Federal Color & Chemical Co.

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COMPLAIN'!' IN THE MATTER OF THE ALLEGED VIOLATION OF SEC- TION II OF AN ACT OF CONGRESS APPROVED SEPTEMBER 26 1 1914, Docket 282.-September 12, 1919.

SYLLABUs, Where a corporation engaged In the manufacture and sale of dyPstu:ITs, chemicals, soap, and kindred products- (a) gale and o:!Tered to give to employees of customers nnd of prospecth·e customers, gratuities cona1st1ng of liquo.r, cilzars, meals, vu lu· 72 FEDERAL TRADE COMl\IJSSION DECISIONS. Complaint. 2F.T.C.

able pt·eseuts, and othet· personal pro1wrty, ns an indueemeut for them to influence their employers to purchase its goods or to refrain from dealing with its comvetitors;

(b) gave and ofl'et·ed to give to employees of Its customers unl JJrospeetlve customers, and of its competitors' customers and prospective customers, eutertaiument consisting of amusements and diversions of various kinds, as un iudueement for them to intluence their employers to Jlllreh,tse its gootls or to refrain from dt>aling with its competitors; nnd (c) gave anti offpretl to ~ive to employee;; of its customet·s and prospective custontPrs, nnd of its COllllJPtitors' cu:stomers. nnd prospective customers, sums of motley, us an inducement for them to influence their employers to purchase its goods or to refrain from dealing with its competitors:

Held, '!'hat sudt gifts and ofl'et·s to give, under the circumstances set forth, constitutetl an unfair method of competition in violation of section 5 of the uct of September 26, 1914. COMPLAINT.

' The Federal Trade Commission, having reason to believe _from a preliminary investigation made by it that the Federal Color & Chemical Co., hereinafter referred to as respondent, is now and for more than a year last past has been using unfair methods of competition in interest:tte commerce, in violation of the provisions of section 5 of an act of Congress approved September 26, 1914, entitled· "An act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," and it appearing that a proceeding by it in respect thereof would be to the interest of the public, issues this complaint, stating its charges in that respect on information and belief as follows: PAHAORAPH 1. That the respondent, the Federal Color & Chemical Co., a corporation organized and existing and doing business under and by virtue of the laws of the State of Massachusetts, having its principal office and place of business at the city of Boston, in the State of :Massachusetts, is now, and for more than one year last pnst has been, engaged in manufacturing and selling dyestuffs, chemicals, soap, and kindred products throughout the States and Territories of the. United States, and that at all times hereinafter mentioned the respondent has carried on and con- FEDERAL COLOR & CHEMICAL CO. 73 71 Findings. ducted such business in competition with other persons, firms, copartnerships, and corporations manufacturing and selling like products.

PAR. 2. That jn the course of its business of manufacturing and selling dyestuffs, chemicals, soap, and kindred products throughout the States and Territories of the United States the respondent is now, and for more than one year last past has been, secretly giving and offering to give to employees of both its customers and prospective customers and its competitors' customers and prospective customers, as an inducement to influence their employers to purchase or contract to purchase from the respondent dyestuffs, chemicals, soap, and kindred products, without other consideration therefor, gratuities such as liquor, cigars, meals, valuable pres(>nts, and entertainment.

PAR. 3. That in the course of its business of manufacturing and selling dyestuffs, chemicals, soap, and kindred products throughout the States and Territories of the United States the respondent is now, and for more than one year last past has been, secretly paying and offering to pay and loaning and offering to loan to employees of both its customers and prospective customers and its competitors' customers and prospective customers, without the knowledge and consent of their employers, sums of money as an inducement to influence their said employers to purchase or contract to purchase from the respondent dyestuffs, chemicals, soap, and kindred products, or to influence such customers to refrain from dealing or contracting to deal with competitors of the res.rondent.

REPORT, FINDINGS AS TO THE F AC"TS, AND ORDER.

The Federal Trade Commission, having issued and served its complaint herein, wherein it is alleged that it had reason to believe that the above-named respondent, the Federal · Color & Chemical Co., has been and now is using unfair methods of competition in interstate commerce in violation of the provisions of section 5. of an act of Congress approved 74 FEOEHAL TRADE CO~Hf ISSlON DECISIONS. Findings. 2l!'.T.O. September 26, 1914, entitled "An act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," and that a proceeding by it in that respect would be to the interest of the public and fully stating its charges in this respect, and the respondent having filed its answer admitting that the matters and things alleged in the said complaint are true in the manner and form therein set forth, and agreeing and consenting that the Commission shall forthwith proceed to make and enter its report, stating its findings as to fads, and its ortler disposing of this proceeding without the introduction of testimony in support of the same and waiving any and all right to the introduction of such testimony, the Commission makes this report and findings as to the facts and conclusions: FINDINOS AS TO THE FACTS.

PARAGRAPII 1. That the respondent, the Fe<lcral Color & Clwmical Co., is a corporation organizell, existing, and doing business under and by virtue of the laws of the State of Massachusetts, with its home office lol'atl~d at the city of Boston, in said State of Massachusetts, now and for more than one year last past engaged in the business of manufal'turing and selling dyestuffs, chemicals, soap, and kindred products generally in commerce throughout the States and Territories of the United States in direct oompetition with other persons, firms, copartnerships, and corporations manufacturing and selling like products.

PAR. 2. That for more th1m one year last past the respondent has given and offered to give employees of both its customers and prospective customers, as an inducement to influence their employers to purchase or to contract to purchase from the respondent dyestuffs, chemicals, soap, and kindred products, or to influence such employers to refrain from r.Iealing or contracting to deal with competitors of the respondent, without other consideration therefor, grntuities consisting of liquor,. cigars, meals, valuable presents, and other personal property.

FEDERAL COLOR & CHEMICAL CO, 75 71 Order.

PAR. 3. That for more than one year last past the respondent has given and offered to give employees of both its customers and prospective customers, and its competitors' customers and prospective customers, as an inducement to influence their emplqyers to purchase or to contract to purchase from the respondent, dyestuffs, chemicals, soap, and kindred products, or to influence such employers to refrain from dealing o'r contracting to deal with competitors of the respondent, without other consideration therefor, entertainment consisting of amusements and diversions of various kinds and description.

PAR. 4. That for more than one year last past the respondent has given and offered to give employees of both its customers and prospective customers and its competitors' customers and prospective customers, as an inducement to influence their employers to purchase or to oontract to purchase from the respondent dyestuffs~ chemicals, soap, and kindred products, or to influence such employers to refrain from dealing or contracting to deal with competitors of the respondent, without other consideration therefor, sums of money.

CONCLUSIONS, That the methods of competition set forth in the foregoing findings as to facts in paragraphs 2, 3, 4, and each and all of them, are under the circumstances therein set forth, unfair methods of competition in interstttte commerce in violation of the provisions of section 5 of the act of Congress approved September 26, 1914, entitled "An act to create a Federal Trade Commission, to define its powers and ~duties, and for other purposes."

ORDER TO CEASE AND DESIST, The Federal Trade Commission, having issued and served its complaint herein, and the respondent having filed its answer admitting that the matters and things alleged and contained in the said complaint are true in the manner and 76 FEDERAL TRADE COMMISSION DECISIONS, Order. 2F.T.C.

form therein set forth and agreeing and consenting that the Commission shall forthwith proceed to make and. enter its report stating its findings as to the facts and its order disposing of this proceeding without tl~e introduction of testi'mony in support of the same, and wui ving any and all right to the introduction of such testimony, and the Commission having made and filed its report containing its findings as to the facts and its conclusions that the respondent has violated section 5 of an act of Congress approved September 26, 1914, entitled "An act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," which said report is hereby referred to and made a part hereof: Now, therefore, It is ordered, That the respondent, the Federal Color & Chemical Co., and its ofiicers, directors, agents, servants, and employees, eeuse and desist from directly or indirectly: (1) Giving or offering to give employees of its customers or prospecti ,.e customers, or those of its competitm;s' customers or prospective customers, as an inducement to influence their employers to purchase or to contract to purchase from the respondent dyestuffs, chemicals, soap, and· kindred products, or to influence such employers to refrain from dealing or contracting to deal with competitors of the respondent, without other considemtion therefor, gratuities, such as liquors, cigars, meals, theater tickets, valuuble presents, and other personal property.

(2) Giving or offt>ring to give employees of its customers or prospe('tive customers, or those of its competitors' customers or prospe<'ti ve customers, as an inducement to influence their employers to purchase or to contract to purchase from the respondent dyestuffs, chemicals, soap, and kindred products, or to influence such employers to refrain from dealing or contracting to deal with competitors of the respondent, without other consideration therefor, entertainment, consisting of amusements or diversions of any kind whatsoever.

(3) Giving or offering to give employees of its customers or prospective customers, or those of its competitors' cus- TABLE OF ANALOGOUS CASES. 77 71 Table. tomers or prospective customers, as an inducement to influence their employers to purchase or to contract to purchase from the respondent dyestuffs, chemicals, soap, and kindred products, or to influence such employers to refrain from dealing or contracting to deal with competitors of the respondent, without other consideration therefor, money. NOTE.-Tbe cases in the following table involve sub!'ltnntlnlly the f'\ame set of facts as the preceding case, namely, gifts of money to and, In some instances, entertainment of, customers and prospective customers of the donor and of the donor's competitors; also in some instances the giving of gratuities, such as liquor, ci~nrs, meals, presents, and other personal property to customers and prosvectlve customers of the donor:

TABLE.

nate. :Pack. No. Respondent. Location. Commodity, Amwer,Uon, or st\pula-trial. --- Sept. 12 286 Barry Bentley (do- CllJilden, N.J Soap and k1n- AnswoP and coning bw iness as dred products. sent. The ~tandn.rd Soap Co.).

12 287 Charles J. Fox ...... Philadelphia{! Pa ..... do ........... Do. 12 288 J. L. Quimby (do- New Yorks ty .. Lubricating oils, Do. ing business as {reascs and J. L. Quimby & lndred prod- Co.). nets. 12 290 Enterprise Soap Philadelphia, Pa Soap ............ Do. Works, Inc.

12 - 291 The Arnbol Mfg. Co. New York City .. Sizing, soap, Stipulation. glue, and kindred product.s.

12 292 Roxbury Chemical Boston, Mass .... Soap und kin· Answer and COD· Works, Inc. dred products. sent. 12 294 o. P. Olsen & Co., New York City. Grain, pres<'rved Do.· mo. meats, fish, rope, oil, paints, other sh~'su~li:t an k dr products.

12 295 Edward P. Bosson Quincy, Mass .•• Dkes, s~, and Do. and Nehemiah H. indre prod· Lane (doing busi· ucts. ness as Bosson & Lane). 12 300 Robert Cohn and Bayonne,• N.J ... Meats, prod~ Do. Adol'bh Cohn (do- and other r lng usiness as products, a.nd LOis Cohn & suftplies lor Sons). sh ps. 78 FEDERAL TRADE COMMISSION DECISIONS. Complaint. 2F.T.C.

FEDERAL TRADE COMMISSION v.

WOODLEY SOAP MANUFACTURING CO.