VCA Laboratories

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IN THE MATTER OF VCA LABORATORIES, ET AI..

Docket 6071. Complaint, Dec. , 1952. Order, June 16 1954 Charge: Advertising falsely as to ailments and symptoms, results of product free goods! etc. in sale of "Hybutol" food and drug; preparation. Before Mr. James A. PUTCell hearing examiner. Kash for the Commission. Mr. Jesse D.

, D. and Rogers, lloge & Mr' . Richard A. Mahar of 'Washington Hills of New York City, for respondents.

ORDER CLOSING CASE W HOUT Plm.TUDICE This matter has been certified to the Commission by the hearing examiner for consideration of a propooed stipulation and agreement to cease and desist of respondent VCA Laboratories offered in settlement of this proceeding.

Counsel supporting the complaint does not oppose this proposal stating that he believes the acceptance of the proposed stipulation that such awould constitute an adequate settlement of the matter and settlement would result in a great saving of time and expense. The Commission having considered the proposed settlement and being of the opinion that its acceptance would result in the elimination of the complained of practices, and that, therefore, further proceedings herein are unnecessary:

It is ordered Tlmt the proposed stipulation and agreement to cease Laboratories be, and itand desist submitted by respondent VCA hereby is, accepted.

It is further ordered That the case growing out of the complaint herein, be, and it hereby is, closed, without prejudice, however, to the right of the Commission to reopen the same or to take such further or other action against the respondents at any time in the future as may be warranted by the then existing circumstances. r. Syllabus 50 :H. IN Tile MATTER OF THE NIK- LOK COMPANY ET AL.

DECISION IN REGARD TO TI-lE ALLEGED VlOLATIOX OF Tile FEDERAL TRADE COJ\IMISSION ACT Doclcet 6124. Complaint, Oct. 1955-Deeision, June, 1954 Where live corporations, including two wholly owned subsidiaries, which were engaged in the production of coin toilet locks, and in the leasing, installation, and Inaintenance thereof in eOlllfoTt stations and putIie restrooms, in hotels, railroad stations, bus stations, airport stations, and other public buildings; occupied a substantial and dominant position in the business of leasing such locks; were the sole members of an unincorporated association; and were in competition except as competition had been restricted as below set forth- 'With intent and effect of restricting and injuring competition in commerce in the manufacture and production of said loci" and in the leasing and maintenance thereof, and as part and parcel of a combination, conspiracy, cooperation, and planned common course of action: acting individually and through and by means of their said association- (a) Fixed prices and terms and conditions for the leasing, installation, and maintenance of their respective locks; refused to quote prices or other terms in the leasing of said locks where a member of their association had installations; and arranged and agreed as to the portion of the proceeds from the installation of said locks to be allocated between them and their said customers;

(b) Engaged in collusive bidding; arranged for one respondent to receive a share or portion of the income which another respondent received from its installation; abstained from soliciting each other s customers and from the removal of each other s Jocks at the solicitation of Jessees, except in accordance with previous understanding and agreement. and otherwise refused to compete with each other in leasing or maintaining said locks; and exebanged from time to time the locations of the installation of their Jocks as a means or method of nssuring thm there would be no competition between th('11se1 ves ;

(c) Alloeated customers nmong themselves; united their facilities, acting under and through the association, to eliminate eompetitors, and to prevent others from engaging therein: and agreed to and did refuse to sell, or otherwise supply their respective locks to others desiring to purchase the same, and agreed to nnd did prevent such others from securiug sources of supply; and (d) Punished and penalized for violations of rules and practices established hy respondents, through and by means of the association; arranged for each of respondents, as members of the association, to be kept fully informed as to the activites, rules, and practices of the association as a means and method whereby respondents effectuated the aforesaid acts and praetiees; and employed the association as an instrumentality and means of carrying out and making effective the aforesaid combination, conspiracy, cooperation and planned comrnon course of action:

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THE NIK- LOK CO. ET AL. 1013 1012 Decision If eld That such acts and practices were all to the prejudice of their competitors and to the public; had a dangerous tendency to hinder and prevent competition and to create in respondents a monopoly in such business; and constituted unfair acts and praetiees and unfair methods of competition in commerce.

Before 311'. James A. Purcell hearing examiner. MT. George W. Williams for the Commission. Mantel Doyle oJ Indianapolis, Ind. , for Nik- Lok Co. and Pacific Nik- Lok Co. Ine.

Mr-. Lee Her-'uey and Mr. Nelson O. Doland of Boonton, N. J., for General Service Co. Ine., and General Service Coin Lock Co., Ine. Sherpiclc, Gilbert, Regan Davis of New York City, for American Coin Lock Co. Inc.

DECISION OF THE COMMIoSION Pursuant to Rule XXII of the Commission s Rules of Practice and as set Jorth in the Commission s "Decision of the Commission and Order to File l eport of Compliance " dated June 18 , 1954, the initi tl decision in the instftnt matter of hearing examiner .James A. Purcell, ao set out as follows, became on that date the decision of the Commission.

INITIAL DECISION BY JAMES A. PUHCELL, HEARING EXAJlIINER STATEMENT OF THl' CASE The Federal Trade Commissioll on October 5, 1953, issued a complaint charging respondents, The ik- Lok Company, a corporation; PaciJlc Nik- Lok Compa,ny, Inc. , a corporation; General Service Company, lnc., a corporation; General Service Coin Lock Company, Inc., a corporation; and American Coin Loek COl1pftny, Inc., a corporation, with having violated the Federal Trade Commission Act by the use of unfair acts and practices and unfair methods 01' competition and by conspiring ill divers particnJars to hinder and restrict competition in the manufacture, production, leasing and maintenance of eo in operated toilet door locks.

Thereafter respondents filed their respective answers by which they severally admitted all oJ the material allegations of the complaint and waived all intervening procedure and further hearing as to said fads.

Thereafter the proceeding regularly came on for final consideration by the above-named Hearing Examiner upon the complaint and answers thereto and said Hearing Examiner, having duly considered the record herein finds tlmt this proceeding is in the interest of the public Findings 50 F. T. C.

and makes the following Jlndings as to the fact, conclusion drawn therefrom, and order.

FINDINGS OF FACT T. The Respondents (a) Respondent, The Nik- Lok Company, is a corporation organized and doing business under the laws of the State of Indiana with its principal offce and place of bUoiness in the Terminal Building, 110 North Illinois Street, Indianapolis, Indiana. (b) Respondent, Pacific Nik- Lok Company, Inc., is a wholly owned subsidiary of respondent, The Kik- Lok Company, organized and doing business under the laws of the State of California, with its principal offce and place of business in the Pacific Electric Building, 610 S. Main Street, Los Angeles, California. (c) Respondent, General Service Company, Inc., is a corporation organized and doing business under the laws of the State of Maryland with its principal offce and place of business Jocated at 518 Main Street, Boonton, New .Jersey.

(d) Respondent, General Service Coin Lock Company, Inc. , is a wholly owned subsidiary of General Service Company, Inc., organized and doing business under the bwo of the State of 1iaryland, with its principal offce and place of business at 318 J\fain Street, Boonton New Jersey.

(e) Respondent, American Coin Loek Company, Inc., is a corporation organized and doing bUoiness under the laws of the State of Maine with its principal notice and place of business at 453 Cottage Street Pawtucket, Rhode Island.

II. Btlsiness Engaged In Respondent companies are now, and have been, during the time hereinafter mentioned, engaged in the production, either through manuJ'cture or otherwise, of eoin toilet loeks, and in the leasing, installation and maintenance of said locks, which locks are placed either on the doors leading to comfOlt stations or on the doors leading to the toilet stalls in public restrooms lQ( ated in hotels, railroad stations bus stations, airport statious and other public buildings. III. Interstate 001lumen;e Respondents are now and have been for more than five years last past, in the course of their aforeoaid buoineooes, shipping or causing to be shipped said locks, in commerce, among or between the various THE NIK- LOK CO. ET AL. 1015 1012 Findings States of the United States and the District of Columbia, and during all of said time have carried on a constant course of trade and commerce therein.

IV. The Ooin Lock Industry The coin Jock industry consists of two distinct groups, namely, the bought" Jock manu:fcturers and the "lease" lock manufacturers. The former sell the eoin locks outright, either to the owner or operator of public restrooms or to companies which are engaged in the business of leasing locks. The latter manufacturers rent their locks to the owners or operators of public restrooms and the income derived from Elch leasing is divided between the lessee and lessor according to the terms of the Jease agreement. The respondents lease, and do not sell said Jocks. There are but a few companies engaged solely in the business of selling locks outright. However, there are numerous companies who purchase such locks and who in turn lease them to owners or operators of public restrooms.

V. Respondents' Position in the Industry Respondents oceupy a substantial and dominant position in the business of leasing said Jocks and as such are able to and have, by combining and conspiring with each other, accomplished and are still accomplishing the illegal acts, practices and eiTects hereinafter set forth.

,71. Use of the Ooin Lock ManufactuTeT's Association as a Means OaT'lying out the A cts and PTactices OhaT.!ed Respondents are the sole members of an unincorporated association known as the Coin Lock Manufaeturers Association, hereinafter referred to as the "Association. Said Association does not have permanent offices nor a permanent place of business, but representatives of respondents meet as such an association several times a year. such meetings they discuss their mutllal problems. Said Association acts and has acted as a means and method whereby the respondents have carried on the acts and practices hereinafter set forth. VII. In Oompetition'with Others The respondents are now and have been for more than five years last past, engaged in competition in leasing, installing and maintaining said locks, with one another and with others who are engaged in one or more of such activities in commerce, as "commerce" is defined in the 1016 FEDERAL TRADE COMMISSION DECISIOKS l"indings 50 F. T. C.

:Federal Trade Commission Act, except as such competition has been and is now restricted, hindered, lessened or restrained by the acts and practices of the respondents, as hereinafter described. VIII. Specific Violations For more than five years last past, and continuing to the present time, the respondents, acting individually and through and by means of the aforesaid Association, for the purpose and with the effect of restricting and hindering competition in commerce, in the manufacture and production of eoin toilet locks, and in the leasing and maintenance of same, have, through combination, conspiracy, cooperation and planned common course of action, and as part and parcel thereof done and performed, and are still doing and performing, the following acts and practices:

1. Fixed prices and the terms and conditions for the leasing, installation and maintenance of their respective locks. 2. Refused to quote prices or other terms in the leasing of said locks where a lIember of respondent Association has installations. 3. Arranged and agreed as to the portions of the proceeds from the installation of said locks to be allocated to themselves and to their customers.

4. Engaged in collusive bidding.

5. Arranged for one respondent to receive a share or portion of the income which another respondent reeei ved from its installation. G. Abstained from soliciting each other s customers and from the removal of each other s loeks at the solicitation of Jessees, except in aceordanee with previous understanding and agreement, and otherwise refused to compete with each other in leasing or maintaining said locks. 7. Exchanged from time to time the locations of the installation of their locks as a means or method of assuring that there would be no competition between themselves.

8. Allocated customers among themselves.

9. l7united their facilities, acting under and through the Asoociation to eliminate eompetitors, and to prevent others from engaging therein. 10. Agreed to refuse md have refused to sell, or otherwise supply their respedive locks to others desiring to pnJ' hase the same, and have agreed to prevent, and have prevented such others from securing sources of supply.

11. Punished and penalized for violations of rules and praetiees established by respondents, through and by means of the Assoeiation. 12. Arranged for each of respondents, as members of the Association, to be kept fully informed as to the activities, rules and praetiees THE NIK- LOK CO. ET AL. 1017 1012 Order of the Association as a means and method whereby respondents effectuated the aforesaid acts and practices. 13. Employed the Association as an instrumentality and means of carrying out and making effective the aforesaid combination, eonspiracy, cooperative and planned common course of action. IX. Stipulation Affecting Respondent American Ooin Lock Oompany Respecting,q Use and Payment for "SteTileseats Respondent, American Coin Lock Company, Inc., as set forth in a stipulation between counsel and appeariug of record herein, not only is engaged in the activities hereinabove set forth, but is also engaged in the installation of "Sterileseats " a toilet seat which, under agreement with location owners, this respondent places in toilet cub ides rest rooms and the like. All such placeo where "Sterileseats" are installed are serviced with coin lock devices hereinabove referred to and there is no practical method by which collections may be efl'ected for use of the seats aside from a portion or percentage of the "take from the use of such coin locks attached to tho outside door of each compartment. Therefore, a provision in this behalf, saving to this respondent the privilege of securing payment for their "Sterileseats will be incorporated in the order to follow, which proviso wil not however, ailect the obligation of oaid respondent to fully observe and comply with the terms of said order as to all of the remaining provisions thereof.

CONCLLSIONS The acts and practices hereinabove found are all to the prejudice of competitors of respondents and to the public, have a dangerous tendency to hinder and prevent competition in the sale, distribution leasing, installation and maintenance of coin toilet locks in "commerce " within the intent and meaning of the Federal Trade Commission Act; have a dangerous tendency to create in respondents a monopoly in the sale, distribution, leasing, installation and maintenance of coin toilet locks in said commerce, and constitute unfair acts and practices and unfair methods of competition within the intent and meaning of Section 5 of the Federal Trade Commission Act, as amended.

ORDER It is ordered That the respondents, the Nik- Lok Company, Pacific Nik- Lok Company, Inc., General Service Company, Inc., General Service Coin Lock Company, Inc" and American Coin Lock Company, Inc., their oiIcers, directors, agents and, employees, directly 1018 FElJERAL TRADE COMMISSION DECISIONS Order 50 Ji' T. C. or indirectly, in or in connection with, the selling, leasing, installing or maintaining, in commerce, between and among the several states of the United States, and the District of Columbia, coin toilet locks do forthwith cease and desist from entering into, cooperating in carrying out or continuing in any combination, conspiracy, agreement understanding, or planned common course of action between any two or more of said respondents, or between one or more of said respondents and any person or persons so engaged in any line of commerce as to ordinarily compete with any of said respondents, to do or perform any of the following acts or things, namely: 1. Fixing the prices, terms or conditions for leasing, installng and maintaining of their respective locks.

2. Refusing to quote prices or other terms in the leasing of said locks where a member of the Association has installations. 3. Entering into or carrying out any arrangement. as to, or pertaining to, the portion of the proeeeds from the installation of said locks to be allocated to the lessees or customers thereof. 4. Engaging in eollusive bidding.

5. Entering into any arrangement whereby one manufacturer or lessor of said machines is to receive any portion or share of the income which another manufacturer or lessor receives from the installation of its machines.

6. Abstaining from soliciting each other s customers, and from displacing each other s installations at the solicitation of lessees except in accordance with the agreement or understanding between them. 7. Exehanging with each other locations of their installations. 8. Allocating customers.

9. Uniting their facilities or acting, by or through the Association or by any other means or method, for the purpose, or with the effect , eliminating competitors or of preventing or attempting to prevent new competition.

10. Agreeing to refuse, or refusing, to sell or otherwise supply their said locks to others desiring to purchase the same. 11. Agreeing to prevent or preventing others from securing said locks from any sources of supply other than the respondents. 12. Punishing or penalizing, by any means or methods, for any violation of any rules or practices established or promulgated by the Association, or any similar Association to which the respondents belong or are affliated.

13. Keeping each other informed as to the activities, rules, or practices of the Association, or any similar group or association to which the respondents belong, or to which they are affliated, for the purpose of effectuating, or attempting to effectuate, any of the prohibitions or injunctions contained in this order.

1012 Ord 14. Using or employing the Asooeiation, or any other association or group to which the respondents belong, or with which they arc affliated, or through any other means or method, for the purpose or with the effect of carrying out or aUempting to carry out any of the prohibitions or injunctions of this order.

Pr01Jided, however That nothing contained in subparagraphs 3 and 5 of this order shall be construed to prohibit any lawful lieense arrangement or lawful lease arrangement by respondent American Coin Lock Company, Inc., whereby the use of Sterileseats are licensed or leased in return for a percentage or share of' the income received by another from the inotallation of locks.

OIilER TO FILE REPORT OF COMPLIANCE It is ordered That the respondent herein shall within sixty (60) days after serviee upon it of this order, file with the Commission a report in writing setting iorth in detail the manner and form in which it has complied with the order to cease and desist Las required by said declaratory decision and order of June 18, 1954J. Decision 50 F. T. C.