Spartan Electric Radiator Corporation

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In tur Matrer or SPARTAN ELECTRIC RADIATOR CORPORATION CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket 7889. Complaint, Mar. 21, 1960—Decision, July 16, 1960 ‘Consent order requiring a New York City distributor of chrome-plated brass shower heads imported from Japan to cease furnishing to its retallercustomers advertising material—in payment of the cost of which it participated—setting out various fictitious amounts as “Value” or as “Usually”, together with lesser sales prices, thereby falsely representing the “Value” and “Usually” prices as the usual retail selling prices, and the difference between the larger and smaller amounts as the purchaser's savings.

Complaint Pursuant to the provisions of the Federal Trade Commission Act, and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that the Spartan Electric Radiator Corporation, a corporation, hereinafter referred to as the respondent, has violated the provisions of said Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint, stating its charges as follows:

Paracrapy 1. Respondent Spartan Electric Radiator Corporation is a New York corporation with its office and principal place of business located at 52-55 74th Street, Maspeth 78, N.Y. Par. 2. Respondent is the distributor of chrome-plated brass shower heads imported from Japan and causes and has caused such ny SPARTAN ELECTRIC RADIATOR CORPORATION 137 136 Complaint items, when sold, to be shipped from the State of New York to dealers located in various other States of the United States. Respondent maintains, and at all times mentioned herein has maintained, a substantial course of trade in said shower heads in commerce, as “commerce” is defined in the Federal Trade Commission Act.

Par. 8. In the conduct of its business, the respondent has been, and is now, in competition, in commerce, with corporations, firms and individuals engaged in the sale of shower heads. Par. 4. Respondent, in the course and conduct of its business, furnishes advertising materia] to the retailers of its shower heads located in various states which sets out various amounts in connection with the several sizes thereof, which amounts are sometimes designated as “Value” and in other instances as “Usually” together with lesser sales prices. Respondent participates in the payment of the cost of the advertising when said material is used by retailers. Par. 5. Retailers using the aforesaid advertising matter represented, through the use of the amounts designated as “Value”, that such amounts were the customary and usual retail selling prices of the products advertised in the trade area where the representations were made and that the amounts designated as “Usually” were the prices at which the retailers had sold the products advertised in the recent regular course of business. By means of the aforesaid advertisements the retailers further represented that the differences between the larger amounts and the smaller amounts represented savings from the customary and usual retail prices, or the advertisers’ customary and usual prices, as the case may be. In truth and in fact, the amounts designated as “Value” were fictitious and in excess of the prices at which the products were usually and customarily sold at retail in the trade area where the representations were made; the amounts designated as “Usually” were fictitious and in excess of the prices at which the retailers had sold the products advertised in the recent regular course of business. The differences between the larger and smaller amounts did not represent savings either from the customary and usual retail prices or the retail advertisers’ customary and usual prices. Par. 6. By furnishing the retailers of its products with the various forms of material containing the fictitious prices, as aforesaid, respondent placed in the hands of said retailers the means and instrumentalities by and through which they were and are enabled to mislead and deceive the public as to the usual and customary retail prices of their products, as aforesaid, and as to the savings which accrue to them when purchasing at less than the designated prices and values.

Decision . 57 FVL.C.

Par. 7. The use of the aforesaid practices by the respondent has had, and now has, the tendency and capacity to mislead and deceive a substantial portion of the purchasing public into the erroneous and mistaken belief that the listed prices were the usual and regular retail prices of respondent’s shower heads and that by purchasing at lesser prices, they were afforded savings from the usual and regular retail prices, and into the purchase of respondent’s shower heads by reason of said erroneous and mistaken belief. As a consequence’ thereof, trade in commerce has been unfairly diverted to the respondent from its competitors and injury has thereby been done to competition in commerce.

Par. 8. The aforesaid acts and practices of respondent, as herein alleged, were, and are, all to the prejudice and injury of the public and of respondent’s competitors and constituted, and now constitute, unfair and deceptive acts and practices and unfair methods of competition, in commerce, within the intent and meaning of the Federal Trade Commission Act.

Ames W. Williams, Esq., for the Commission. Respondent, pro se.

Inzrzau Decision sy Roserr L. Piper, Heartnc EXAMINER The Federal Trade Commission issued its complaint on March 21, 1960, against the above-named respondent, charging it with having violated the Federal Trade Commission Act, by misrepresenting the price of its product. Respondent appeared and entered into an agreement dated April 26, 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 appropriate oflicials 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 SPARTAN ELECTRIC RADIATOR CORPORATION 139 1865 1 2 1 1 2 1141 519 91 25 96.536919 Order2 1 3 0 0 0 526 589 1316 1342 -1 3 1 3 1 0 0 529 589 1313 400 -1 4 1 3 1 1 0 532 589 1309 43 -1 5 1 3 1 1 1 532 594 117 32 95.868347 records 1 3 1 1 2 675 594 113 32 95.610825 unless5 1 3 1 1 3 814 593 68 32 96.019791 ands 1 3 1 1 4 907 593 89 31 96.221703 until5 1 3 1 1 5 1023 593 27 31 96.816833 it5 1 3 1 1 6 1075 592 150 31 96.174950 becomes5 1 3 1 1 7 1252 602 21 21 94.361298 a5 1 3 1 1 8 1296 594 80 38 94.361298 parts 1 3 1 1 9 1400 590 38 32 96.029015 of5 1 3 1 1 10 1463 590 60 32 96.401619 thes 1 3 1 1 11 1549 590 146 32 96.384964 decisions 1 3 1 1 12 1720 590 40 31 96.917557 of5 1 3 1 1 13 1784 589 57 31 96.944214 thea 1 3 1 2 0 532 639 1309 46 -1 5 1 3 1 2 1 532 644 235 40 96.286362 Commission,5 1 3 1 2 2 783 645 76 31 96.635406 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96.477333 anda 1 4 1 3 0 529 2077 1309 48 -1 5 1 4 1 3 1 529 2085 199 40 96.360657 employees,5 1 4 1 3 2 745 2084 142 41 96.088654 directly5 1 4 1 3 3 906 2094 37 21 96.863457 or5 1 4 1 3 4 960 2082 148 42 96.355942 through5 1 4 1 3 5 1127 2092 66 30 96.689636 any5 1 4 1 3 6 1209 2085 176 37 96.725609 corporate5 1 4 1 3 7 1402 2092 37 21 97.002327 or5 1 4 1 3 8 1457 2082 96 31 96.967758 others 1 4 1 3 9 1570 2081 123 40 95.554787 device,5 1 4 1 3 10 1710 2081 35 32 93.297791 in5 1 4 1 3 11 1763 2077 75 36 93.253120 con-4 1 4 1 4 0 529 2131 1310 43 -1 5 1 4 1 4 1 529 2136 130 31 96.585457 nection5 1 4 1 4 2 689 2135 83 32 96.007408 with5 1 4 1 4 3 799 2135 57 31 96.422028 thes 1 4 1 4 4 883 2133 145 41 96.464714 offerings 1 4 1 4 5 1054 2133 56 31 96.720749 for5 1 4 1 4 6 1137 2133 79 38 95.813637 sale,5 1 4 1 4 7 1242 2133 68 30 96.840050 sales 1 4 1 4 8 1334 2142 37 20 96.445618 or5 1 4 1 4 9 1398 2131 220 32 96.778603 distributions 1 4 1 4 10 1645 2132 38 31 96.991966 of5 1 4 1 4 11 1710 2132 129 31 96.503227 shower4 1 4 1 5 0 529 2181 1309 46 -1 5 1 4 1 5 1 529 2186 114 40 95.891754 heads,5 1 4 1 5 2 662 2196 38 21 95.891754 or5 1 4 1 5 3 720 2196 65 31 96.385406 any5 1 4 1 5 4 806 2184 98 32 96.197105 others 1 4 1 5 5 922 2183 155 42 96.197105 product,5 1 4 1 5 6 1097 2183 34 32 96.801682 in5 1 4 1 5 7 1152 2193 191 28 96.382385 commerce,5 1 4 1 5 8 1363 2192 35 21 96.889511 as5 1 4 1 5 9 1418 2181 222 32 93.737770 “commerce”5 1 4 1 5 10 1659 2181 29 32 96.040398 is5 1 4 1 5 11 1708 2181 130 33 96.444023 defined4 1 4 1 6 0 530 2232 1308 39 -1 5 1 4 1 6 1 530 2236 34 31 95.295532 in5 1 4 1 6 2 587 2236 55 31 95.295532 thes 1 4 1 6 3 665 2235 144 32 96.486664 Federal5 1 4 1 6 4 832 2235 112 31 96.222908 Trades 1 4 1 6 5 967 2233 223 33 96.312347 Commissions 1 4 1 6 6 1213 2233 78 38 96.530258 Act,5 1 4 1 6 7 1313 2232 42 31 96.556786 do5 1 4 1 6 8 1376 2232 182 31 95.645515 forthwith5 1 4 1 6 9 1582 2242 90 21 96.748222 ceases 1 4 1 6 10 1694 2232 68 31 93.261673 ands 1 4 1 6 11 1785 2232 53 31 89.997040 de-4 1 4 1 7 0 530 2280 868 38 -1 5 1 4 1 7 1 530 2286 60 32 96.540733 sists 1 4 1 7 2 609 2286 107 32 95.094391 from:3 1 4 2 0 0 529 2334 1311 304 -1 4 1 4 2 1 0 572 2334 1266 44 -1 5 1 4 2 1 1 572 2341 25 27 93.069771 1.5 1 4 2 1 2 622 2337 145 41 95.748657 Placing5 1 4 2 1 3 785 2336 33 32 96.603973 in5 1 4 2 1 4 839 2337 57 30 95.978210 thes 1 4 2 1 5 915 2335 109 32 95.978210 hands5 1 4 2 1 6 1043 2335 37 31 96.375420 of5 1 4 2 1 7 1100 2334 153 32 96.180367 retailers5 1 4 2 1 8 1273 2346 64 29 96.490807 any5 1 4 2 1 9 1357 2346 114 21 96.253799 means5 1 4 2 1 10 1491 2346 38 20 96.253799 or5 1 4 2 1 11 1549 2335 289 40 96.051933 instrumentality4 1 4 2 2 0 532 2385 1308 43 -1 5 1 4 2 2 1 532 2387 42 41 95.433083 by5 1 4 2 2 2 596 2388 65 31 94.527847 ands 1 4 2 2 3 685 2387 150 41 96.759117 through5 1 4 2 2 4 859 2386 109 31 96.761200 which5 1 4 2 2 5 991 2386 78 40 95.935684 they5 1 4 2 2 6 1092 2396 78 30 96.973198 may5 1 4 2 2 7 1193 2389 173 37 96.124725 represents 1 4 2 2 8 1386 2385 77 32 96.124725 that5 1 4 2 2 9 1485 2397 65 30 96.571136 any5 1 4 2 2 10 1573 2389 139 28 96.604210 amounts 1 4 2 2 11 1732 2385 29 33 96.919571 is5 1 4 2 2 12 1782 2385 58 32 96.923744 thea 1 4 2 3 0 531 2435 1308 42 -1 5 1 4 2 3 1 531 2438 93 30 95.760925 usual5 1 4 2 3 2 648 2437 66 31 96.190163 ands 1 4 2 3 3 735 2442 193 35 96.164551 customary5 1 4 2 3 4 948 2435 98 32 96.411682 retails 1 4 2 3 5 1066 2436 94 40 96.083832 prices 1 4 2 3 6 1179 2436 38 31 93.285957 of5 1 4 2 3 7 1236 2435 230 41 90.274384 respondent’s5 1 4 2 3 8 1486 2436 145 40 96.220131 products 1 4 2 3 9 1649 2436 36 31 96.277733 in5 1 4 2 3 10 1705 2446 19 21 95.276649 a5 1 4 2 3 11 1742 2436 97 31 96.893242 trade4 1 4 2 4 0 532 2487 1306 44 -1 5 1 4 2 4 1 532 2501 87 30 96.486572 area,5 1 4 2 4 2 637 2491 94 31 96.356804 when5 1 4 2 4 3 751 2490 80 32 96.593430 such5 1 4 2 4 4 851 2493 139 28 96.593430 amounts 1 4 2 4 5 1005 2488 29 33 95.444130 is5 1 4 2 4 6 1051 2488 34 32 95.444130 in5 1 4 2 4 7 1104 2498 110 23 96.939255 excess5 1 4 2 4 8 1231 2487 37 33 96.618019 of5 1 4 2 4 9 1285 2488 57 32 96.235161 thes 1 4 2 4 10 1358 2487 93 42 96.235161 prices 1 4 2 4 11 1468 2493 36 28 96.715965 at5 1 4 2 4 12 1521 2488 109 33 96.591873 which5 1 4 2 4 13 1648 2488 74 33 93.259277 said5 1 4 2 4 14 1738 2488 100 42 92.757713 prod-4 1 4 2 5 0 529 2542 1310 43 -1 5 1 4 2 5 1 529 2550 55 26 95.608093 ucts 1 4 2 5 2 608 2545 28 32 95.608093 is5 1 4 2 5 3 660 2545 135 40 95.426247 usually5 1 4 2 5 4 820 2544 67 31 96.687096 ands 1 4 2 5 5 913 2542 217 41 96.078506 customarily5 1 4 2 5 6 1157 2542 72 32 96.375282 sold5 1 4 2 5 7 1255 2546 35 27 95.753311 at5 1 4 2 5 8 1314 2542 98 31 96.217270 retails 1 4 2 5 9 1437 2542 35 32 96.506920 in5 1 4 2 5 10 1497 2542 58 32 96.370888 thes 1 4 2 5 11 1579 2543 97 32 96.370888 trades 1 4 2 5 12 1699 2554 78 21 96.706932 areas 1 4 2 5 13 1802 2554 37 20 96.762276 or4 1 4 2 6 0 531 2596 755 42 -1 5 1 4 2 6 1 531 2609 93 20 95.672165 areas5 1 4 2 6 2 641 2599 111 30 95.672165 where5 1 4 2 6 3 768 2598 57 31 96.387367 thes 1 4 2 6 4 842 2596 267 42 96.446190 representations 1 4 2 6 5 1126 2596 30 32 96.444283 is5 1 4 2 6 6 1171 2596 115 39 96.667862 made;3 1 4 3 0 0 529 2650 1310 147 -1 4 1 4 3 1 0 571 2650 1267 42 -1 5 1 4 3 1 1 571 2654 28 29 89.236595 2.5 1 4 3 1 2 623 2652 145 40 96.426758 Placing5 1 4 3 1 3 787 2651 34 32 95.644920 in5 1 4 3 1 4 841 2651 57 31 95.644920 thes 1 4 3 1 5 916 2650 109 31 96.337669 hands5 1 4 3 1 6 1042 2650 38 31 96.836617 of5 1 4 3 1 7 1100 2650 153 31 96.518990 retailers5 1 4 3 1 8 1273 2660 65 30 96.389488 any5 1 4 3 1 9 1357 2661 115 20 95.839806 means5 1 4 3 1 10 1491 2661 38 21 96.783920 or5 1 4 3 1 11 1548 2650 290 41 96.267990 instrumentality4 1 4 3 2 0 530 2703 1309 43 -1 5 1 4 3 2 1 530 2706 43 40 96.560791 by5 1 4 3 2 2 596 2705 66 32 96.508636 ands 1 4 3 2 3 685 2704 149 41 96.702553 through5 1 4 3 2 4 857 2704 109 31 96.758606 which5 1 4 3 2 5 988 2704 81 40 96.034828 they5 1 4 3 2 6 1091 2713 78 30 96.745544 may5 1 4 3 2 7 1192 2707 173 36 96.767395 represents 1 4 3 2 8 1384 2703 76 31 95.761490 that5 1 4 3 2 9 1483 2714 65 30 96.130638 any5 1 4 3 2 10 1572 2707 137 28 96.130638 amounts 1 4 3 2 11 1732 2703 30 32 96.639122 is5 1 4 3 2 12 1782 2703 57 31 96.491150 thea 1 4 3 3 0 529 2756 1308 41 -1 5 1 4 3 3 1 529 2759 162 32 92.111732 retailer’s5 1 4 3 3 2 714 2758 98 32 96.202934 usual5 1 4 3 3 3 836 2758 67 30 95.751671 ands 1 4 3 3 4 927 2761 190 36 95.751671 customary5 1 4 3 3 5 1141 2756 94 41 96.922249 prices 1 4 3 3 6 1258 2756 37 32 93.292648 of5 1 4 3 3 7 1318 2756 232 41 91.966995 respondent’s5 1 4 3 3 8 1573 2757 145 40 94.985870 products 1 4 3 3 9 1742 2757 95 31 94.985870 when Complaint 57 F.T.C.

such amount is in excess of the price at which said product is usually and customarily sold by said retailers in the recent regular course of business;

3. Placing in the hands of retailers of its product any means or instrumentality by and through which they may misrepresent the savings available to their customers from the retailer’s usual and customary price or from the price at which said product is usually and customarily sold in the trade area or areas in which the representation is made.

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 16th day of July 1960, become the decision of the Commission; and, accordingly : It ts ordered, That respondent Spartan Electric Radiator Corporation, 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 the manner and form in which it has complied with the order to cease and desist.