Home Centers, Inc., et al.

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BILLING CODE 4910-13-M FEDERAL TRADE COMMISSION (16 CFR Part 13] [File No. 762 3119] Home Centers, Inc., Et ah; Consent Agreement with Analysis To Aid Public Comment AGENCY: Federal Trade Commission. ACTION: Consent agreement. SUMMARY: In settlement of alleged violations of Federal law prohibiting unfair acts and practices and unfair methods of competition, this consent order, accepted subject to final Commission approval, among other things, requires two Tallmadge, Ohio firms engaged in the sale and distribution of retail general merchandise to cease representing price reductions in product advertising, unless comparison prices are bona fide, and duration of advertised offer, is disclosed; or misrepresenting, in any way, that their products are being sold at a savings to consumers.

DATE: Comments must be received on or before October 12,1979. ADDRESS: Comments should be directed to: Office of the Secretary, Federal Trade Commission, 6th St. and Pennsylvania Ave., NW., Washington. D.G 20580.

FOR FURTHER INFORMATION CONTACT: Paul R. Peterson, Director, 4R, Cleveland Regional Office, Federal Trade Commission, 1339 Federal Office Bldg., 1240 East Ninth St., Cleveland, Ohio 44199(216)522-4207.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal Trade Commission Act, 38 Stat, 721,15 U.S.C. 46 and § 2.34 of the Commission’s rules of practice (16 CFR 2.34), notice is hereby given that the following consent agreement containing a consent order to cease and desist and an explanation thereof, having been filed with and accepted, subject to final approval, by the Commission, has been placed on the public record for a period of sixty (60) days. Public comment is invited. Such comments or views will be considered by the Commission and will be available for inspection and copying at its principal office in accordance with § 4.9(b)(14) of the Commission’s rules of practice (16 CFR 4.9(b)(14)).

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Federal Register / VoL 44, No. 157 / Monday, August 13, 1979 / Proposed Rules 47347 [File No. 762 31191 Home Centers, Inc., and Home Centers of Cleveland, Inc.

Agreement Containing Consent Order To Cease and Desist The Federal Trade Commission having initiated an investigation of certain acts and practices of Home Centers, Inc., a corporation, and Home Centers of Cleveland, Inc., a corporation, and it now appearing that Home Centers, Inc. and Home Centers of Cleveland, Inc., hereinafter sometimes referred to as proposed respondents, are willing to enter into an agreement containing an order to cease and desist from the use of the acts and practices being investigated, It is hereby agreed by and between Home Centers, Inc. and Home Centers of Cleveland, Inc,* by their duly authorized officers, and their attorney, and counsel for the Federal Trade Commission, that:

1. Proposed respondents Home Centers, Inc. and Home Centers of Cleveland, Inc. are corporations organized, existing and doing business under and by virtue of the Laws of the State of Ohio, with their principal place of business located at 65 Midway Plaza, in the City of Tallmadge, State of Ohio. 2. Proposed respondents admit all the jurisdictional facts set forth in the draft of complaint here attached. 3. Proposed respondents waive: (a) Any further procedural steps; (b) The requirement that the Commission’s decision contain a statement of findings of fact and conclusions of law; and (c) All rights to seek judicial review or otherwise to challenge or contest the validity of the order entered pursuant to this agreement.

4. This agreement shall not become part of the public record of the proceeding unless and until it is accepted by the Commission. If this agreement is accepted by the Commission it, together with the draft of complaint contemplated thereby and related materials pursuant to Rule 2.34, will be placed on the public record for a period of sixty (60) days and information in respect thereto publicly released. The Commission thereafter may either withdraw its acceptance of this agreement and so notify the proposed respondents, in which event it will take such action as it may consider appropriate, or issue and serve its complaint (in such form as the circumstances may require) and decision, in disposition of the proceeding.

5. This agreement is for settlement purposes only, and does not constitute an admission by proposed respondents that the law has been violated as alleged in the draft of complaint here attached.

6. This agreement contemplates that, if it is accepted by the Commission, and if such acceptance is not subsequently withdrawn by the Commission pursuant to the provisions of § 2.34 of the Commission’s rules, the Commission may, without further notice to proposed respondents, (1) issue its complaint corresponding in form and substance with the draft of complaint here attached and its decision containing the following order to cease and desist in disposition of the proceeding, and (2) make information public in respect thereto. When so entered, the order to cease and desist shall have the same force and effect and may be altered, modified, or set aside in the same manner and within the same time provided by statute for other orders. The order shall become final upon service. Delivery by the U.S. Postal Service of the complaint and decision containing the agreed-to order to proposed respondents’ address as stated in this agreement shall constitute service. Proposed respondents waive any right they may have to any other manner of service. The complaint may be used in construing the terms of the order, and no agreement, understanding, representation, or interpretation not contained in the order or the agreement may be used to vary or contradict the terms of the order.

7. Proposed respondents have read the proposed complaint and order contemplated hereby. They understand that once the ordér has been issued, they will be required to file one or more compliance reports showing that they have fully complied with the order. Proposed respondents further understand that they may be liable for civil penalties in the amount provided by law for each violation of the order after it becomes final. Order Paragraph One: For purposes of this order, the following definition shall apply:

“Reference price” shall mean a price against which, directly or by implication, the offering price is being compared. A reference price incudes prices described variously as “regular price,” “former price," "list price,” “retail price,” “value,” or terms of similar import and meaning, or a reference price may be implied by terms such as “$40 savings,” “save 20%,” or terms of similar import and meaning.

Paragraph Two: It is ordered, That each of the respective respondents, Home Centers Inc. and Home Centers of Cleveland, Inc., corporations, and their respective successors and assigns, each of the respective respondents’ officers, agents, representatives, and employees, directly or through any corporation, subsidiary, division, or other device, in connection with the advertising, offering for sale, sale, or distribution of any product in or affecting commerce, as “commerce” is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

(A) Representing in any manner, directly or by implication, that any of respondents’ products are being sold at a reduction from a higher, reference price, either by use of such reference price, by the use of terms such as “special,” "savings,” “sale,” - “clearance." or other terms of similar import and meaning, or otherwise, unless:

(1) Such reference price is respondents actual, bona fide price at which substantial sales were made to the public by respondents on a regular basis for a reasonably substantial period of time in the immediate, recent past;

(2) Such reference price is respondents actual, bona fide price at which the product was openly and actively offered for sale to the public for a reasonably substantial period of time in the recent, regular course of respondents’ business; or (3) Such reference price is based on some other'price at which the same or similar products were offered or sold to the public in the immediate area in the recent, regular course of business, respondents have actual knowledge of these facts at the time the representation is made, and respondents clearly and conspicuously disclose, at the time and place that the representation is made, the source and nature of such reference price. (B) Representing in any manner, directly or by implication, that any of respondents’ products are being sold at a special or reduced price, unless the reduction in price is meaningful, and unless respondents clearly and conspicuoulsy disclose, at the time and place that the representation is made, the duration for which the specialor reduced price is in effect. (C) Misrepresenting in any manner, directly or by implication, that any of respondents’ products are being sold at a special or reduced price or at a savings to consumers.

Paragraph Three: It is further ordered, That:

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47348 Federal Register / Vol. 44, No. 157 / Monday, August 13, 1979 / Proposed Rules (A) Respondents shall, for a period of three (3) years subsequent to the date of this order:

(1) Maintain such records as will show the measures taken to insure continuing compliance with thé terms and provisions of this order; (2) Grant any duly authorized representative of the Federal Trade Commission, upon reasonable notice of time and place, access to all such records;

(3) Furnish to the Federal Trade • Commission, at the Commission’s expense, copies of such records which are requested by any of its duly authorized representatives. (B) Respondents shall maintain such records as are necessary to substantiate each representation which, in any manner, is subject to Paragraph Two (A) or Two (B) of this order. Such records shall be maintained for a period of one (1) year from the date each such representation is made. Paragraph Four: It is further ordered, That a copy of this order be delivered to all present and future personnel either (a) engaged in a supervisory capacity in the design and creation of advertising materials for respondents' products, or (b) engaged in a management or supervisory capacity in the sale of products. Respondents shall secure from each said person a signed statement acknowledging receipt of this order. Paragraph Five: Itis further ordered, That respondents notify the Commission at least thirty (30) days prior to any proposed change in either corporate respondent such as dissolution, assignment, or sale resulting in the emergence of a Successor corporation, the creation or dissolution of subsidiaries, or any other change in the corporation which may affect compliance obligations arising out of this order.

Paragraph Six: It is further ordered, That each of the respondents herein shall, within sixty (60) days after service upon them of this order, file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with this order.

Analysis of Proposed Consent Order to Aid Public Comment The Federal Trade Commission has accepted an agreement to a proposed consent order from Home Centers, Inc. and Home Centers of Cleveland, Inc. The proposed order has been placed on the public record for sixty (60) days for reception of comments by interested persons. Comments received during this period will become part of the public record. After sixty (60) days, the Commission will again review the agreement and the comments received and will decide whether it should withdraw from the agreement or make final the agreement’s proposed order.' The complaint alleges that Home Centers misrepresented that: (1) Certain products were being offered for sale at special or reduced prices; and (2) The advertised offers were for a limited period of time. The complaint also alleges that Home Centers represented that certain products were being offered for sale at prices lower than those prevailing in the immediate area, when, in fact, respondents did not possess a reasonable basis to make such representations.

The proposed order would prohibit Home Centers from representations that any of their products are being sold at a reduction from some higher, comparison price (whether the comparison price is explicitly set forth in the advertising or not) unless:

(1) The price to which the sale price is compared is the actual price at which Home Centers made substantial sales of the product or at which they actively offered the product for sale; or (2) The price to which the sale price is compared is a price at which the same or a similar product was sold or offered for sale in the same area and Home Centers has actual knowledge of this fact and Home Centers states in the advertisement the source and nature of the comparison price.

The proposed order would further prohibit Home Centers from representing that any of their products are being sold at a special or reduced price unless the reduction is meaningful and unless they disclose the duration of the advertised offer;

The proposed order would also prohibit lióme Centers from misrepresenting in any way that any of their products are being sold at a savings to consumers.

The purpose of this analysis is to facilitate public comment of the proposed order, and it is not intended to constitute an official interpretation of the agreement and proposed order or to modify in any way their terms. James A. Tobin, Acting Secretary.

[FR Doc. 79-24862 Filed 8-10-79; 8:45 ami BILLING CODE 6750-01-M DEPARTMENT OF ENERGY Federal Energy Regulatory Commission [18 CFR Part 159]