[Federal Register Volume 59, Number 210 (Tuesday, November 1, 1994)] [Unknown Section] [Page 0] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 94-27010] [[Page Unknown]] [Federal Register: November 1, 1994] ======================================================================= ----------------------------------------------------------------------- FEDERAL TRADE COMMISSION [File No. 911 0097] Baby Furniture Plus Association, Inc.; Proposed Consent Agreement With Analysis To Aid Public Comment agency: Federal Trade Commission. action: Proposed consent agreement. ----------------------------------------------------------------------- summary: In settlement of alleged violations of federal law prohibiting unfair acts and practices and unfair methods of competition, this consent agreement, accepted subject to final Commission approval, would prohibit, among other things, an Alabama buying cooperative and trade association from taking any action on behalf of its members, or encouraging them to take any action, that interferes with a juvenile product manufacturer's decision as to how or to whom to distribute its products. The consent agreement also would prohibit the respondent from coercing--by means of actual or threatened refusals to deal--any juvenile products manufacturer to abandon or adopt--or to refrain from abandoning or adopting--any marketing method for its products. dates: Comments must be received on or before January 3, 1995. addresses: Comments should be directed to: FTC/Office of the Secretary, Room 159, 6th Street and Pennsylvania Avenue NW., Washington, DC 20850. for further information contact: Phoebe Morse, Boston Regional Office, Federal Trade Commission, 101 Merrimac St., Suite 810, Boston, MA 02114-4719. (617) 424-5960. supplementary information: Pursuant to section 6(f) of the Federal Trade Commission Act, 38 State. 721, 15 U.S.C. 46 and Sec. 2.34 of the Commission's rules of practice (16 CFR 2.35), notice is hereby given that the following consent agreement containing a 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 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 Sec. 4.9(b)(6)(ii) of the Commission's rules of practice (16 CFR 4.9(b)(6)(ii)). Agreement Containing Consent Order To Cease and Desist The Federal Trade Commission having initiated an investigation of certain acts and practices of the Baby Furniture Plus Association, Inc. (``BFPAI'') and it now appearing that the BFPAI, hereinafter referred to as proposed respondent, is 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 the BFPAI, by its duly authorized officer, and counsel for the Federal Trade Commission that: 1. Proposed respondent Baby Furniture Plus Association, Inc. is a corporation organized, existing and doing business under and by virtue of the laws of the Commonwealth of Virginia, with its principal office and place of business located at Suite 1, 1020 Montgomery Highway, Birmingham, Alabama 35216. Respondent is a voluntary association of retailers of juvenile products doing business in approximately twenty- five States. 2. Proposed respondent admits all the jurisdictional facts set forth in the draft of complaint here attached. 3. Proposed respondent waives: (a) Any further procedural steps; (b) The requirement that the Commission's decision contain a statement of findings of fact and conclusions of law; (c) All rights to seek judicial review or otherwise to challenge or contest the validity of the order entered pursuant to this agreement; and (d) All claims under the Equal Access to Justice Act. 4. This agreement shall not become a 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, 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 proposed respondent, 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 respondent of facts, other than jurisdictional facts, or of violations of law 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 Sec. 2.34 of the Commission's rules, the Commission may without further notice to proposed respondent, (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 decision containing the agreed-to order to proposed respondent's address as stated in this agreement shall constitute service. Proposed respondent waives any right it might 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 in the agreement may be used to vary or contradict the terms of the order. 7. Proposed respondent has read the proposed complaint and the order contemplated hereby. It understands that once the order has been issued, it will be required to file one or more compliance reports showing that it has fully complied with the order. Proposed respondent further understands that it may be liable for civil penalties in the amount provided by law for each violation of the order after it becomes final. Order For purposes of this order, the following definitions shall apply: A. ``Baby Furniture Plus Association, Inc.'' means Baby Furniture Plus Association, Inc., and its directors, committees, officers, representatives, agents, employees, successors and assigns. B. ``Juvenile products'' means products or accessories to products that are used by or are intended for use by babies, children or juveniles. I It is ordered that BFPAI, directly, indirectly, or through any corporate or other device, in or in connection with its activities in or affecting commerce, as ``commerce'' is defined in section 4 of the Federal Trade Commission Act, as amended, forthwith cease and desist from: A. Taking any action, directly or indirectly, on behalf of its members, including but not limited to any actual or threatened boycott or refusal to deal, that has the purpose or effect of interfering with any juvenile product manufacturer's decision as to how or to whom it distributes its product(s); B. Coercing, compelling, inducing, or intimidating by means of actual or threatened refusals to deal, or attempting to coerce, compel, induce, or intimidate by means of actual or threatened refusals to deal, any manufacturer of juvenile products into abandoning, adopting or refraining from abandoning or adopting any marketing method, practice or policy with regard to the distribution of its product(s); and C. Requesting, urging, recommending or suggesting that BFPAI members take any action, directly or indirectly, including but not limited to any actual or threatened boycott or refusal to deal, which has the purpose or effect of interfering with any juvenile product manufacturer's decision as to how or to whom it distributes its product(s). Provided that this order shall not be construed to prevent BFPAI from engaging in trade association or buying cooperative activities that are lawful under the antitrust laws. II It is further ordered that BFPAI shall: A. Distribute by first-class mail a copy of this order and the accompanying complaint to each of BFPAI's members within thirty (30) days after the date on which this order become final; B. For a period of five (5) years after the date on which this order becomes final, provide each new BFPAI member with a copy of this order and the accompanying complaint at the time the member is accepted for membership; and C. Within thirty (30) days after the date on which this order becomes final, distribute by first-class mail to each manufacturer enumerated in ``Appendix A'' to this order a copy of the Commission's complaint and order in this matter and letter, on BFPAI letterhead and signed by BFPAI's president, in the form shown as ``Appendix B'' to this order. III It is further ordered that, for a period of five (5) years after this order becomes final, BFPAI shall maintain in its files a copy of the minutes of each meeting of its membership and of each meeting of its board of directors and a copy of all correspondence received from, or sent to, any mail order dealer of juvenile products, any manufacturer of juvenile products, or any association representing manufacturers of juvenile products and that such copies of minutes and correspondence be made available to Commission staff for inspection and copying upon reasonable notice. IV It is further ordered that, within sixty (60) days after the date on which this order becomes final, BFPAI shall file with the Commission a verified written report setting forth in detail the manner and form in which it has complied with this order. Thereafter, additional reports shall be filed at such other times as the Commission or its staff may, by written notice to BFPAI, require. V It is further ordered that BFPAI shall notify the Commission at least thirty (30) days prior to any proposed change in the corporation such as a dissolution, assignment, or sale resulting in the emergence of a successor corporation or association, or any other change in the corporation or association which may affect compliance obligations arising out of this order. Appendix A A.D.I. Lamps, P.O. Box 6357, Phoenix, AZ 85005, Attn: National Sales Manager Aprica U.S.A., Inc. P.O. Box 25408--Zip 92825-5408, 1200 Howell Avenue, Anaheim, CA 92805, Attn: National Sales Manager Baby Trend, Inc., 1928 W. Holt Avenue, Pomona, CA 91768, Attn: National Sales Manager Bandaks Emmaljunga Incorporated, 737 South Vinewood Street, Escondido, CA 92029, Attn: National Sales Manager Bassett Furniture Industries, Inc., P.O. Box 626, Bassett, VA 24055, Attn: National Sales Manager Carlson Children's Products, Inc., 122 Kirkland Circle, Oswego, IL 60543, Attn: National Sales Manager Century Products Company, 9600 Valley View Road, Macedonia, OH 44056-9989, Attn: National Sales Manager Chicco Artsana of America, 200 Fifth Ave., Rm 910, New York, NY 10010, Attn: National Sales Manager Child Craft Industries, Inc., P.O. Box 444, Salem, IN 47167-0444, Attn: National Sales Manager Children on the Go, 1670 S. Wolf Road, Wheeling, IL 60090, Attn: National Sales Manager Cocso, Inc., 2525 State St., Columbus, IN 47201, Attn: National Sales Manager Dutalier, Inc., 298 Chaput St. Pie, Quebec, Canada JOH 1WO, Attn: National Sales Manager Evenflo Juvenile Furniture Co., 1801 Commerce Drive, Piqua, OH 45356, Attn: National Sales Manager FBS, Inc., 1071 Batesville, Rd., Greer, SC 29650, Attn: National Sales Manager Fisher-Price, Inc., 636 Girard Ave., East Aurora, NY 14052, Attn: National Sales Manager Gerry Baby Products, 12530 Grant Drive, Denver, CO 80233, Attn: National Sales Manager Glenna Jean Mfg., P.O. Box 2187, Petersburg, VA 23804, Attn: National Sales Manager Graco Children's Products, Inc., Rt 23, Main St., Elverson, PA 19520, Attn: National Sales Manager Jolly Jumper, P.O. Box M, Woonsocket, RI 22895, Attn: National Sales Manager Lambs & Ivy, 5978 Bowcroft St., Los Angeles, CA 90016, Attn: National Sales Manager The Little Tikes Co., 2180 Barlow Rd., Hudson, OH 44236, Attn: National Sales Manager Newborne Company, River Rd., Worthington, MA 01098, Attn: National Sales Manager Noel Joanna Inc., 22942 Arroyo Vista, Rancho Santa Margarita, CA 92688, Attn: National Sales Manager Nu-Line, 214 Nu-Line St., Suring, WI 54174, Attn: National Sales Manager Omron Marshall Products, 600 Barclay Blvd., Lincolnshire, IL 60069, Attn: National Sales Manager Pansy Ellen Products, 1245 Old Alpharetta Rd., Alpharetta, GA 30202, Attn: National Sales Manager Perego, USA, 3625 Indpendence Drive, Fort Wayne, IN 46808, Attn: National Sales Manager Prince Lionheart, 3070 Skyway Dr., Bldg. 502, Santa Maria, CA 93455, Attn: National Sales Manager The Red Calliope & Associates, Inc., 13003 S. Figueroa St., Los Angeles, CA 90061, Attn: National Sales Manager Rochelle Furniture, 722 North Market St., Duncannon, PA 17020, Attn: National Sales Manager Safety 1st, Inc., 210 Boylston St., Chestnut Hill, MA 02167, Attn: National Sales Manager Sandbox Industries, P.O. Box 477, Tenafly, NJ 07670, Attn: National Sales Manager Sassy, Inc., 1534 College SE, Grand Rapids, MI 49507, Attn: National Sales Manager Simmons Juvenile Products Co., 613 E. Beacon Avenue, New London, WI 54961, Attn: National Sales Manager Snugli, Inc., 12520 Grant Drive, Denver, CO 80233, Attn: National Sales Manager Summer Infant Products, 33 Meeting Street, Cumberland, RI 02864, Attn: National Sales Manager Welsh Company, 1535 S. Eighth St., St. Louis, MO 63104, Attn: National Sales Manager Appendix B Dear------------------------------------------------------------------- As you may be aware, the Federal Trade Commission (``FTC'') has been investigating certain activities of the Baby Furniture Plus Association, Inc. (``BFPAI''). The BFPAI has voluntarily entered into an agreement with the FTC which resulted in the issuance by the FTC on (date) of a complaint and the entry of a consent order. The order requires that you be sent a copy of the complaint, the order and this letter. In accordance with the terms of the FTC's order, you are hereby notified that, among other things, the BFPAI will cease and desist from: A. Taking any action, directly or indirectly, on behalf of its members, including but not limited to any actual or threatened boycott or refusal to deal, that has the purpose or effect of interfering with any juvenile product manufacturer's decision as to how or to whom it distributes its products(s); B. Coercing, compelling, inducing, or intimidating by means of actual or threatened refusals to deal, or attempting to coerce, compel, induce, or intimidate by means of actual or threatened refusals to deal, any manufacturer of juvenile products into abandoning, adopting or refraining from abandoning or adopting any marketing method, practice or policy with regard to the distribution of its product(s); and C. Requesting, urging, recommending or suggesting that BFPAI members take any action, directly or indirectly, including but not limited to any actual or threatened boycott or refusal to deal, which has the purpose or effect of interfering with any juvenile product manufacturer's decision as to how or to whom it distributes its product(s). A copy of the complaint and the order are enclosed. Sincerely, ---------------------------------------------------------------------- President Enclosures Analysis of Proposed Consent Order to Aid Public Comment The Federal Trade Commission has accepted, subject to final approval, an agreement to a proposed consent order from proposed respondent Baby Furniture Plus Association, Inc. (``proposed respondent'' or ```BFPAI''). The proposed consent 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 and take other appropriate action or make final the agreement's proposed order. Description of Complaint A complaint prepared for issuance by the Commission along with the proposed order alleges that proposed respondent's members, all of whom are retailers of juvenile products, agreed to act in concert to restrict the competition that some of the members faced from the New Hampshire Buyer's Service catalog. The complaint alleges that pursuant to this agreement, the BFPAI wrote letters to thirty-seven manufacturers of juvenile products in which it directly or impliedly threatened that its members would refuse to deal with them if the manufacturers continued to do business with the New Hampshire Buyer's Service catalog. The complaint alleges that these actions constituted a combination or conspiracy to threaten to boycott juvenile product manufacturers that do business with the New Hampshire Buyer's Service catalog. This conduct, it is alleged, had the purpose or effect, or the tendency or capacity, to restrain competition unreasonably and injure consumers. Among other things, it is alleged that the conduct restrained competition between the proposed respondent's members and other retailers of juvenile products, including the New Hampshire Buyer's Service catalog, restrained the ability of manufacturers of juvenile products to distribute their products through mail order catalogs, and deprived consumers of the benefits of additional price, quality and service competition in connection with the sale of juvenile products. Description of the Proposed Consent Order The proposed order would require the proposed respondent to cease and desist from taking any action on behalf of its members, including an actual or threatened boycott or refusal to deal, that has the purpose or effect of interfering with a juvenile product manufacturer's decision as to how or to whom it distributes its products. In addition, the proposed order requires the BFPAI to cease and desist from actual or threatened boycotts, refusals to deal or the use of other means of coercion to compel or induce any juvenile product manufacturer to adopt or refrain from adopting any marketing method, practice or policy with regard to the distribution of its products. Finally, the proposed order requires the proposed respondent to cease and desist from requesting, urging, recommending or suggesting that its members take action, such as an actual or threatened boycott or refusal to deal, which has the purpose or effect of interfering with a juvenile product manufacturer's decision as to how or to whom it distributes its products. The proposed order contains a safe harbor provision which provides that the order shall not be construed to prevent the BFPAI from engaging in trade association or buying cooperative activities that are lawful under the antitrust laws. The BFPAI is required to take several remedial actions under the terms of the proposed order. Within 30 days after the order becomes final, the BFPAI must distribute a copy of the order to all its members and, for a five year period, the BFPAI must make a copy of the order available to all new members at the time they are accepted for membership. In addition, within 30 days after this order becomes final, the BFPAI must also send a letter to the manufacturers it had threatened to boycott in which it acknowledges the consent order and outlines the order's principal terms. Finally, the proposed order requires the BFPAI to file compliance reports, to retain certain documents for a five year period, and to notify the Commission of certain changes in status. The purpose of this analysis is to facilitate public comment on the proposed order. It is not intended to constitute an official interpretation of the agreement and proposed order or to modify in any way their terms. The proposed consent order has been entered into for settlement purposes only and does not constitute an admission by the proposed respondent that the law has been violated as alleged in the complaint. Donald S. Clark, Secretary. Dissenting Statement of Commissioner Mary L. Azcuenaga in New England Juvenile Retailers Association, File 911-0079, and Baby Furniture Plus Association, Inc., File 911-0097 In these cases, two trade associations complained to manufacturers about free riding by a catalogue seller, and the Commission charges them and the retailer members of one association with directly or impliedly threatening a concerted refusal to deal with the manufacturers. Although the letters of complaint were ill-advised, evidence that the retailers (many of whom were not represented by counsel during our investigation) were committed ``to a common scheme designed to achieve an unlawful objective''\1\ (i.e., a coercive, concerted refusal to deal) is thin at best. Given the dearth of evidence of unlawful agreement, the arguably procompetitive purpose, and the absence both of market power and of anticompetitive effects, I do not find reason to believe that the challenged conduct unreasonably restrained trade or that the imposition of an order is in the interest of the public. I dissent. \1\Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752, 768 (1984). --------------------------------------------------------------------------- [FR Doc. 94-27010 Filed 10-31-94; 8:45 am] BILLING CODE 6750-01-M