Herman Lubinsky

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In toe Marrer or HERMAN LUBINSKY DOING BUSINESS AS SAVOY MUSIC COMPANY CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIULATION OF THE FEDERAL TRADE COMMISSION ACY Docket 7826. Complaint, Mar. 17, 1960—Decision, May 10, 1960 Consent order requiring record distributors in Newark, N.J., to cease paying concealed “payola” to disc jockeys of radio and televisiou programs as inducement to have their records broadcast frequent)y in order to increase sales.

Mr. John 7. Walker and Mr. James H. Kelley for the Comission. Respondent, for himself.

Inirisu Decision py J. Earn Cox. Hearne Examines The complaint charges respondent, who is engaved, as 2 liusicpublishing concern, in the business of promoting, selling and distributing phonograph records on behalf of several record uranutacturers located in various states of the United States. with violation. of the Federal Trade Commission Act, in that respondent, alone or with certain unnamed record manufacturers, has negotiated fer and disbursed “payola,” i.e, the payment of money or other valuable consideration to disk jockeys of musical programs on radio and television stations, to induce, stimulate or motivate the disk jockeys to select, broadcast, “expose” and promote certain records, in which respondent is financially interested, on the express or implied understanding that the disk jockeys will conceal, withhold or cainoutlage the fact of such payment from the listening public. After the issuance of the complaint, respondent and counsel supporting the complaint entered into an agreement containing consent SAVOY MUSIC CO. 13885 1384 Order order to cease and desist, which was approved by the Director, Associate Director and Assistant Director of the Commission’s Bureau of Litigation, and thereafter transmitted to the hearing examiner for consideration.

The agreement states that respondent Herman Lubinsky is the sole proprietor of Savoy Music Company, with his offices and principal place of business located at 56 Ferry Street, Newark, New Jersey.

The agreement provides, among other things, that respondent. admits all the jurisdictional facts alleged in the complaint, and agrees that the record may be taken as if findings of jurisdictional facts had been duly made in accordance with such allegations; that. the record on which the initial decision and the decision of the Commission shall be based shall consist solely of the complaint and this agreement; that the agreement shall not become a part of the official record unless and until it becomes a part of the decision of the Commission; that the complaint may be used in construing the terms of the order agreed upon, which may be altered, modified or set aside in the manner provided for other orders; that the agreement. is for settlement purposes only and does not constitute an admission by respondent that he has violated the law as alleged in the compjaint; and that the order set forth in the agreement and hereinafter included in this decision shall have the same force and effect as if entered after a full hearing.

Respondent. waives any further procedural steps before the hearing examiner and the Commission, the making of findings of fact or conclusions of Jaw, and all of the rights he may have to challenge or contest the validity of the order to cease and desist entered in accordance with the agreement.

The order agreed upon fully disposes of all the issues raised in the complaint, and adequately prohibits the acts and practices charged therein as being in violation of the Federal Trade Commission Act. Accordingly, the hearing examiner finds this proceeding to be in the public interest, and accepts the agreement containing consent order to cease and desist as part of the record upon which this decision is based. Therefore, Jt is ordered, That. respondent Herman Lubinsky, an individual doing business as Savoy Music Company, or under any other name or names, and his 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: 13886 FEDERAL TRADE COMMISSION DECISIONS Syllabus 56 F.T.C.

(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 respondent has 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 respondent has a financial interest of any nature.

There shall be “public disciosure” 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 broadeasting 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 TILE 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 shal}, on the 10th day of May, 1960, become the decision of the Commission; and, accordingly:

/t is ordered, That respondent. Herman Lubinsky, an individual, doing business as Savoy Music Company, shall, within sixty (60) days after service upon him of this order, file with the Commission a report in writing, setting forth in detail the manner and form in which he has comphed with the order to cease and desist.