Wm. H. Wise & Co., Inc.

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

IN THE :\hTTER OF W:\f. H. WISE & CO., IXC.

CONSENT ORDERj ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE CO DIISSIOX ACT Docket C-694. Complaint, Jan. 1964-De(ji8ion, Jail. , 1964 Consent order requiring a Kew York City distributor to retail dealers and directly to the public of electric tools and a volume entitled "Wise Gar. den Encyclopedia, to cease repl esenting falsely in advertising in periodicals and otherwise that said encyclopedia was newly revised and brought up-to-date, with a "complete new sUIJplement" , anel included latest developments and methods in garden and lawn care, when the volume had undergone no general revision since its original publication; and to cease representing falsely that its portable electric jig saw was "guaranteed for ;a full year" when limitations on the guarantee ' were not disclosed. . . Complaint 64 F.

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 ,Vm. H. ,Vise & Co. , Inc., a corporation hereinafter referred to as respondent, has 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 ill that respect as follows:

PARAGRAPH 1. Respondent Wm. H. Wise & Co., Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of New York, with its principal offce and place of business located at 370 Seventh Avenue, New York, New York.

PAR. 2. Respondent is now, and for some time last past has been engaged in the advertising, offering for sale and distribution, directly to the public and also to retail dealers for resale to the public, of electric tools, including portable electric jig saws, and of various books including a volume entitled ",Vise Garden Encyclopedia PAR. 3. In the course and conduct of its business, respondent now causes, and for some time last past has caused, its said products, when sold, to be shipped from its place of business in the State of :' ew York, to purchasers thereof located in the various States of the United States and maintains, and at all times mentioned herein has in com-maintained, a substantial course of trade in said products, merce, as "commerce" is defined in the Federal Trade Commission Act.

PAR. 4. Respondent, in the course and conduct of its said business, and for the purpose of inducing the purchase of the said book Wise Garden Encyclopedia" has made many statements and representations concerning the contents and subject matter of said book in advertisements inserted in periodicals and in other advertising material. Typical, but not all inclusive of such statements and representations, are the following:

NOW READY. The world's greatest, most comprehensive Garden Encyclopedia.

EVERYTHD1G YOU EED TO KNOW ABOUT A YTHING YOU WA TO GROW.

Bigger and Better than E'ver.

also a complete new supplement"

Include atest Developments, )Iethods, etc. You get the latest facts about the miracles of Chemical Gardening, ::fodern Insecticides and Weed Kilers; Plant Hormones. Learn about New Plants and Flowers; Wild Flower Gardening at home; new ways with Indoor Flower Arrangements and House WM. H. WISE & CO. , INC. 399 397 Complaint and "'Yater Gardens Every word andPlants; all about Rock Gardens picture up to date.

PAR. 5. By means of the aforesaid statements and representations and others of similar import not specifically set forth herein, respondent has represented, and now represents, directly or by implication:. 1. That the Vise Garden Encyclopedia has been newly revised and brought up-to-date;

2. That said book contains a complete new supplement; 3. That the Vise Garden Encyclopedia contains information as to the latest developments and methods in garden and lawn care. PAR. 6. In truth and in fact:

1. The said Wise Garden Encyclopedia was not ncwly revised and brought up-to-date, as of December 1962; 2. The supplement described as " a complete new supplement" was added in 1951 and had undergone no changes or revisions when so described in advertising material disseminated in 1961 and 1962 3. Said Garden Encyclopedia did not contain information as to the latest developments and methods in gardening and lawn care. In fact, said encyclopedia had undergone no general revision since its original publication in 1936 through 1962. Therefore, the statements and representations set forth in Paragraphs 4 and 5 above are false, misleading and deceptive. PAR. 7. Furthermore, in the course and conduct of its business and for the purpose of inducing sales of its portable electric jig saw respondent made certain statements and representations with respect to the guanantee of saiel product, of which the following is typical: FULLY GUARAKTEED. Your saw is Underwriters' Approved. It comes with warranty and service card-guaranteed for a full year by the world' famous PORTABLE ELECTRIC TOOL CO:\IPANY, PAR. 8. By and through the use of the representations set forth in Paragraph 7, respondent has represented, directly or by implication, that its said portable electric jig saw is guaranteed in every respect for a year.

PAR. 9. In truth and in fact, the guarantee for respondent's said portable electric jig saw is not unconditional; but is limited in certain respects. These limitations are not disclosed in the adycrtising and are not Inade known to the purchaser prior to sale. Therefore, the representations set forth in Paragraphs 7 and 8 were and are, false, misleading and deceptive. PAR. 10. In the conduct of its business, and at all times mentioned herein, the respondent has been in substantial competition in commerce with corporations, firms and individuals engaged in the 400 FEDERAL 'TRADE COl\MISSION T DECISIONS Decision 64 F.

sale of garden encyclopedias and tools of the same general kind and nature as those sold by respondent.

PAIL 11. The use by the respondent of the aforesaid false, misleading and deceptive statements, representations and practices has had, anc1now has, the capacity and tendency to mislead,cl 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 respondent's products by reason of said erroneous and mista,ken belief.

-\R. 12,. The aforesaid acts and practices of respondent, as herein alleged, were and are all to the prejudice and injury of the public and of respondent's competitors and constituted: and now constitutes unfair methods of competition in commerce, and unfair and deceptive acts and practices jn commerce, in violation of Section 5 of the Federal Trade Commission Act.

DECli'IOX .AXD ORDER The Commission having heretofore determined to issue its c.omplaint charging the respondent nalled in the caption hereof with yiolationof the Federal Trade Commission Act, and the respondent having been served with notice.e of said determination and "\with a copy of the complaint the Commission intended to issue, together wi th it proposed form of order; and The respondent and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by respondent of all the jurisdictional facts sct forth in thc complaint to issue herein, a statement that the signing of said agreement is for settlement purposes only and docs not constitute an admission by respondent that the law has been violated as set forth in such complaint, and waivers and prm-isions as required by the Commissiori' s rules; and The Commission, having considered the agreement, hereby accepts same, issues its coli1plilint in the form contemplated by said agreement, makes the tol1owing jnrisdietiona.l findings, and enters the following order:

1. Respondent iVm. H. ,Vise & Co., Ine. 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 370-7th Avenue, in the. city of ew York, State of New York.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent, and the proceeding is in the public interest.

, NATIONAL ALLIANCE OF TELEVISION A),T ELECTRO)7IC 401 SERVICE ASSOCIATIONS ET AL.

397 Syllabus ORDER It is ordered That respondent ,Vm. II. ,Vise & Co., Inc. , a Corporation, and its offcers, and respondent's agent.s, l'epresentatiycs and employees, directly or through any corporate or other device, in connection with the offering for sale, sale and - distribution in commerce, as "commerce" is defined in the Federal Trade Commission Act, of the 'Vise Garden Eneyclopec1ia or any other books or publications, and of portable electric saws or a.ny other products, do forthwith cease and desist from representing, directly or by implication: 1. That the "Tise Garden Encyclopedia has been revised when in fact said book has not undergone any material revision and is the same or substantially the same volume preyiollsly sold and offered for sale by respondent.

2. That the ,Vise Garden Encyclopedia contains a new supplement when in fact such supplement is the same or substantially the same supplement previously included with the said garden encyclopedia.

3. That the Wise Garden Encyclopedia contains information as to the latest developments and methods and in gardening and lawn care when in fact said book does not contain such information.

4. That any article of merchandise is guaranteed unless the nature and extent of the guarantee, the identity of the guarantor, and the n1a.nner in which the guarantor will perform thereunder are clearly and conspicuously disclosed. It is f!trther ordered That the respondent herein shall, within sixty (60) days aft.er service upon it of this order, file with the Commission a report in writing setting forth ill detail the mfllller and fonn in which it has complied with this order. Ix THE lUXTTER OF NATIONAL ALLIANCE OF TELEVISION AND ELECTRONIC SEIWICE ASSOCIATIONS ET AL.

CONSENT ORDER ETC., I1\T REGARD TO THE ALLEGED VIOLA TION OF THE FEDERAL TRADE C01lDnSSION ACT Docket 0-695. C01lv7ai11t, Ja.n. 1964 Deci8ron, Jal1. 1964 Consent order requiring a national a ociati(Jn of television repair men and its mem1Jers, including 100 locfll or state as.c:ociations Affliate" members and indh"idual servicemen \Tho "ere ;' \ssociate" members, to cease sup- 402 FEDERAL TRADE CO:MMISSIO DECISIONS Complaint 64 F.

pressing competition in the repair and service of television and other electronic devices and in the distribution of parts and components used therein, through concertedly refusing to purchase from suppliers who sold directly to consumers 01' part-time ser,icemcn or y\'bo offered warranties or service on devices, equipment and parts so sold; inducing, and entering into agreements with suppliers to refuse to sell to part-time s€nicemen; and using their "Affliate" members as instrumentalities to monopolize trade and lessen competition in the repair and servicing of television radio and electronic devices and equipment. fPL.AINT Pursuant to the provisions of the Fec1e.ral Trade Commission Act (15 lj, C. Sec. 41 et seq. and by virtue of the authority vested in it by said Act, the Federal Trade Commission 1uLving reason to believe that the parties hereinafter more particularly named, desig nated, described and referred to as respondents have violated the provisions of said Act, a,JJc1 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 follows:

PARAGRAPH 1. Respondent K ational Alliance of Television and Electronic Service Associations, hereinafter sometimes referred to as NATESA, is a nonprofit trade association organized and existing as a corporation under the laws of the District of Columbia, with its principal of\ce and place of business located at 5908 South Troy Street, Chicago, Illinois with operations in most of the several States of the 17united States.

Respondent KATESA was ostensibly organized for thc purpose of correlating work and progress of regional, state and local television and electronic service associations; of representing servicemen before other segments of the industry and governmental agencies; and of encouraging the formation of local, state and regional associations. It is composed of a membership of three classes: (a) Affliate which is composed of approximately 100 local and state(b)television,Associateradiowhichandincludeselectronicindividualsservice associations;who are members of a local or state Affliate and are known as Affliate Associate members lld individuals who reside in areas where there is no Affliate and are known as :Non-Affliate Associate members; and (c) Honorary which is composed of persons, companies or other entities not actively engaged in the television, radio and electronic service industry, but who are deemed to have rendered exceptional services to respondent KATE SA. The said Honorary members have not participated in the acts and practices charged herein as unlawful KATIONAL ALLI,L"ice OF TELEVISION AJoi ELECTRONIC 403 SERVICE ASSOCIATIONS ET AL.

401 Complaint and therefore are specifically excluded as respondents in this proceeding.

Respondent NATESA is governed by a Board of Directors consisting of one Director chosen by each Affliate and an Executive Coun. eil consisting of the following offcials: the executive director, president secretary-general, treasurer, eastern vice president, eastern secretary, east central vice president, east central secretary, west central vice. president, west central secretary, western vice president, and western secretary. All of said offcials except the executive director are elected by the membership for a term of one year. The cxecutive director is selected by the Executh-e Council each even-numbered year for a term of two years.

The membership of respondent KATES A constitutes a class so numerous and changing as to make it impracticable to specifically name each and an of such members a,s parties respondent herein. The foliowing, among others, are members of respondent X A TESA are fairly representative of the whole membership and have been responsible, in part, for the direction and control of said respondent. They are named as respondents herein in their individual capacities as members of respondent KATESA, and as representatives of all members of respondent NATESA, including Affliate members, Affliate Associate members and Non.Affliate Associate members, as a class, including those not herein specifically named, all of whom arc made respondents herein:

Frank J. Moch, 5906 South Troy Street, Chicago, Illinois. Respondent 1\1:och has served as executive director of respondent N A TESA for the years, among others, 1959 to the present, and has served as publisher of the "NATESA Scope, offcial magazine of respondent KATESA prior to and from 1959 to the present. Ralph H. ,V oertendyke, 235 North Santa Fe Road, Salina, Kansas. Respondent "\V oertendyke served as president of respondent NATESA from August 1961 to August 1962 and as west central vice president from 1960 to 1961.

Alphonse Benoit, Jr., 2637 Banks Street, New Orleans, Louisiana. Respondent Benoit served as president of respondent X A TESA from 1960 to 1961 and as secretary-general from 1959 to 1960. Valery Metoyer, 6017 Prospect Avenue, Kansas City, Missouri. Respondent :Metoyer served as president of respondent XATESA from 1959 to 1960.

Pall 2. Respondent Television and Electronic Service, Inc. , also known as TESA-GREEK BAY, a corporation organized and doing business under the Jaws of the State of \Viscollsin, with its offces and principal place of business located at 109 Garfield Street in 404 FEDERAL TRADE COlUMISSION DECISIONS Complaint 64 F. T.

Grcen Bay, 'Visconsin is an association 01 local television, radio and electronic servicemen or service organizations and is an "Affliate member of respondent NATE SA.

The membership of respondent TESA-GREEN BAY constitutes a class so numerous and changing as to make It impracticable specifically name each and all of such members as parties respondent herein. The following, among others, are members of TESA- GREEN BAY, are fairly representative of the whole membership and have been responsible, in part, for the dire.ction and control of said respondent. They are named as respondents herein ill their individual capacities, as members of respondent TESA-GREEX BAY, and as representatives of all members of respondent TESA- GREEN BAY, as a class, including those not herein specifically named, all of whom are made respondents herein: Oliver Davis, 109 Garfield Street, Green Bay, "\Visconsin. R.esponc1nt Davis has selTed as secretary of respondent TESA-GREEN BA Y since 1956.

Don Beno, 1153 :Maill Street, Green Bay, ,Yisconsin. Respondent Bend served as president of respondent TESA-GREEN BAY in 1959, as a member of a. committee to negotiate ,with local distributors in 1959, and as N ATESA director in 1960. Harold J uelich, 312 North Chestnut, Green Bay, 'Wisconsin. Respondent Juclich served as NATESA' s director in 19M) as a member of a committee of respondent TESA-GREEN BAY to negotiate with distributors in 1959 , and as treasurer of respondent TESA- GREEN BAY in 1962.

PAR. 3. Respondent NATESA, primarily through its excutiye director, disseminates to its n1members and representatives thereof located throughout the 1Jnited States va.rious communications, including, but not limited to, correspondence, directives, trade publication articles, technica.l material and other data. Respondent NATESA publishes the "NATESA Scope, a monthly trade magazine, which it has transmitted from tile State of Illinois to members of NATESA, including members of respondent TESA-GREEN BA Y, and to others located in various States of the United States. All or virtually all of thc members of respondent NATESA , including members of respondent TESA-GREEN BAY. in the course and conduct of repairing and servicing television, r;dio and electronic devices and equipment purchase various products such as radio and television tubes. Such products are sold and shipped by manufacturers thereof to wholesalers or distributors in States other than the States of manufacture or other than the States where shipment originated who in turn resell said products to lncmbers of respondent NATESA and also to ultimate consumers, located -'ATIO AL ALLIANCE OF TELEVISION AXD ELECTRONIC 405 SERVICE ASSOCIATIONS ET AL.

401 Complaint in various States of the United States, and there has been, and now , a constant current and course of trade in commerce in said products between and among the several States of the United States. PAR. 4. Except to the extent that competition has been hindered frustrated, lessened and eliminated by the acts and practices alleged in this complaint, respondents have been ill substantial competition \with each other in that individual members of local Affliates C0111pete, and respondents have been ill substantia.l competition with other corporations, firms, partnerships and individuals engaged ill the sale and distribution of television, radio and electronic devices equipment or parts in colIllnerce ' as that term is defined ill the Federal Trade Commission Aet.

PAR. 5. The said respondents, hereinbefore llall1ccl and described and each of them, and others not specifically named herein, during the period of time, to 'wit, fI'OlTI ill or about August 1959 , to date of tills complaint, have formulated, adopted and placed into effect a phn, scheme, or policy between and among themselves and others not named herein to hinder, frustrate, suppress and eliminate competition in the repair and service of television and other elect.ronic devices and in the distribution a.nd sale of parts and components used in the service and repair of television (l,nd other electronic devices in the course of the aforesaid commerce. Pursuant to, in furt.herance of, and in order to make eiJective the purposes and objectives of the aioresaid pbn, scheme 01' policy, said respondents or some of them with the acquiescence of a.ll others through combination, conspiracy, understanding, agreement or planned common course of action or course of dealing, between and among and in cooperation with each other, have utilized, among other things, the follmving policies, methods, acts and practices: 1. Refused, threatened refusal, or attempted to obtain the refusal of independent servicemen, including respondent. members and nonme,mbers, to purchase from manufacturers, distributors or wholesalers who have sold or distributed television, radio or electronic devices, or equipment and parts directly to consumers or part-time servicemen.

2. Refused, threatenecll'efusal, or attempted to obtain the refusal of independent servicemen, including respondent members and nonmembers, to purchase frolll manufacturers or distributors who, in connection with the offering for sale, distribution, or sale of television, radio and electronic devices, equipment and parts, have offered warranties or service upon such devices, equipment and parts. 3. Induced, influenced, and entered into agreements with, wholesalers or distributors of television, radio and electronic parts or Decision 64 F.

equipment to refuse to sell such parts or equipment to part-time serVlCemen.

4. Established and utilized local and state "Afliliatc" members and the offcers, directors and lnembers thereof, as instrumentalities in attempting to monopolize t.trade or lessen competition in the repair and servicing of television, radio 01' electronic devices and equipment.

PAR. 6. The plan, scheme, policy, combination, conspiracy, mutual understanding, agreement, pla,nned C0111110n course of action or course of dealing, and the acts and practices and methods, as hereinabove alleged, arc all singularly unfair and to the prejudice of the public and against public policy because of their dangerous tendency unduly to prevent and eliminate part-time servicemell from competing in the repair and service of television, radio or electronic devices and equipment, to limit and rest.rict channels of distribution of said devices and equipment or component parts thereof, to hinder competition, and to restrain and monopolize trade and commerce and thereby constitute unfair methods of competition and unfair acts and practices ill commerce within the meaning of Section 5 of the Federal Trade Commission Act, as amended. DECISIO:\AXD ORm:p.

The Commission having heretofore determined to issue its complaint charging the respondents nmned in the caption hereof with violation of the Federal Trade Commission Act, a,nd 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 anagreenmnt containing a consent order, an admission by respondents of all the jurisdictional facts set forth in the complaint to .issue herein, a stateme,nt 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 ancl 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 fmdings, and enters the following order:

1. Respondent National Alliance of Television and Electronic Service Associations: hereinafter sometimes referred to as N '-\.TESA is a nonprofit trade association organized and existing as aCOrpOl'll- NATIONAL ALLIANCE OF TELEVISION AXD ELECTRONIC 407 SERVICE ASSOCIATIOKS ET AL.

401 Order tion under the laws of the District of Columbia, with its principal offce and place of business located at 5908 South Troy Street, Chicago, Illinois.

Respondent Frank J. Mach is executive director of NATESA and his address is 5906 South Troy Street, Chicago, Illinois. Respondents Ralph H. ,Voertendyke, Alphonse Benoit, Jr., and Valery :Metoyer are members of and are representatives of a.ll the members of proposed respondent K ATESA. The address of Ralph H. VV oertendyke is 235 Korth Santa Fe Road, Salina, Kansas. The address of Alphonse Benoit, Jr. is 2637 Banks Street, New Orleans Louisiana. The address of Valery "fetoyer, is 6017 Prospect A venue, Kansas City, l\1missouri.

Respondent Television and Electronic Service Association, Inc. is a nonprofit trade association organized and existing as a corporation under the laws of the State of vVisconsin, with its offces and principal place of business located at 109 Garfield Street, Green Bay, \Visconsin.

Respondents Oliver Davis, Don Beno and Harold J uelich are members of and are representatives of all the members of proposed respondent Television and Electronic Service Association, Inc. The address of Oliver Davis is 109 Garfield Street, Green Bay, Wisconsin. The address of Don Beno is 1153 "fain Street, Green Bay, ,Visconsin. The address of Harold J uelich is 312 North Chestnut Green Bay, \Visconsin.

2. The Federal Trade Commission has jurisdiction of the subject matter of this procee,ding and of the respondents, and the proceeding is in the public interest.

ORDJ It is ordered That respondents National Alliance of Television and Electronic Service Associations, a corporation, its offcers, representatives, agents, and members of its Board of Directors, the members of said National Alliance of Television and Electronic Service Associations, their agents, representatives a,nel employees; Te1cvision and Electronic Service Association, Inc., a corporation, its offcers, representatives, and a.gents, the members of said Television and Electronic Service Association, their agents, representatives or employees; Frank J. Moch; Ralph H. Woertendyke; Alphonse Benoit, Jr. ; Valery "fetayer; Oliver Davis; Don Beno; and Harold Jue-hell, directly or indirectly, individually and a.s represent.atives of all members of Xational ..lJliance of Teledsioll an(l Electronic. Service Associations, or as memuers, offcers or directors of other responde.nts, or through any corporate or other device, in connection 408 FEDERAL CfRADE COMMISSION DECISIOXS Order 64 F.

with the repair, purchase or sale or with or in connection with the offer to repair, purchase or sell or distribute television, radio and electronic devices, equipment or component paris thereof in commerce, as "commerce ' is defined in the Federal Trade Commission Act do fort.hwith cease and desist from entering into, cooperating , carrying out or continuing any planned common course of action understanding, agreement or conspiracy between any bvo or more of sajd respondents, or between anyone or more of said respondents and others not parties hereto, to do or perform any of the following acts, practices or things:

(1) Refusing, threatening refusal, or attempting to obtain the refusal of persons engaged in the repair and servicing of television, radio or electronic devices or equipment, to purchase from any manufacturer, distributor or "\yholesaler who sells or distributes such devices or equipment or component parts thereof to part-time repairmen or directly to consumers. (2) Refusing, threatening refusal, or attempt.ing to obtain the refusal of persons engaged in the repair and servicing of television, radio or electronic devices or equipment, to purchase from manufacturers or disnibutors who of IeI' warranties or service on such devices or equipment.

(3) Inducing, influencing or entering into agreement with 'Wholesalers or distributors of television, radio or electronic devices and equipment 01' component parts thereof to refuse to sell to part-time repairmen or to any competitors of respondents. (4) Inducing, persuading, coercing 01' attempting to induce persuade or coerce any manufacturer, distributor or wholesaler to confine or limit the offering for sale, distribution or sale of television, radio or electronic devices, equipment or component parts thereof, to repairmen who are members of ATESA , ineluding members of ATESA Affliates, or to t.hose who conform to any standard established by any of respondents. (5) lJtilizing the offces of a.ny loca.l, state or national association, or the offcers, directors or members thereof, to do or perform or to aiel or abet in doillg or performing anything prohibited by any provision of this order.

It i8 jurthe?' ordered 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 data.il the manner and form in 'Which they have complied with this order. SILva HARD"WARE CO. 409 Complaint