Random House, Inc.

Text (OCR of the scan at left; may contain errors)

IN THE MATTER OF RANDOJ\1 HOUSE, INC.

COMPLAINT, SETTLE::\lent" FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SUBSEC. (a) OF SEC. 2 OF AN ACT OF CONGRESS APPROVED OCT. 15', 1914 AS AMENDED BY AN ACT APPROVED JUNE 19, 19,36 Docket 5962. Settlement, findings and order, March 6, 1952 Where one of the major publishers in the United States of "trade" or popular fiction and nonfiction books, which was engaged in the direct or indirect publication of such books, and in the competitive interstate sale and distribution of its said publisher s editions to retail book sellers, and to wholesalers or jobbers for resale thereto, and to other's, including public libraries and educational institutions; and which included among its said purchas~l's many engaged in competition with one anothel' in such wholesale 01' retailing- Long discriminated in price between different purchasers through pricing and selling its said books under a discount schedule pursuant to which it sold to some at list prices less discounts ranging from 49J/~ pel' cent on purchases of five thousand or more books to 43 percent on quantities of less than one hundred, while allowing other wholesalers or jobbel's who: competed with said purchasers only a single discount of 43 per cent irrespective of the quantity purchased:

Effect of which discrimination, or any appreciable part thereof, had been or might be substantially to lessen competition 01' tend to create a monopoly in the lines of commerce in which it and said jobbers or wholesalers were respectively engaged, or to injure, destroy or prevent competition with it 01' with said jobbers or wholesalers who received the belletit of said discriminations or with customers of either:

Helcl That such acts and practices, under the circumstances set forth, were in viola tion of subsec. (a) of Sec. 2 of the Clayton Act as amended by the Robinson-Patman Act.

Before Mr. Frank Hie?' hearing examiner. ill?'. Fletche1' G. Cohn and .:.lI1'. Robe1't F. Quinn for the Commission. lYeil, Gotslwl &J Jlanges of New York City, for respondent. COMPLAINT Pursuant to the provisions of an Act of Congress entitled "An Act to supplement existing laws against unlawful restraints and monopolies, and for other purpose, " approved October 15, 1914 (Clayton Act), as amended by an Act of Congress approved June 19, 1936 (Robinson-Patman Act) (U. S. C. Title 15, Sec. 13), and by virtue of 1 For an explanatory statement setting forth the background of the settlement in question in this, and three other cases against Houghton, Mifflin Company, page 86, Little, Brown and Company, page 869" the instant respondent, and Simon and Schuster Inc.. page 886, see footnote in the Boughton Mifflin proceeding on page 861. RANDOM HOUSE, INC. 879 8~ 8 Complaint the authority vested in it by said Acts, the Federal Trade Commission having reason to believe that RandOlll House, Inc., hereinafter refen' ed to as respondent, has violated the provisions of subsection (a) Section 2 of the Clayton Act as amended, hereby issues its complaint stating its charges in these respects as follows: PARAGRAPH 1. Respondent, Random House, Inc., is a corporation organized and existing under the laws of the State of New York with its principal office and place of business located at 457 Madison A venue New York, New York.

PAR. 2. Respondent is now, and for many years last past has been engaged directly or indirectly in the publication, distribution, and sale of popular fiction and non-fiction books commonly known as trade books.

Respondent was organized in 1925 and is one of the major publishers of said trade books in the United States. It does not do its own printing, which is handled by severalclifferent printing companies. Respondent sells and distributes its trade books to retail book sellers for resale to the public and to wholesalers or jobbers for resale to retail book stores and others, including public libraries and educational institutions. Editions of said trade books so sold and distributed are .known as publisher s editions. PAR. 3. In the course and conduct of its business for many years last past, respondent has been, and is now engaged in commerce, as commerce" is defined in the Clayton Antitrust Act, as amended by the Robinson-Patman Act, in that it ships or causes to be shipped publisher s editions of said books from the States in which the several places of production and business of the respondent are located, to purchasers thereof located in other States and in the District of Columbia; and there is, and has been at all times herein mentioned, a continuous current of trade and commerce in said books between and among the several States of the United States and in the District of Columbia.

PAR. 4. Except insofar as it has been affected, as alleged in Paragraph Six hereof respondent, in the course and conduct of its business jn commerce, has been and is now in competition with persons, firms and other corporations some of which ,,-ere, and are engaged in. pimilar businesses in commerce.

Also except insofar as it has been affected, as alleged in Paragraph Six hereof many of said jobbers or ,,-wholesalers were and are, in competition, some in commerce, \'with each other, and many of said retail book sellers ,were, and are, in competition, some in commerce with each other in the retail sale of said trade books. 213840--54---- Complaint 48 F. T. C.

PAn. 5. Respondent in the course and conduct of its business, in commerce, has been for many years last past, and more particularly since June 19, 1936, and is now discriminating in price between different purchasers of its trade books by selling such products to some purchasers at higher prices than it sells SUCJl products of like grade and quality to other purchasers, and some of such other purchasers are engaged in active and open compe6tion with the less favored purchasers in the resale of such books ,within the United States, except as it has been affected as herein alleged.

Respondent has priced and sold its publishers' editions of trade books at list prices less specific discounts allowed to each class of purchasers among which are jobbers or .wholesalers. Respondent has so discriminated in that it has priced and sold !'aid books to some jobbers or wholesalers at. said list prices less discounts ranging from 4n1j2~~6 to 43~;~6, with the former being granted ,with respect to quantities of 5 onn or more copies, and the latter to .Jess than 100 copies ,,'while re~pol)dent has priced and sold said books to other jobbers or wholesa leJ's who are in competition in the resale of said hooks ",ith those jobbers 01' wholesalers receiving the aforementioned discounts at list prices less n discount of only 43~/o, irre- :;pective of the quantities purchased.

PAR. 6. The effect of these discriminations or any appreciable part thereof has bee-n and may be substantially to lessen competition or tend to create a monopoly in the lines of commerce in which respondent and said jobbers or wholesalers are respectively engaged, or to ~njure, destroy, or prevent colllpetitjon with respondent or with said jobbers or wholesalers who receive the. benefit of such discriminations or with customers of either of them.

Paint. 7. The acts and practices of respollc1ent as alleged in Paragraph Fiye hereof are in violation of subsection (n.) of Section 2 of the Clayton J\ct, as amended by the RobinsOll-Patman Act, approved ~ nne 19, 1936 (D. S. C. Title I;'), Sec. 13). CONSENT SETTLK.\IE~T Pursuant to the provisions of an Act of Congress entitled "An Act to supplement existing laws against unlawful restraints and monopolies ~ TIll' COl1llui;;sion s "Xotice of .-\cceptance of Consent SettlenH'nt and Order to File eport of Compliance " announcing find pro1l1u)gating- the consent srttlement as published herewith, follows:

The consent settlement tendered by the parties in this proceeding, a copy of which is served herewith, was on March 6. 1952. accepted by the Commission, subject only to the condition that the respondent comply with the requirements of the following paragraph with respect to the filing of a report showing the manner and form in which it has complied with the order to cease and desist, and subject to such condition said consent settlement was RAJ.~DOM HOUSE, INC. 881 878 Findings and for other purposes " approved October 15, 1914 (Clayton Act), as amended by an Act of Congress approved June 19, 1936 (Robinson- Patman Act) , the Federal Trade Commission on the day of March 12 1952, issued and subsequently served its complaint on the respondent naIned in the caption herein charging it with violation of subsection ( a) of Section 2 of the Clayton Act as amended. The respondent, desiring that this proceeding be disposed of by the consent settlement procedure provided in Rule V of the Commission Rules of Practice, solely for the purposes of this proceeding, any review thereof, and the enforcement of the order consented to, and conditioned upon the Commission s acceptance of the consent settlement hereinafter set forth, and in lieu of answer to said complaint, hereby: 1. Admits all of the jurisdictional allegations set forth in the complaint.

2. Consents that the Commission may enter the matters hereinafter set forth as its findings as to the facts, conclusion, and order to cease and desist. It is understood that the respondent, in consenting to the Commission s entry of said findings as to the facts, conclusion, and order to cease and desist, specifically refrains from admitting or denying that it has engaged in any of the acts or practices stated therein to be in violation of law or that such acts or practices, if engaged in would be in violation of law.

3. Agrees that this consent settlement may be set aside in whole or in part under the conditions and in the manner provided in Paragraph (f) of Rule V of the Commission s Rules of Practice. The admitted jurisdictional facts, the statement of the acts and practices which the Commission had reason to believe were unlawful the conclusion based thereon, and the order to cease and desist, all of which respondent consents may be entered in final disposition of thi.s proceeding, are as follows:

COMMISSION S FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent, Random House, Inc., is a corporation organized and existing under the laws of the State of New York with its principal office and place of business located at 457 :Madison Avenue New York, New York.

ordered entered of record as the Commission s findings as to the facts, conclusion, and order in disposition of this proceeding.

It is acconUngly ordered, That the respondent, Random House, Inc., a corporation, shall within sixty (60) days after service upon it of this notice and order, file with the Commission a report in writing setting forth in detail the manner and form in which it has cornpHed with the orner to cease and desist contained in the consent settlement entered herein.

Findings 48 F. T. C.

PAR. 2. Respondent is now, and for many years last past has been engaged directly or indirectly in the publication, distribution, and sale of popular fiction and non-fiction books, commonly known as trade books.

Respondent was organized in 1925 and is one of the major publishers of said trade books in the United States. It does not do its own printing, which is handled by several different printing companies. Respondent sells and distributes its trade books to retail book sellers for resale to the public and to wholesalers or jobbers for resale to retail books stores and others, including public libraries and educational institutions. Editions of said trade books so sold and distributed are known as. publisher s editions.

PAR. 3. In the course and conduct of its business for many years last past, respondent has been, and is now, engaged in commerce, as "commerce" is defined in the Clayton Antitrust Act, as amended by the Robinson-Patman Act, in that it ships or causes to be shipped publishs editions of said trade books from the States in which the several places of production and business of the respondent are located, to purchasers thereof located in other States and in the District of Columbia; and there is, and has been at all times herein mentioned, a con- 6nuous current of trade and commerce in said books between and among the several States of the United States and in the District of Columbia.

PAR. 4. Except insofar as it is specified to the contrary in Paragraph Six hereof respondent, in the course and conduct of its said business in commerce, has been and is now in competition with persons, firms, and other corporations, some of which were, and are engaged in similar businesses in commerce.

Also except insofar as it is specified to the contrary in Paragraph Six hereof many of said jobbers or wholesalers were, and are, in competition, some in commerce, with each other, and many of said retail book sellers were, and are, in competition, some in commerce, with each other in the retail sale of said trade books. PAR. 5. Respondent in the course and conduct of its business, in commerce, has for many years last past, and more particularly since June 19, 1936, and until December 31 , 1951, discriminated in price between different purchasers of its trade books by selling such products to some purchasers at higher prices than it sells such products of like grade and quality to other purchasers, and some of such other purchasers are engaged in active and open competition with the less favored purchasers in the resale of such books within the United States, except as it has been affected as herein found. RANDOM HOUSE , INC. 883 878 Order Respondent has priced and sold its publisher s editions of trade books at list prices less specific discounts allowed to each class of purchasers among which are jobbers or wholesalers. Respondent has so diseriminated in that it has priced and sold said books to some jobbers or wholesalers at said list prices less discounts ranging from 49V2% to 43%, with the former being granted with respect to quantities of 5 000 or more copies, and the latter to less than 100 copies while respondent has priced and sold said books to other jobbers or wholesalers who are in competition in the resale of said books with those jobbers or wholesalers receiving the aforementioned discounts at list prices less a discount of only 43%, irrespective of the quantities purchased.

PAR. 6. The effect of these discriminations or any appreciable part thereof has been and may be substantially to lessen competition or tend to Clear te a monopoly in the lines 'of commerce in which respondent and said jobbers or wholesalers are respectively engaged, or to injure destroy, or prevent competition with respondent or with said jobbers or wholesalers who receive the benefit of such discriminations or with eustolllers of either of them.

PAR. 7. The acts and practices of respondent stated in Paragraph Five hereof are in violation of subsection (a) of Section 2 of the Clayton Act, as amended by the Robinson-Patman Act, approved Tune 19, 1036 (n. S. C. Title 15, Sec. 13). ORDER TO CEASE AND DESIST 1 i is o'i'Clered That the respondent Random House, Inc., a corporation, its officers, representatives, agents and employees, directly or through any corporate or other device, in connection with the sale of trade books in commerce as "eoll1merce" is defined in the aforesaid Clayton Act, do forthwith cease and desist from: Directly or indirectly discriminating in price between different purehasers of its trade books by selling such books to any of its purehasel's at higher prices than it sells the same books by whatever titles of like grade and quality to others of its purchasers where such purehasers are in competition ,with each other in the resale or distribution of said books.

ANDOl\I HOUSE, INC.

By (sgd) ROBERT IC HAAS 17 ice President.

(Title) Dated: January 29, 1952.

Order 48 F. T. C.

The foregoing consent settlement is hereby accepted by the Federal Trade Commission and ordered entered of record on this 6th day of J\iarch, 1952, subject only to the condition that the respondent shall within sixty (60) days after service upon it of a copy of this consent settlement, file with the Commission a report in writing setting forth in detail the manner and form in which it has complied with the order to cease and desist contained in said consent settlement. Note. Follo\ving the Commission s acceptance of the consent settlement, reproduced above. the Commission dismissed Count III of the complaint in Docket 5901 by the following order: This matter coming on to be heard by the Commission upon a joint motion of counsel for the respondent and counsel in support of the complaint, requesting that Count III of the complaint in this proceeding be dismissed without prejudice; and It appearing from said motion and from the record that prior to the commencement of the taking of evidence herein, the respondent pursuant to the provisions of Rule V of the Commission s Rules of Practice, moved the hearing examiner to suspend proceedings before him to permit negotiations by counsel upon a consent settlement dispositive of the proceeding, which motion 'was granted by said hearing examiner; and It further appearing that the proposed eonsent settlement thereafter agreed upon would have disposed of Count III of the complaint only, and not the entire proceeding as required by said Rule V, whereupon the parties entered into a stipulation under the terms of which it was agreed to request the dismissal of Count III of the complaint and the simultaneous issuance of a new complaint embodying the substance of said Count III with the understanding that the parties would at the same time submit to the Commission, through the hearing examiner . a proposed consent settlement of the new proceeding, which proposed consent settlement was submitted with the aforesaid joint motion; and It further appearing to the Commission that Count III of the complaint states a cause of action entirely separate from those stated in Counts I and II of said complaint, and that dismissal of said Count III would not adversely affect this proceeding insofar as Counts I and II are concerned; and The Commission have considered the proposed consent settlement tendered by the parties, and being of the opinion that said proposal is appropriate in all respects to dispose of the suggested ne\\" proceeding and that it should be accepted, subject only to the condition that the respondent shall, within sixty (60) days after service upon it of a notice of such acceptance, file with the Commission a report RANDOM HOUSE, INC. 885 878 Order writing setting forth in detail the manner and form in ,which it has complied with the order to cease and desist contained in said consent settlement:

It'ifS o-I'dered That Cm mt III of the complaint in this proceeding be and it he.reby is, dismissed; it being understood, however, that simultaneously'with this action a new complaint will be issued against the allegations of said Count III therespondent embodying all of the issues raised by which will be disposed of by acceptance of the proposed consent settlement heretofore tendered; and it being further understood that this shall not affect in any way the continuation of this. prec.eeding under Counts I and II of the complaint llerein. Complaint 48 F. T. C.