E. C. Publications, Inc.

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IN Tile iATrEH 01"

E. C. FGBLICATIONS IKC.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VlOLATIOX OF SEC. 2 ( d) OF THE CLAYTON ACT Docket C-180. Complaint, July 1962-Decis,zon, July 18, 1962 Consent order requiring a New York City publisher of magazines and comic books-including ".:fad" Worst From Mad", and "More Trash From lad" to cease discriminating in price in violation of Sec. 2(d) of the Cla;yton 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 ,,,horn furnished services '72S-122-()5 118 FEDERAL TRADE COMMISSION DECISIOI\ Complaint 61 F.

in connection with the handling of respondent's publications such as taking purchase orders and distributing, biling, and collecting-while not making such payments available on proportionally equal terms to their competitors including drug chains, grocery chains, and other newsstands. CO:\lPLA.INT The Federal Trade Commission having reason to believe that the party respondent named in the ca.ption hereof and hereinafter more particularly designated and described, has violated and is now violating the provisions of subsection (d) of the Section 2 of the Clayton Act (U.S.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. R.e.spondent E. C. Publications, Inc., is a corporation organized and doing business under the laws of the State of Now Yark with its offce and principal place of business located at 850 Third Avenue, Ne York, N. Y. Said respondent, among other things, has been engaged nnd is presently engaged in the business of publishing and distributing various publications including magazines and comic books under copyrighted titles including " lac1' 1Vorst From ThIad" and "More Trash From :\1ad". Respondent's sales of publications during the calendar year 1960 exceeded two million dollars. PAn. 2. Publications published by respondent are distributed by respondent to customers through its national distributor, Independent News Co., hereinafter referred to as Independent Ne Independent News has acted and is now acting as national distributor for the publications of several1 independent publishers, including respondent publisher. Independent Newt, 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 Independent K ews for the benefit of these publishers are the taking of purchase orders and the distributing, billing and collecting for such publications from customers. Independent News also had participated in the negotiation of various promotional arrangements with the retail customers of said publishers, including said respondent. In its capa,city as national distributor for respondent in dealing with the customers of respondent, Independent News served and is now serving as a conduit or intermediary for the sale, distribution and promotion of publications published by respondent. The 1ad" series of publications are the most popular ancl widely circulated publications of their Lype in the Un ited States and are distributed throughout _ __ _ E. C. PUBLICATIONS , INC. 119 117 Complaint various States by Independent ~ ew, through local distributors to retail outlets.

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

PAR. 4. In the course and conduct of its business in commerce 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 ,,,ith the handling, sale, or offering for sale of publications sold to them by respondent. Such pa.yments or a.allowances were not made avaoilable on proportionally 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 chain retail outlets in railroad, airport and bus terminals, as well as outlets located in hotels and offce buildings. Such payments or anowances were not offered or otherwise made available on proportionally equal terms to all other customers (including drug chains grocery chains and other newsstands) competing with the favored customers in the sale and distribution of the publications of respondent publisher. Among the favored customers receiving payments in 1960 and during the first six months of 1961, which were not offered to other competing customers in connection with the purchase and sale of 1'8spondent s publications were:

Appromm.flte A moul1t Received 1961Customer: 1960 (Jan.-June) Greyhound Post Houses, Forest Park, 11L-__-_------- - $4 0.27. 00 $3, 541. 05 431. 32 Interstate Hosts, Los Angeles, Calif----_ - 2GO.31 Union News Co., New York City, N.Y_n_n - 12 057. 16 10 851. 28 Respondent made said payments to its favored customers on the basis of individual negotiations. Among said favored customers such payments were not made on proportionally equal terms. PAR. 6. The acts and practices of respondent as alleged above are in violation of the provisions of subsection (d) of Section 2 of the Clayton Act, as amended.

120 FEDERAL TRADE CO lission DECISIONS Decision and Order 61 F.

DECISION AXD ORDER The Commission having heretofore determined to issue its complaint charging the respondent named in the caption hereof with violation of subsection (d) 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 fOrlll of order; and Tho respondent and counsel for the Commission having thereafter executed an agreement containing a consent 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 and does not constitute nn admission by respondent that the law lias been violated as set forth in such complaint and wa.lvers 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 following jurisdictional findings, and enters the following order:

1. Respondent E. C. Publications, Inc., is a corporation organized existing and doing business under and by virtue of the Jaws of the State of ~ ew York, with its offce and principal place of business located at 850 Third Avenue, in the city of Kcw York, State of New York.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent. ORDF..

It i., ordered That respondent E. C. Publications, Inc., a corporation, its offcers, employees, agents and representatives, directly or through any corporate or other device, in connection with the distribution, sale or offering for sale of publications inducting magazines a.nd comic books in commerce, as "commerce" is defined in the amended Clayton Act, do forthwith cease and desist from: Paying or contracting for the payment of an allowance or anything of value to, or for the benefit of, any customer as compensation or in consideration for any services or facilities furnished by Or through such customer in connection ith the handling, offering for sale, sale or dist.ribution of pubhcations including ma.gazines and cOlnic books published, sold or ouered for sale by respondent, unless such payment 01' consideration is affrmatively offered and otherwise 1l"de available on proportionally , , , P1:BLICATION MA:\AGKMENT CORP. ET AL. 121 117 Complaint equal terms to all of its other customers competing with such favored customer in the distribution of such publications including maga.zines and comic books.

The word "customer': as used above shall be deemed to mean anyone 'who purchases from E. C. Publications, Inc. , acting either as principal or agent, or from a distributor or 'Ivholesaler where such transaction with such purchaser is essentially a sale by such respondent., acting either a,s principal or agent. It ;8 tnTther ordel"ed That the respondent herein 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 fonn in which it has complied with this order. Is THE :l:lc\TTH OF PUBLICATIOK l\iA~AGEMEKT CORPORATION ET AL. CONSENT ORDER, ETC. : IN REGARD TO THE ALLEGED VIOLATIOXOl' SEC. 2(d) OF Tile CLAYTON ACT Docket C-1S1. C01J1Jlaint, July 1962-JJecision, July lS , 1962 Consent order n.'quiring the New York City publishers of magazines inc1urling Tempo TV Girls and Gags loan s Point of View Bold", and "Chicks and Chuckles, 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 ,,;hom operated chain retail outlets illrailroac1, airport, and bus "terminals, and outlets in hotels and offce buildings, and others of wbom furnished services in connection with the handling of respondents' publications such as taking pmchase orders and distributing, biling, and mllecting-while not making such pa;ymcnts available on proportionally ' equal terms to their competitor' , including drug chains, grocery chains, and other newsstands.

CO:\IPLAINT The Federal Trade Commission, having reason to believe that the parties respondent named in the caption hereof and hereinafter HlOre particularly designated and described, lULVe violated and are now vio1aUng 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:

PAR,\GRAPH 1. Respondent Publication :Management Corporation is f1 corporation organized and doing business under the laws of the State , , Complaint 61 F.

of K ew Yark, with its offce and principal place of business locat.ed at 11 East 17th Street, New York, N.Y. Said respondent, among other things, has been engaged and is presently engaged in the business of publishing fUld distributing various publications including magazines under copyright.ed titles including "Tempo TV Girls and Gags Ma.n s Point of View, "Bold':, and " Chicks and Chuckles Respondent' s sales of publications during the calendar year 1960 exceeded one hundred ninety thousand (lolhrs. PAR. 2. ReSpOlldpJlts .Tll1e .T. " nrsllll"Y ilnd \.Tthl1l' ,Ynrs!w\\- arc the president, and secretary, l'especii\"ely, of PulJlication ::LlllagclIcllt Corporation. They formulate, direct and control the acts ,tncl practices of said corporate. respondent. nnd their :1address the same as that of the corporate l"eopondent.

PAR. 3. Publications published Ly respondent Publication Jlanagement Corporation are distributed to customers through its national distributor, Kable mys Company, hereinafter referred to fis Kable. Kable has acted and is nol\' acting as national clistributor for the publications of several independent publishers, including said respondent Publication l\1anflgement Corporation. Kable, as national distributor of publications published,d by said respondent nnd other independent publishers, has pe,rformed and is no\'\' performing various services lor these publishers. Among the services performed and still being performed by Kable for the benefit of these publishers are the taking of purchase orders and the distributing, billing and collecting for such publications from customers. liable al o had participated in the negotiation of various promotional arrangements wit.h the retall Cllstomers of sa.id publishers, including said respondent. In its capacity as national distributor for respondent. Publication l\lanagement Corporation in dea.ling with the customers of said respondent, Kable sen ed and is now SelTiJlg ns a conduit or intermediary for the, sale, distribution a.nd promotion of publications published by said respondent.

PAR. 4. Hepondent, Publication l\Ianagmnent Corporatioll through its conduit or jntel'nediary, Kable, has sold and c1ist,ribl1tec1 and now sons n,nc1 distributes its publications in substantial quant-ities in commerce, as "eommcrce:' is defined in the Clayton Act, as a111cndec1 competing customers located throughout. various States of the United States and in the District of Columbia.

PAR. 5. In the course and conduct of its business in commerce, respondent Publication l\fanagement Corporation has paid or contracted for the payment of something of value to or for the benefit of somo of its customers as compensation or in consideration for services 01' __ _ _ _ PUBLICATION :MNAGEMENT CORP, ET AI.. 123 121 Decision and Order facilities fumished, or contracted to be furnished, by or through such customers in connection with the handling, sale, or offering for sale or publications sold to them by said respondent. Such payments or allowances were not made available on proportionally equal terms aJl other customers or said respondent competing in the distribution 'Or such publications.

PAR. 6. As an example of the practices alleged herein, respondent Publication 1\1amlgement Corporation has made payments or allowanees to certain retail customers ,yho operate chain retail outlets in railroad, airport and bus terminals, as well as outlets located in hotels and office buildings. Sneh payment.s or allowa,nces were not offered or othenvise made available on proportionally equal terms to all other "Customers (including drug chains, grocery chains and other newsstands) competing with the favored customers in the sale and distribution of the publicat.ion of saiel respondent publisher. Among the favored cust.omers receiving payments in logo: a.nd during the first six months of l!1fJl, which were not offered to other competing customers in connection with the purchase and sale of said respondent' publications were:

Approadmate Amount'16Y-ReceivedCustomers: 1960 (Jan.--une) Greyhound Post Houses, FOlest Park, 11L_ - $190. 68 S85. Interstate Hosts, Los Angeles, Calif -- 83. 60 31. ABC Vending Corp., Long Island City, N.Y------ - Hi2.01 92. Union News Co., Ne,v York City, X.Y-- -- 4 525. 96 817. Respondent made s;lic1 payments to its fn vored customers on the basis of inc1ividlla.llle.got1,lt,iolls. -Among said favored cnstomeI'S sneb payments were not made all proportionally equal terms. PAR. f. The acts and practices 01 said respondents as alleged above ,ue in viola.tion of the provisions of subsection (d) of Section :2 of the Clayton Act, as amended.

DECISION .\::0 ORDER The Commission ha \'ing heretofore determined to issue its complaint charging the respondents lHU11ed in the caption hereof with violation or subsection (d) or Section 2 or the Chyton Act, as amended, ane! the respondents having been servecl ,,-ith notice of said determination and with n. copy of the complaint the Commission intended,d to issue together ,with a proposed form of order; ancl The respondents ancl con11sel for the Commission having thereafter executed an agre-ement containing a consent orrler, an admission by the responde-nts of all t.he jl1rlsclictional facts set forth in the com- 124 FEDERAL TRADE CO:'IMISSION DECISIONS Decision 'and Order 61 F.

plaint to issue herein, 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 Commissioll rules; aull The Commission, having considered the agreement, hereby accepts same, issues its complaint in the form contemplated by said agreement makes the following jurisdictional findings, and enieTs the following order:

1. Respondent" Publication l\Ianagement Corporation, is a corporation organized, existing and doing business under and by virtue of the laws of the State of New York, with its offce and principal place of business located at 11 East 17th Street, in the city of K ew York, State of ew York.

Respondents Jules J. "Warshaw and Arthur "Warshaw are offcers of said corporation, and their address is the same as that of said corporation.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents. ORDER It is o1ylered That respondents Publication :\lanagement Corporation, a corporation, its offcers and Jules J. Varshaw and Arthur ,Varsha\v, individually and as offcers of Publication )ianagement Corporation, and respondents' enlployccs, agents and representatives directly or through any corporate or other device, in connection with the distribution, sale or offering for sale of publications including magazines in commerce, as " commerce" is defined in the amended Clayton Act, do forthwith cease and desist from: Paying or contracting :for the payment of an allowance or anything of value to, or for the benefit of, any customer as compensation or in consideration for any selTices or facnities furnished by or through such customer in connection with the handling, offering for sale, sale or distribution of pubhcations including maga,zines published, sold or offered for sale by respondents unless such payment or consideration is affrmatively offered and otherwise made available on proportionally equal terms to all of their other customers competing \'ith such favored customer in the distribution of such pl1bhcat.ions including magazines. The \YOI'd "customer" as used above shall be deemed to mean anyone who purchases from a respondent, acting either as principal or agent, or from a distributor or 1\'holesa.ler where such transaction ",.jth , ,, , , , , ,, , HARVEY PUBLICATIONS , INC. , ET AL. 125 121 Complaint such purchaser is essentially a sale by such respondent, acting either as princi pal or agent.

It .is further ordend That the respondents herein shall, within sixty (60) days after serviee upon them of this order, file with the Commission a report in writing setting forth in detail the manner and