Vee-Jay Records, Inc.

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In the Marrer or VEE-JAY RECORDS, INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket 7767, Complaint, Jan. 27, 1960—Decision, June 14, 1960 Consent order requiring Chicago 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.

Respondents, pro se.

Decision 56 F.T.C..

Intra, Decision sy Encar A. Burrir, Hearrng Examiner On January 27, 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 connection with the manufacture, distribution and sale of phonograph records to independent distributors for resale to retail outlets and jukebox operators in various states of the United States. On April 20, 1960, the respondents and counsel supporting the complaint entered into an agreement containing a consent order to. cease and desist in accordance with section 3.25(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 unless 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. Respondent Vee-Jay Records, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Illinois, with its principal office and place of business located at 1449 South Michigan Avenue, Chicago, Illinois. Respondents James Bracken and Ewart G. Abner, Jr., are president and treasurer, and executive vice president, respectively, of the corporate respondent. Said individual respondents formulate, direct. and control the acts and practices of said corporate respondent. The VEE-JAY RECORDS, INC., ET AL. 1525 1523 Decision address of the individual respondents 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 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 It 7s ordered, That respondent Vee-Jay Records, Inc., a corporation, and its officers, and respondents James Bracken and Ewart G. Abner, Jr., 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 materia] 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 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 initia] decision of the hearing examiner did on the 14th day of June, 1960, become the decision of the Commission; and, accordingly : Decision 56 F.T.C.

It 1s 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.