Variety, Inc.

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

IN THE J\tla TI'ER OF VARIETY, INC.

OONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF SEC. 2( OF THE CLAYTON ACT Docket 0-202. Oomplaint, Aug. 3, 1962-Decision, Aug. 3, 196~ Consent order requiring the New York City publisher of "trade papers" including "Variety" magazine, to cease violating Sec. 2 (d) of the Clayton Act by making payments-and on the basis of individual negotiation and not proportionally equal-to certain operators of chain retail outlets in railroad, airport, and bus terminals and outlets in hotels and office buildings while not offering such allowances on proportionally equal terms to all competitors of such outlets. including drug and grocery chains and other newsstands. Complaint 61 F.

COJ.\IPLAINT 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:

\R.\GRAPH 1. Respondent Variety, Ine., is a corporation organized and doing business under the la'\Ys of the State of New Yark, ,,-ith its office and principal place of business located at 154 ,Vest L16th Street New York, N.Y. Said respondent, among other things, has been engaged, and is presently engaged in the business of publishing and distributing various publications including magazines or "trade papers~' under copyrighted titles including "Varieti:. Respondents sales of publications during the calendar year 1960 exceeded one million clonal's.

PAR. 2. Publications published by respondent are distributed by respondent to customers through its national distributor, J\lacFadden Publications, Inc., hereinafter referred to as J\laeFadclen. )IacFadden has acted and is now acting as national distributor for the publications of several independent publishers, including respondent publisher. J\lacFadden, 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 J\lac- Fadden for the benefit of these publishers are the taking of purchase orders and the distributing, billing and collecting from customers. J\facFadden also had participated in the negotiation of various promotional arrangements with the retail customers of said publishers including said respondent.

In its c.apac.ity as national distributor for respondent in dealing "ith the customers of respondent ~laeFadden served and is nov serving as a conduit or intermediary for the sale, distribution and prol11otion of publications published by respondent. "Variety" is the most popular and widely c.ireulated publication of its type in the United States and is distributed throughout various States by ~lac- Fadden through local distributors to retail outlets. m. 3. Respondent, through its conduit or intermediary, J\iac- Fadden, has sold and distributed and now sells and distributes its publications in substantial quantities in commerce, as "commerce" is VARIETY, INC. 369 367 Decisionanc1 Order defined in the Clayton Act, as amended, to competing customers located throughout various States of the United States and in the District of Columbia.

P)..R. 4. In the course and conduct of its business in commerce, respondent has paid or contracted for the payment Df 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 payments or allmyances were not made available on proportionally equal terms 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 WhD operate chain retail outlets in railroad, airport. and bus terminals as 'yell as outlets located in hotels and office buildings. Such payments or allmyances 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 Yiiith the purchase and sale of respondent~s publications were: Union N8'YS Company of New York City which received $4 499. in 1960 and $1 431.44 during the first half of 1961. Union News operates n8'ysstands throughout many States including New York ~iassachusetts, Illinois, Pennsylvania, and the District of Columbia. 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. \R. 6. The acts and practices of respondent as alleged above are in violation of the provisions Df subsection (d) of Seetion 2 of the Clayton Act, as amended.

DECISION AND 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 ,,'ith notice of said determination and with a copy of the complaint the Commission intended to issue together ,,'ith a proposed form of order; and Decision and Order 61 F.

The respondent and counsel for the Commission having thereafter executed an agreement containing a eonsent order; an adniission' 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 an admission by respondent that the law has been violated as set forth in such complaint, and waivers and provisions as required by the Commission 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, Variety, Inc., is a corporation organized, existing and doing business under and by virtue of the' laws of t,he, State New York, with its office and principal place of' business located at 154 '\Vest 46th Street, in the city of New York, State of New York. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent. ORDER It is ordered That respondent Variety, Inc., a corporation, its officers, employees, 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 or "trade papers 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 COlllpensation or in consideration for any services or facilities furnished by or through such customer in connection with the handling, offering for sale, sale or distribution of publications including magazines or "trade papers" published, sold or offered for sale by respondent, unless such payment or consideration is affirmatively offered and otherwise made available on proportionally equal terms to all of its other customers competing with such favored customer in the distribution of such publications including magazines or "trade papers The word "customer" as used above shall be deemed to mean anyone who purchases from Variety, Inc., acting either as principal or agent or from a distributor or wholesaler where sneh transaction with such purchaser is essentially a sale by such respondent, acting either as princi pal or agent.

JOHN HAMILTON AGENCY 371 367 Complaint, It isfu1'ther ordered That therespohdent herein sha;ll, 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 form in which it has complied with this order.