James B. Lansing Sound, Inc

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Moc!ifying O.rqer_ 97 F.TC. IN 1'HE MATTER 010' JAMES B. LANSING SOUND, INC.

MODIFYING ORDER IN REGARD TO ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Ducket C- 1785. Decision, Aug. 1970-Modifying Order, May 20, 1981 This order reopens the proceeding and modifies the order issued by the: Commission on August 24 1970, 77 F. C. 1165 35 FR 15807, by replacing Paragraph 1(2) of the original order with one containing additional language which permits the firm to establish lawful, reasonable and non-discriminatory minimum standards for its dealers and to withhold its products from dealers who fail to maintain those standards.

RROPENING AND MODIFICATION OF ORDER By petition of April 10, 1981, respondent James B. Lansing Sound Inc. CJBL") requests that Paragraph 1(2) of the Commission s order issued against JBL on August 24, 1970 be modified so that the order would no longer prohibit JBL from establishing performance standards for sellers of its loudspeakers. Pursuant to Section 2.51 of the Commission s Rules of Practice the petition was placed on the public record for comment. Attorneys for Best Products Co., Inc. filed the only comment requesting that the Commission deny JBL's petition. JBL had previously petitioned the Commission to modify the consent order; the Commission denied this petition by order dated August 29, 1978. The Commission found that although there had been a change of law since the order was issued the petition had made an inadequate showing of the need for the requested relief. Upon consideration of JBL's petition and supporting materials and the public comment, the Commission now finds that JBL has a very small market share and that JBL would likely suffer significant competitive injury unless the order is modified. Further the Commission notes that the proposed modification relates only to a non price vertical restraint that the Commission s complaint had not alleged to be a reinforcing mechanism for resale price fixing. For these reasons the Commission has determined that the order should be modified. ItAccordingly,is ordered That the proceeding be, and it hereby is, reopened. It is further ordered That the order to cease and desist be, and it hereby is, modified by substituting the following for Paragraph 1(2). 2. Preventing or prohibiting any independent dealer or distributor from reselling his products to any person or group of persons JA1Vlh;i: tl. L1\l 1. VU1 , u' 914 Modifying Order business or class of businesses exc pt as xp.r ssly provided herein. This order shall not prohibit James B. Lansing Sound, Inc. from establishing lawful, reasonable, and non-discriminatory minimum standards for its dealers, including standards that relate to promotion and store display, demonstration, inventory levels, service and repair, volume requirements and financial stability; nor shall this order prohibit respondent from requiring its dealers who sell JBL products for resale to make such sales only to dealers who maintain such minimum standards.

Commissioner Pertschuk did not participate. Commissioner Bailey voted in the negative.

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