Interco Incorporated

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

IN THE MATTER OF INTERCO INCORPORATED, ET AL.

MODIFYING ORDER IN REGARD TO ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION AND CLAYTON ACTS Docket 2929. Consent Order, Sept. 1978-Modifying Order, Oct. , 1986 The Federal Trade Commission has modified a 1978 consent order with respondents by setting aside the portions ufthe order pertaining to the exclusive dealing prohibitions. The Commission concluded that respondents do not have the market power to exclude competitors.

ORDER REOPENING AND SETTING ASIDE PORTIONS OF ORDER ISSUED SEPTEMBER 26, 1978 On May 6, 1986, respondents Interco Incorporated ("Interco ), Londontown Corporation ("Londontown ) and Queen Casuals, Inc. ("Queen Casuals ) fied a "Request As Supplemented To Reopen And Set Aside Part Of Order" ("Request"), pursuant to Section 5(b) of the Federal Trade Commission Act, 15 V. C. 45(b), and Section 2.51 of the Commission s Rules of Practice. Londontown and Queen Casuals are wholly owned subsidiaries ofInterco. The Request asked the Commission to reopen the consent order issued on September 26, 1978 ("the order ) and set aside paragraphs (1) and (2) of Part II of the order. (92 F. C. 404) Paragraphs (1) and (2) of Part II of the order are applicable only to respondents' footwear products. Paragraph (1) of Part II forbids respondents from enforcing any agreement, understanding or arrangement which prevents resellers or prospective resellers from sellng the footwear products of competitors or from independently determining the volume of footwear to be purchased from competitors. Paragraph (2) of Part II prohibits respondents from requiring or inducing resellers to cancel orders for or not purchase footwear products supplied by competitors.

After reviewing respondents' Request, the Commission has concluded that the public interest warrants reopening and setting aside the mentioned paragraphs of the order as requested by respondents. The action we take today is consistent with our previous determinations in Brown Shoe Company, Inc. Docket No. 7606, July 16, 1984 (104 C. 266), and in International Shoe Company, Docket No. 6835 January 30 1985 (105 F. C. 191). In both of those matters the Commission set aside perpetual exclusive dealing orders in the footwear industry. The same considerations which prompted our actions in . !, Modifying Order 108 F. these earlier matters are applicable to the present request. Respondents have demonstrated that they do not have market power in the domestic footwear industry either at the manufacturing or retailing levels. Given the present characteristics ofthe shoe industry and that respondents do not have market power by which they may exclude competitors, paragraphs (1) and (2) of Part II of the order now serve no procompetitive purpose and may impede respondents efforts to achieve effcient distribution of their footwear products through lawful practices available to their competitors. Accordingly, it is ordered that this matter be and it hereby is reopened and that paragraphs (1) and (2) of Part II of the Commission Decision and Order issued on September 26, 1978, shall be of no further force and effect.

135 Complaint