Boise Cascade Corporation

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1:\ THE MATTER OF BOISE CASCADE CORPORATION MODIFIED FINAL ORDER , ETC. , 11'' REGARD TO ALLEGED VIOLATION OF SEC. 2 OF THE CLAYTON ACT A:-D SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket ,fuss. Final O(der, Feb. 1986-Modified Final Order, June 20, 1991 This modified final order prohibits the Idaho-based distributor of office products from knowingly inducing, receiving, or accepting wholesale discounts on such products that Boise resells to end-users in the future. The Commission s original order prohibited the respondent from knowingly receiving prices discriminatorily lower than those available to its competitors in the sale of office products to end-users. Appeamnces For the Commission: Chris M. Couillou. For the respondent: Victor E. Grimm, Bell, Boyd Lloyd Chicago, IL.

:v0DIFIED FINAL ORDER Boise Cascade Corporation having filed in the United States Court of Appeals for the District of Columbia Circuit a petition for review of the order to cease and desist issued herein on February 11 , 1986 , 107 FTC 76 , 224, and reissued on :\ovember 1 , 1990 , and the Commission having before it a proposal of Boise Cascade to terminate thc proceeding for judicial review upon the Commission s entry of the following modified order, and the Commission having detcrmincd to accept the proposal, and having the authority to modify its order by virtue of the fact that the record in the proceeding has not been filed with the Court of Appeals (see 15 L. C. 21(b) and Commission Rule 72(a)); accordingly, It is ordered That the cease and desist order entered in this matter be modified to read as follows:

The following definitions shall apply in this order: Comp:ain . Fi:1alOrder etc. previously Dublisl1ed at 107 FTC 76 (1986) 324 FEDERAL TRADE CmIMISSION DECISIONS Modifying Order 114 F.

A. Boise Cascade shall mean Boise Cascade Corporation, its divisions and subsidiaries, its officers, directors, agents and employees, and its successors and assigns.

B. Office Products shall mean furniture and supplies commonly used in offices such as those which are sold or distributed by Boise Cascade Corporation s Office Products Division. C. Wholesaler is a firm that regularly purchases Office Products for resale to another firm that sells such products to end-users. D. Wholesale Discount" is any discount, rebate, allowance or deduction or term or condition of sale (however characterized) provided by sellers of Office Products to wholesalers by reason of their status as wholesalers.

II.

It is further ordered That Boise Cascade shall, in connection with the offering to purchase or purchasing in commerce, as "commerce " is defined in the Clayton Act, of Office Products for resale, cease and desist from knowingly inducing, receiving or accepting, directly or indirectly, from any seller a wholesale discount if the product on which such discount is received is resold by Boise Cascade to an end-user. It is further ordered That Boise Cascade shall, within sixty (60) days of the effective date of this order, distribute a copy of this order to each of its suppliers of Office Products. IV.

It is further ordered That Boise Cascade shall notify the Commission at least thirty (30) days prior to any proposed change in the corporate structure of Boise Cascade, such as the creation or dissolution of subsidiaries or divisions, 01' any other change in the corporation, which may affect compliance obligations arising out of the order.

It 1:S further ordered That Boise Cascade shall, within ninety (90) days after service upon it of this order, file with the Commission a BOISE CASCADE CORPORATION 325 323 Dissenting Statement report in writing settng forth in detail the manner in which it has complied with this order and shall file such other reports as the Commission may from time to time require to assure compliance with the terms and conditions of this order.

Commissioner Azcuenaga dissenting and Commissioner Owen not participating.

DISSENTING STATEMEKT OF COMMISSIONER MARY L. AZCUENAGA The Commission today decides to accept an order proposed by Boise Cascade Corporation in settlement of this matter. The order proposed by Boise is at once more narrow and more broad than the order entered by the Commission following adjudication on the merits. 1\either change is in the public interest. The compromise order is considerably more narrow than the adjudicated order, because it prohibits Boise only from accepting wholesale prices, not discriminatory prices, on goods resold to end users. Boise wil remain free to use its buying power to negotiate any discriminatorily lower price that does not fit the definition of wholesale contained in the order. In view of the Commission unanimous finding of liability for "endemic" practices and the theory of injury in the case (Boise s receipt of discriminatory prices, of which wholesale discounts were an example see Complaint "I 4 , 107 FTC at 77), J see no compelling reason to concede that the adjudicated order is overbroad. I see even less reason to abandon the gravamen of the relief that was anticipated at the outset of the case and that was imposed after a full adjudication and full consideration by the Commission of the terms of the order. 107 FTC at 223. The compromise order also is more broad than the adjudicated order and, indeed, the Robinson-Patman Act, because it omits any reference to two elements essential to a violation: a discriminatory price and competition with disfavored purchasers. As J understand it, Boise receipt of a wholesale price on goods resold to end users would violate the compromise order even if Boise s only competitors are others of the "Big 5" wholesalers that paid the same price. This is a perverse result.

1 The arJ \lciica ed u!"ccr of the Commiss:on pmhihits Roise fro ll rcceiv::1g a net pt.jce lower than that paici by distliouwrs wi:.h wi,ich Bo:sc competes for sales to end usc"s. The order proposed by Boise ("compromise order ) illohioits the I"cccip'. 0:" wr.olesale discollr.ts or. VOdl1ccs hat Roise "csells to ef.ci 'Jsers The C:omrr.ission, describi:1g the o:'ccr as " unremarkab " nev€l-:heless modif:er! the order' to "e::mina;:e e sugges;:icr. of ovedweadth" by TTw: ing cX;Jlicit tr.m i: 2.p;Jlied ot1ly:o oEire )llodur1s reso d by Boise to end JSCi'S.

Dissenting Statement 114 r.

Accepting the compromise order at this stage of the proceeding, when Boise s appeal from the Commission s adjudicated order and opinion on remand in pending, also fails to serve the public interest by leaving the applicable legal standards in a state of confusion and disarray. This might be acceptable, if the compromise order were consistent with the public interest. Unfortunately, the only interest" served here is expediency. I dissent.

CHAIN PHARMACY ASSOCIATION OF :\EIV YORK STATE , INC. 327 327 Complaint