Curtis Publishing Co., Inc.

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

In roe Matrer or CURTIS PUBLISHING CO., INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF SEC. 2(d) OF THE CLAYTON ACT Docket 7885. Complaint, Feb. 5. 1959—Decision, July 6, 1960 Consent order requiring a corporate national publisher and its two publishing and distributing subsidiaries—with sales of “Saturday Evening Post’, “Ladies’ Home Journal”, “The American Home”, and other publications for 1957 in excess of $30,000,000—to cease violating Sec. 2(d) of the Clayton Act by making payments or allowances for services or facilities furnished certain customers operating retail outlets in railroad, airport, and Complaint 57 F.T.C.

bus terminals and in hotels and office buildings—and on the basis of individual negotiation—which were not made available on proportionally equal terms to all competing customers.

* ComMPpLaINntT The Federal Trade Commission having reason to believe that the parties respondent named in the caption hereof and hereinafter more particularly designated and described, have violated and are now violating the provisions of subsection (d) of Section 2 of the Clayton Act (U.S.C. Title 15, Sec. 18), as amended by the Robinson- Patman Act, hereby issues this complaint stating its charges with respect thereto as follows:

Parsacrapy 1. Respondent Curtis Publishing Co., Inc., (hereinafter sometimes referred to as Curtis) is a corporation organized and doing business under the Jaws of the State of Pennsylvania, with its principal office and place of business located at. Independence Square, Philadelphia, Pa. Curtis has been engaged and is presently engaged in the business of publishing and distributing various publications (e.g. magazines, pocket books, comic books) under copyrighted titles, distribution being made through its whollyowned subsidiary, respondent Curtis Circulation Company, Inc. Par. 2. Respondent The American Home Magazine Corp., (hereinafter sometimes referred to as American), a wholly-owned subsidiary of respondent Curtis Publishing Co., Inc., is a corporation organized and doing business under the Jaws of the State of New York, with its principal place of business located at 300 Park Avenue, New York 22, N.Y. American has been and is presently engaged in the business of publishing and distributing various publications under copyrighted titles, distribution being made through respondent Curtis Circulation Company, Inc. Par. 38. Respondent Curtis Circulation Company, Inc. (hereinafter referred to as Curtis Circulation) is a corporation organized and doing business under the laws of the State of Delaware, with its principal place of business located at Independence Square, Philadelphia, Pa.

Curtis Circulation has acted and is now acting as a national distributor for all the various publications of the respondent publishers, as well as for publications of independent publishers. Sales of publications through Curtis Circulation in 1957 were in excess of $30,000,000. Approximately $20,000,000 of such sales were accounted for by sales of magazines published by its parent company, Curtis, and approximately $1,500,000 of such sales were accounted for by magazines published by American. Some of the magazines pub- CURTIS PUBLISHING CO., INC. 9 7 Complaint lished by these respondent publishers and distributed by Curtis Circulation include “Saturday Evening Post”, “Ladies’ Home Journal”, and “The American Home”. These magazines are among the most popular and widely circulated magazines in the United States. Curtis Circulation, as national distributor of publications published by respondents Curtis and American, has performed and is now performing various services for said respondent publishers. Among the services performed and still being performed by Curtis Circulation for the benefit of the respondent publishers in connection with the sale and distribution of their publications are taking orders; distributing, billing and. collecting from customers; and participating in the negotiation of various promotional arrangements with the retail customers of respondent publishers. In its capacity as national distributor for the respondent publishers in dealing with customers of said respondent publishers, Curtis Circulation served and is now serving as a conduit or intermediary for the sale, distribution and promotion of the publications of the respondent publishers. These publications are distributed throughout. various States by Curtis Circulation through local distributors to retail customers.

Par. 4. Respondent publishers, through their conduit or intermediary Curtis Circulation, have sold and distributed and now sell and distribute their publications in substantial quantities in commerce, as “commerce” is defined in the Clayton Act, as amended, to competing customers located throughout various States of the United States and in the District of Columbia. Par. 5. In the course and conduct of their business in commerce, respondents paid or contracted for the payment of something of value to or for the benefit of some of their customers as compensation or in consideration for services or facilities furnished, or contracted to be furnished, by or through such, customers in connection with the handling, sale, or offering for sale of publications sold to them by respondents. Such payments or allowances were not made available on proportionally equal terms to all other customers of respondents competing in the distribution of such publications.

Par. 6. Asan example of the practices alleged herein, respondents have made payments or allowances to certain retail customers who operate chain retail outlets in railroad, airport and bus terminals, as well as outlets located in hotels and office buildings. Such payments or allowances were not offered or otherwise made ayvailable on proportionally equal terms to all other customers (including drug chains, grocery chains and other newsstands) competing Decision 57 FTC.

with the favored customers in the sale and distribution of respondents’ publications. Among the favored customers receiving payments in 1957 which were not offered to other competing customers in connection with the purchase of respondents’ publications were: Approzimate Customer payment received The Union News Company, New York, N.Y.__ $34,906 Fred Harvey, Chicago 4, Ill. - 7,774 Garfield News Co., New York, N.Y - --- 5,883 ABC Vending Corp., New York, N.Y - a 5,345 Barkalow Bros., Omaha, Nebraska___ 4,273 The Armstrong Co., Boston 14, Mass 2,451 Respondents made said payments to their favored customers on the basis of individual negotiations. Among said favored customers such payments were not made on proportionally equal terms. Par. 7. The acts and practices of respondents as alleged above are in violation of the provisions of subsection (d) of Section 2 of the Clayton Act, as amended.

Mr. J. Wallace Adair and Mr. Jerome Garfinkel for the Commission.

Pepper, Hamilion & Scheetz, by Mr. Wilbur H. Haines, Jr., of Philadelphia, Pa., for respondents.

Iniriau Decision sy Apnrr E. Lrrscomp, Hearing ExXaMINER The complaint herein was issued on February 5, 1959, charging Respondents with violation of §2(d) of the Clayton Act (U.S.C. Title 15, § 13), as amended by the Robinson-Patman Act, by paying or contracting for the payment of something of value to or for the benefit of some of their customers as compensation or in consiceration for services or facilities furnished, or contracted to be furnished, by or through such customers in connection with the handling, sale or offering for sale of publications sold to them by Respondents, such payments or allowances not having been made available by Respondents on proportionally equal terms to all their other customers competing in the distribution of such publications, and Respondents not having made such payments among their favored customers on proportionally equal terms. Thereafter, on April 27, 1960, Respondents, their counsel, and counsel supporting the complaint herein entered into an Agreement Containing Consent Order to Cease and Desist, which was approved by the Director and Associate Director of the Commission’s Bureau of Litigation, and thereafter, on May 9, 1960, submitted to the hearing examiner for consideration.

CURTIS PUBLISHING CO., INC. 11 q Decision The agreement identifies Respondent The Curtis Publishing Company (erroneously named in the complaint as Curtis Publishing Co., Inc.) as a Pennsylvania corporation, with its office and principal place of business located at Independence Square, Philadelphia, Pa.; Respondent The American Home Magazine Corporation (erroneously named in the complaint as The American Home Magazine Corp.) as a New York corporation, with its office and principal place of business located at 800 Park Avenue, New York 22, N.Y.; and Respondent Curtis Circulation Company (erroneously named in the complaint as Curtis Circulation Company, Inc.) as a Delaware corporation, with its office and principal place of business located at Independence Square, Philadelphia, Pa. Respondents admit all the jurisdictional facts alleged in the complaint, and agree that the record may be taken as if findings of jurisdictional facts had been duly made in accordance with such allegations.

The agreement is entered into subject to the condition that the initial decision based thereon shall become the decision of the Commission on the same date that the initial decisions in Dockets 7384, 7386, 7387, 7288, 7389, 7390, 7391, 7392, 7393, 7894, 7611, 7612, 7613, 7614, and 7615 become the decisions of the Commission. Respondents waive any further procedure before the hearing examiner and the Commission; the making of findings of fact and conclusions of law; and all of the rights they may have to challenge or contest the validity of the order to cease and desist entered in accordance with the agreement. All parties agree that the record on which the initial decision and the decision of the Commission shall be based shall consist solely of the complaint and the agreement; that the order to cease and desist, as contained in the agreement, when it shall have become a part of the decision of the Commission, 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; that the complaint herein may be used in construing the terms of said order; that the word “customer” wherever used in said order means anyone who purchases from a respondent, acting either as principal or agent, or from a distributor or wholesaler where such transaction with such purchaser is essentially a sale by such respondent, acting either as principal or agent; 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. After consideration of the allegations of the complaint and the provisions of the agreement and the proposed order, the hearing Order 57 F.T.C.

examiner is of the opinion that such order constitutes a satisfactory disposition of this proceeding. Accordingly, in consonance with the terms of the aforesaid agreement, the hearing examiner accepts the Agreeemnt Containing Consent Order to Cease and Desist; finds that the Commission has jurisdiction over the Respondents and over their acts and practices as alleged in the complaint; and finds that this proceeding is in the public interest. Therefore, It ts ordered, That each of the named respondents, The Curtis Publishing Company, The American Home Magazine Corporation, Curtis Circulation Company, its officers, agents, representatives or employees, directly or through any corporate or other device, in connection with the distribution, sale or offering for sale of magazines, paperback or comic books in commerce, as “commerce” is defined in the amended Clayton Act, do forthwith cease and desist from paying or contracting for the payment of an allowance or anything of value to, or for the benefit of, any customer as compensation or in consideration for any services or facilities furnished by or through such customer in connection with the handling, offering for sale, sale or distribution of any magazine, paperback or comic book published, sold or offered for sale by such respondent, unless such payment or consideration is affirmatively offered or otherwise made available on proportionally equal terms to all of its other customers competing with such favored customer in the distribution of such magazine, paperback or comic book. It is further ordered, That respondent Curtis Circulation Company, its officers, agents, representatives or employees, directly or through any corporate or other device, in connection with the distribution, sale or offering for sale of magazines, paperback or comic books in commerce, as “commerce” is defined in the amended Clayton Act, do forthwith cease and desist from paying, contracting for, or passing on an allowance or anything of value to, or for the benefit of any customer of any publisher for which it distributes any magazine, paperback or comic books as compensation or in consideration for any services or facilities furnished by or through such customer in connection with the handling, offering for sale, sale or distribution of any of such publisher’s magazines, paperback or comic books which are sold, offered for sale or distributed by Curtis Circulation Company, unless such allowance or consideration is affirmatively offered or otherwise made available on proportionally equal terms to all other customers of such publisher to whom Curtis Circulation Company, distributes such publisher’s magazines, paperback or comic books, and who are competing with such favored COWLES MAGAZINES, INC., ET AL. 13 7 Sylabus customer in the distribution of such magazines, paperback or comic books.

DECISION OF THE COMMISSION AND ORDER EXTENDING TIME FOR FILING REPORT OF COMPLIANCE Pursuant to § 3.21 of the Commission’s Rules of Practice, the hearing examiner’s initial decision in this proceeding shall, on the 6th day of July 1960, become the decision of the Commission. It is ordered, That the time within which the respondents may file their report, setting forth the manner and form in which they have complied with the order to cease and desist, as required by § 3.26 of the Rules of Practice, be, and it hereby is, extended until further order of the Commission.

The Commission on January 10, 1961 issued an order to file report of compliance, as follows:

The Commission, by order entered June 30, 1960, having noted that the hearing examiner's initial decision in this proceeding should, on July 6, 1960, become the decision of the Commission, and having directed that the time within which the respondents may file 2 report of compliance with the order to cease and desist con- ‘tained in said decision be extended until further order of the Commission :

It 73 now ordered, That the respondents 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 contained in the aforesaid initial decision. Commissioner Mills not participating.