Frank F. Taylor Company

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Ix THE 1\fA Tler OF THANK F. TAYLOH COMPANY COXSEX'l' ORDER , ETC., IX REGARD TO THE ALLEGED VIOLATION OF SEC. 2 (A) OF THE CLAYTON ACT AS Al\IEXDED Docket 6198. Complaint, JIa,r. 1954-Decision, July, 1954 Consent settlement order requiring a manufacturer of baby walker-strollers anti children s three-wheel velocipedes to cease discriminating in price in the sale of its products through fa 'wring mail order houses and chain automotive supply stores, for example, over other competing customers. Before 11,.. William L. Paok hearing examiner. lift. Peter' J. Dias and lift. Rioe E. SohJ'i11 heJ' for the Com- 1111S810n.

Frost J aoobs of Cincinnati, Ohio, for respondent. COMPLAINT The Federal Tra.de Commission having i'enson to believe that Frank F. Taylor Company is violating and has violated the provisions of Section 2 (a) of the Clayton Act, as amended by the Hobinson- Patman Act, approved June 19 , 1936 (U. S. C. Title 15, Section 13), hereby issues its complaint, stating its charges \with respect thereto as foUows:

PARAGRAPH 1. Respondent Frank F. Taylor Company, is a corporation organized, existing and doing business under and by virtue of the laws of the State of Ohio, with its principal offce and place of business located at 2801 Highland Avenue, Cincinnati, Ohio. PAll. 2. Respondent is now and, since June 19, 1936 has been engaged in the manufacture of baby walkcr-stroUers and children three wheel velocipedes, and has sold and now sells such products to different purchasers located in the various States of the United States and the District of Columbia for use, consumption, or resale therein. In connection with such sales respondent transports said products, or causes the same to be transported, from Cincinnati Ohio, to said purchasers so located, thereby creating a continuous current of commerce in said products.

PAR. 3. The respondent, in the course and conduct of its business has been and is in competition with other corporations, individuals partnerships and firms engaged in manufacturing, selling and distributing saiel products in commerce between: and among the various States of the United States and the District of Columbia. ..._ . .

Complaint 51 F. T. C. Respondent' s purchasers are competitively engaged in the resale of its products at retail in the various territories and places where said purchasers respectively carryon their business. Included among such purchasers aTB mail order hOllses, department stores, chain automotive supply stores, drug stores, infants' stores and hardware stores. as above- PAR. 4. In the course and conduct of its business, described, respondent has sold and now sells its products to some of said purchasers at higher prices than it has sold anclnow sells such products of like grade and quality to other of said purchasers. Hespondent's favored purchasers ate now, and have been, competing with its non-favored purchasers in the resale of said products. An example of the discrimination involved herein is found in connection with sales of the two most popular items of baby walkerstrollers sold by respondent. The prices chargee! a few fa vorce! purchasers, such as mail order hOllses and chain automotive supply stores, as compared with the prices charged the many other competing purchasers are set forth below. The prices charged said other competing purchasers vary according to the quantity of respondent' s products purchased in a single order as indicated. The price paid by the favored purchasers is the sarno regarrlle.ss of quantity purchased. The prices set forth below, effective during 1952 are per unit, f. o. b. Cincinnati, Ohio:

pierl s i 12to23j1jl' rcs 24 pieces or IltO(assorted)I1 (Clssorted) orc (assorted) ,,dodclNo. J,5 Price to favored purcbascrs. ,5. 1520 $5. 5. 92Price to other purchasers- -- ,:n. 57 $5. in::tion'Price disrr:n 1.01 Dcllm' sper unit-- " 1.37120. 16. Percentperunit 12. J\fodeINo. P- Price to fnvored 9l1 purchasers-- um- :f;.:i7. $1\:i7. 56.Price t.o other purchasers-- Pricediscrimip9.tion:

Dollars per unit.._ 1.62 1.23 Percent per un:L-- 20. 9 ' 16. PAR. 5. The effect of such discriminations in price made by re spondent, as set forth in Paragraph 4 hereof, may be substantially to lessen competition or tend to create a monopoly in the lines of cornmerce in \which respondent and its purchasers are respectively engaged; or to injure, destroy, or prevont competition with respondent and its purchasers who receive the benefit of such discriminations. PAn. 6. The foregoing acts and practices of the respondent, as above alleged, violate Section 2 (a) of the Clayton Act, as amended (D. S. C. Title 15, Sec. 13).

FRll'I F. TAYLOR CO.

Order DECISION OF THE COl\nnSSION Pursuant to Rule XXII of the Commission s Rules of Practice, and as set forth in the Commission s "Decision or the Commission and Order to File Report of Compliance " dated July 29, 1954, the initial decision in the instant. matter or hearing examiner "\Villiam L. Pack, as set out as follows, became on that elate the decision or the Commission. TNITIAL DECISION BY WILI.AJI L. PACK HEARING EXAMINER The complaint in this matter charges respondent with price discrimination in violation of Section 2 (aJ of the Clayton Act, as amended. Since the issuance and service or the complaint and the filing of respondent' s answer thereto, a stipulation has been entered into by respondent and counsel supporting the complaint which provides, among other things, that respondent admits all or the jurisdictional allegations in the complaint; that the answer heretofore filed by respondent shall be withdrawn; that the inclusion of findings of fact and conclusions or law in the decision disposing or this matter waived, together with any further procedural steps before the hearing examiner and the Commission to which respondent may be entitled under the Clayton Act, as amended, or the rules of practice of the Commission; and that the order hereinafter set forth may be entered in disposition of this proceeding, such order to have the same force and effect as if made after a fun hearing, presentation of evidence, and findings and conclusions thereon, respondent specifically waiving any and aJ! right, power or privilege to challenge or contest the validity of such order.

The stipulation is hereby accepted and made a part of the record herein, and the following order issued:

ORDER It is ordered that respondent Frank F. Taylor Company, a corporation, and its offcers, representatives, agents and employees, directly or through any corporate or other device, in connection with the sale or distribution of its 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: By selling such products of like grade and quality to any purchaser thereof at a higher price than the price charged any other purchaser or purchasers who in fact compete with the non favored pnrehaser in the sale and distribution of such products. FEDERAL TRADE COMMISSIO)1 DECISIO)1S Order 51 F. T. C. For the purpose of comparison, the term "price" as used in this order takes into account discounts, rebates, allowances a.nd other terms a.nd conditions of sale.

ORDER TO FILE REPORT OF COMPLIANCE It is ordered that the respondent herein shall within sixty (60) days after service upon it of this order, fie with the Commission a report in writing setting forth in detail the manner and form in which it has complied with the order to cease and desist Cas required by said declaratory decision and order of July 29, 1954J. BUCHAXAN IIEAIUNG AID CO.

Complaint I X THE lA TTER OF ANTHONY W. HAGEDOHN DOING BUSINESS AS BU- CHANAN IIEAIUKG AID COMPANY CONSENT ORDER , ETC., IK REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE CO I1nSSION ACT lJuckct 6205. Complaint, May 195.q-Decision, J1lly SO, 1954 Consent settlement order requiring a seller of devices represented to be hearing aids to cease advertising falsely the qualities or acceptance of said products and from "bait" advertising in the sale of the devices. Before Mr. James A. Purcell hearing examiner. Mr. John J. M cN ally for the Commission. Mr. Oarl L. Shipley, of Washington, D. C., for respondent. IPLAIXT 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 Anthony W. Hagedorn, an individual, doing business as Buchanan Hearing Aid Company, hereinafter referred to as respondent, has violated the provisions of said Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as follows: PARAGRAPH 1. Respondent Anthony IV. Hagedorn is an individual doing business as Buchanan Hearing Aid Company with his principal place of bilsiness located at 726 Fourteenth Street, N. IV. Washington, D. C.

PAR. 2. Respondent is now, and for more than one year last past has been, engaged in the sale of devices represented to be hearing aids, to members of the purchasing public. In the course and conduct of said business, respondent causes some of said devices when sold, to be transported from his place of business located in the District of Columbia to the purchasers thereof located in the District of Columbia and in adjacent states, and ma.intains, and at all times mentioned herein has Inaintainec1, fl course of trade in commerce among and between the various States of the Cnited States. PAR. 3. Among the various devices sold by respondent as aforesaid is the "Dahlberg Tnl-Sonic Canal Earphone " a device, as "device" is defined in the Federal Trade Commission Act, which is so \\ FEDERAL TRADE COMMISSIO DECISIONS Complaint 51 F.

designed that a part thereof is inserted into the ear canal. The complete device consists of a tip, a length of plastic tubing, an adaptor and a receiver, plus a wire cord with a plug attachment. PAR. 4. In the course and conduct of his business as aforesaid, respondent has disseminated, and caused the dissemination of, advertisements concerning said device by the United States lails and by various other means in commerce, as "commcrec" is defined in the Federal Trade Commission Act, including, but not limited to advertisements inserted in newspapers, circulars and other advertising media for the purpose of inducing, and which were likely to induce directly or indirectly, the purchase of said dcv ic.e. Respondent has also disseminated and caused the dissemination of advertisements concerning said device by various means for the purpose of inducing and which were likely to induce, directly or inclireetJy, the purchase of said device in commerce, as "commerce " is defined in the Federal Trade Commission Act. Among and typical1 , but not all inclusive, of the statements contained in said advertisements, disseminated as aforesaid, are the following:

HARD OF HEARING? EW Dahlberg 'lru-Souie Canal Earphone Yesterday s orcam-tuclay s renlity (d( piction uf a bum an ear with a You ll thril to a liew and different device inserted into the ear canal. hearing e perience when you hear A diagram indicates the placement ith the Dahlberg Tlu-Sonic Canal of the device in the ear canal Earphone. The new canal earthrough use of the letters A , B phone (A) with soft, air-light tube and C) and faaw l rubber tip (B) so small, Dahlberg it' s hidden within ear canal (0)- Hearing Aids so near eardrum (D) gives amazing are accepted by hearing power. the American Out of Sight! :No earmald Medical Association Fits any ear-all hearing aids. PAR. 5. Through the use of the aforesrLid statements and others of the same import not specifically set forth herein, respondent represented that the "Dahlberg Tru-Sonic Canal Earphone" wil fit the eat canals of all persons and when inserted therein ,vill be hidden or out of sight; that the device is so constructed as to fit all hearing aids and that it has been accepted by the American Medical Association. PAH. 6. The said advertisements are misleading in material respec.ts and constitute "false advertisements ' as that term is defined in the Federal Trade Commission Act. In truth and in fact, the "Dahl- BUCHAJ,AN HEARING AID CO.

Complaint berg Tru-Sonic Canal Earphone" wil not fit the ear canals of all persons and when inserted therein will not be hidden nor out of sight. Said device is not so constructed as to fit all hearing aids and has not been accepted by thc American Medical Association. PAR. 7. The use by respondent of the aforementioned false and misleading statements and representations had the tendency and capacity to induce a substantial portion of the purchasing public into the erroneous and mistaken belief that said statements and representations were true and into the purchase of substantial quantities of the respondent's devices by reason of such erroneous and mistaken belief.

PAR. 8. In the course and conduct of his business, respondent through the use of newspapers, radio broadcasts, circulars disseminated through the United States mails, and other forms of advertising, has made certain other statements respecting the devices offered by him and the prices thereof.

Among and typical, but not all-inclusive of the statements made by respondent, as aforesa.id, were the following: SUPER POWER EEARIKG WITH (depiction of a human hand with a small disk-like object about the size ofthe a dime held between the thumb and :...mw forefinger) Actual size of receh"

ELECTRO IC RECEIVETI FOR BEAIlING AID ESERS This tiny receiver wil take the place of Old Fashioned Bearing Air TIeceivers. Yes, it is true! We now offer tile world' s :frst real aid-powered receiver small enough to fit INSIDE our ear. Sound is heard in the most natural wa:y ever invented for the hard of hearing '" '" '" 819. 50 full price. STOP BEING DEAF! (depiction of a policeman holding up Remarkable New Hearing a disproportionately large hand) Discoyery (arrow bearing- tbe phrase "All you need" ! pointing to a depiction of a thin fork shaped device, the tines of which are rounded Bud the stem of ,which appears to llierce through a disc to a coil-shaped terminal) Here is the sensational new hearing aie that your friC'uc1:- c1on t !'f'e. No cords no batteries-no plastic tubes-Do box of any ldllcl. hllprove your appearance-be comfortable-at ease-get a new lease on life" $39.50 complete * .. .. I'm ,"ery deaf but I HEAR everything with my new TRU- SONIC Hearing Aid. FEDERAL TRADE COMMISSION DECrSIOKS Complaint 51 F. T. C.

Read what Mrs. Gladys Jones, Washington mother, sa3's: I am very deaf. I have worn hearing aids for 20 rears. Some of the most expensive models on the market. Believe me, I know the trials, cliscomforts irritation and embarrassment of wearing the avcrage hearing aid-no matter bow costly. Kow I wear 'lru- SONIC, the hearing aid \"\hi('h operates on a brand new principle of electronics, and I hear better than I did in 20 years: Best of all TRL-SO:NIC cost only S39.50-Just about one-fifth of most hearing aids.

Won t you hard-of-hearing folks let me send you the complete TRV-SOKIC story? It's FRg, fascinating-and could revolutionize your life as it did mine! * * "' Revolutionary Kew TRU-SO:\IC D-2 Hearing Device 'VEAR OTHIKG in your ear except this tiny device 38. TRU-SONIC ATTACHMENT Fell PRIm; WHERE DEAF:\ESS STRIKES . . . not a gadget! (depiction showing a human ear with not a come on! a device inserted in the ear canal . . . but a truly fine complete hearing and a cross-section of the nuious aid tissues comprising the human audi- . . . unseen on women tory system. Said device appears to , . inconspicuous on men consist of a series of six centered . as low as 1.25 per week rounded blocks of varying size and . . . low down payment thickness, the portion closest to the free tryout eardrum being disk-shaped) Fitted utterly unlike old fashioned hearing aids. The most modern ear attach. ment of today * " '" the TRE- SONIC CANAL EARPHONE pictured above. .A hearing aid you ll be proud to own. Better hUlry! Supplies are limited! * '" '" PAH. 9. Through the use of the statements set forth in Paragraph 8 hereof, and others of similar import not specifically set forth herein respondent represented, directly or by implication, that he was making a bona fide offer to sell the devices referred to or described in said ad vertisements.

PAR. 10. The aforesaid represe,ntations ",were false, misleading and deceptive. In truth and in fact, respondent's said oIrers were not bona fide offers to sell the devices referred to or described in said advertisements. On the contrary, respondent's said offers were made for the purpose of developing leads as to prospective purchasers of different or more expensive devices than those referred to or described in said adve.rtisernellts.

In numerous instances persons attracted by respondent's advertisements, upon visiting respondent' s place of business or upon being BUCHANAN HEAREG AID CO.

Decision visited by respondent or his sales people in their homes or offces, ,were informed by respondent or his salespeople in effect, that. the advertised devices \YQuld not aid their hearing, \were not as described lu the advertisements, or were not desira.ble as hearing aids. R.respondent or his salespeople often failed to even demonst.rate said devices to prospective purchasers, but attempted to and did describe, demonstrate and in many instances sold, different or more expensive devices than those described or referred to in said advertisements, to such persons, many of whom -would not have contacted respondent exec.pt for the representations made in said advertisements. PAn 11. Respondent's false and misleading statements and representations, set forth in Paragraphs Eight through Ten hereof, had the tendency and capacity to induce members of the purchasing public to contact respondent and to purchase devices which they would not have otherwise purchased from respondent except for such practices PAR. 12. The a.foresaid acts and practices of respondent, as herein alleged, were all to the prejudice and injury of the public and constituted unfa.ir and deceptive acts and practices, in commerce, within the intent. and meaning of the Federal Trade Commission Act. DEC.ISION OF THE CO::DfISSION Pursuant to Hule XXII of the Commission s Rules of Practice and as set forth in the Commission s "Decision of the Commission and Order to File Heport of Compliance, dated July 30 , 195'1 , thc initial decision in the instant matter of hearing examiner .J ames A. Purcell as set out as follows, became on that date the deeision of thb Commission.

rXlTI.-\L DECISIUX BY .1 Al\gS HCELL, I-EARI:XG EX.-\:\U PllrSWl1t to the provisions of the Fel1eral Trade Commission Ad the Federal Trade Commission on :May 5 , 1954, issued and subsequently served its complaint upon respondent, Anthony ,V. Hagedorn an individual doing business as Buchanan IIearing Aid Company, engaged in the sale of hearing aid devices, with his principal place of business located at X o. 726 Fourteenth Street, K orthwest, \Vashington, D. C.

On .J line 23 , HJ;':i4, there was filed with the Federal Trade Commission a. stipulation between the parties for a consent. order, which st.ipulation appears of record in these formal proceedings. By the t.terms thereof the parties agree t.hat the complaint and said stipulation shall C'onstil.nte the entire record herein; that respondent l1(lmits all of tbe jnrisclictjollaJ allegations set forth in the complaint: that both FEDERAL TRADE COM IISSION DECISIONS Order Bl I!"' T. C. parties waive the making or findings or fact or conclusions or law by the hearing Examiner or by the Commission; that respondent ,vaives the right to file exceptions or to demand oral argument berore the Commission, as well also all further and other procedure before the I-Iearing Examiner or the Commission to which: but ror the execution of said stipulation, respondent may be entitled under the Federal Trade Commission Act or the Rules or Practice or the Commission. Said stipulation further recites that it was executed for settlement purposes only, does not constitute an admission by respenclent or violation or law as alleged in the complaint: and that said complaint 1nay be used in construing the terms or the order herein, which order may be altered, modified or set aside in the manner provided by law. On the basis of the foregoing the undersigned Hearing Examiner concludes that this proceeding is in the public interest and, in conformity with the action therein contemplated and agreed, makes the following order;

ORDER It i8 ordered that respondent Anthony ,V. Hagedorn, an individual doing business as Buchanan Hearing Aid Company, or under any other name, and respondent' s agents, representatives and employees. directly or through any corporate or other device, in connection with the offering for sale, sale and distribution of /lrvirr. c1p.IDated as the "Dahlberg Tru-Sonic Canal Earphone ' or any device of sub. stantiany similar character, whether sold under the same or any other name, do forthwith cease and desist from directly or indirectly: 1. Disseminating or causing to be disseminated by means of the United States Mails or by any other means in commerce, as "commerce" is defined in the Federal Trade Commission Act, any advertisement which represents directly or by implication that said device: (a) wil fit the ear canal of all persons;

(b) is hidden and out of sight when inserted in the ear canal; (c) will fit all hearing aids;

(d) has been accepted by the American Medical Association. 2. Disseminating or causing to be disseminated by any means for the purpose of inducing or which is1ike1y to induce, directly or indirectly, the purchase of said device in commerce, as "commerce" is defined in the Federal Trade Commission Act any advertisement 1\which contains any of the representations prohibited in Paragraph (1) above. It is further ordered that respondent, Anthony 'V. Hagedorn, an individual doing business as Buehanan Hearjng Aid Company, or under any other name, and respondent's agents and employees, directly BUCHANAN HEARING AID CO.

Order or through any corporate or other device, in connection with the offering for sale, sale and distribution of hearing aids or other merchandise in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from representing directly or by implication that hearing aids or other merchandise are offered for sale when such offer is not a bona fide offer to sell the merchandise so offered.

OIilER TO FILE REPORT OF CO::IPLIANCE It i8 ordej' ed that the respondent herein shall within sixty (60) 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 complied with the order to cease and desist las required by said declaratory decision and order of July 30, 1954J. &:

FEDERAL TRADE COMMISSIQX DECISIONS Decision 51 F.