Sylvania Electric Products, Inc.

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Ix THE MATTER OF SYLVANIA ELECTIGC PRODliCTS, IKC.

cox SENT 0ImER, ETC., IX REGARD TO THE ALLEGED VIOLATION OF SEC. :2 (d) OF THE CLAYTON ACT Docket 8,-;01. COilplaint, June lJ 1.YIJ2-Deci.'ioil, Fe/!. 2S 196-1 ':' Consent order requiring a "Waltham, 1\la,'8., manufacturer of photographic lighting products, including flash lamps, flood lamps and projection lamps. to cease Yiolating Sec. 2(d) of the Clayton Act by such practices as paying It membership service COl'1Ul'atioll composed of \Whole:;a1e druggists at least 818 000 as compensation for advertising and at least 82 700 for promotioual or oth('l' sel'Yiccs furnished in connectioll with the sale respondent' s products, \yhile Dot milking comparable allowances available to all competitors of the fw,ored wholesale druggists. COl\PLA1XT The Federal Trade Commission, having reason to belie' e tlwt the party respondent named in the ea ption hereor, and hereinarter more pa.rticularly described, Ins Ylobtec1 flnd is no'\ yiobdng the prm sions of subsection (d) of Section :2 of the Clayton Act, as anlf'n(led by the Robinson-Patman Act (li. C. Title 15, Sec. 13), hereby issues its complaint, stating its charges with respect thereto as follo'ys: PARAGK-\rU 1. Hespondcnt Sylvania Electric. Products, Inc. , is f1, corporation organized, existing and doing business under and by virtue of the laws of t.he State of Dela\"\file ,,'ith Hs offce and principal place or business located at 63 Second Avenue, \Valtham :JIassachusetts.

Pall 2. Respondent is nmy and has been engaged in the bu incss of manufacturing, selling HJlcl distributing flash lamps, flood bmps projection lamps and other Iniscellaneous type of photogl'aphie lighting products. It sells its products to drug and sunclries ,,Lolesalers located throughout the United States. The total sales of 1'e- "'This proceeding was reopened. cease and dc-"ist order ,Gcated and the complaint Wi!" rlismissed on Feb. 24, 1965.

1274 FEDERAL TRADE COr.l)lISSIO), DECISIOXS DecLsiOIl and Order 64 F.

spondent's photo lamp division during the year 1D59 Wlll approximately $28 886 000.

\R. 3. In t118 course and conduct of its business, respondent htls engaged, flllc1 is now engaging, in commerce, as ':commerce" is defined in t.he Clayton Act, as amended, in tlutt respondent sells and causes its products to be transported from the responclenfs principal place of business, located in JHa,ssaehusetts, to customers located in other states of the United States.

\R. 4. In the course and conduct of its business in commerce respondent paid or contracted lor the payment of something of value to or for the benefit of some of its customers as compensation or jn consideration for services or facilities furnished by or through such customers in connection with their offering for sale or sale of products sold to them by respondent, and such payments were not made ayailablc on proportionally equal terms to all other customers rmnpeting in t.he sale and distribution of responden(s products. PAR. 5. For example, during the year 1969 respondent contracted to pay and did pay to Druggists' Serviee Compfmy, Illc. a membership service corporation composed of wholesale druggists, at least 818 000 as compensation or its an fll101Yflnce for ;1fhel'ti.sing and at least $2 700 as compensation or in consideration for promotional consultation, advisory or other services or facilities furnished by or through Druggists Service Company, Inc. , or its members, in r:onnectioll with tlle offering for sale or sale of products sold to such wholesale members by respondent. Such compens1ltion or allowances \n:re not oiIered or othcn-dsc made available on proportionally eqna.l terms to all othm' customers competing with the wholesa.le members of Druggests' Sen-ice Company: Inc. in the. sale and distribution of proclucts purcl1flsed from respondent.

PAR. 6. The acts and practices of respolldel1t as alleged abo,- , are in ,-iol"tion of subsection (d) of Section 2 of the Clayton ;\et, as amended by thc Robinson-Patman Act.

DECISION xxn Onder This lnatter having come on to be, heard by the. Commission upon a record consisting of the Commission s comph1jnt charging the respondent muned in the. caption lwreof wit.h yiobt.ion of subsection (d) of Section 2 of the Chvton A.ct as amrnrlecl. rmd an agreeme.nt ' and between rc.spopdplJ t. nncl ('ollnsc1 snppOl'ti1ig- the (' n!:1nint \':hieh agl'ecnwnt contains an order to ('(',Fe flllc1 (lcsist. an admit::slon by the respondent of all iUl'isclietional fflct '111eg' cd in th(' ('nmplaint SYLVAKIA ELECTIUC pnODLCTS L\TC. 1275 1273 Order ;1, statement that the signing of said agreement is for settlement purposes only and docs not constitute an admission by respondent that it has violated the law as alleged in the complaint, and ,waivers uld provisions as required by the Commissjon s rules: and It appearing that the aforesaid agreement also provides, in effect that it is subject to the condition that thc effective date of the Commission s order enter.red in this proceeding pursuant to said agreement shall be stayed by the Commission until the Commission issues ft final order in the matter of General Electric Oompany, Docket No. 8487 LP. 1238 hereina, and that such condition is met inasmuch as service of this Decision and Order will not be made until issuance of the Commission s final order in that matter; and The Commission lun-ing determined that such agreement provides an adequate basis for appropriate disposit.ion of this proceeding and having accepted such agreement, the follo,ying jurisdictional findings are hereby Inac1e and the following order is entered: 1. R,respondent, Sylvania Electric Products Inc. , is a corpol'union organized and doing business under and by virtue of the laws OT the State of Debwarc "ith its offce and principal place of business Jocat,eel at 730 Third -=b-enne, New York New York. 2. The Federal Trade Commission has jurisdiction of the sublect matter of this proceeding and of the respondent. ORDER It o?ylered, That respondent Sylvania Electric Products Inc. corporation, its offcers, employees, agents and representatives" c1i- CCt1y or through any corporate or other device, in the course, of business in commel'ce\ as "commerce" is defined in the Clayton Act as mnenclec1, do forthwith cease and desist. from: Paying, or contracting for the payment of, anything of value or for the benefit of, any custonler of respondent as compensation, or in consideration for advertising, promotional, consultation, advisory 01' any other services 01' facilities furnished by or through such customer, in connection with the processing, handling'. s,"1e. or olTering for sale of flash lamps, flood lamps pl'ojeeiion flash la, mps and other miscellaneous types of photogra,phic lighting products manufactured, sold or offered :for sale hy respondent unless such payment or consideration is m:lcle ava,Dable on proportionally equal terms to all other customers competing with sucb favored customer in the distribution of such products.

Complaint YT.

within It i8 fUTthe1' ordered That the respondent herein shall, sixty (60) days after service upon it of this order, fie with the Commission a report in writing setting forth in detail the manner and form in which it has complied with this order. IN THE MA'l' TER OF THE READER'S DIGEST ASSOCIATION, I CO:r"' T ORDER , ETC., IN REGARD TO Tile ALLEGl'::n VIOLATION OF THE FEDER.'\L TRADE COMMISSION ACT Vocket C-71S. Complaint, Feb. 196 Dccision, Feb. , 190- Consent order requiring' a publisher with headquarters in Pleasantvile. -r"' to cease representing falsely, in advertisements in its Reader s Digest ):fagazine and in pamphlets, brochures and other advertising matter sent to subscribers and others on its mailng list, that phonograph record albums it offered for sale were aVfiilab1e only to subscribers to Reader Digest and that the offer was limited in point of time. COMPLAINT Pursuant to the provisions or the Federal Trade Commission Act, a11! by virtue of the authority vested in it by said Act, the Federa! Trade, Commission, having reason to believe that The R.eacler Digest. Association, Inc. , a corporation, hereinarter referred to as Tespondent, has violated the provisions of said Act, and it appearing to the Commission that a proceeding hy it. in respect there.of would be. in t.he public interest, hereby issues its complaint stating its charges in that respect as follows:

P AHAGRAPH 1. Respondent The Header s Digest Association, Inc. is f1 corporation organized, existing and doing business under and by virtue of the Jaws of the State of Delaware, with its principal offce and place of business located at Pleasantyil1e in the State of New York.

PAR. 2. Respon(lent is nov, and for some time last past has been engaged in the adverhsing, offering ror sale, sale and distribution or phonograph record albums to the public.

P -\R. 3. In the course and conduct or its business, respondent now cause's, and for some time last past has caused, its sflid product, vdwn sold. ro be shipped from its place of husiuess in the State of X ew York to purchasers thereor located in various other States or the United States, R,nd ma.intains, and at an times mentioned hereill has maintained, a substantial course of trade in said product in com- ) , THE READER' S DIGEST ASSOCIATIO J INC. 1277 1'" Complflint meree, as "commerce:' is defined in the Federal Trade Commission Act.

P"R. 4. In the course and conduct of its business and for the purp08b of inducing the sale of its phonograph record albums, respondent has made certain statements and representations by advertisemeds in its Reader s Digest Magazine and in pamphlets, brochures and other advertising materials sent by direct mail to subscribers and others on its mailing lists, of which the following are typical but J10t all inclusive:

An exclusive offer for Reader s Digest subscribers only Once in a lifetime offer for Reader s Digest subscribers only 3ut our supply of there sets is limited R.remember-only one edition of these records wil be published. PAR. 5. Through the use of the aforesaid statements and representations, and others of similar import but not specifically set forth herejn, respondent represented directly and by implication: (1) That the sale of the phonograph record albums being offered are available only to subscribers of the Reader s Digest 1Iagazine; (2, That. the offer is a limited offer in point of time, in that uu1ese the subscriber acts immediately he will not. be able to obtain the. phonograph record a.lbums offered in the particular advertiseme,::t:

PAR. 6 In truth and in fact:

The respondent does not limit the sale of the said phonograph recoyd albums to subscribers of Reader s Digest. Magazine exclusiv JJ :

. The respondent does not limit the sale of said phonograph records in point of time. Sales of the phonograph record albums are made continually as long as orders are submitted. Therefore, the statements and representations as set forth in Paragra.ph Four hereof 'iye.re and are false, misleading and deceptive. PAR. 7. In the conduct of its business, at all times mentioned herein, respondent has been in substantial competition, in commerce with corporations, firms and individuals in the sale of phonograph rec.ord albums of the same general kind and nature as those sold by respondent.

L\.. 8. The nse by respondent of the aforesaid false, misleading anci d.eceptive statements, repre entations and practices has had, and now has\ the capacity and tendency to mislead members of the, pur. chasing 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 product, hy reason of said erroneous ancl mistaken belief.

1278 :FEDERAL TRADE CO:\L\lission DECISIONS Order Gel r. P AH. 9. 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 constitute unfair methods of competition in conuneree and unfair and dceeptiyc acts and practices in commerce, in violation of Section 5 of the Federal Trade Commission Act.

DECISION nm ORDER The Commission having heretofore determined to issue its complaint charging the respondent named in the caption hereof lyith violation of the FedenLl Trade Commission Act, and the respondent having been served with notice of said detennination and with a copy of the complaint the Commission intended to issue, together wit.h a proposed form of order; and The respondent and counsel for the Commission having the.reafter executed nn agreement containing a consent order, an admission by 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 docs not constitute an ad mission by respondent that the la"y has been yiolatcd 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 agreeme,nt., ma,kes the following jurisdictional findings, and enters the following order:

1. Respondent, The R.eader s Digest Association, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware, with its offce and principall'laee of business located at Pleasantvile, in the 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 puhlic interest.

ORDER It is ordered That respondent The Reader s Digest Association Inc. , a corporation, and its offcers, and respondent's agents, representatives and employees directly or through any corporate or other device, in connection with the offering for sale, sa.Je or distribution of phonogn1ph record albums or other products, in commerce. as commerce" is defined in the Federal Trade Commission Ac . c10 forthwith cease and c1desist from:

SEACRES'f INDUSTRIES CORPORATION ET AL. 1279 1276 Complaint 1. Representing, directly or by implication, that the sale of fspondent's products is being restricted to subscribers to the R.eader s DiO'est l\IaO'azine or to anv other class or roup or perons .without clearly a.nd conspicuously disclosing in conjunction "ith such ,' epresentation whether such products wil he sold 511bsccjuently to other groups or to the public. S. Hepresenting, directly or by implication, that the supply of products being advertised is limited when an adequate supply i3, in fact., ayajIable t.o respondent or that any offer is limited 111 point of time or in any other ma.nner unless such restriction or Jimhation is nctl1aJ1y imposed, a.nd adhered to, by respondent. It is further o?'del-eel That the respondent herein shall, within sixty (60) days after service upon it of this order, fie with the Commission a report in writing setting forth in detail the manner and form in which it has complied with this order.