Vesco Products Company, Inc.

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IN Tile J'L\TTER OF \VESCO PRODUCTS CO:\IPANY, INC.

CONSENT ORDE: ETC. : IN REGARD TO THE ALLEGED VIOLATlOX OF SEC. 2(aj OF TH.E CLAYTQX ACT Docket C-146. C01Hpla..int, May 1.962-lJeci8io)t Hay, 196' Consent order requiring Chicago distributors of automotive repair or re-placement parts to cease discriminating in price in violation of Sec. 2(.a) of the Clayton Act by classifying some favored jobbers as ,va rehouse distributors and thus allowing them higher dif'cOl11tS than competing- jobbers wh" paid the regular johber prices.

CO::UPLADlT The Fc(leral Tnule Commission, having reason 1: believe that the pa.rty respondent named in the caption hereof and hereinafter more particularly designated and described has violated and is now violating the provisions of subsection (a.) of Section 2 of the Clayton Act, as amen,led by the Robinson-Patman Act, approved June 19 , 1936 (V. C. Title 1\ :-ec. 13), hereby issues its complaint, stating its cha,rges with l'cspeet thereto as follo,ys: \IL\GK\PH 1. Respondent 'Vesco Products Company, Inc.., is fL corporation organized, existing and doing business under and by virtue of the laws of the State of Ilinois, with its principal office and place of business located at 2300 Sout.h Parlcwa.y, Chicago 16, Illinois. Prior to January 1, 1961 , the businpb'3s was operated as a pmtnership under the name 'Vestern Automotive Company. Since . January 1 , 19f51, the business has been operated as a corporate.ion under the name 'VescD Products Company, Inc. 'Vesco Products Company, Inc., is engaged in the sale and distribution of automot.ye repair or replacement parts, specific.ally universal joint,s and components t.here-of. 'Vesco Products Company, Inc., currently has a yearly sale.s voJllme of approximate2. OOO OOO.

Respondent 'Ye,sco Products Company, Inc. in the course and COllduct of its business as aforesa.ic1, has caused, (l,nd now c.auses, t.he said automotive parts to he shipperl and transporte.d from the state of loc.atioll of its principal place, of bl1since to the pure-hasers thereof located in states other t,han the state ,,,heJ'ein s,llrl f:hipl1E'nts originated. Said j)arts have been, and are, sold to difierent purchasers for use. or resale within the United States and the District of Columbia. In the sale of said parts, respondent has been, at all times relevant herein, engaged ill commerce, (l commerce: is defined ill the ClaytDll Act. ESCO PRODVCTS co. , IXC. 1665 1664 Complaint PAR. 2. Purchasers of respondents automotive replacement parts "re cl"ssified by respondent generally within two separate classifications, namely, "jobbers" and "\varchouse distributors . Re pondent extends and sets terms and conditions of sale for each such classifie tion as follows:

Jobbers- purchaser classified as lL "jobber" is normally engaged in reselling replacement paris to automotive vehicle fleets, garages gasoline service stat.ions, and others in the automotive repair trade serving the general public. .TabbeTs purchase from respondent's published jobber price list less a discount of 15. :. R.respondent sells to jobber purchasers located throughout the "Cnited States. lV rt:rehou,8e Distl-ibu.t01'8- purchaser classified as a '; warehouse distributor" normally re::e115 only to jobbers. A ,va rehouse distributor purchases from responden(s published jobber prices less discounts of 20% allcllO%, which result.s in a total "yarehouse distribut.or discount of 28%, from respondent's published jobber prices. Hcspondent sells to warehousc distributors located thrOllghout t.hc 1:nitecl States. PAH. 3. Respondent, ill the course and conduct of its busine.ss as aforeslLicl, has been, and now is, discriminating in price between different purchasers of its automoti,-e replacement parts of like grade and quality by selling said parts at higher fmd less favorable prices to some purchasers th~ln the same are sold to other purchasers, TI.any of whom have been, and now are, in competition with the purchasers paying the higher prices.

For example, among respondent's custolDCrti arc a nmnber of jobbers who resell as jobbers, which have been classified by respondent as ware house distributors. Respondenes classification of such jobbers as warehouse distributors results in the granting of higher and more favorable price discounts to these jobbers than are granted to respondent' s jobber customers who purchase at respondent:s regular jobber prices and do not receive the discounts available to respondent's warehouse distributor classification.

PAR. 4. The effect of respolldenfs afore-sairl discriminations ill price bet."ye,8n the said different. pure-hasel's of its said products of like grade and quality, sold in manner and method and for purposes as aforestated, may be substantially to le&sen competition or tend1to create a monopoly in tho, lines of commerce 1n which the aforesaid favored purchasers are engaged, or to injure, destroy, or prevent. competition with said favored purchasers.

\R. 5. The aforesaid acts and practices of respondent constitute "TioJations of the provisions of subsection (a) of Section g of the Clayton Act ("C. S.C. Title 15, Sec. 13), as amended by (he Robinson-Patman Act. approved ,Tunc 19 , 19:16.

1666 FEDERAL TRADE CO ISSION DECISIONS Decision and Order 60 F. T, DECISION AXD ORDER The Commission having heretofore determined to issue its complaint charging the respondent named in the caption hereof with violation of subsection (a) of Section 2 of the Clayton Act, as amended, and the respondent having been served with notice of said determination and with a copy of the complaint the Commission intended to issue together with a proposed form of order; and The respondent and counsel for the Commission having thereafter executed an agreement containing a conse.nt order, an admission by the respondent of all the jurisdictional facts set forth in the complaint to issue herein, a statement that the signing of said agreement is for settlement purposes only a,nd does not constitute an admission by respondent that the Jaw 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 contemplated by said agreement makes the follmying jurisuictional findings, and enters the following order:

1. Respondent 'Vesco Products Company, Inc. , is a corporation organized, existing and doing business under and by virtue of the laws of the State of Illinois, with its offce and principal place of business located at 2300 South Parkway, in the city of Chieago, State of Illinois. 2. Tho Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent. ORDER It is ordered That the respondent 'Vesco Products Company, Inc. a corporation, and s~Lid respondent's offcers, representatives, agents and employees, directly or through any corporate or other device, in connection with the sale and distribution of automotive repair or replacement parts, in commerce, as "commerce" is defined in the Clayton Act, do fOliJr\With cease and desist from discriminating in the price of such products of like grade and quality: By selling to anyone purchaser at net prices higher than the net prices charged t.o any other purchaser who, in fact, compet,es with the purchaser paying the higher price ill the resale and distribution of respondent's sa.id products.

It is lUl'that ordered That the respondent he.rein shall, within sixty (GO) d LYS after service UPOll it of this order, file with the Commission a report in writing setting forth in det.ail the manner and form in which it has complied with this order.

AMERICAN METAL PRODUCTS CO. ET AL. 1667 Complaint