain modifications in the aforesaid order to cease and desist, the anslver to such motion filed by counsel in support of the complaint and a brief in opposition to the motion filed on behalf of National Candy "\V1101esalers Association, Inc. , as intervenor; and the Commission, having considered said motion answer: brief, and the record herein, and being of the opinion that its order to cease and desist issued November 12 ID47, should be modified in certain respects:

1. It is ordered That the respondent, The Curtiss Candy Co., a corporation: and its offcers, representatives: agents, and employees, directly or through any corporate or other device, in connection with the purchase of corn sirup or glucose or other candy ingredients in commerce, as "comrneree" is defined in the aforesa.id Clayton Act, do forthwith cease find desist from:

1. ICnmyingly receiving or accepting from any seller, or knowingly inducing any seller to grant, any discrimination in pdcc set forth and described in paragraph 7 of the findings as to the facts herein or any discrimination in price substantially similar thereto. 2. Knowingly receiving or accepting from any seller, or knowingly inducing any seller to grant, any discrimination in price prohibited by section 2 of the Clayton Act either directly or hy means of any discount or allowa.nce made by means of any booking practice extension of time of delivery, or otherwise.

II. It i8 T"rther ordered That the respondent, The Curtiss Candy Co. , a corporation, and its offcers\ representatives, a.gents, and employees, directly or through any corporate or other device, in the sale of candy bars or other candy products in commerce, as "commerce is defined in the aforesaid Clayton Act do forthwith cease and desist from discriminating, directly or indirectly, in the price of such products of like grade and quality as among purchasers when the differences in price are not justified by differences in the cost of manufacture, saJe or delivery resulting from differing methods or quantities in which such products are sold or delivered:

1. By selling such products to some vendin machine operators at prices lower than the prices charged other vending-machine operators who in f ld compete with the favored purchasers in the sale and dis trilmtion of such products.

2. By selling such products to some wholesalers or johhers thereof at prices lower than the pr.ices charged other wholesalers or jobbers who in fact compete with the favored purchasers in the sale and distribution of such products.

THE CVRTISS CANDY CO. 163 161 Order 3. By selling such products to some retailers thereof at prices 10,,er than the prices charged other retailers who in fact compete with the favored purchasers in the sale and distribution of such products. 4. By sening such products to some purchasers thereof at prices lower than the prices charged other purchasers who in fact compete with the favored purchasers in the sale and distribution of such products, either directly or by means of discount deals, fall booking practices, or other similar plans.

5. By selling such products to any retailer at prices lower than prices charged wholesalers or jobbers whose customers compete with such retailer.

For the purposes of comparison, the term "price" a.s used in this order takes into account discounts, rebates, also"'a-nces, a.nd other terms and conditions of s(11e.

III. It /8 jw' tkel' onlm' That the respondent, The Curtiss Candy Co. , a corporate.ion, and its otrcers, representatives, agents, and employees, directly or through any corporate or other device, in connection with t.he sale or offering for sale of eanc1y bars or other ca,nc1y products in commerce, as "commerce" is defined in the aforesaid Clayton Act, do forthwith cease and desist from: 1. Paying or contracting to pay anything of ya.lue to, or for the benefit of, any purchaser for advertising services or facilities furnished by such purchaser, unless such payment or consideration is flvnila,ble to an other competing purc hasers on proportionally equal terms.

2. Paying or contracting to pay anything of value to any purchaser either directly or by granting allowances or discounts upon purchases made, upon the condition that such purchaser prominently display responde,nt' s candy products in said purchaser s place of business or display only respondent' s candy or candy products on said purchaser display racks or display any advertising desjgns, insignia, or posters advertising respondent's products in said purchaser s place of business or for any other similar advertising service or facility where such payments, djscounts, or allowances arc not made available to all other competing purchasers of respondent's candy bars or candy products on proportionally equal terms.

IV. It is JUTther ordered That the respondent, The Curtiss Candy Co., a corporation, and its offcers, representatives, agents, and employees, directly 01' through any corporate or other device, in connection with the sale of candy or other products in commerce, as commerce" is defined in the aforesaid Clayton Act, do forthwith cease an(l desist from:

Opinion 48 F.

1. Discriminating, directly or indirectly among competing purchasers of respondent's candy or candy products by furnishing, or contributing to the furnishing of, dm11011strator services to any retailer purchasing respondent's products when such services arc not accorded on proportionally equal terms to other retailer-purchasers located in the same city or other retailer-purchasers who in fact resell such products in competition ''with retailers who receive such ervices. 2. Discriminating, diredly or indirectly, among competing purchasers of respondent's candy or candy products by fnrnishing, or contributing to the furnishing of, any newspaper, billboard, radio or other advert.ising to any p1 rchaser in col llection with the sale of offering for sale of products purcha.sea from respondent.. when such services or facilities are not accorded to competing pure1wsers upon proportionally equal terms.

3, Discriminating in favor of one purchaser again1lst another purchaser or purchasers of respondent.'s candy or candy products bought for resale by contracting io furnish 01' fnl'Jlishing any services or facilities in connection wit.h the offering for sale or sale of such candy or candy products so purcha ed upon terms not accol\1ed to all pm' chasers on proportionally equal terms.

V, It is f'1trther O1'dcred That the respondent. The ClIrtiss Candy Co., a corporation, and its offcers, representatives, agents, and employees, directly or through any corporate or other device, in connection with the sale, or making an:.y contract for the sale.: of respondent' ca-ndy or candy products in com mcree, as "commercp, ' is ddinecl in the Clayton Act, do forthwith cease and desist from: 1, Selling, or making any contract for the scalp. of, l'e pOlldelit\:; candy products on the. cOlldition agreeme.nt, or l1J1rlerstnnding that the. purchaser tllPreof shall not use or de.al in candy or l' antl:r protluct supplied by any competitor of the respoll(lent. 2. Enforcing or continuing in operation or effect, nny cOlldition agreement, or understanding in or in cOllnection wit.h any existing contract of sale which condition, agreement, 01' llHlerstanc1ing is to the effect that the purchaser of respondent's el1cly or candy prod nets will deal in and sell only candy and candy product, supplied by the respondent.

SPECIAL COXCURRDW OPe-HON OF co n.nSSIOKER LOWELL H, MASOK I concur in the Commission s order granting in part and denying in part the respondent's motion for modification of the order to cease and de.sist in this proceeding, but wish to make my position clear with respect to the dcnial of the requcst for a provision per- THE CURTISS CANDY CO. 165 161 :\Tote mitting the respondent to justify a price discrimination by showing that its lower price ",'as granted to meet an equally low price of a competitor.

As pointed out in my dissent from the Commission s action in the Standard Oil Co. case (Docket No. 4389),' it has always been my view that under the provisions of section 2 (b) of the Clayton Act, as amended, a seller may realistic Llly meet in good faith a price offered by a competitive seller, without necessarily changing his price to customers other tha,l1 those to whom the competitive offer was made. This is still my view of the law. It does not follow, however, that in every case in which the Commission finds that a respondent has unlawfully discriminated in price, it must include in its order prohibiting the discriminations an affrmaton of the respondent's right in this respect. As the United States Court of Appeals for the Second Circuit pointed out in the Ruberoicl case (decision reli(lered June 4: 1951), a sp1ler s right to meet in good faith a competitive offer is a statutory right whicll the Commission could not take a,yay from him even if it tried, thus making it VdlOlly unl1cce,ssary for the order to eOlltain any reference to the right; and furthermore, the provision jf included in the order, may be actually misleading as suggesting the possible retrial in contempt proceedings of issues already settled. By way of illustration, a respondent against whom a prima facie case of price discrimination has been estH blishecl has an opportunity in the Commission s proceeding to justify his discriminations by shmving that his lower price was granted to meet an equally low price of a competitor. If in the proceeding before the Commission the respondent seeks to so justify his discriminations and fails, or if he docs not pee fit to attempt to so justify the discriminations, the questioned practices raised by the attendant facts arc condemned once and for all. If it were otherwise, Government and business would be chasing each other on a merry-go-round, trying anc1retrying before Commission and court the same old charges on the same old facts. In the event of a definite. change of circumstances, a respondent has his rights protected under section 5 (b) if the order be under the Federal Trade Commission Act, and under section 11 if the order he under the Clayton Act.

Nore, Part II of the original order to cease and desist, the only part modified required respondent, its offcers, etc., in the sale of candy bars or other candy products in commerce, to cease and desist from discriminating, directly or in directly, in the price of such products of Hke grade and quality as among pur. chasers when the differences in price are not justified by differences in the cost of manufacture, sale, or delivery resulting from diIering methods or quantities in which such products are sold or delivered: See 43 F, T. C. 56 at 50, Note 48 F. 'r. C.

1. By sellng such products to some vending-machine operators at prices different from the prices charged other vending-machine operators who in fact compete in the sale and distribution of such products: Provided, however That this shah not prevent price differences of less than one-1ml! cent per case, based upon 24-count, which do not tend to lessen, injure, or destroy competition among such vending-machinc operators or between respondent and its competitors. 2. By sellng such products to some wholesalers or jobbers thereof at prices different from the prices charged otller wholesalers or jobbers who in fact compete in the sale and distribution of such products: Pl' ovided, however That this shall not pre ent price differences of less than one-half cent pel' case, based upon 24-count, which do not tend to lessen, injure, or destroy competition among such wholesalers or jobbers or between respondent and its competitors. 3. By sellng such products to some retaiJeJ"S thereof at prices different from prices charged other retailers w110 in fact compete in tJJe sale awl distribution of such products: Provided, however That this shah not prevent price differences of less than one-half cent per case, based upon 24-count, which do not tend to lessen, injure, or destroy competition among such retailers or bet\vcen respondent and its competitors.

4. By sellng such products to some purclmsers thereof at IJrices uifferent from tbe prices charged other purcl1flsers who in fact compete ill the sale and distribution of such products, either uirectly or by means of discount cleals, falllJooking practices, or other similar plans: ProV'd, , however That this shall not prevent price differences of less than one-half cent per case, based upon the 24conut, which do not tend to lessen, injure, or destloy competition among such purchasers or between respondent and its competitors. 5. By seUing such products to any retailer at prices lower than prices charged wholesalers or jobbers whose customers compete with such retailer For the purposes of comparison, the term "price" as used in this order takes into account discounts, rebates, allowances, and other terms and conditions of sale.

THE WA);DER CO. 167 Syllabus