The Regina Corporation

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IN THE MATTER OF THE REGINA CORPORATION CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF SEC. 2 (d) OF THE CLA YTOK ACT Docket 8421. Com.plaint, June 2, 1961-Decision, Pcb. , 1962 Consent order requiring a Rahway, .K. , distributor of floor polishers, \vaxers, and vacuum cleaners and parts and accessories therefor, with gross annual sales in excess of $12 000 000, to cease violating Sec. 2(d) of the Clayton Act by giving compensation for services to certain fa,ored customers out not to others competing with them, such as (1) a payment of $.1 612 to,,-arcl the salary of demonstrating sales persons hired by Abraham & Straus, (2) promotional allowances of $1 000 paid to L. R. Beavis & Co., a distributor of its products, and of $2 501 paid to Gimbel Brothers, Inc., of Ne\y York and (a) varying amounts paid different customers in connection with advertiSiJlg programs, \which bore no relation to the amounts accrued by them upon purchases.

COl\PLAINT The Federal Trade Commission having reason to believe that the party respondent named in the caption hereof, and hereinafter more particularly designated and described, ha.s violated and is now violating the provisions of subsection (d) of Section 2 of the Chtyton Act (U. C. Title 15, Sec. 13), as amended, hereby issues its complaint stating its charges with respect thereto as follo\ys: PARAGRAPH 1. R.respondent, The Regina Corporation, is a corporation organized, existing and doing business under and by virtue of the laws of the State of Delamlre, with its offce, factory and principal place of business located at Regina A venuc, nahway, N. PAR. 2. R.respondent is nmv, and for ulany years last past has been engaged in the sale and distribution of floor polishers, waxers, and vacuum cleaners with parts and accessories thereto. Respondent sells these products to distributors and indirectly through such distributors to retailers such as department stores and appliance stores, and also directly to such retailers. These retailers have businesses located in various cities throughout the LTnited States. The Regina Corporation s gross sales volume is in excess of $12 000 000 annually.

PAR. 3. In the course and conduct of its business, respondent now causes, and for some time last past has caused, its said products when sold, to be transported in commerce, as "commerce" is defined In the Clayton Act, as amended, from its principal place of business in the State of ow J ersey to customers located .in the same and in other States of the United States and the District of Columbia. 242 FEDERAL 'TRADE COMMISSION DECISIOJ' Complaint GO F.

\R. 4. In the course and conduct of its business in commerce respondent paid or contracted for the payment of something of value to or for the benefit of some of its customers as c01npensation or in consideration for services or facilities furnished by or through such customers in connection with their offering for sale or sale of products sold to th81n, directly or indirectly, by saiel respondent, and such payments, sometimes hereinafter referred to as promotional allowa.nces were not available on proportionally equal terms to all other customers competing in the distribution of its products. PAR. 5. Included among, and illustrative of the payment alleged in paragraph 4, were credits, paid by way of allowances or deductions, to certain favored customers during ID59 a.nd 1960. During the period .January 1, 1959, through November 30 1960, respondent contracted to pay and paid $1 612.00 toward the salary of demonstrating sales persons hired by Abraham & Straus in connection with the offering for sale and sale by Abraham & Straus of respondent' s products ,vithout making such monies availa,blc to cllstomers competing with the aforesaid favored cllstomer.

PAR. 6. As a further example, during the period May) , )960 through November 80, 1960, L.R.. Bea.vis & Co., Inc., a distributor of the respondent's products, was p"id or credited $1 000.00 (one thousand dollars), from respondent' s Associate Fund as a promotional allowance. R.respondent. did not offer, or otherwise make available, to distributors competing with said favored distributor promotional allowa,nces on proportionally equal.l terms. In addition, certain retailers purchasing respondenes products through dist.ributors \ye1'6 paid promotional allowances not oflered or paid on proportionally equal terms to competing retailers purchasing responclenfs products through the same, and through different distribut.ors. For example, Gimbel Brothers, Inc., of New York, was paid $2 501.00 as promotional allowances during the period J anuary 1, 1960, through 11 ovember 30, 1960, whiJe durjng the same period no promotional allowance was offered or otherwise made ayuiJable to B. )Lltman & Company, Inc., of New York. The two stores named in this example are competitors in thc sale of respondent' s products, and both stores purchase said products through the same distributor. PAR. 7. During the years 1958 through and including 1960, and for S0111C years prior thereto, respondent ma,intained advertising programs for each customer purchasjng directly from tlJ.e respondent based upon varying accruals, depending upon the product and model purchased. These direct purchasing accounts were not advised or otherwise informed of the a1l0Wlt of advertising monjes which ac- 'THE REGIKA CORP. 243 2,11 Decision and Order crued per machine, nor were they advised or otherwise informecl of their total advertising accruals. Somo direct purchasing customers received promotional allowances in excess of the amount accrued by them, while other competing direct purchase cllstonlers were not of- Jered, nor did they receive, promotional allowance monies which they had accrued.

For example, during the pedod January 1, 1959 , through ovembel' 30 , 1960, R. I-I. Iacy & Co. accrued $6 078.50 in promotional allowneos and was paid $16 933. 58; Abrnhmll & Strans accrued $3 723. and was paid $10 290.18; Bambcrger s accrued $1 219.50 and was paid $764.03. The three customers named in this example compete with one another in the sale of respondent's products. As a condition to the receipt of credit or payment fronl the respondent for advertising its products, such as those described in this paragraph and in paragraph 6, customers were required in p1f.cing such advertisements either to lucntion no price at all, or to list a price no lower than that suggested by respondent.

PAR. 8. The promotional allowances referred to in paragraphs 5 , and 7, ,,ere not, and are not, available on proportionally equal terms to all of respondents customers competing in the distribution of respondent' s products in that:

(1) Respondent made, or oil'ered to make, such allo\Yances to some customers and failed to ma, , or offer to make, similar allowances to all competing customers, anel (2) the terms and conditions of respondent's various promotional plans ,,ere, and are, such as to preclude SOIne competing customers frolll accepting and enjoying the benefits to be derived from said plans.

,\H. D. The acts and practices of respondent as alleged above, violate subsection (d) of Section '2 of the Clayton Act, as amended (U. Title 15, Sec. 13).

DECISION AND ORDER This matter having come to be heard by the Commission upon a record consisting of the Commission s complaint charging the respondent named in the caption hereof with violation of subsection (d) of Section 2 of the Clayton Act, as amended, and an agreement by f1ncl betwe,en respondent and counsel supporting the complaint which agrcement conta,ins an order to cease and desist., an admission by the respondent of all the jurisdictional facts alleged in the complaint, a statement that the signing of saiel agreement is for settle ment purposes only and does not constitute an admissjon by respondent that it has violated the Ia,,' as alleged in the complaint, and waivers and provisions as required by t.he Commission s rules; and 244 FEDERAL TRADE COMMISSION DECTSIO Syllabus GO F.

The Commission having considered the agreement and order contained therein and being of the opinion that the agreement provides an adequate basis for appropriate disposition or the proceeding, the agreement is hereby accepted, the following jurisdictional findings are made, and the follmving order is entered: 1. Respondent The Regina Corporation is a corporation existing and doing business under and by virtue of the laws of the State or Deht"\Yfire, with its principal offce and place of business located in the city of Rahway, State of New Jersey.

2. The Federal Trade Commission has jurisdiction of the subject matter or this proceeding and or the respondent. OlilER 1 t i8 ordered That respondent The Regina Corp., a corporation its olliccrs, employees, agcnts and representatives, directly or through any corporate or other device, in the course of business in commerce as "commerce" is defined in the Clayton Act, as amended, do forthwith cease and desist fI'Olll:

Paying or contracting ror the payment or anything of value to or for the benefit of, any customer of respondent as compensation or in consideration for achertising, demonstrator scryjces, or any other services or fa.cilities furnished by or through such customer in connection with the processing, handling, sale or offering for sale of floor polishers, waxers, vacuum cleaners, and related products manufactured, sold or offered for sale by respondcnl unless such payment 01' cOJlsjc1eration is lnade ava.ilable on proportionally equal terms to all ot.her cllstomers competing with such favoreel customers in the distribution of suc.h products.

Itis fndh61' ordered That the responclent herein shal) , within sixty (60) clays after service upon it of this olc1er file with the Commission a report. in writing setting forth in detail the manner and forlll in