Mystery Publishing Company et al.

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IN THE ~fatter J)lYSTERY PUBLISHING CO~IP ANY ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOh-\.TION OF SEC. 2 (c1) OF THE CLA 'YTON ACT Docket C-20S. Complaint, Aug. 24, 196, Decision, Aug. 84, 196, Consent order requiring two New York City publishers of "Dude" magazine and "Gent" Real", and "See" magazines, respectively, ~with a common 728-122--65---- 422 FEDERAL TRADE CO~1:MISSION DECISIONS Complaint 61 F.

national distributor, to cease Yiolating Sec. 2 (d) of the Clayton Act by making individually negotiated payments or allowances not proportionally equal to certain operators of chain retail outlets in railroad, airport, and bus terminals, ancl outlets in hotels and office buildings, ,Yhile not maldng such allowances Hyailable on proportionally equal terms to drug chains, grocery chains, and other newsstands.

COMPLAINT The Federal Trade Commission, having reason to believe that the parties respondent named in the caption hereof and hereinafter more particularly designated and described, have violated and are. nO'iV violating the provisions of subsection (d) of Section :2 of the Clayton Act (V. C. Title 15, Sec. 13), as nmended by the Robinson-Patman Act, hereby issues its complaint, stating its charges "\with respect thereto as follmys:

PARAGRAPH 1. Respondent :Mystery Publishing Company is a corporation organized and doing business under the la"\yS of the State of K e"\y York, with its office and principal place of business located at 50S 8th ~\.Yenue, K e"\y York, N.Y. Said respondent, among other things, has been engaged, and is presently engaged, in the business of publishing nnd distributing various publications, including magazines uncle!' copyrighted titles, including "Dude. Respondents sales of publications during the period from January 1, 1060, through June , 1961 , exceeded seven hundred thousand dollars. PAR. ~. Respondent Excellent. Publications, Inc., is a corporation organ ized1 and doing' business under the la "\\s of the State of New York. with its ofiice and principal place of business 10cnted at 505 8th Avenue, Ne,y York, N.Y. Said respondent, among other things, hns been engaged, and is presently engaged, in the business of publishing and distributing various publications, including magazines under copyrighted titles, including "Gent Real " and "See." Respondent' sales of publications during the period from January 1, 1960, through June 30 , 1961, exceeded one million four hundred thousand dollars. PAR. 3. Publications published by the respondents named herein are distributed by said respondents to customers through their national distributor, Kable N e"\\s Company, hereinafter referred to as Kable. I\:a.ble has Hcted and is no"\\ acting ns national distributor for the publications of several independent publishers, including the respondents named herein. I(able, as national distributor of publications published by said respondents nnd other independent publishers, has performed nnd is now performing various services for these publishers. J\.among the services performed and still being performed by I\:n ble for the benefit of these publishers are the taking of purchase orders and the distributing, billing and collecting for such publications from MYSTERY PUBLISHING CO. ET AL. 423 421 Complaint customers. Kable has also negotiated promotional arrangements with the retail customers of the publishers it represents, on behalf of and with the kno"le.dge and approval of sa.id publishers, including respondent publisher.

in In its eapac.ity as national distributor for said respondents, dealing ",ith the customers of said respondents, ICable served and is now serving as a conduit or intermediary for the sale, distribution and prornotioll of publications published by said respondents. PAR. 4. Respondents I\Iystery Publishing Company and Excellent Publications, Inc., through their conduit or intermediary, ICable, have sold and distributed, and now sell and distribute, their publications in substantial quantities, in commerce, as "commerce:: is defined in the Cla.yton Act, 'as amended, to c.competing customers located throughout various states of the United States and in the District of Columbia. PAR. 5. In the course and conduct of their business in commerce, respondents lUystery Publishing Company and Excellent Publications Inc. hate paid or contracted for the payment of something of value to or for the benefit of some of their customers as compensation or in consideration for services or facilities furnished, or contractecl to be furnished, by or through such customer,rs in connection ,with the. handling, sale, or offering for sale of publications sold to them by said respondents. Such payments or allo\Yfl1lces were not made available on \proportionally equal terms to all other customers of said respondents competing in the distribution of such publications. PAR. 6. As an example of the practices alleged herein, respondents I\Iystery Publishing Company and Excellent Publications, Inc. hate made payments or allmyances to certain retail customers ,,-ho operate chain retail outlets in railroad, airport and bus terminals, as ,yell as outlets located in hotels and office buildings. Such payments or allowances 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 said respondent publishers. Among the favored c.customers receiving payments in 1960, and during the first six months of 1961, which were c.connection with the pur-not offered to other competing customers in c.hase and sale of respondents publications were: Approximate MYSTERY PUllLISHIKG CO~IPA~Y A71wnnt Received 1960 1961Customers: (J an. J 1/11 $90. 48 ABC Vending Corp., Long Island City, N.Y_----------- $242. 00 Union News Co., New York, X.Y--------------------- 500. 00 2, 502. 90 185. 71 103. Interstate Hosts, Los Angeles, Calif----------------- _ Decision and Order 61 F.

EXCELLEXT PUBLICATION:\S, INC.

ABC Vending Corp., Long Island City, N.Y_----------- 321. 55 125. Union News Co., New York, N.Y__-_----------------- 12, 191. 89 4 376. Interstate Hosts, Los Angeles, Calif_--_--_ 129. 95 149. Greyhound Post Houses, Forest Park, 11L______------ 344. 16 220. Respondents Inade said payments to their favored customers the basis of individual negotiations. A1nong said favored customers such payments were not made on proportionally equal terms. PAR. 7. The acts and practices of said respondents, as alleged above are in violation of the provisions of subsection (d) of Section 2 of the Cla,yton Act, as amended.

DECISIO~ AND ORDER The Commission having heretofore determined to issue its complaint charging the respondents named in the caption hereof with violation of subsection (d) of Section 2 of the Clayton Act, as amended, and the respondents having been served "ith 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 respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents 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 l' sponclents that the law 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 following jurisdictional findings, and enters the following order:

1. Respondent ~lystery Publishing Company is a corporation organized, existing and doing business under and by -virtue of the laws of the State of New York, with its office and principal place of business located at 505 Eighth Avenue, in the city of New York, State of New York.

Respondent Excellent Publications, Inc., is a corporation organized existing and doing business under and by virtue of the laws of the State of New York, "ith its office and principal place of business 10cnted at 505 Eighth Avenn€, in the city of New York, State or New York.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents. THE MARTIN-SENOUR CO. 425 421 Syllabus ORDER Is -is orcle' That respondents :Mystery Publishing Company and Excellent Publications, Inc., both corporations, their respective officers employees, agents and representatives, directly or through any corporate or other device, in connection "ivith 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 services or facilities furnished by or through such customer in connection with the handling, offering for sale, sale or distribution of publications, including magazines published, sold or offered for sale by respondents, unless such payment or consideration is affirmatively offered and othenTise made available on proportionally equal terms to all of their other customers competing with such favored customer in the distribution of such publications, including magazines. The word "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 wholesaler where such transaction with such purchaser is essentially a sale by such respondent, acting either as principal or agent.

It is fw,ther 0 ?YleTe cl That the respondents herein shall, within sixty (60) days after service upon them of this order, file with the Commission a report in writing setting forth in detail the manner and form in which they have complied with this order.