Paperback Library, Inc.

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

IN "lie 1vhi PAPERBACK LIBRARY, INC.

CONSENT ORDER, ETC. , IN REGARD TO THE ALLEGED VIOLATION m" SEC, 2(d) OF THE Ok'\ YTON ACT Docket 0-16- Complaint, July 196Z-Decision, July, 1962 Consent order requiring a New York City publisher of paperback bool to cease discriminating in price in violation of Sec. 2(d) of the Clayton Act by paying promotional allowances to certain retail customers-some of whom operated chain retail outlets in railroad, airport, and bus terminals, and outlets in hotels and offce buildings, and others of whom furnished services in connection with the handling of respondent's publications such as taking purchase orders and distributing, biling, and conecting while not making such payments available on proportionally equal terms to their competitors including drug chains, grocery chains, and other newsstands. COMPLAlxr The Federal Trade Commission, having reason to believe that the party respondent named in the caption hereof and hereinafter more particularly designated and described, has violated and is now violating the provisions of subsection (d) of Section 2 of the Clayton Act (U. C. Title 15, Sec. 13), as amended by the Robinson-Patman Act hereby issues its complaint stating its charges with respect thereto as follows:

PARAGRAPH 1. Respondent Paperback Library, Inc. , is a corpora tion organized and doing business Ullder the laws of the State of :Kew Yark, with its offce and principal place of business located at 152 West 42nd Street, New York Y. Said respondent, among other things, has been engaged and is presently engaged in the business of publishing and distribu6ng various publications including paperback books under copyrighted titles.

PAR. 2. Publications published by respondent are distributed by respondent to customers through its national distributor, Publishers Distributing Corporation, hereinafter referred to as PDC. PDC has acted and is now acting as national distributor for the publications of several independent publishers, including respondent publisher. PDC, as national distributor of publications published by respondent and other independent publishers, has performed and is now performing various services for these publishers. Among the services performed and still being performed by PDC for the benefit of these publishers are the taking of purchase orders and the distrib. , .

PAPERBACK LIBRARY e.re.

Complaint uting, bjling and collecting for such publications from customers. PDC also has negotiated various promotional and display arrangements with the retail customers of such publishers, with the knowledge and approval of such publishers, inelnding said respondent. In its capacity as national distributor for respondent in dealing with the customers of respondent, PDC served and is now serving as a conduit or intermediary for the sale, distribution and promotion of publications published by respondent.

PAR. 3. Respondent, through its conduit or intermediary, PDC, has sold and distributed and now sells and distributes its publications in substantial quantities in commerce, as "commerce" is deiined in the Clayton Act, as amended, to competing customers located throughout various States of the United States and in the District of Columbia.

PAR. 4. In the course and conduct of its business in commerce, re. spondent has paid or contracted for the payment of something of value to or for the benefit of some of its 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 respondent. Such payme,nts or allowances were not made available on proport.ionally equal terms to all other customers of respondent competing in the distribution of such publications. PAR. 5. As an example of the practices alleged herein, respondent has made payments or allowances to certain retail customers who operate drug chains. Such payments or aJlmvances were not offered or otherwise made available on proportionally equal terms to all other customers (including newsstands, grocery chains and Other drug chains) competing with the favored customers in the sale and distribution of the publications of respondent publisher. Among the favored customers receiving payments in 1961 which were not offered to other competing customers in connection 'with the purchase and sale of respondent' s publications were:

Approximate Customer: Amount Received Drug Fair Washlngton, D.C-_ ------ S:314. SUn Ray Drug, Philadelphia, Pa--_--_-- --- 550. Respondent made said payments io its favored customers on the basis of individual negotiations.

PAR. 6. The acts and practices of respondent as nl1eged above are in violation of the provisions of subsection (d) of Section 2 of the Clayton Act, as amended.

FEDERAL TRADE CO:\DlISSION DECISIOXS Decision and Order 61 F.

Declsion AXD ORDER The Commission having heretofore c1eJennined to 1::SU8 i1:s complaint charging the respondent named in the caption hereof ,, ith violation of subsection (d) of Section 2 of the Clayton Act, as amended, and the respondent having been seryec1 with notice of said determination and with ;L copy of the complaint the Commission intended to issue, together \'lth ft, proposed form of order; and Tho l'2spm;c1cnt and counsel for the Commission lll''ing j,hel'E'ftfter executed an agreement containing a consent order n admission by the respondent of all the jurisdictional facts set forth in the complaint to issue herein L statement that the signing of said flg'1'2Cement is lor sett.1ement purposes only and does llot constituto f'n nc1mission by respondent that the lIuv has been violated as set forth in such complaint, flld Y, flivers and provisions as required by the Commission rules; and The Commission, having considered tho agreement? hereuy accepts same, issues its complaint. in the form contemplated by sfiizl l?reCmcnt ma,kes the following jurisclietioncil findings: and enters the follo'ving order:

1. liesponc1ent Paperback Library, Jnc.. , is corpor: t:oll organized existing and doing business under and lJy virlne of the b\'- s of the SLat.e of Ke-w York, i\ithits offce and princjpal l;:ace of business located at 162 ,Vest :!2nd Street, in t.he city of 2\elv York, State of X e,," Yark.

2. The Federal Tra.de Commission has jurisdiction of the subject matter of this proceeding and of the respondent. ORDER It ,is o1'dered That. respondent Paperback Library, Inc' j f1 corporation, it.s Of!U:TS, employees, agents and repl'Psentatiyes, directly or through any corporate or other device, in connection \'- jth the c11stribution, sale or ofl'e.ring for sale of publications including pi1perbnck books in commerce, as "commerce" is defined in the amended Clayton Act, do fortln'with cease and desist from: Pa.ying or contracting for the payment of an al1mnmce or anything of value to, or for the benefit of, any cllstomer as compensation or in consideration for a.ny services or facilities :furnishecl by or through such cllsLome.r in connection with the ha,nclling, offering for sale, sale or distribution of publications including paperbnck books published, sojd or offered for sale by respondent, unless such payment or consideration is nffrma- :

TC. THE lU , I Complaint tively offered and otherwise made available on proportionally equal terms to all of its other.r customers competing with such favored customer in the distribution of such pulJlications including paperback books.

The word ':custonwr" as used above shah be deerned to 1neall anyone who purch lses from Paperback Library, Inc., acting either as principal or agent, or from 1 distributor or wholesaler ,,,here such transaction with such purchaser is essentially a sRIe by such respondent acting either as principal or agent.

It -is lu?'thel' onlereel That the respondent herein shall, within sixty (GO) days after service upon it of this order, file with the Commission n report in "Titing setting forth in c1etail the manner and