Astor Records. Inc.

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ASTOR RECORDS. INC.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF ‘THE FEDERAL TRADE COMBLISSION ACT Docket 7802. Complaint, Mar. 2. 1960—Decision, June 9, 1960 Consent order requiring 1 Pittsburgh distributor af phonograph records to cease paying concenled “payola” to television and radio dise jockeys as inducement to have its records broadcast freqnenthy in order to increase sales. John T. Walker, Esq., and James H. Kelley. E'sq.. for the Commission.

David M. Kaufman, Esq.. of Pittsburgh, Pa.. for respondent. Inirran Decision ny Rorerr Tu. Prreen. Heartsa Exawtner The Federal Trade Commission on March 2. 1960, issued -its complaint against the above-named respondent. who is engaged in the offering for sale, sale and distribution. of phonograph records to independent distributors for resale to retail outlets and jukebox operators in various states of the United States, charging it with violation of the Federal Trade Commission Act, in that respondent, alone or with certain mnnamed record distributors, has negotiated for and disbursed “payvola.” Le. the pavinent 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 ASTOR RECORDS, INC. 1511 1510 Decision respondent is financially interested, on the express or implied understanding that the disk jockeys will conceal, withhold or camouflage the fact of such payment from the listening public. Respondent appeared and entered into an agreement dated April 8, 1960, containing a consent order to cease and desist, disposing of all the issues in this proceeding without further hearings, which agreement has been duly approved by the Director, Associate Director, and Assistant Director of the Bureau of Litigation. Said agreement. has been submitted to the undersigned, heretofore duly designated to act as hearing examiner herein, for his consideration in accordance with §3.25 of the Rules of Practice of the Commission. Respondent, pursuant to the aforesaid agreement, has admitted all of the jurisdictional allegations of the complaint and agreed that the record may be taken as if findings of jurisdictional facts had been made duly in accordance with such allegations. Said agreement further provides that respondent waives all further procedural steps before the hearing examiner or the Commission, including the making of findings of fact or conclusions of law and the right to challenge or contest the validity of the order to cease and desist entered in accordance with such agreement. It has also been agreed that the record herein shall consist solely of the complaint and said 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 said agreement is for settlement purposes only and does not constitute an admission by respondent that it has violated the law as alleged in the complaint, that said order to cease and desist shall have the same force and effect as if entered after a full hearing and may be altered, modified, or set aside in the manner provided for other orders, and that the complaint may be used in construing the terms of the order. This proceeding having now come on for final consideration on the complaint and the aforesaid agreement containing the consent order, and it appearing that the order and agreement cover all of the allegations of the complaint and provide for appropriate disposition of this proceeding, the agreement is hereby accepted and ordered filed upon this decision and said agreement becoming part of the Commission’s decision pursuant to §§8.21 and 8.25 of the Rules of Practice. and the hearing examiner accordingly makes the following findings, for jurisdictional purposes, and order: 1. Respondent Astor Records, Inc., is a corporation existing and doing business under and by virtue of the laws of the State of Pennsylvania, with its office and principal place of business located Decision 56 F.T.C.

at 1711 Fifth Avenue, in the City of Pittsburgh, State of Pennsylvania.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent hereinabove named. The complaint states a cause of action against said respondent under the Federal Trade Commission Act, and this proceeding is in the interest of the public. Therefore, It is ordered, That respondent Astor Records, Inc., a corporation, and its officers, and respondent’s 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 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 broadeasting 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 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 hearmg examiner shall, on the 9th day of dine, 1960. become the decision of the Commission; and, accordingly : /t is ordered, That respondent Astor Records, Inc., a corporation, shall. within sixty (60) days after service upon it of this order, file with the Commission a report in writing, setting forth in detail MERCURY RECORD CORP. ET AL. 15138 1510 Decision the manner and form in which it has complied with the order to cease and clesist.