Majestic Utilities Corporation

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IN THE L""TTEn 01' :MAJESTIC UTILITIES CORPOIL\.TION ET AL.

COXSE:KT ORDER ETC.; IX REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE G02\IlIISSION ACT Docket 0-588. Complaint, Sept, 1963 Deci8lon, Sept. , 1963 Consent order requiring Denver sellers of furniture, appliances, magazines and dictionaries through door-to-door sale.'3men, to cease representing falsely that a copy of "'Webster s Home University Dictionary" would be given 7S0- lS-- G8- 726 FEDERAL TRADE COMMISSIOX DECISJOXS Complaint 63 F.

free or as a gift with the purchase of a 5-year subscription to "Look" magazine; and to cease using the registercd trade Dame "Educators Institute with its deceptive implication that their commercial el1terprise \vas an institution of higher learning.

CO:\IPLAIXT 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 Majestic Utilities Corporation, a corporation, and Phillip IVinn and Jack Darby, individually and as offcers of said corporation, hereinafter referred to as respondents, have violated the provisions of said Act, and it appearing to the Cuum1ission 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 follows:

PARAGR.APII 1. Respondent :Majestic Utilitie,s Corporation is a corporation organized, existlng and doing business under and by virtue of the Jaws of the State of Colorado, with its principal offce and place of business located at 1514 Arapaho Street, Denver, Colorado. llespondents Phillip IVinn and .Tack Dluby are offcers of said corporation. They formulate, direct and control the acts and practices of t.he corporate respondent, including the acts and practices hereinafter set forth. Their address is the same as that of tlle corporate respondent.

PAR. 2. Hespondents are now, and have been for more than one year last past, engaged in the sale and distribution of furniture appliances, maga,zines and dictionaries to the public. PAR. 3. In the course and conduct of their business, respondents did cause tl1eir said merchandise, when sold, to be shipped from their place of business in the State of Colorado and a branch store in the State of 1\ ebraska to purchasers in various other States of the United States, and maintain, and at all times herein mentioned have maintained L substantial course of trade in commerce, as "commerce " is uefinec1 in the Federal Trade Commission Act. -\H. 4. In the conduct of their business, at all times 1l1entioned herein, respondents have been in substantial competition, in COl1llnerce with corporations, firms and individuals in the sale of merchandise of the same general kind and nature as that sold by respondents. PAn. 5. Hespondents' method of selling magazines and dictionaries is by door-to.c1oor salesmen who, in the course of the present.atjon have stated or represented, directly or by implication among other things, that a, copy of "\Vebster s Home lJnivcrsity Dictionary" would be gi.Yen 1re,8 or as a, gift with the purchase of a a-year subscription to Look" ma.gazlne.

,, MAJESTIC l7TILITIES CORP. , ET AL. 727 725 Decision and Order PAR 6. In truth and in fact, the dictionary is not given free or as a gift with the purchase of the subscription, but on the contrary, the price of the dictionary is included in the total purchase price of the combination offer.

Therefore, the statements and representations set forth in Paragraph 5 ate false, misleading and deceptive. PAR. 7. In the course a,nd conduct of their business, the respondents use the registered trade name of "Educators Institute, thereby representing, directly or by implication, that they are conducting an institution of higher learnng with a staff of competent, experienced and qualified educators offering instruction in the arts, sciences and subjects of higher learning.

PAR. 8. In truth and in fact, respondents' business is not an " Ins t.ute" as described in Paragraph 7, but 011 the contrary, is a commercial enterprise engaged in selling magazine subscriptions and dictionaries for a profit.

Therefore, the statements and representations set forth in Paragraph 7 are false, misleading and deceptive. P AU 9. The use by the respondents of the aforesaid false, misleading and deceptive statements, representations and practices has had, and now has, the cnpa,city and tendency to mislead members of the purchasing public into the erroncous and mistaken belief that said statements and representations ,were and are true and into the purchase of substantial quantities of respondents' magazine subscriptions and dictionaries.

PAR. 10. The aforesaid a,cts and practices of respondents, as herein alleged, i\ere, and are, all to the prejudice and injury of the public and of respondents' competitors and constituted, and now constitute unfair methods of competition in commerce a,nd unfair and deceptive acts and practices in commerce, in violat.ion of Section 5 of the Federal Trade Commission Act.

DECISION \ND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practic.es of the respondents named in the caption hereof, and the respondents having been furnished thereafter with " copy of a draft of complaint which the Bureau of Deceptive Practices proposed to present to the Commission for its consideration and which, if issued by the Commission, ,yould charge respondents ith violation of the Federal Trade Commission Act; and The respondents and counsel for the Commission having thereafter executed an agrcement containing a consent order, an admission by tho respondents of all the jurisdiction"1 facts set forth in the aforesaid 728 FEDERAL 'TRADE CO),L\1ISSTQ:\ DECISIONS Decision aucl Order 63 F.

draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by the respondents that the law has been violated as alleged in such complaint, and waivers and proi isions as required by the Commission s rules; and The Commission, having reason to believe that the respondents have vlo1rted the Federal Trade Commission Act, and having determined that complaint should issue stating its charges in that respect hereby issues its complaint, accepts saiel a,agreement, makes the following jurisdictional findings and enters the following order: 1. Hesponclent :Majest.ic Utilities Corporation is a corporation organized, existing and doing business under and by virtue of the bws of the State of Colorado, with its offce and principal place of business located at 1314 _-\rapaho Street, in the city of Denver, State of Colorado.

Hespondents Phillip ,Yinn and Jack Darby are offcers of said corporate.ion, and their address is the same as that of said corporation. 2. T118 Federal Trade Commission has jurisdiction of the subject mattet of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER It is ordej' That respondents, lUajestic 1Jtilities Corporation, a corporation anu its offcers, and Phillip ,Vinn and Jack Darby, incliyiclua.l1y and as oflcers or said corporation, and respondents' represE'Tltatlyes, agents, and employe, , directly or through any corporate or otller device, in connection with the offering for sale, sale or rlistribution of magazine subscriptions or any other merchandise in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Representing, directly or by implication, that dictionaries or ot.her it.ems of value sold in conjunction .with magazine subscrip tions or other merchandise are given to a customer or purchaser fre.e or as a gift;

2. Using the words "Institute" or "Educators Institut.e " either singly or together or in conjunction with any other word or words of similar import and meaning, or any abbreviation or simulation thBl'eof as part of respondents trade or corp8rate name or using said word or words in any other manner to designate, describe or refer to respondents' business, or otherwise misrepresenting the nature of their business in any manner. It is fgTther ordered That the respondents herein shall, within sixty (60) days after service upon them of this order, file with the YOLXGER' 729 725 Oomplaint Commission a report in writing setting forth in detail the manner and form in which they have compliocj with this order. By the Commission, Commissioner MacIntyre not participating.