Westinghouse Electric Corporation

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IN THE MAT'I' OF WESTINGHOUSE ELECTRIC CORPORATION ET AL.

CONSENT ORDER, ETC., IX REGARD TO THE ALLEGED VIOLATIO OF THE FEDERAL TRDE COhDIISSION ACT Docket 0-65. Complaint, Jan 18, 196B-Decision, Jan. , 1962 Consent order requiring three corporations and the three individuals wbo participated directly in tbe ilegal activities in their behalf, to cease engaging in a price-fixing conspiracy in the sale of polyethylene shielding materialsold principally to naval shipyards and used as radiation shields around atomic reactors on naval vessels-in the course of which, at meetings and otherwise, they agreed upon, fixed, and maintained prices, terms, and conditions of sale, and agreed upon the price they would bid on particular bids submissions requested by customers.

WESTINGHOUSE ELECTRIC CORP. ET AL. 173 172 Complaint COl\PLADIT Pursuant to the provisions of the Federal Trade Commission Act (38 Stat. 717, 15 D. C. Sec. 41 et seq. 52 Stat. 111), and by virtue of the authority vested in it by said Act, the Federal Trade Commission having reason to believe that Westinghouse Electric Corporation, a corporation; Daniel L Sweeney, individually and as Industrial Sales Manager, Micarta Division, vVestinghouse Electric Corporation; St. Regis Paper Company, a corporation; The Garrett Corporation, a corporation; Walter L. Clark, individually and as Division Manager Air Cruisers Division, The Garrett Corporation, and John J\1. Zeier an individual, more particularly described and referred to hereinafter as respondent, have violated the provisions of Section 5 of said Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby names the previously mentioned corporations and individuals, each and all as respondents herein, and issues its complaint against each of the named parties stating its charges in that respect as follows: P ARAGRArH 1. Respondent 'Vestinghouse Ele.cric Corporation heroinafter referred to as \Vestinghouse, is a corporation organized and existing under the laws of the State of Pennsylvania, with its principal offce and place of business located at 3 Gateway Center (P.O. Box 2278), Pittsburgh 30, Pa.

Individual respondent Daniel L. Sweeney is the Industrial Sales Manager, l\ficarta Division, \Vestinghouse Electric Corporation. The Micarta Division of Westinghouse Electric Corporation is located in Hampton, S.

Respondent St. Regis lper Company, hereinafter referred to as St. Regis, is a corporation organized and existing under the laws of the State of New York, with its principal offce and place of business located at 150 East 42nd Street ew York 17 Respondent The Garrett Corporation, hereinafter referred to as Garrett, is a corporation organized and existing wlcler the laws of the State of California, with its principal offce and place of business located at 0851-9051 Sepulveda Boulevard, Los Angeles, Calif. Individual respondent Walter L. Clark is the Division :lTanager. Air Cruisers Division, The Garrett Corporation. The Air Cruisers Division of The Garrett Corporation is located in Belmar, N. Individual respondent .John 11. Zeier wa,s an Industrial Sales Manager, Pallelyte Division, St. Regis Paper Company. The principal offce of the Panelyte Division of the St. Regis Paper Company is located at the same address as respondent St. Regis Paper Company. Complaint 60 F.

Said John :vr. Zeier is not presently an employee of respondent St. Regis Paper Company and has not been connected with St. Hegis Paper Compa.ny since August 12, 1060. Said John 1\1. Zeier resides at 157 Poe Road, Princeton, K.

PAR. 2. The corporate respondents hereinbefore named and described, through their operating divisions, are engaged in the manufacture, sale and distribution, or the sale and distribution of polyethylene shielding 111ate.rial Each of the corporate respondents is engaged in selling and distributing polyethylene shielding material to customers located in states other than the state in which each corpo rate respondent respectively mainta.ins production or processing facilities. There has been flnd is now a pattern and course of int,erstate commerce in said polyethylene shielding materia.! by corporate respondents within the intent and meaning of the Federal Trade Commission Act. The volume of such business in commerce is substantial. The individual respondents hereinbefore nRmcd and described were at all times pertinent to this complaint, oilcials of the respective corporate respondents as hereinbefore described and participated directly in the acts, practices and methods on behalf of their Tespective corporations hereinafter charged in this complaint as being il1legal. PAR. 3. Each of the corporate respondents is in substantial competition with each of the other corporate respondents named herein in the manufacture, sale, processing and distribution of polyethylene shielding material in interstate commerce except to the extent that competition has been hindered, lessened or restricted and eliminated by the unfair methods of competition and unfair acts and practices hereinafter set faith.

PAR. 4. Polycthylene shielding material, manufactured and sold by the corporatc respondents, is used as ra,diation shields around atumic reactors aboard na.val vessels, such as submarines, cruisers, and merchant ships, where considerations of weight ma.ke it impra.ctieal to use the concrete and lead shielding used for land-based atomic reactors. Corporate respondents purchase pellets of polyethylenc from primary manufacturers and process them into sheets of the requirod size and specifications by means of either extrusion or compression molding. Polyethylene shielding is mannfactnred and sold for the purpose described above in several sizes, the most fl'Bquently llsed of which are 4 feet by 8 feet and 3 feet by 5 feet. The thickness of the polyethylene shielding generally ranges from % inch to 11/2 inches. Polyethylene shielding is mauufa,etured and sold in two forms, virgin a.nd borated. The principal customers for polyethylene shielding material are naval atomic reactors in various typesshipyards engaged in installing WESTINGHOUSE ELECTRIC CORP. ET AL. 175 172 Decision and Order of ships. These naval shipyards are those openLted by the 1.united Stat,es Government or by private shipyards working under Government contracts. Nearly every sale of polyethylene shielding material to these shipyards is the result of awards on bids made by one or more of the respondents in response to requests for secret bids by these customers. All polyethylene shielding material sold for this type of defense work mllst meet the requirements or military specification X o. MIL- 10336 C (ships). While the volume oftotal polyethylene shielding sales is comparatively small, being $1 596 000 eluring the year 1959, it is a very essential material to the defense or the united States and to the atomic energy program. Furthermore, it is very likely that many more uses or polyethylene shielding material will be developed in the future.

PAR. 5. During the years 1058 and 1050 each and all of the respondents named herein have engaged in unfair methods or competition and unfair acts and practices in commerce in the manufacture, sale and distribution or polyethylene shielding material in that they have through conspiracy, combination, agreement, and planned common courses of action, and as a part thereor, done and performed the following:

(a) Fixed prices;

(b) Fixed and maintained price,s, terms and conditions of sale; (c) Attended meetings at which the prices at which polyethylene shielding material would be listed on the various respondent's price lists was agreed upon;

(d) Used agreed upon prices in submitting bids for polyethylene shielding material to various customers requesting such bids; (e) Held meetings and agreed upon the price which the respondents would bid on particular bids submissions requested by customers. PAR. 6. The acts and practices of the respondents, as herein alleged have had and do have the effect of hindering, lessening, restricting, restraining and eliminating competition in the sale of polyethylene shielding material; are all to the prej udice of customers of respondents and of the public; and constitute unfair methods of competition and unfair acts and practices in commerce within the intent and Ineaning of the Federal Trade Commission Act.

DECISION AXD ORDER The Commission having heretorore determined to issue its complaint charging the respondents named in the caption hereof with violation of the FedenLl Trade Commission Act, and the respondents ha,ving been served with notice or said determination and 'With a copy 176 FEDERAL TRADE CO IMISSIOX DECISIQXS Decision and Order 60 F.

of the complaint the Commission intended to issue, together with a proposed form of order; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of aJl the jurisdictional facts set forth in the complaint contemplated by such agreement, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondents that the law has been violated as set forth in such complaint and waivers and provisions as required by the Commission s rules; and The Commission, having considered the agreement, hereby accepts same, issues its complaint in the form contelnplated by said agreement, makes the following jurisclictiona.l findings, and enters the following order:

1. ",Vestinghouse Electric Corporation is a corporation organized and existing under the la\vs of the State of Pennsylvania, with its principal offce and place of business located at 3 Gate\'my Center (P.O. Box 2278), Pittsburgh 30, Pa.

Daniel L. Sweene.y is the Industria.! Sales Ianage.r, i\ficarta Division, Westinghouse Electric Corporation. The lVlicarta Division of "r estinghouse Electric Corporation is located in Hampton, S. St. Regis Paper Company is a corporation organized and existing under the laws of the Sbtte of ew York, with its principal offce and place of business located at 150 East 42nd Street ew York , N.

The Garrett Corporation is a corporation organized and existing under the laws of the State of California, with its principal offce and place of business located at 0851-0051 Sepnlveda BoulcYard, Los Angeles, Calif.

",Vater L. Chtrk is the Division :Manager, Air Cruisers Division The Garrett Corporation. The Air Cmisers Division of The Garrett Corporation is located in Behmtr J aim M. Zeier was 'U1 Industrial Sales Manager, Panelyte Division St. Regis Paper Company. The principal offce of the Panelyte Division of the St. Regis Paper Company is located at 150 E. 12nd Street New York 17 Y. Said ,Tohn Jl1. Zeier has not been employed or in any way connected with respondent St. Regis Paper Company or its Panelyte Division since August 12, 1060. Said ,T aim :\1. Zeier now resides at 157 Poe Road, Princeton, N.

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.

'VESTIXGHOUSE ELECTRIC CORP. ET AL. 177 172 Decision and Order ORDER It is ordered That corporate respondents ",Vestinghouse Electric Corporation, a corporation; St. Hegis Paper Company, a corporation; The Garrett Corporation, a corporation, their respective offcers, agents representatives and employees, and individual respondents Daniel L. Sweeney, individually and as industrial sales nlflnager, I\:Icarta Division, )Vestinghouse Electric Corporation; \VaJt.er L. Clark, individually and as division manager, Air Cruisers Division, The Garrett Corporation; and John 1. Zejer, individually, directly, indirectly or through any corporate or other device in connection with the manufacture, sale and distribution or sale and distribution in commerce between and among the several states of the United States and in the District of Columbia of polyethylene shielding material, do forthwith cease and desist from entering into, cooperating in, carrying out or continuing any conspiracy,phmuecl common course of action, understanding, combination or agreement between anyone or more of said respondents, or between anyone or more of said respondents and any other person, persons or business entity not a. party hereto, to do 0'1' perform any of the following acts, practices or things: A. Fix or maintain prices, terms or conditions for the sale of poly ethylene shielding material;

B. Fix or maintain prices: ie1'ms or conditions of sale to be used in submitting bids on polyethylene shielding Hintorial; and C. Bid or quote, refrain from bjelcling or quoting, or causing another to bid or quote or refrain from bidding or quoting to any purchaser or prospe.ctive purchaser of polyethylene shielding mate-rial. It is j1trther oldeTed That corporate respondents ",V B.,;tinghouse Electric Corporation, a eorponLtion; St. Regis Paper Company, a corporation; The Garrett Corporation, a corporation, their respective offcers, agents, representatives, employees, and individual respondents Daniel L. Sweeney, individually and as industrial sales manager licarta Division, \Vestinghouse Electric Corporation; '\Valter L. Clark, individually and as division manager, Air Cruisers Division The Garrett Corporation; and Johns. Zeier, individmtlly, directly, indirectly or through any corporate or other device in connection with the manufacture, srtJe and distribution or sale and distribution in commerce between and among the several states of the Vnited States and in the District of Columbia of polyethylene shielding material do individually and independently fortlnvith cease and desist from: A. Attending meetings at which any other respondent or respondents or manufacturers of polyethylene shielding material not a party 178 FEDERAL TRADE CO:M:MISSION DECISIONS Decision and Order 60 r. T. herctOo are present, at which the prices, terms or conditiolls for the sale of polyethylene shielding material ILre discussed; B. Attending meetings at which any other respondent or respondents or manufacturers of polyethylene shielding material not a party hereto are present, at which t.he prices, terms or conditions ror the sale of polyethylene shielding material to be bid on particular bids are discussed;

C. Holding or participating in any discussions by telephone or otherwise, with any competitor or competitors pertaining to prices, terms or cOonditions of sale of polyethylene shielding material; D. Sending to, requesting from, or exchanging with any competitor or competitors any information written or oral pertaining to prices terms or conditions or sale of polyethylene shie.1ding material; and E. Formulating or snbmitting any bid Oon polyethylene shielding material to a purchaser or prospective purchILser the prices or terms and conditions of sILle of which are based in any WILY upon informatiOon obtained in a manller prohibited by (A), (B), (C) and (D) above.

It;" further ordered That corporate respondents Westinghouse Electric Corporation, a corporation; St. Regis Paper Company, a corporation; The Garrett Corporation, a corporation, shall, within sixty (60) days after the effective date of this order, each individually and independently:

A. Review its then prevILiling prices for polyethylene shielding material;

B. Cancel existing price lists for polyethylene shielding material and cancel existing prices for polyethylene shielding material not based on lawful considerations:

C. Determine prices for polyethylene shielding material based upon lawful considerations; and D. Establish the prices determined under (C) above, which prices shall become effective not later than sixty (60) da,ys from the date or service or this order, provided, however, that establishment or any new prices within solid sixty (60) days shall not be construed as indicating that the former prices were in any way unlawful. Nothing contained he-rein shall prevent any respondent acting independently and for a lawful purpose from hereafter deviating from, modifying or otherwise changing prices established hereunder. Provided, however, that:

(1) Xothing contained in this order shad prohibit any respondent. or the offcers, agents, representatives or enlployees of such respondent from communicating in any way with the offcers, agents representa GEORGE' S RADIO AND TELEVISION CO. , INC. , ET AL. 179 172 Complaint tives or employees of such respondent in connection with the purchase or sale (by bid or otherwise) of polyethylene shielding material, or from negotiating or entering into with any other person, persons, or business entity any bona fide purchase or sale (by bid or otherwise) of polyethylene shielding material at prices, terms or conditions of sale independently offered or accepted in such transaction. (2) Nothing contained in this order shall be construed as prohibiting any respondent from formulating or submitting a joint bid for polyethylene shielding material 'Ivith any other person, persons or business entity to any governmental unit or agency or in connection with any contract to be performed for any governmental unit or agency if such joint bid is expressly requested by the purchaser or if such joint bid is expressly made known to the purchaser by thc time of the offcial opening of the bid or the date of contract of sale, whichever is earlier, providing that, for a period of five (5) years from the effective date of this order any respondent submitting such a joillt bid for polyethylene shielding material notify the Federal Trade Commission of each such joint bid within thirty (30) days after the offcial opening of the bid or the date of contract of sale, whichever is earlier.

It i, further o"dered That each of the respondents shall, within sixty (60) days after the service upon them of this order, file with the Commission a report in writing setting forth in detail the manner