South Lake Tahoe Lodging Association

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THE MA TIER OF SOUTH LAKE TAHOE LODGING ASSOCIATION CONSENT ORDER, ETC , IN REGARD TO ALLEGED VIOLA TIO:- OF SEe. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket C-3830. Complaint. Oct. 1998--Decision, Oct. , 1998 This consent order prohibits, among other things, the California-based trade association, representing the interest of motel and hotel operators, from participating in, suggesting, or assisting any agreement, combination or conspiracy with its members to restrict the posting of signs advertising the prices at which its individual members offer lodging. The consent order requires the respondent to amend its by-laws to incorporate the provisions of this order and requires the respondent to distribute copies of the amended by- laws to each of its members. Participants For the Commission: David Newman, Jeffrey Klurfeld, Wilard Tom, Wiliam Baer, Oliver Grawe and Jonathan Baker. For the respondent: 1. Dennis Crabb, Rollston, Henderson Rasmussen Crabb South Lake Tahoe, CA. COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act as amended, (I5 use. et seq. and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that South Lake Tahoe Lodging Association (hereinafter "respondent") has violated the provisions of Section 5 of the Federal Trade Commission Act, and it appearing to the Commission that a proceeding by it in respect thereof would bc in the public interest, hereby issues this complaint stating its charges as follows:

PARAGRAPH 1. Respondent South Lake Tahoe Lodging Association is a corporation organized, existing and doing business under and by virtue of the laws of the State of California, with its principal place of business located at P.O. Box 5746, South Lake Tahoe, California.

PAR. 2. Respondent is a trade association representing the interests of motel and hotcl opcrators and other operators oflodging SOUTH LAKE TAHOE LODGING ASSOCIAnON 395 394 Complaint properties in the South Lake Tahoe area. For purposes of this complaint, the South Lake Tahoe area comprises those portions ofEl Dorado County, California, and Douglas County, Nevada, lying within the Lake Tahoe basin. Respondent' s members are generally engaged in the offering of short-term lodging in the South Lake Tahoe area. Respondent has approximately 63 members, who together with certain of respondent' s associate members, constitute approximately 70 percent of the available lodging units in the South Lake Tahoe area. Except to the extent that competition has been restrained as alleged herein, respondent's members have been and are now in competition among themselves and with other motels, hotels and lodging properties.

PAR. 3. Respondent is organized for the purpose of guarding and fostering the interests of its members. Respondent engages in activities that 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, 15 C. 44.

PAR. 4. Respondent's acts and practices, including the acts and practices alleged herein, are in or affecting commerce, as "commerce is defined in the Federal Trade Commission Act, 15 U.S. e. 44. PAR. 5. Respondent has been and is acting in agreement combination or conspiracy with its members, or in agreement combination or conspiracy with some of its members, to restrain trade in the offering oflodging in the South Lake Tahoe area by eliminating the posting of signs advertising the prices at which its individual members offer such lodging.

PAR. 6. The purposes or effects of the agreement, combination or conspiracy and respondent's acts or practices as described in paragraph five are and have been to restrain competition unreasonably and to deprive consumers of the benefits of competition in one or more of the following ways, among others: (a) By foreclosing, reducing and restraining competition among providers of lodging in the South Lake Tahoe area; (b) By depriving consumers of truthful information concerning the prices of lodging in the South Lake Tahoe area; and (c) By depriving consumers of the benefits of competition among providers of lodging in the South Lake Tahoe area. 396 FEDERAL TRAE COMMISSION DECISIONS Dccision and Order 126 F. PAR. 7. The aforesaid acts and practices constitute unfair methods of competition in or affecting commerce in violation of Section 5 ofthe Federal Trade Commission Act, 15 U. C. 45. These acts and practices are continuing and will continue in the absence of the relief requested.

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 San Francisco Regional Office 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 and counsel forthe 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 law has been violated as alleged in such complaint, or that the facts as alleged in such complaint, other than jurisdictional facts, are true and waivers and other provisions as required by the Commission s Rules; and The Commission having thereafter considered the matter and having detennined that it had reason to believe that the respondent has violated the said Act, and that a 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 confonnity 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:

I. Respondent South Lake Tahoe Lodging Association is a corporation organized, existing and doing business under and by virte of the laws of the State of California, with its principal place of business located at P.O. Box 5746, South Lake Tahoe, California. , SOUTH LAKE TAHOE LODGING ASSOCIAnON 397 394 Decision and Order 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 It is ordered That for the purposes ofthis order respondent" or SL TLA" shall mean the South Lake Tahoe Lodging Association, its predecessors, successors and assigns, and its directors, committees offcers, delegates, representatives, agents and employees. II.

directly or indirectly, or It is further ordered That SLTLA, through any person or any corporate or other device, in or in connection with its activities as a trade association, in or affecting commerce, as "commerce " is defined in the Federal Trade Commission Act, shall forthwith cease and desist from carring out participating in, inducing, suggesting, urging, encouraging, or assisting any agreement, combination or conspiracy with its members or agreement, combination or conspiracy with some of its members to restrict the posting of signs advertising the prices at which its individual members offer lodging;

Provided, however, that nothing in this order shall be construed to prevent respondent or its members from exercising rights protected under the First Amendment to the United States Constitution to petition any federal, state or local government executive agency or legislative body concerning legislation, rules, programs, or procedures, or to participate in any federal, state or local administrative or judicial proceeding.

It is further ordered That SL TLA shall: A. Within sixty (60) days after the date this order becomes final amend its by-laws to incorporate by reference paragraph II of this order, and distribute by first-class mail a copy of the amended bylaws to each of its members;

398 FEDERAL TRAE COMMISSION DECISIONS Decision and Order 126F.TC. B. Within thirty (30) days after the date this order becomes final distribute by first-class mail a copy of this order and the complaint to each of its members;

C. For a period offive (5) years after the date this order becomes final, provide each new member with a copy of this order, the complaint, and the amended by-Jaws within thirty (30) days of the new member s admission to SLTLA; and D. Within seventy-five (75) days after the date this order becomes final, and annually thereafter for a period of five (5) years on the anniversary of the date this order becomes final, file with the Secretary of the Commission a verified written report setting forth in detail the manner and form in which SL TLA has complied with and is complying with this order.

IV.

It is further ordered That SL TLA shall notify the Commission at , such asleast thirty (30) days prior to any change in SL TLA dissolution or reorganization resulting in the emergence of a successor corporation or association, or any other change in the corporation that may affect compliance obligations arising out of this order. ' It is further ordered That for the purposes of determining or securing compliance with this order, respondent shall permit any duly authorized representative of the Commission: A. Upon seven (7) days notice to respondent, to have access during offce hours and in the presence of counsel, to inspect and copy all books, ledgers, accounts, correspondence, memoranda and other records and documents in the possession or under the control of respondent relating to any matters contained in this order; and B. Upon seven (7) days notice to respondent and without restraint or interference from it, to interview directors, committees offcers, delegates, representatives, agents and employees. VI.

It is further ordered That this order shall terminate on October 7 2018.

NORTEK INe. 399 399 Complaint