Sonotone Corporation

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IN THE MATTER OF SONOTONE CORPORATION MODIFYING ORDER IN REGARD TO ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket C-2414. Consent Order, June 973-Modifying Order, Jan. , 1984 The Federal Trade Commission has modified the order issued against Sonotone Corp. on June 19, 1973 (82 F. C. 1802). The modified order permits the company to suggest resale prices to its dealers, and impose standards on the kinds of customers and territories its dealers can serve. The modification leaves intact the prohibition against resale price maintenance.

ORDER MODIFYING ORDER TO CEASE AND DESIST On June 19, 1973, the Federal Trade Commission issued an order against Sonotone Corporation in Docket No. G-2414 prohibiting Sonotone, in the sale of its own brand name hearing aids, from imposing exclusive dealing arrangements and customer and territorial restraints upon its dealers. (82 F. C. 1802) Two of Sonotone s larger competitors are now permitted by recent Commission actions to engage in the same nonRprice vertical restraints contained in the order against Sonotone. On July 26, 1982 the Commission dismissed the complaint in Beltone Electronics Corp. Docket No. 8928 (100 F. C. 68), challenging the same practices prohibited by the order against Sonotone. On April 11 , 1983, the Commission modified the order in Dahlberg Electronics, Inc. Docket No. 8929 (101 F. C. 703j, which is also similar to the order against Sonotone to set aside prohibitions on Dahlberg s use of certain non-price vertical restraints. Further, it modified that order s ban on resale price maintenance to permit Dahlberg to suggest retail prices to its dealers. On December 7, 1983, the Commission, pursuant to Section 3.72(b) of the Commission s Rules of Practice, 16 C. R. 3.72(b), issued to Sonotone an order to show cause why the proceeding herein should not be reopened to set aside provisions of the final cease and desist order in Docket No. G-2414, prohibiting Respondent' s use of exclusive dealing arrangements and customer and territorial restrictions. Respondent was provided an opportunity to object to the proposed modification of the order against it, and having failed to do so, is now deemed to have consented to such modification. In view of the Commission s actions in Beltone and Dahlberg, the Commission believes that this modification is in the public interest. Accordingly, Modifying Order 103 F. It is hereby ordered That this matter be, and it hereby is, reopened and that Paragraphs No. , 2, 3, 4, 6, 7, 8 and 9 of Part I shall be set aside as of the effective date of this order. It is further ordered That Paragraph No. 5 of Part I be modified as ofthe effective date of this order by striking "5" and "or suggesting and inserting !I " after " stabilizing, Modifying Order