[Federal Register Volume 80, Number 212 (Tuesday, November 3, 2015)]
[Notices]
[Pages 67740-67742]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-27934]
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FEDERAL TRADE COMMISSION
[File No. 151 0181]
Step N Grip, LLC; Analysis To Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement.
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SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair methods of competition.
The attached Analysis to Aid Public Comment describes both the
allegations in the draft complaint and the terms of the consent order--
embodied in the consent agreement--that would settle these allegations.
DATES: Comments must be received on or before November 27, 2015.
ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/stepngripconsent online or on paper, by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Write ``Step N Grip, LLC--
Consent Agreement; File No. 151 0181'' on your comment and file your
comment online at https://ftcpublic.commentworks.com/ftc/stepngripconsent by following the instructions on the web-based form.
If you prefer to file your comment on paper, write ``Step N Grip, LLC--
Consent Agreement; File No. 151 0181'' on your comment and on the
envelope, and mail your comment to the following address: Federal Trade
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite
CC-5610 (Annex D), Washington, DC 20580, or deliver your comment to the
following address: Federal Trade Commission, Office of the Secretary,
Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex
D), Washington, DC 20024.
FOR FURTHER INFORMATION CONTACT: Michael Turner (202-326-3649). Bureau
of Competition, 600 Pennsylvania Avenue NW., Washington, DC 20580.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34,
notice is hereby given that the above-captioned consent agreement
containing consent order to cease and desist, having been filed with
and accepted, subject to final approval, by the Commission, has been
placed on the public record for a period of thirty (30) days. The
following Analysis to Aid Public Comment describes the terms of the
consent agreement, and the allegations in the complaint. An electronic
copy of the full text of the consent agreement package can be obtained
from the FTC Home Page (for October 27, 2015), on the World Wide Web,
at http://www.ftc.gov/os/actions.shtm.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before November 27,
2015. Write ``Step N Grip, LLC--Consent Agreement; File No. 151 0181''
on your comment. Your comment--including your name and your state--will
be placed on the public record of this proceeding, including, to the
extent practicable, on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the
Commission tries to remove individuals' home contact information from
comments before placing them on the Commission Web site.
Because your comment will be made public, you are solely
responsible for making sure that your comment does not include any
sensitive personal information, like anyone's Social Security number,
date of birth, driver's license number or other state identification
number or foreign country equivalent, passport number, financial
account number, or credit or debit card number. You are also solely
responsible for making sure that your comment does not include any
sensitive health
[[Page 67741]]
information, like medical records or other individually identifiable
health information. In addition, do not include any ``[t]rade secret or
any commercial or financial information which . . . is privileged or
confidential,'' as discussed in Section 6(f) of the FTC Act, 15 U.S.C.
46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). In particular, do
not include competitively sensitive information such as costs, sales
statistics, inventories, formulas, patterns, devices, manufacturing
processes, or customer names.
If you want the Commission to give your comment confidential
treatment, you must file it in paper form, with a request for
confidential treatment, and you have to follow the procedure explained
in FTC Rule 4.9(c), 16 CFR 4.9(c).\1\ Your comment will be kept
confidential only if the FTC General Counsel, in his or her sole
discretion, grants your request in accordance with the law and the
public interest.
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\1\ In particular, the written request for confidential
treatment that accompanies the comment must include the factual and
legal basis for the request, and must identify the specific portions
of the comment to be withheld from the public record. See FTC Rule
4.9(c), 16 CFR 4.9(c).
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Postal mail addressed to the Commission is subject to delay due to
heightened security screening. As a result, we encourage you to submit
your comments online. To make sure that the Commission considers your
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/stepngripconsent by following the instructions on the web-based
form. If this Notice appears at http://www.regulations.gov/#!home, you
also may file a comment through that Web site.
If you file your comment on paper, write ``Step N Grip, LLC--
Consent Agreement; File No. 151 0181'' on your comment and on the
envelope, and mail your comment to the following address: Federal Trade
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite
CC-5610 (Annex D), Washington, DC 20580, or deliver your comment to the
following address: Federal Trade Commission, Office of the Secretary,
Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex
D), Washington, DC 20024. If possible, submit your paper comment to the
Commission by courier or overnight service.
Visit the Commission Web site at http://www.ftc.gov to read this
Notice and the news release describing it. The FTC Act and other laws
that the Commission administers permit the collection of public
comments to consider and use in this proceeding as appropriate. The
Commission will consider all timely and responsive public comments that
it receives on or before November 27, 2015. You can find more
information, including routine uses permitted by the Privacy Act, in
the Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.
Analysis of Agreement Containing Consent Order to Aid Public Comment
The Federal Trade Commission (``Commission'') has accepted, subject
to final approval, an agreement containing consent order (``Consent
Agreement'') from Step N Grip, LLC (``Step N Grip''). The Commission's
Complaint alleges that Step N Grip violated Section 5 of the Federal
Trade Commission Act, as amended, 15 U.S.C. 45, by inviting a
competitor in the sale of certain rug devices to set and raise prices.
Under the terms of the proposed Consent Agreement, Step N Grip is
required to cease and desist from communicating with its competitors
about prices. It is also barred from entering into, participating in,
inviting, or soliciting an agreement with any competitor to divide
markets, to allocate customers, or to fix prices.
The Consent Agreement has been placed on the public record for 30
days for receipt of comments from interested members of the public.
Comments received during this period will become part of the public
record. After 30 days, the Commission will review the Consent Agreement
again and the comments received, and will decide whether it should
withdraw from the Consent Agreement or make final the accompanying
Decision and Order (``Proposed Order'').
The purpose of this Analysis to Aid Public Comment is to invite and
facilitate public comment. It is not intended to constitute an official
interpretation of the proposed Consent Agreement and the accompanying
Proposed Order or in any way to modify their terms.
I. The Complaints
The allegations of the Complaint are summarized below:
Step N Grip markets and sells a device called NeverCurl that is
intended to keep the corners of a rug from curling. Step N Grip sells
NeverCurl primarily through Amazon.com; Step N Grip also sells
NeverCurl through its own Web site.
Step N Grip's closest competitor in the sale of such rug devices is
Competitor A, a company that also sells its product on Amazon.com. For
several months prior to June 1, 2015, Step N Grip generally priced
NeverCurl at $13.95 per package, while Competitor A priced its product
at $16.99 per package.
On June 1, 2015, Competitor A lowered its price on Amazon.com to
$13.49 in an effort to compete more aggressively with Step N Grip. In
response, Step N Grip lowered its price on Amazon.com to $12.95.
On June 7, 2015, Competitor A lowered its price on Amazon.com to
$11.95 in response to Step N Grip. That same day, Step N Grip lowered
its price to $11.95 on Amazon.com and sent an email message to
Competitor A. The communication, in its entirety, read: ``We both sell
at $12.95? Or, $11.95?''
Competitor A reported the communication to the FTC.
II. Analysis
Step N Grip's June 7 message to Competitor A is plainly an attempt
to arrange an agreement between the two companies setting and
increasing the price of their competing products. It is an invitation
to collude. The Commission has long held that invitations to collude
violate Section 5 of the FTC Act, and this is unaltered by the
Commission's recent Statement on Section 5.
In a recent statement, the Commission explained that unfair methods
of competition under Section 5 ``must cause, or be likely to cause,
harm to competition or the competitive process, taking into account any
associated cognizable efficiencies and business justifications.'' \2\
Potential violations are evaluated under a ``framework similar to the
rule of reason.'' \3\ Competitive effects analysis under the rule of
reason depends upon the nature of the conduct that is under review.\4\
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\2\ Fed. Trade Comm'n, Statement of Enforcement Principles
Regarding ``Unfair Methods of Competition'' Under Section 5 of the
FTC Act (Aug. 13, 2015) (Section 5 Unfair Methods of Competition
Policy Statement), available at https://www.ftc.gov/system/files/documents/public_statements/735201/150813section5enforcement.pdf.
Commissioner Ohlhausen dissented from the issuance of the Section 5
Unfair Methods of Competition Policy Statement. See https://www.ftc.gov/public-statements/2015/08/dissenting-statement-commissioner-ohlhausen-ftc-act-section-5-policy.
\3\ Section 5 Unfair Methods of Competition Policy Statement.
\4\ See, e.g., California Dental Ass'n v. FTC, 526 U.S. 756, 781
(1999) (``What is required . . . is an inquiry meet for the case,
looking to the circumstances, details, and logic of a restraint.'').
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An invitation to collude is ``potentially harmful and . . . serves
no legitimate business purpose.''\5\ For this
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reason, the Commission treats such conduct as ``inherently suspect''
(that is, presumptively anticompetitive).\6\ This means that an
invitation to collude can be condemned under Section 5 without a
showing that the respondent possesses market power.\7\
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\5\ In re Valassis Commc'ns., Inc., 141 F.T.C. 247, 283 (2006)
(Analysis of Agreement Containing Consent Order to Aid Public
Comment); see also Address by FTC Chairwoman Edith Ramirez, Section
5 Enforcement Principles, George Washington University Law School at
5 (Aug. 13, 2015), available at https://www.ftc.gov/system/files/documents/public_statements/735411/150813section5speech.pdf.
\6\ See, e.g., In re North Carolina Bd. of Dental Examiners, 152
F.T.C. 640, 668 (2011) (noting that inherently suspect conduct is
such that be ``reasonably characterized as `giv[ing] rise to an
intuitively obviously inference of anticompetitive effect.'''
(citation omitted)).
\7\ See, e.g., In re Realcomp II, Ltd., 148 F.T.C. ___, No.
9320, 2009 FTC LEXIS 250 at *51 (Oct. 30, 2009) (Comm'n Op.)
(explaining that if conduct is ``inherently suspect'' in nature, and
there are no cognizable procompetitive justifications, the
Commission can condemn it ``without proof of market power or actual
effects'').
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The Commission has long held that an invitation to collude violates
Section 5 of the FTC Act even where there is no proof that the
competitor accepted the invitation.\8\ There are various reasons for
this. First, unaccepted solicitations may facilitate coordination
between competitors because they reveal information about the
solicitor's intentions or preferences. Second, it can be difficult to
discern whether a competitor has accepted a solicitation. Third,
finding a violation may deter similar conduct--conduct that has no
legitimate business purpose.\9\
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\8\ See, e.g., In re Valassis Commc'ns, Inc., 141 F.T.C. 247
(2006); In re Stone Container, 125 F.T.C. 853 (1998); In re
Precision Moulding, 122 F.T.C. 104 (1996). See also In re McWane,
Inc., Docket No. 9351, Opinion of the Commission on Motions for
Summary Decision at 20-21 (F.T.C. Aug. 9, 2012) (``an invitation to
collude is `the quintessential example of the kind of conduct that
should be . . . challenged as a violation of Section 5' '') (citing
the Statement of Chairman Leibowitz and Commissioners Kovacic and
Rosch, In re U-Haul Int'l, Inc., 150 F.T.C. 1, 53 (2010)). This
conclusion has been endorsed by leading antitrust scholars. See P.
Areeda & H. Hovenkamp, VI ANTITRUST LAW ] 1419 (2003); Stephen
Calkins, Counterpoint: The Legal Foundation of the Commission's Use
of Section 5 to Challenge Invitations to Collude is Secure,
ANTITRUST Spring 2000, at 69. In a case brought under a state's
version of Section 5, the First Circuit expressed support for the
Commission's application of Section 5 to invitations to collude. Liu
v. Amerco, 677 F.3d 489 (1st Cir. 2012).
\9\ In re Valassis Comm'c, Inc., 141 F.T.C. 247, 283 (2006)
(Analysis of Agreement Containing Consent Order to Aid Public
Comment).
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III. The Proposed Consent Order
The Proposed Order contains the following substantive provisions:
Section II, Paragraph A of the Proposed Order enjoins Step N Grip
from communicating with its competitors about rates or prices, with a
proviso permitting public posting of rates.
Section II, Paragraph B prohibits Step N Grip from entering into,
participating in, maintaining, organizing, implementing, enforcing,
inviting, offering, or soliciting an agreement with any competitor to
divide markets, to allocate customers, or to fix prices.
Section II, Paragraph C bars Step N Grip from urging any competitor
to raise, fix or maintain its price or rate levels or to limit or
reduce service terms or levels.
Section II, Paragraph D forbids Step N Grip from instructing or
encouraging a distributor or seller to engage in the conduct proscribed
in Section II, Paragraphs A through C.
Sections III-VI of the Proposed Order impose certain standard
reporting and compliance requirements on Step N Grip.
The Proposed Order will expire in 20 years.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2015-27934 Filed 11-2-15; 8:45 am]
BILLING CODE 6750-01-P