James H. Martin, Inc.

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

In THe Marver or JAMES H. MARTIN, INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket 7738. Complaint, Jan. 8, 1960—Decision, May 26, 1960 Consent order requiring Chicago 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. Mr. Warren &. King, of Chicago, Ill., for respondents. Initia Decision By Evear A. Bourrie, Hearing EXAMINER On January 8, 1960, the Federal Trade Commission issued its complaint against the above-named respondents charging them with violating the provisions of the Federal Trade Commission Act in 599869—62—— 94 Decision 56 F.T.C.

connection with the offering for sale, sale and distribution of phonograph records as independent distributors for several record manufacturers to retail outlets and jukebox operators in various states of the United States. On March 21, 1960, the respondents and counsel supporting the complaint entered into an agreement containing a consent order to cease and desist in accordance with section 8.25(a) of the Rules of Practice and Procedure of the Commission.

Under the foregoing agreement, the respondents admit the jurisdictional facts alleged in the complaint and agree among other _ things, that the cease and desist order there set forth may be entered without further notice and shall have the same force and effect as if entered after a full hearing. The agreement includes a waiver by the respondents of all rights to challenge or contest the validity of the order issuing in accordance therewith; and recites that the said agreement shall not become a part of the official record wnless and until it becomes a part of the decision of the Commission, and that it is for settlement purposes only and does not constitute an admission by the respondents that they have violated the law as alleged in the complaint. The hearing examiner finds that the content of the said agreement meets all the requirements of section 3.25(b) of the Rules of Practice. This proceeding having now come on for final consideration by the hearing examiner on the complaint and the aforesaid agreement for consent order, and it appearing that said agreement provides for an appropriate disposition of this proceeding, the aforesaid agreement is hereby accepted and is ordered filed upon becoming part of the Commission’s decision in accordance with section 3.21 of the Rules of Practice; and in consonance with the terms of said agreement, the hearing examiner makes the following jurisdictional findings and order:

1. Respondents James H. Martin, Inc. and Music Distributors, Inc. are corporations organized, existing and doing business under and by virtue of the laws of the State of Illinois, with their principal offices and places of business located, respectively, at 2419 South Michigan Avenue, and 1343 South Michigan Avenue, in the City of Chicago, State of Ilinois.

Respondent James H. Martin is the sole owner and president of both corporate respondents, and formulates, directs and controls the acts and practices of said corporate respondents. The address of the individual respondent is 2419 South Michigan Avenue, Chicago, I]linois.

2. The Federal Trade Commission has jurisdiction of the subject JAMES H. MARTIN, INC., ET AL, 1469 1467 Decision matter of this proceeding and of the respondents hereinabove named. The complaint states a cause of action against said respondents under the Federal Trade Commission Act, and this proceeding is in the interest of the public.

ORDER lt ts ordered, That respondents James H. Martin, Inc., a corporation, and Music Distributors, Inc., a corporation, and their officers, and James H. Martin, individually, and as an officer of said corporations, 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. There shall be “public disclosure” within the meaning of this order, by an 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 26th day of May, 1960, become the decision of the Commission; and, accordingly: Decision 56 F.T.C.

It is ordered, That the 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.