Ric Records, Inc.

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

In the MatTTer oF RIC RECORDS, INC., ALSO DOING BUSINESS AS RIC RECORD CO., ETC.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket 7801. Complaint, Mar. 2, 19690—Decision, June 9, 1960 Consent order requiring New Orleans, La., manufacturers of phonograph records to cease paying concealed “payola™ to television and radio dise jockeys as inducement to have their records broadcast frequently in order to increase sales.

Mr. John T. Walker and Mr. James H. Kelley for the Commission. Mr, Joseph V. DiRosa, of New Orleans, La., for respondents. Iniriat Decision By Winiiam L. Pack, Hreartne EXAMINER The complaint in this matter charges the respondents with violation of the Federal Trade Commission Act in the sale and distribution of phonograph records by negotiating for and disbursing “payola” (money and other valuable consideration) to disk jockeys broadcasting musical programs, and causing such fact to be withheld from the public. 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 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 ade- RIC RECORDS, INC., ETC. 1509 1508 Order quate basis for appropriate disposition of the proceeding, the agreement is hereby accepted, the following jurisdictional findings made, and the following order issued:

1. Respondent Ric Records, Inc., is a corporation, also doing business as Ric Record Co., and Ron Record Co., organized, existing and doing business under the laws of the State of Louisiana, with its principal office and place of business located at 630% Baronne Street, New Orleans, Louisiana. Individual respondent Joseph S. Ruffino is president of the corporate respondent, and formulates, directs and controls the acts and practices of said corporate respondent. The address of said individual respondent is the same as that of said 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 ts ordered, That respondent Ric Records, Inc., a corporation, also doing business as Ric Record Co. and Ron Record Co., and its officers, and respondent Joseph S. Ruffino, individually and as an officer 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 either 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 either 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 Decision 58 F.T.C.

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 9th day of June, 1960, become the decision of the Commission; and, accordingly : It is 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. w oTHEe Marrer or