Atlantic Recording Corporation

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

In THE MatTTER OF ATLANTIC RECORDING CORPORATION ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket 7711. Complaint, Dec. 80, 1959—Decision, Apr. 28, 1960 Consent order requiring New York City manufacturers and distributors of phonograph records to cease giving concealed “payola” to television and radio disc jockeys to induce playing their records in order to increase sales. Mr. John T. Walker and Mr. James H, Kelley for the Commission. Marshall & Ziffer, of New York, N.Y., by Mr. Paul G. Marshall, for respondents.

Inzrta Decision By Wittiam L. Pack, Hrartnec Examiner The complaint in this matter charges the respondents with violation of the Federal Trade Commission Act in connection with the sale and distribution of phonograph records. An agreement has now been entered into by respondents and counsel supporting the complaint which provides, among other things, that respondents admit all of the jurisdictional allegations in the complaint; that the record on which the initial decision and the decision of the Commission shall be based shall consist solely of the complaint and agreement; that the inclusion of findings of fact and conclusions of Jaw in the decision disposing of this matter is waived, together with any further procedural steps before the hearing examiner and the Commission: that the order hereinafter set forth may be entered in disposition of the proceeding, such order to have the same force and effect as if entered after a full hearing, respondents specifically waiving any and all rights to challenge or contest the validity of such order; that the order may be altered, modified, or set aside in the manner provided for other orders of the Commission; that the complaint may be used in construing the terms of the order; and that the agreement is for settlement purposes only and does not constitute Order 56 F.T.C.

an admission by respondents that they have violated the law as alleged in the complaint.

The hearing examiner having considered the agreement and proposed order and being of the opinion that they provide an adequate basis for appropriate disposition of the proceeding, the agreement is hereby accepted, the following jurisdictional findings made, and the following order issued :

1. Respondent Atlantic Recording Corporation is a corporation existing and doing business under and by virtue of the laws of the State of New York, with its office and principal place of business located at 157 West 57th Street, New York, New York. Individual respondents Ahmet M. Ertegun, Miriam Bienstock, Gerald Wexler, Nesuhi Ertegun and Vahdi Sabit are, respectively, president, vicepresident, vice-president, vice-president, and secretary-treasurer of the respondent corporation. Their address is the same as that of the corporate respondent.

2. 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 is ordered, That Atlantic Recording Corporation and its officers, and Ahmet M. Ertegun, Miriam Bienstock, Gerald Wexler, Nesuhi Ertegun and Vahdi Sabit, 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 Federal 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 the 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 material 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. ALL SOUTH DISTRIBUTING CORP. ET AL. 1343 1341 Decision 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 8.21 of the Commission’s Rules of Practice, the initial decision of the hearing examiner shall, on the 28th day of April, 1960, become the decision of the Commission; and, accordingly :

It ts ordered, That respondents herein shall, within sixty (60) 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 desist.