Estes Park Accommodations Association, Inc

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IN THE MATTER OF THE ESTES PARK ACCOMMODATIONS ASSOCIATION, INC. CONSENT ORDER IN REGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket C-3143. Complaint, Aug. 1984-Decision, Aug. , 1984 This consent order requires an association composed of operators of motels, hotels cabins and campgrounds in the area of Estes Park, Colorado, to cease inhibiting competition by restricting, impeding or advising its members and others against the truthful advertising ufthe terms and conditions ofthcir accommodations; and by declaring such activities unethical. The association is precluded from taking any action against a person charged with violating an ethical standard without first providing that person with reasonable notice ofthe allegations and a hearing, as well as written findings and conclusions concerning the allegations. Respondent must also remove from its membership application, policy statement or guidelines, any provision which is inconsistent with the prohibitions contained in the order. Appearances For the Commission: Claude C. Wild, Ill For the respondent: R. Hallberg, Estes Park, Co!. COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act as amended (15 U. C. 41 et seq. and by virtue ofthe authority vested in it by said Act, the Federal Trade Commission, having reason to believe that the named respondent has violated the provisions of Section 5 ofthe Federal Trade Commission Act and that a proceeding by it in respect thereof would be in the public interest, hereby issues this Complaint, stating its charges as follows: PARAGRAPH 1. Respondent, The Estes Park Accommodations Association, Inc., is a corporation formed pursuant to the laws of the State of Colorado, with its mailing address at P.O. Box 178, Estes Park, Colorado.

PAR. 2. Respondent is an association formed to represent the interests of operators of motels, hotels, campgrounds, cabins, and other lodging facilities for travelers in the area of Estes Park, Colorado. Respondent has approximately 80 members, and these members control a substantial majority ofthe lodging facilities available to travelers in that area.

PAR. 3. Members ofreSDonrh,:nt, ::rp pna ap.n -in tho hl1"' Y'D"" ro t....", 518 Complaint viding lodging facilities to travelers for a profit. Except to the extent that competition has been restrained as herein alleged, members of respondent have been and are now in competition among themselves and with other operators of lodging facilities for travelers. PAR. 4. Respondent is organized for the purpose, among others, of guarding and fostering the interests of its members. Respondent engages in activities which further its members' pecuniary interests. By virtue of its purposes and activities, respondent is a corporation within the meaning of Section 4 of the Federal Trade Commission Act, as amended, 15 U. C. 44.

PAR. 5. In the conduct of their business, members of respondent provide lodging facilities for travelers from other states and countries. Additionally, the respondent and its individual members send advertisements to recipients in other states, place advertisements in publications with interstate circulation, and participate in trade shows in other states. The acts and practices described below are " in or affecting commerce" within the meaning of Section 5(a)(I) of the Federal Trade Commission Act, 15 U.s. C. 45(a)(1).

PAR. 6. Respondent has acted as a combination of at least some of its members or has conspired with at least some of its members to foreclose, frustrate, and eliminate competition among the operators oflodging facilities for travelers in tbe Estes Park, Colorado, area by: A. Prohibiting its members from truthfully advertising their facilities and prices to the public, from distributing truthful information about their prices and facilities, and from otherwise soliciting travelers' business; and B. Coercing individual members into abandoning their efforts to truthfully advertise their facilities, to distribute truthful information about their prices, and to otherwise solicit travelers' business. PAR. 7. Respondent has engaged in various acts or practices in furtherance of this combination or conspiracy, including: A. Adopting and implementing written and unwritten codes of ethics, policy statements and guidelines that prohibit efforts by its members to truthfully advertise the prices for their lodging facilities by means of posting price signs, or to otherwise distribute truthful information to the public about their facilities and prices; B. Publishing statements by some of its offcials advising members that certain advertising of prices is unethical and threatening expulsion and other sanctions against members that post price signs; and C. Sending letters to individual members who truthfully advertised their facilities and prices that pressured such members to abandon such activities.

PAR. 8. Through the combination or conspiracy and the acts or 520 FEDERAL TRADE COMIVISSION DECISIONS Decision and Order 104 F. practices described above, certain members of respondent have agreed not to, and do not, advertise or post the prices of their lodging facilities, and certain individual members of respondent have been coerced into abandoning the advertising of prices for their lodging facilities. Consequently, competition among the operators of lodging facilities for customers has been foreclosed, frustrated and eliminated, and customers have been deprived of the benefits of competition among the operators of lodging facilities.

PAR. 9. The combination or conspiracy and the acts and practices described above constitute unfair methods of competition or unfair or deceptive acts or practices in violation of Section 5 of the Federal Trade Commission Ad. Such combination or conspiracy is continuing and wil continue absent the entry against respondent of appropriate relief DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondent named in the caption hereof, and the respondent having been furnished thereafter with a copy of a draft of complaint which the Denver Regional Offce proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondent with violation of the Federal Trade Commission Act; and The respondent, its attorney, and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondent of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondent that the Jaw has been violated as alleged in such complaint, and waivers and other provision as required by the Commission s Rules; and The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondent has violated the said Act, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, now in further conformity with the procedure prescribed in Section 2. 34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

1. Respondent The Estes Park Accommodations Association, Inc. , is :: rnrnnr::tinn ()rP':.mi7. (L p-xlstin!! and doing business under and bv 518 Decision and Order virtue of the laws of the State of C610rado;with its mailing address at P.O. Box 178, Estes Park, Colorado.

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.

ORDER For purposes of this Order, the following definitions shall apply: A. EPAA means The Estes Park Accommodations Association, inc. its members, officers, directors, committees, representatives, agents employees, successors and assigns.

E. The term lodging focilities means motel rooms, hotel rooms cottages, cabins and any other accommodations designed for the housing of travelers.

II.

It is ordered That EPAA shall cease and desist from, directly or indirectly, or through any corporate or other device: A. Restricting, regulating, impeding, declaring unethical, interfering with, or advising against the advertising, publishing, or posting by any person of the prices, terms, or conditions concerned with the furnishing of lodging facilities; and B. Suggesting, inducing, urging, encouraging or assisting any person, business, or any other nongovernmental organization to take any of the actions prohibited by Part II (A).

Nothing contained in Part II shall prohibit EPAA from (1) fiing any complaint with a governmental agency concerning violations of any law, or (2) formulating, adopting, disseminating to its members and enforcing reasonable ethical guidelines governing the conduct of its members with respect to representations, including unsubstantiated representations, that would be false or deceptive within the meaning of Section 5 of the Federal Trade Commission Act. It is further ordered That EP AA sball cease and desist from taking any action against a person alleged to have violated any ethical standard promulgated in conformity with this Order without first providing such person with:

Dccision and Order 104 F. A. Written notice of the allegations against him or her; B. A hearing wherein such person, or a person retained by him or her, may seek to rebut such allegations; and C. The written findings or conclusions ofEPAA with respect to such allegations.

IV.

It is further ordered That EP AA shall:

A. For a period of three years after service of the final Order provide each new member of EPAA with a copy ofthe letter attached as Appendix A at the time the member is accepted into EP AA; B. Within thirty (30) days after service of the final Order, send a copy ofthe letter attached as Appendix A to each current member of EPAA;

C. Within thirty (30) days after service of the final Order, remove from any existing EPAA membership application, policy statement or guideline, any provision, interpretation, or policy statement which is inconsistent with Part II or Part III of this Order; D. Within sixty (60) days after service of the final Order, fie a written report with the Federal Trade Commission setting forth in detail the manner and form in which it has complied with this Order; E. For a period of three (3) years after service of the final Order maintain and make available to the Commission staff for inspection and copying, upon reasonable notice, records adequate to describe in detail any action taken in connection with the activities covered by Part II or Part II of this Order; and F. Within one year after service of the final Order, and annually thereafter for a period ofthree (3) years, file a written report with the Federal Trade Commission setting forth in detail any action taken in connection with the activities covered by Part II or Part III of this Order.

It is furl her ordered That EPAA shall notify the Commission at least thirty (30) days prior to any proposed change in EP AA, such as dissolution, assignment, or sale resulting in the emergence of a successor corporation or association, or any other change in EP AA which may affect compliance obligations arising out of this Order. , u- --- 5IR Decision and Order APPENDI:) A (Lctle,head of EPAAJ Dear Member:

The Estes Park Accommodations Association, Inc. (EP AA), and the Federal Trade Commission have entered into an agreement which resulted in an Order prohibiting EPAA or its members from:

1. Restricting, regulating, impeding, declaring unethical, interfering with, or advising against the advertising, publishing, or posting by any person of the prices, terms or conditions concerned with the furnishing of' lodging facilities; and 2. Suggesting, inducing, urging, encouraging or assisting any person, business, or any other nongovernmental organization to take any of the actions prohibited by the above paragraph.

The Order does not prohibit EPAA from' 1. Filing any complaint with a governmental agency concerning violations of any law, or 2. Formulating, adopting, disseminating to its members, and enforcing reasonable ethical guidelines governing the conduct of its members with respect to representations, including unsubstantiated representations, that would be false or deceptive within the meaning of Section 5 of the Federal Trade Commission Act. EP AA may not take any action against a person alleged to have violated any ethical standard promulgated in conformity with this Order without providing such person with:

1. Written notice of the allegations against him or her; 2. A hearing wherein such person, or a person retained by him or her, may seek to rebut such allegations; and 3. The written findings or conclusions of EPAA with respect to such allegations. A copy of the Complaint and Order issued pursuant to this agreement will be furnished by EPAA upon request.

Thank you for your cooperation.

Sincerely, President The Estes Park Accommodations Association, Inc.

Modifying Order 104 F.