Altheimer & Baer, Inc., et al.

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

form in ,which it has complied with this order. I X THE :MA TTER OF ALTHEI~IER & BAER, INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE CO::\DIISSION ACT Docket C-810. Complaint, Sept. 5, 19GB-Decision, Sept. 5, 1962 Consent order requiring Chicago distributors of a variety of merchandise to cease supplying their retail dealers .with advertising materialancl other printed matter which misrepresented the availability, quantity, composition, prices, guarantees, and other features of their said products, as in the order below more specifically set out.

COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that Altheimer &; Baer , ALTHEIMER & BAER , INC. , ET AL. 431 430 Complaint Inc., a corporation, and :Milton L. Altheimer, individually and as an officer of said corporation, and Lewis J. Solomon, individually and as Advertising ~Ianager of said corporation, hereinafter referred to as respondents, have violated the provisions of said Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as follmvs:

PARAGR,,\PI-I 1. Respondent Altheimer &. Baer, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Illinois with its office and principal place of business located at ,'.104 North ,Yells Street, Chicago, Ill. Respondent JHilton L. Altheimer is an officer of the corporate respondent. Respondent Le",is J. Solomon is Advertising ~Ianager of the corporate respondent. They formulate, direct and control the acts ftnd practices of the coll)orate respondent including the acts and practices hereinafter set forth. Their address is the same as that of the corporate respondent.

PAR. 2. Respondents are no"" and for some time last past hate been, engftgec1 in the advertising, ofiering for sale, sftle and distribution of various articles of rmerchandise such as dishes, table,,-are, sheets towels, ",aiches and fishing equipment, to retailers for resale to the public.

PAR. 3. In the course and conduct of their business, respondents now cause, and for some time last past have caused, their said merchandise "hen sold, to be shipped from various States to purehasers thereof located in States other than the State in which the shipment originated and maintain, and at all times mentioned herein have maintained, a substantial course of trade in said merchandise in commerce, as commerce" is defined in the Federal Trac~e Commission Act. PAR. 4. Respondents, for the purpose of inducing the sale of their merchandise, have engaged in the practice of supplying their retail dealers with advertising material and other printed matter containing various statements and representations of which the following are typical, but not all inclusive:

$39.95 'While Stocks Last While Limited Quantities Last Quantities Limited 118 Pieces of . . . tools. . . Plus bonus gift of 11 Piece Ensemble Included FREE. . . 11 Piece Handy Tool Ensemble No-?\ot $29.95, No-$24. , Yes Only $17.

);'ever Before Yes-~eyer Before at This Sale Price $22. Never Before at This Low Low-Price 10 Year Factory Guarantee. . . Factory Guaranteed Complain t 61 F.

Chrome Vanadium Alloy Steel. . . Alloy Steel Hydromatic Dishwasher. . . Its Completely Automatic PAR. 5. Through the use of the aforesaid practices respondents have represented, and have placed in the hands of retailers the means and instrumentalities of representing, directly or by implication, that: 1. Certain offers of merchandise must be accepted at once or within a limited time.

. The supply or quantity of certain articles of merchandise is limited.

3. The tool set advertised at $39.95 contains 118 pieces of tools and that an II-piece tool ensemble will be given "free" with this set that is, as a gift or gratuity without cost to the purchaser. 4. Certain prices, set out in juxtaposition with a lower price, are the generally prevailing prices at which the designated merchandise is sold at retail in the trade area or areas where the representations are made.

5. The prices at which certain merchandise is being offered for sale are special prices which are lower than the generally prevailing prices at \\'which said merchandise is sold at retail in the trade area or areas w here the representations are made. 6. Certain merchandise is unconditionally guaranteed for a, definite period of time.

7. The wrenches and tools in the set offered at $39.95 are all made of ehrome vanadium alloy steel, and the II-piece set of %" drive socket wrenehes included therein is made of alloy steel. 8. Certain dishwashers offered for sale are completely automatic. PAR. 6. In truth and in fact:

1. Said offers of merchandise need not be accepted at once or within a limited time.

2. The supply or quantity of said articles of merchandise is not limited. Adequate quantities are availaJble.

3. The tool set advertised at $39.95 does not contain 118 pieces tools and purchasers of this set do not receive an ll-piece tool ensemble free or without cost bec.cause the pric.e charged for the merehalldise purc.based includes the price of the said ensemble. 4. The prices set out in juxtaposition with a lower price are not the generally prevailing pric.es at which the merc.handise is sold at retail in the trade area or areas where the representations are made. 5. The pric.es at which said merchancbse is being offered lor sale ftre not spec.ial prices and are not 10\\e1' than the generally prevailing prices at ,vhieh the merchandise is sold at retail in the trade area or areas where the representfttions are made.

ALTHEIMER & BAER , INC., ET AL. 433 430 Decision and Order 6. Respondents' merchandise is not unconditionally guaranteed for any definite period of time and the advertising does not disclose the nature and terlllS of the guarantee or in what manner the guarantor will perfonn.

7. The wrenches and tools in the set offered at $39.95 are not all made of chrome vanadimn alloy steel, and the II-piece set of drive socket wrenches, included therein, is not made of alloy steel. The latter, set, and other wrenches and tools in the set, are !made of carbon steel and not chrome vanadium or alloy steel 8. Said dishwashers are not completely automatic since they have no timing de-vice that will automatically activate and shut off all eyeles of operation.

Therefore, the statements and representations referred to in paragraphs 4 and 5 were and are false, Inisleading and deceptive. PAR. 7. In the conduct of their business at all times mentioned herein, respondents have been in substantial competition, in cOJllmerce with corporations, firms and individuals in the sale of merchandise of the same general kind and nature as that sold by respondents. PAR. 8. The use by respondents of the aforesaid false, misleading and deceptive statements, representations and practices has had, and now has, the capacity and tendency to mislead members of the purchasing public into the erroneous and mistaken belief that said statements and representations were and are true and into the purchase of substantial quantities of respondents' merchandise by reason of said erroneous and mistaken belief.

PAR. 9. The aforesaid acts and practices of respondents, as herein alleged, were and are all to the prejudice of the public and respondents cOlllpetitors and constituted, and now constitute, unfair methods of competition in conllnerce and unfair and deceptive acts and practices in commerce, in violation of Section 5 of the Federal Trade Conllnis-sion DECISIONAct.AND ORDER The Commission having heretofore determined to issue its complaint charging the respondents named in the caption hereof with violation of the Federal Trade Commission Act, and the respondents 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 respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by respondents of all the jurisclietional facts set forth in the complaint Decision and Order 61 F.

to issue herein, a statement that the sig11ing of said agreement is for settlement purposes only and does not constitute an admission by respondents tlmt 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, AJtheimer &. Baer, Inc., is a corporation organized existing and doing business under and by virtue of the la,,'s of th~, State of Illinois, with its office and principal place of business locate, at 404 North ,Vells Street, in the city of Chicago, State of Illinois. Responde.nt :Milton L. Altheimer is an officer of said corporation. Respondent Lewis J. Solomon is Advertising :Manager of said corporation. 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, and the proceeding is in the public interest.

ORDER I t is 0 nle 'ied That respondents Altheimer 8: Baer, Inc., a corporation, and its officers, and :Milton L. Altheimer, individually and as an officer of said corporation, and Lewis J. Solomon, individually and as Advertising I\lanager of said corporation, andl'respondents' agents representatives, and employees, directly or through any corporate or other device, in connection Yi'ith the offering for sale, sale or distribution of merchandise in commerce, as "commerce~' is defined in the Federal Trade Commission Aet, do forth,with cease and desist from: A. Hepresenting, directly or indirectly, that: 1. O:trers of merchandise must be accepted at once, or within a limited time, ",hen there is, in fact, no specific time limitation.

2. The supply or quantity of any merchandise is limited "hen adequate (luantities are available.

3. Tool sets or other assemblages of merchandise contain a greater number of pieces 01' components than is a fact. "1. lderchanc1ise is given free 01' ",without charge in connection ,with the purchase of other merchandise ",hen the price charged for the merchandise purchased includes the price of the so-called free merchandise.

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THE BORG-ERICKSON CORP. 435 430 Syllabus 5. Any amount is the usual and customary retail price of Inerchandise when it is in excess of the generally prevailing price or prices at which the merchandise is sold at retail the trade area or areas where the representation is made. 6. Any price is a "sale" or special price unless such price constitutes a reduction from the generally prevailing price or prices at which the merchandise is sold at retail in the trade area or areas where the representation is made. 7. Any merchandise is guaranteed unless the nature and extent of the guarantee and the manner in which the guarantor will perform thereunder are clearly and conspicuously disclosed.

8. Any tool or wrench made of carbon steel is made of chrome vanadium alloy steel or other alloy steel. 9. Any machine or device is automatic or completely automatic unless it contains mechanisms or features 'whereby all operations of the machine or device are completed without the intervention of the operator after the machine or device has been activated.

B. JHisrepresenting in any manner the composition, quantiy, quality, usual price, availability or performance of any product. C. Furnishing or other\ise placing in the hands of distributors or dealers in said products the means and instrumentalities by and through which they may mislead or deceive the public in the manner or as to the things hereinabove prohibited. 1 t is f1lather oTClel;ecl That the respondents herein shall, within sixty (60) da.ys after service, upon them of this order, file with the Commission a report. in writing setting forth in detail the manner