Universal Record Distributing Corporation

Text (OCR of the scan at left; may contain errors)

In roe Martrer or UNIVERSAL RECORD DISTRIBUTING CORPORATION ET AL.

CONSENT ORDER, ETC.. IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket 7672. Complaint, Dec. 2, 1959—Decision, Jar. 3, 1960 Consent order requiring an independent Philadelphia distributor for several record manufacturer to retail outlets and jukebox operators in the area of eastern Pennsylvania, southern New Jersey, and Delaware, to cease disbursing concealed “payola’—payment of money or other valuable consideration—to disc jockeys of radio and television programs to induce the “exposure’’—playing of a record day after day and several times a day—and promotion of its records.

UNIVERSAL RECORD DISTRIBUTING CORP. ET AL. 989 988 Decision Ur. John T. Walker and Ar. James H. Welley counsel supporting the complaint.

Mr. Charles R. Weiner, of Philadelphia, Pa. for respondents. InirtaL Decision By Epwarp CreeLt, Hearinc Examiner The Federal Trade Commission issued its complaint against the above-named respondents on December 2, 1959, charging them with having violated the provisions of the Federal Trade Commission Act by unfairly paying money or other valuable consideration to induce the playing of phonograph records over radio and television stations In order to enhance the popularity of such records. On February 11, 1960 there was submitted to the undersigned hearing examiner an agreement between the above-named respondents, and counsel supporting the complaint providing for the entry of a consent order.

Under the foregoing agreement, the respondents admit the jurisdictional facts alleged in the complaint. The parties agree, among other things, that the cease and desist order there set forth may be entered without further notice and have the same force and effect as if entered after a full hearing and the document includes a waiver by the respondents of all rights to challenge or contest the validity of the order issuing in accordance therewith. The agreement further recites that it is for settlement purposes only and does not constitute an admission by the respondents that they have violated the Jaw as alleged in the complaint.

The hearing examiner finds that the content of the agreement meets all of the requirements of Section 3.25(b) of the Rules of the Commission.

The hearing examiner having considered the agreement and proposed order, and being of the opinion that they provide an appropriate basis for settlement and disposition of this proceeding, the agreement is hereby accepted and it is ordered that said agreement shall not become a part of the official record unless and until it becomes a part of the decision of the Commission. The following jurisdictional findings are made and the following order issued. 1. Respondent Universal Record Distributing Corporation is a corporation organized, existing and doing business under and by virtue of the Jaws of the State of Pennsylvania, with its principal office and place of business located at 1330 West Girard Avenue, Philadelphia, Pennsylvania.

2. Respondents Harold B. Lipsius, Harry Finfer and Clara B. Lipsius are president, vice president and secretary treasurer, respec- Decision 56 F.T.C.

tively, of the respondent corporation. The address of the individual respondents is the same as that of said corporate respondent. 3. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents and the proceeding is in the public interest.

ORDER It «s ordered, That respondents Universal Record Distributing Corporation, a corporation, and its officers, and Harold B. Lipsius, Harry Finfer, and Clara B. Lipsius, individually and as officers of said corporation, and respondents’ agents, representatives and employees, directly or through any corporate or other device, in connection with phonograph records which have been distributed, in commerce, or which are used by radio or television stations in broadcasting programs in commerce, as “commerce” is defined in the Federa] Trade Commission Act, do forthwith cease and desist. from: 1. Giving or offering to give, without requiring public disclosure, any sum of money or other material consideration, to any person, directly or indirectly, to induce that person to select, or participate in the selection of, and broadcasting of, any such records in which respondents, or any of them, have a financial interest of any nature. 2. Giving or offering to give, without requiring public disclosure, any sum of money or other materia] consideration, to any person, directly or indirectly, as an inducement to influence any employee of a radio or television broadcasting station, or any other person, in any manner, to select, or participate in the selection of, and the broadcasting of, any such records in which respondents, or any of them, have a financial interest of any nature. There shall be “public disclosure” within the meaning of this order by any employee of a radio or television broadcasting station, or any other person, who selects or participates in the selection and broadcasting of a record, when he shall disclose, or cause to have disclosed, to the listening public at the time the record is played, that his selection and broadcasting of such record are in consideration for compensation of some nature, directly or indirectly, received by him or his employer.

DECISION OF THE COMMISSION AND ORDER TO FILE REPORT OF COMPLIANCE Pursuant to Section 3.21 of the Commission’s Rules of Practice, the initial decision of the hearing examiner shall] on the 8rd day of March, 1960, become the decision of the Commission; and, accordingly :

It is ordered, That the respondents herein shall within sixty (60) SHEFFIELD MERCHANDISE, INC., ET AL. 991 988 Decision days after service upon them of this order, file with the Commission a report in writing setting forth in detail the manner and form in which they have complied with the order to cease and clesist.